Document:

exv10w6

 

Exhibit 10.6

Management Bonus Plans

of Hutchinson Technology Incorporated

     We have a fiscal year 2008 management bonus plan that covers executive officers and certain
other management-level employees of our Disk Drive Components Division, and a fiscal year 2008
management bonus plan that covers executive officers and certain other management-level employees
of our BioMeasurement Division. In addition, executive officers and certain other management-level
employees who provide corporate support to both divisions rather than solely to one division will
have a 50% participation level in each of these plans for fiscal year 2008.

Fiscal Year 2008 Disk Drive Components Division Management Bonus Plan

     The plan is designed to create an incentive for management of our Disk Drive Components
Division to achieve goals that our board of directors believes align with the interests of our
long-term shareholders. The plan design includes an annual corporate financial objective and
additional divisional goals that measure progress toward strategic initiatives. Individual bonus
targets, expressed as a percentage of base salary, are approved for all participants by our board
of directors upon the recommendation of the board’s compensation committee.

     Fifty percent of the bonus target is dependent on our achievement of an annual corporate
financial objective, which is set giving consideration to long-term financial performance to ensure
that the company is growing earnings over time. For fiscal year 2008, earnings before taxes (EBT)
will be the corporate financial objective. The award amount to be paid based on EBT is determined
based on whether actual EBT for the fiscal year is above (subject to a ceiling, above which no
further amounts are awarded) or below (subject to a floor, below which no amounts are awarded) the
pre-established objective for EBT.

     The remainder of the bonus target is dependent on achievement of certain divisional objectives
relating to strategic initiatives in the areas of market position and business stature, long-term
growth and innovation, quality and service and manufacturing proficiency. As with the corporate
financial objective, the award amount to be paid based on these divisional objectives is subject to
a ceiling (above which no further amounts are awarded) and a floor (below which no amounts are
awarded) in relation to achievement of certain pre-established thresholds.

Fiscal Year 2008 BioMeasurement Division Management Bonus Plan

     The plan is designed to create an incentive for management of our BioMeasurement Division to
achieve goals that our board of directors believes align with the interests of our long-term
shareholders. The plan design includes the same annual corporate financial objective that is
described above and additional divisional goals that measure progress toward strategic initiatives.
Individual bonus targets, expressed as a percentage of base salary, are approved for all
participants by our board of directors upon the recommendation of the board’s compensation
committee.

     Fifty percent of the bonus target is dependent on our achievement of the same annual corporate
financial objective described above. The remainder of the bonus target is dependent on achievement
of market penetration objectives for our BioMeasurement Division. As with the corporate financial
objective, the award amount to be paid based on the market penetration objectives is subject to a
ceiling (above which no further amounts are awarded) and a floor (below which no amounts are
awarded) in relation to achievement of pre-established thresholds.

Corporate Executive and Management Participation

     As indicated, executive officers and certain other management-level employees who provide
corporate support to both divisions rather than solely to one division will have a 50%
participation level in each of these plans for fiscal year 2008. This group includes three of our
named executive officers, Wayne M. Fortun, President and Chief Executive Officer; John A. Ingleman,
Senior Vice President and Chief Financial Officer; and R. Scott Schaefer,

 

 

Vice President and Chief Technical Officer. As a result, each of these individuals will have
50% of the applicable bonus target based on the annual corporate financial objective described
above, 25% of the bonus target based on the strategic goals described above for our Disk Drive
Components Division and 25% of the bonus target based on the strategic goals described above for
our BioMeasurement Division. In addition, a pre-established minimum threshold EBT must be achieved
in order for our chief executive officer and chief financial officer to receive any bonus amount
for fiscal year 2008.

     The decision to pay bonuses is made annually by our board of directors upon the recommendation
of the compensation committee of our board of directors. Bonuses are paid in cash in the first
quarter of the following fiscal year. The actual total bonus amount paid to any participant may not
exceed 200% of the participant’s bonus target, and the actual total bonus amounts paid to all
participants under these plans may not exceed 25% of actual EBT for the fiscal year.exv10w12

 

Exhibit 10.12

SEPARATION AGREEMENT

     This Separation Agreement is entered into this 18th day of September, 2007, between
Christina M. Temperante (“Temperante”) and Hutchinson Technology Incorporated (“HTI”).

I.       RECITALS

     A.       Temperante has been employed by HTI.

     B.       In connection with her employment by HTI, Temperante executed an Agreement Not to Compete,
Not to Disclose Confidential Information and Assignment of Inventions dated June 29, 2001
(“Agreement Not to Compete”).

     C.       In connection with her employment by HTI, Temperante executed Incentive Stock Option
Agreements and Non-Statutory Stock Option Agreements dated July 2, 2001, November 28, 2001,
November 20, 2002, November 19, 2003, December 1, 2004, November 30, 2005, and November 29, 2006
(“Option Agreements”).

