Document:

EX-10.1

Exhibit 10.1

HUTCHINSON TECHNOLOGY INCORPORATED

SEVERANCE PAY PLAN

(As Amended and Restated Effective April 20, 2009)

I. INTRODUCTION

     Hutchinson Technology Incorporated (“HTI”) has established this Plan to provide
severance pay to eligible employees of HTI whose employment is terminated in connection with
certain events involving a reduction in our workforce. HTI in its complete and sole
discretion will determine what a severance-eligible event is, who is an eligible employee,
the amount of severance an employee is entitled to, and all other factual or interpretive
issues arising under the Plan.

This Plan was originally effective April 17, 2000. This document amends and restates the
Plan effective as of April 20, 2009. This document supersedes and replaces any policy, plan
or practice that may have existed in the past regarding the payment of severance pay, and
describes severance pay available to eligible employees who receive notice on or after April
20, 2009 of a “severance event” that will result in their termination of employment. This
document is both the “Plan document” and the “summary plan description” for the Plan.

II. ELIGIBILITY

     You are considered a participant in this Plan if you meet all of the following
requirements on the day immediately preceding your termination of employment:

	 	-	 	You are classified by HTI as a regular U.S.-based,
full-time employee of HTI.
	 
	 	-	 	If you are an hourly employee, more than 56 days have
passed since your HTI employment began.
	 
	 	-	 	Your employment with HTI is not subject to a written
employment agreement (unless that written employment agreement
specifically provides that you are eligible for this Plan and mentions
this Plan by name).
	 
	 	-	 	You have not received any special severance
arrangement from HTI (unless that special severance arrangement
specifically provides that you are eligible for this Plan and mentions
this Plan by name).
	 
	 	-	 	You are not a participant in any other HTI severance
plan.

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All employees HTI classifies as Part-Time, Temporary, Supplemental, or Intern/Co-op
employees are excluded.

You will be considered to be a “full-time” employee of HTI if you are regularly scheduled to
work at least an average of 40 hours/week.

Persons who are classified by HTI as part-time, whose principal place of employment is
outside the U.S., or who do not meet the requirements of HTI’s policies for being benefits
eligible, are not participants in this Plan. Persons who are classified by HTI as
“independent contractors,” as employees of some other entity whose services are leased to
HTI, or as any other status in which HTI is not currently withholding income taxes from
their wages, are not eligible to participate in this Plan while so classified, regardless of
their correct legal status. If any employees ever become covered by a collective bargaining
agreement, their continued participation in this Plan would be subject to negotiations with
the collective bargaining representative.

The benefits described in this “summary plan description” are available to employees in
positions below Director or Plant Manager level. Employees in positions of Directors or
Plant Managers and above may participate in the Plan, but their terms of participation may
be different.

III. SEVERANCE EVENTS

     If you are an eligible participant in this Plan, you will receive severance benefits if
your employment with HTI is involuntarily terminated as a result of an event that management
designates to be a “severance event.” Some examples of what HTI’s management could in its
sole discretion determine to be a severance event are:

	 	-	 	Closure of the HTI facility at which you work.
	 
	 	-	 	A permanent reduction in HTI’s workforce that
results in the elimination of your position.
	 
	 	-	 	An organizational change that results in the
elimination of your position.

Release Required. Regardless of the reason for your termination, you will not be eligible
for severance benefits unless you sign a release of all claims against HTI (and its
officers, employees and related entities, etc.) on a form provided by HTI for this purpose.
HTI will determine the contents of the release form, and may revise it from time to time as
appropriate to deal with particular severance situations. Severance benefits will be paid
only after any period for rescinding the release has expired.

Ineligibility for Benefits. Severance benefits will not be paid under this Plan in any of
the following circumstances:

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	 	-	 	You are offered another position with HTI and refuse to accept that position.
	 
	 	-	 	You voluntarily terminate your employment with HTI.
	 
	 	-	 	Your employment is terminated by HTI for a
reason that is not declared by management to be a severance event
(including, but not limited to, a termination based on job performance
or misconduct).
	 
	 	-	 	You are placed on a temporary layoff.
	 
	 	-	 	Your employment terminates due to death,
disability, or failure to return to work for HTI following a leave of
absence, layoff or any other period of authorized absence from HTI.
	 
	 	-	 	Your employment with HTI is terminated in
connection with a corporate event, such as a merger, acquisition or
spin-off, or in connection with an outsourcing or similar transaction,
and you are offered employment with a successor to part or all of HTI’s
business or operations (whether or not you accept that offer).
	 