     D.       Temperante’s HTI employment was terminated effective August 29, 2007 (the “Termination
Date”).

     E.       Temperante and HTI desire to resolve all of Temperante’s potential claims on the terms set
out in this Separation Agreement.

II.       AGREEMENT

     For the consideration described below, the adequacy of which the parties
acknowledge, the parties agree as follows:

     1.       Release by Temperante. At the same time that she executes this Separation
Agreement, Temperante shall execute the release that is attached as Exhibit A (the “Release”).

     2.       Payment. Within five business days after the satisfaction of all of the conditions
stated in Paragraph 3 below, HTI shall pay Temperante a lump sum in the amount of $250,000.00, less
applicable withholdings.

     3.       Conditions. HTI need not make the payment described in Paragraph 2 above unless
and until all of the following conditions have been satisfied:

(a)       Temperante executes the Release after the Termination Date and delivers it to HTI within
the time specified in the Release.

(b)       The applicable rescission period for the Release expires without a rescission by
Temperante.

     4.       Right to Consult with an Attorney. Temperante understands and acknowledges that
she is hereby being advised by HTI to consult with an attorney prior to signing this Separation
Agreement and the Release.

     5.       Consideration and Rescission. The periods described in the Release during which
Temperante may consider whether to sign or may rescind the Release and the procedures stated in the
Release for accepting or rescinding the Release also apply to this Separation Agreement. The
Release and this Separation Agreement must be accepted or rescinded together. Rescission of one of
these documents will be deemed a rescission of both of them.

     6.       Cooperation. Upon reasonable notice and request by HTI, Temperante shall be
reasonably available to consult with, advise, and assist HTI with respect to legal and business
matters about which she had knowledge or responsibility during her employment with the HTI.
Without limiting the foregoing, at HTI’s reasonable request, Temperante shall consult with HTI
regarding business matters that she was involved with while employed by HTI and be available, with
or without subpoena, to be interviewed, review documents or things, give depositions, testify, or
engage in other reasonable activities in connection with any litigation or investigation, with
respect to matters that Temperante has or may have knowledge of. In performing her

 

obligations under this Paragraph 6 to testify or otherwise provide information, Temperante shall
honestly, truthfully, forthrightly, and completely provide requested information to the extent that
she is able to do so.

     7.       Agreement Not to Solicit. For a period of 36 consecutive months from and after the
Termination Date, Temperante shall not, directly or indirectly, in any manner or capacity
(including without limitation as a proprietor, principal, agent, partner, officer, director,
stockholder, employee, consultant, or otherwise) solicit, request, advise, or induce any person who
is then an employee or contractor of HTI to terminate, curtail, or otherwise adversely change his
or her relationship with HTI.

     8.       Agreement Not to Hire. For a period of 36 consecutive months from and after the
Termination Date, Temperante shall not, directly or indirectly, in any manner or capacity
(including without limitation as a proprietor, principal, agent, partner, officer, director,
stockholder, employee, consultant, or otherwise) hire, attempt to hire, engage, or attempt to
engage any person who is then an employee of HTI.

     9.       Blue Pencil Doctrine. If the duration of, the scope of, or any activity covered by
any provision of Paragraphs 7 and 8 above is in excess of what is determined to be valid and
enforceable under applicable law, such provision shall be construed to cover only that duration,
scope, or activity that is determined to be valid and enforceable. Temperante hereby acknowledges
that Paragraphs 7 and 8 above shall be given the construction that renders their provisions valid
and enforceable to the maximum extent, not exceeding their express terms, possible under applicable
law.

     10.       Acknowledgement and Remedies. Temperante hereby acknowledges that the provisions
of Paragraphs 7 and 8 above are reasonable and necessary to protect the legitimate interests of HTI
and that any violation of Paragraphs 7 or 8 by Temperante would cause substantial and irreparable
harm to HTI to such an extent that monetary damages alone would be an inadequate remedy. In the
event that Temperante violates any provision of Paragraphs 7 or 8 above, HTI shall be entitled to
an injunction, in addition to all other remedies it may have, restraining Temperante from violating
or continuing to violate such provision.

     11.       Non-Admission. Nothing in this Separation Agreement or the Release is intended to
be, nor will be deemed to be, an admission by HTI that it has violated any law or that it has
engaged in any wrongdoing.

     12.       Entire Agreement. This Separation Agreement and the Release supersede all prior
oral and written agreements, representations, and promises between the parties except that the
Agreement Not to Compete and the Option Agreements shall continue in full force and effect
according to their terms. This Separation Agreement, the Release, the Agreement Not To Compete,
and the Option Agreements constitute the entire agreement between the parties with respect to
Temperante’s employment with HTI and the termination of that employment. Temperante acknowledges
that there were no inducements or representations leading to the execution of this Separation
Agreement or the Release, except as stated in this Separation Agreement.