	 	-	 	You refuse to sign the release form prepared by
HTI, or you rescind the release before it becomes final.
	 
	 	-	 	You leave HTI under any other program in which
management solicits and accepts voluntary terminations (in which case,
severance pay will be determined and paid only under the other program,
unless that program specifically provides that you are eligible for
this Plan and that benefits are cumulative).
	 
	 	-	 	You are covered by a written employment
agreement with HTI at the time your employment terminates (unless that
written employment agreement specifically provides that you are
eligible for this Plan and mentions this Plan by name).

IV. SEVERANCE BENEFITS

     If you meet the eligibility requirements in Section II, have a severance event that
qualifies under Section III and you are in a position below Director or Plant Manager, you
will receive the benefits described in this Section IV. Your severance benefit will be a
lump sum severance payment. The lump sum amount is determined according to the following
formula:

60 hours of base pay for each year of service

The lump sum will be subject to all applicable withholding for taxes, and the net amount
will be paid to you as soon as administratively feasible after the release has become
irrevocable (or after the date your employment terminates, if later), but in no case later
than March 15 of the calendar year following the calendar year in which your termination of
employment occurs.

Years of Service. You will be credited with one year of service for each completed year of
employment with HTI from your date of hire or adjusted date of hire,

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whichever is most recent. Your “date of hire” or “adjusted date of hire” will be determined according to
HTI’s personnel policies as in effect on the date you terminate employment.

If you have less than three years of service, you will nevertheless be credited with three
years of service for purposes of this Plan.

If you have received a severance payment from HTI, are later rehired by HTI, and then have
another severance event, the years of service before the previous severance payment will be
disregarded in calculating your severance pay due to the new severance event. For example,
if you worked 5 years, were terminated and received a severance payment, are rehired by HTI,
work 4 more years, and then have another severance event, the severance amount would be 240
hours of base pay (60 hours x 4 years of service).

Your “base pay.” Severance benefits under this Plan are calculated using your hourly rate
of base pay at the time your employment terminates. (For salaried employees, the hourly
rate is determined by dividing the annual base salary by 2080 hours.) Base pay excludes
overtime, bonuses, profit sharing, shift premiums, or any other special compensation.

Additional Benefits. Your lump sum amount as determined above will be increased by an
additional amount equal to 35% of the total premium for two months of group medical and/or
dental coverage under HTI’s group benefit plan(s). This additional benefit is only
available if you are enrolled in HTI’s group medical and/or group dental coverage on the
date of your termination of employment, and will be calculated by reference to your coverage
and enrollment level in effect as of your termination of employment (i.e., medical employee
only, medical and dental employee plus one, etc.).

Your coverage under HTI’s group benefit plan ceases as of the day of your termination of
employment. The payment of the additional benefit described in this section does not impact
your right and your family members’ right to continuation of medical and dental coverage
under Internal Revenue Code section 4980B(f) or Section 602 of the Employee Retirement
Income Security Act of 1974, as amended (“COBRA”) or state law, nor does it provide for any
payments or coverage under COBRA or state law or HTI’s group benefit plan. You are solely
responsible for timely electing and paying all costs for continuation coverage under COBRA
in accordance with the applicable group medical or dental plan.

Reductions of Severance Benefits. The gross amount of your severance benefits under this
Plan will be reduced by (1) the gross amount of any payments that HTI makes to you to
satisfy its obligations under the Worker Adjustment and Retraining Notification (“WARN”) Act
or similar federal, state, and local laws, (2) the gross amount of any salary or wages you
are paid for a period you are not working at HTI’s

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request after HTI has given you notice under the WARN Act (or similar federal, state, or local law) and prior to your
termination of employment, and (3) consistent with applicable laws, any amount you owe HTI
as determined by HTI’s Human Resources Department.

V. AMENDMENT AND TERMINATION OF THE PLAN

     HTI reserves the right to amend or terminate this Plan at any time and for any reason,
without the consent of or notice to any employee or any other person having any beneficial
interest in this Plan. Notwithstanding the foregoing, however, those employees who
terminate employment prior to an amendment or termination of the Plan shall have their
rights to severance benefits, if any, determined under the Plan as in effect on their last
day of employment. Action to amend or terminate the Plan may be taken by the board of
directors of HTI, by the Chief Executive Officer of HTI, or by any other individual or
committee to whom such authority has been delegated by the board of directors.

VI. SUBMITTING CLAIMS FOR BENEFITS

     Normally, HTI will determine your eligibility and benefit amount on its own and without
any action on your part, other than returning the release form. The severance payments will
be made as soon as administratively feasible after the date the release becomes irrevocable.

Formal Claims for Benefits. If HTI has not acted on your termination, if you disagree with
a decision made by HTI about whether your termination of employment is a “severance event,”
or if you believe that the Plan’s terms or procedures have been violated in any way, and you
want to pursue the matter further, you must submit a written claim for benefits. The claim
must be signed by you and submitted to HTI’s Human Resources Department in Hutchinson,
Minnesota within 6 months after your date of termination of employment. Claims received
after that time will not be considered. Your written claim should explain, as best you can,
what you want and why you believe you are entitled to it, and should include copies of any
documents you believe are relevant or support your position.

HTI will ordinarily respond to your claim within 90 days of the date on which it is
received. However, if special circumstances require an extension of the period of time for
processing a claim, the 90-day period can be extended for an additional 90 days by giving
you written notice of the extension and the reason why the extension is necessary.

HTI will give you a written notice of its decision if it denies your claim for benefits in
whole or in part. The notice will explain the specific reasons for the decision and the
procedures for appealing the decision.

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Appeals. If you do not agree with the decision of HTI and want to pursue the matter
further, you must, within 60 days after receiving the notice that your claim has been
denied, file a written appeal with HTI’s Human Resources Department in Hutchinson,
Minnesota. Your written appeal should describe all reasons why you believe the claim denial
was in error, and should include copies of all documents that you want considered in support
of your appeal. Your appeal will be decided based on the information you submit and we
assemble, so you should make sure your submission is complete.

If you wish, you may review and/or make copies of all documents that we considered or relied
on in deciding your claim. These copies will be provided to you free of charge.

Generally, your appeal will be decided within 60 days after HTI receives it. However, if
special circumstances require a delay, the appeal may take up to 120 days. (If a decision
cannot be made within the 60-day period, you will be notified of this fact in writing.) You
will receive a written notice of the decision on the appeal, which will explain the reasons
for the decision by making specific reference to the Plan provisions on which the decision
is based. If you wish, you may review and/or make copies of all documents that we considered
or relied on in deciding your appeal. These copies will be provided to you free of charge

If your appeal is denied in whole or in part, at that point you have the right to file a
lawsuit in federal court challenging the denial. A court generally will review our decision
based on the evidence and arguments that you presented during the claim and appeal process,
so you should make sure that everything that you believe supports your position is submitted
to us during that process.

VII. PLAN ADMINISTRATION

     The following information relates to the administration of the Plan and the
determination of Plan benefits.

Name of Plan:

Hutchinson Technology Incorporated Severance Pay Plan

Type of Plan:

The Plan is a “welfare benefits plan” that provides severance benefits in the event a
participant’s employment with HTI is terminated under certain circumstances. All benefits
are paid from the general assets of HTI. No trust fund, insurance contract or other pool of
assets is maintained to provide Plan benefits.

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Plan Administrator/Plan Sponsor:

HTI is the “Plan Sponsor” and “Plan Administrator” of this Plan. Communications to HTI
regarding the Plan should be addressed to:

Hutchinson Technology Incorporated

ATTN: Human Resources Department

40 West Highland Park Drive NE

Hutchinson, MN 55350

Telephone: (320) 587-3797

As Plan Administrator, HTI has full discretionary authority to interpret the provisions of
the Plan and to determine which participants are eligible for Plan benefits and the amount
of those benefits. HTI also has full discretionary authority to correct any errors that may
occur in the administration of the Plan, including recovering any overpayment of benefits
from the person who received it.

Employer Identification Number:

HTI’s Federal Employer Identification Number is 41-0901840.

Plan Number:

For Federal reporting purposes, the Plan has been assigned an identification number of 506.

Plan Year:

The Plan Year of this Plan is the calendar year.

Agent for Service of Legal Process:

Legal process regarding the Plan may be served on HTI at the address listed above.

Assignment of Benefits:

You cannot assign your benefits under this Plan to anyone else, and your benefits are not
subject to attachment by your creditors. HTI will not pay Plan benefits to anyone other
than you (or your estate if you die after having a qualifying severance event but before the
severance payment can be made to you).

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Statement of Rights of Participants:

As a participant in this Severance Pay Plan, you are entitled to certain rights and
protections under the Employee Retirement Income Security Act of 1974 (“ERISA”). ERISA
provides that all Plan participants are entitled to:

	 	1.	 	Examine, without charge, at HTI’s Human Resources Department and at other
specified locations, such as worksites, all documents governing the Plan and a copy of
the latest annual report (Form 5500 Series) filed by the Plan with the U.S. Department
of Labor and at the Public Disclosure Room of the Employee Benefits Security
Administration.
	 