     13.       Voluntary and Knowing Action. The parties acknowledge that they understand the
terms of this Separation Agreement and that they are voluntarily entering into this Separation
Agreement. The parties intend to be legally bound. Temperante represents that she is legally able
and entitled to enter into this Separation Agreement and the Release and to receive the payment
described in Paragraph 2 above.

     14.       Governing Law. All matters relating to the interpretation, construction,
application, validity and enforcement of this Separation Agreement shall be governed by the laws of
the State of Minnesota without giving effect to any choice or conflict of law provision or rule,
whether of the State of Minnesota or any other jurisdiction, that would cause the application of
laws of any jurisdiction other than the State of Minnesota.

     15.       Jurisdiction and Venue. Temperante and HTI consent to the jurisdiction of the
courts of the State of Minnesota and the United States District Court for the District of Minnesota
for the purpose of resolving all issues of law, equity, or fact, arising out of or in connection
with this Separation Agreement. Any action involving claims of a breach of this Separation
Agreement shall be brought in such courts. Each party consents to personal jurisdiction over such
party and venue in the state and federal courts identified above.

     16.       Tax Matters.

(a)       HTI and Temperante acknowledge and agree that the payment described in Paragraph
2 of this Separation Agreement is paid solely at the discretion of HTI, does not represent an

 

amount to which Temperante had a right to payment prior to the termination of her employment
(under either an employment agreement or other severance plan of the Company), and is not paid in lieu of any
“deferred compensation” as otherwise defined in Section 409A of the Internal Revenue Code and
regulations thereunder. As a result, the parties intend that the payment be exempt from the
requirements of Internal Revenue Code Section 409A.

(b)       Temperante acknowledges and agrees that neither HTI nor anyone acting on its behalf has
made any representations to her concerning the tax consequences of entering into this Separation
Agreement and receiving the consideration specified in it and that she has not relied on any tax
advice from HTI or anyone acting on its behalf.

	 	 	 	 	 
	 	 	HUTCHINSON TECHNOLOGY INCORPORATED

 	 
	/s/ Christina M. Temperante 	 	By  	/s/ Rebecca Albrecht 	 
	 	 
	Christina M. Temperante 	 	Its  	VP of HR 	 
	 

 

EXHIBIT A

RELEASE BY CHRISTINA M. TEMPERANTE

Definitions. I intend all words used in this Release to have their plain meanings in
ordinary English. Specific terms that I use in this Release have the following meanings:

	 	A.	 	I, me, and my include both me and anyone who has or
obtains any legal rights or claims through me.
	 
	 	B.	 	HTI means Hutchinson Technology Incorporated, any company related to
Hutchinson Technology Incorporated in the present or past (including without
limitation, its predecessors, parents, subsidiaries, affiliates, and divisions), and
any successors of Hutchinson Technology Incorporated.
	 
	 	C.	 	Company means HTl; the present and past officers, directors,
committees, and employees of HTl; the present and past employee benefit plans sponsored
or maintained by HTI and the present and past fiduciaries of such plans; and anyone who
acted on behalf of HTl or on instructions from HTI.
	 
	 	D.	 	Agreement means the Separation Agreement between HTl and me that I am
executing on the same date on which I execute this Release.
	 
	 	E.	 	My Claims means all of my rights that I now have to any relief of any kind from
the Company, including without limitation:

	 	1.	 	all claims arising out of or relating to my employment with HTI
or the termination of that employment;
	 
	 	2.	 	all claims arising out of or relating to the statements,
actions, or omissions of the Company;
	 
	 	3.	 	all claims for any alleged unlawful discrimination, harassment,
retaliation or reprisal, or other alleged unlawful practices arising under the
laws of the United States or any other country or of any state, province,
municipality, or other unit of government, including without limitation, claims
under Title VII of the Civil Rights Act of 1964, the Age Discrimination in
Employment Act, the Americans with Disabilities Act, the Family and Medical
Leave Act, 42 U.S.C. § 1981, the Employee Retirement Income Security Act, the
Equal Pay Act, the Worker Adjustment and Retraining Notification Act, the
Sarbanes-Oxley Act, the Fair Credit Reporting Act, the Minnesota Human Rights
Act, and workers’ compensation non-interference or non-retaliation statutes
(such as Minn. Stat. §176.82);
	 
	 	4.	 	all claims for alleged wrongful discharge; breach of contract;
breach of implied contract; failure to keep any promise; breach of a covenant
of good faith and fair dealing; breach of fiduciary duty; estoppel; my
activities, if any, as a “whistleblower”; defamation; infliction of emotional
distress; fraud; misrepresentation; negligence; harassment; retaliation or
reprisal; constructive discharge; assault; battery; false imprisonment;
invasion of privacy; interference with contractual or business relationships;
any other wrongful employment practices; and violation of any other principle
of common law;
	 
	 	5.	 	all claims for compensation of any kind, including without
limitation, bonuses, commissions, stock options, vacation pay, employee managed
time off (“EMTO”), perquisites, relocation expenses, and expense
reimbursements;

 

 

	 	6.	 	all claims for back pay, front pay, reinstatement, other
equitable relief, compensatory damages, damages for alleged personal injury,
liquidated damages, and punitive damages; and
	 
	 	7.	 	all claims for attorneys’ fees, costs, and interest.

However, My Claims does not include any claims that the law does not allow
to be waived, any claims that may arise after the date on which I sign this Release,
any claims for continuation of coverage under the Consolidated Omnibus Budget
Reconciliation Act (COBRA) or similar state law, and any claims related to the
exercise of stock options that have been awarded under the Hutchinson Technology
Incorporated Incentive Plan.

Agreement to Release My Claims. I will receive consideration from HTI as set forth in the
Agreement if I sign and do not rescind this Release as provided below. I understand and acknowledge
that that consideration is in addition to anything of value that I would be entitled to receive
from HTI if I did not sign this Release or if I rescinded this Release. In exchange for that
consideration, I give up all of My Claims. I will not make any demands against the Company for
compensation or damages relating to My Claims. The consideration that I am receiving is a fair
compromise for the release of My Claims.

Additional Agreements and Understandings. Even though HTI will provide consideration for me
to settle and release My Claims, the Company does not admit that it is responsible or legally
obligated to me. In fact, the Company denies that it is responsible or legally obligated to me for
My Claims, denies that it engaged in any unlawful or improper conduct toward me, and denies that it
treated me unfairly.

Advice to Consult with an Attorney. I understand and acknowledge that I am hereby being
advised by the Company to consult with an attorney prior to signing this Release. My decision
whether to sign this Release is my own voluntary decision made with full knowledge that the Company
has advised me to consult with an attorney.

Period to Consider the Release. I understand that I have 21 days from the day on which I
receive this Release or the day on which my HTI employment ends, whichever occurs later, to
consider whether I wish to sign this Release. If I sign this Release before the end of the 21-day
period, it will be my voluntary decision to do so because I have decided that I do not need any
additional time to decide whether to sign this Release. I understand that the Company need not
accept this Release if I sign it on or before my last day of employment.

My Right to Rescind this Release. I understand that I may rescind this Release at any time
within 15 days after I sign it, not counting the day upon which I sign it. This Release will not
become effective or enforceable, and no consideration will be paid, unless and until the 15-day
rescission period has expired without my rescinding it.

Procedure for Accepting or Rescinding the Release. To accept the terms of this Release, I
must deliver the Release, after I have signed and dated it, to HTI by hand or by mail within the
21-day period that I have to consider this Release. To rescind my acceptance, I must deliver a
written, signed statement that I rescind my acceptance to HTI by hand or by mail within the 15-day
rescission period. All deliveries must be made to HTI at the following address:

                               Ms. Rebecca Albrecht

                               Vice President of Human Resources

                               Hutchinson Technology Inc.

                               40 West Highland Park Drive N.E.

                               Hutchinson, MN 55350-3797

If I choose to deliver my acceptance or the rescission of my acceptance by mail, it must be:

	 	(1)	 	postmarked within the period stated above; and

 

 

	 	(2)	 	properly addressed to HTI at the address stated above.

Interpretation of the Release. This Release should be interpreted as broadly as possible to
achieve my intention to resolve all of My Claims against the Company. If this Release is held by a
court to be inadequate to release a particular claim encompassed within My Claims, this Release
will remain in full force and effect with respect to all the rest of My Claims.

My Representations. I am legally able and entitled to receive the consideration being
provided to me in settlement of My Claims. I have not been involved in any personal bankruptcy or
other insolvency proceedings at any time since I began my employment with HTI. No child support
orders, garnishment orders, or other orders requiring that money owed to me by HTI be paid to any
other person are now in effect.

I have read this Release carefully. I understand all of its terms. In signing this Release, I have
not relied on any statements or explanations made by the Company except as specifically set forth
in the Agreement. I am voluntarily releasing My Claims against the Company. I intend this Release
and the Agreement to be legally binding.

Dated: 9/18/2007

	 	 	 	 	 
	 	 	 
	 	                                                  /s/  Christina M. Temperante
 	 
	 	Christina M. Temperante

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