	 	2.	 	Obtain, upon written request to HTI’s Human Resources Department, copies of all
documents governing the operation of the Plan and copies of the latest annual report
(Form 5500 Series) and updated summary plan description. A reasonable charge may be
made for the copies.
	 
	 	3.	 	Receive a summary of any annual financial report filed by the Plan (if the Plan
is required to file such a report). HTI is required by law to furnish each participant
with a copy of this summary financial report.

In addition to creating rights for Plan participants, ERISA imposes duties upon the people
who are responsible for the operation of the Plan. The people who operate your Plan, called
“fiduciaries” of the Plan, have a duty to do so prudently and in the interest of you and
other Plan participants and beneficiaries. No one may fire you or otherwise discriminate
against you in any way to prevent you from obtaining a benefit or exercising your rights
under ERISA.

If your claim for a benefit under the Plan is denied or ignored in whole or in part, you
have a right to know why this was done, to obtain copies of documents relating to the
decision without charge, and to appeal any denial, all within certain time schedules.

Under ERISA there are steps you can take to enforce the above rights. For instance, if you
request a copy of Plan documents or the latest annual report from the Plan and do not
receive them within 30 days, you may file suit in a federal court. In such a case, the
court may require HTI to provide the materials and pay you up to $110 a day until you
receive the materials, unless the materials were not sent because of reasons beyond its
control. If you have a claim for benefits which is denied or ignored, in whole or in part,
you may file suit in a state or federal court. If you are discriminated against for
asserting your rights, you may seek assistance from the U.S. Department of Labor, or you may
file suit in a federal court. The court will decide who should pay court costs and legal
fees. If you are successful, the court may order the person you have sued to pay these
costs and fees. If you lose, the court may order you to pay these costs and fees, for
example, if it finds your claim is frivolous.

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If you have any questions about the Plan, you should contact HTI’s Human Resources
Department. If you have any questions about this statement or about your rights under
ERISA, or if you need assistance getting documents from HTI, you should contact the nearest
office of the Employee Benefits Security Administration, U.S. Department of Labor, listed in
your telephone directory or the Division of Technical Assistance and Inquiries, Employee
Benefits Security Administration, U.S. Department of Labor, 200 Constitution Avenue N.W.,
Washington, D.C., 20210. You may also obtain certain publications about your rights and
responsibilities under ERISA by calling the publications hotline of the Employee Benefits
Security Administration.

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HUTCHINSON TECHNOLOGY INCORPORATED

SEVERANCE PAY PLAN

(As Amended and Restated Effective April 20, 2009)

Appendix I — Applicable to Employees of HTI Classified As Directors or Plant Managers

If you meet the eligibility requirements in Section II of the Severance Pay Plan (“Plan”), have a
severance event that qualifies you under Section III, and you are serving HTI in a position of
Director or Plant Manager, your benefits will be determined under this Appendix rather than under
Section IV of the Plan. All other terms of the Plan apply to you.

Your severance benefit will be a lump sum payment. Your lump sum payment will be a minimum of 26
weeks of base pay. If you have 10 or more years of service, you will receive an additional week of
pay for each completed year of service in excess of nine, subject to a maximum of 52 weeks.

The lump sum payment will be subject to all applicable withholding taxes and the net amount will be
paid to you as soon as administratively feasible after your release has become irrevocable. For
sake of clarity under Internal Revenue Code section 409A, the net amount will in no case be paid
later than March 15 of the year following the year in which your termination of employment occurs.

Years of Service. You will be credited with one year of service for each completed year of
employment with HTI from your date of hire or adjusted date of hire, whichever is most recent.
Your “date of hire” or “adjusted date of hire” will be determined according to HTI’s personnel
policies as in effect on the date you terminate employment.

If you have received a severance payment from HTI, are later rehired by HTI, and then have another
severance event, the years of service before the previous severance payment will be disregarded in
calculating your severance pay due to the new severance event.

Week of Base Pay. Severance benefits under this Appendix are calculated based on your annual base
pay in effect at the time your employment terminates. Your “base pay” excludes overtime, bonuses,
profit sharing, shift premiums, or any other special compensation. A “week of base pay” is
calculated by dividing your annual base pay by 52.

Additional Benefits. Your lump sum amount as determined above will be increased by an additional
amount equal to the premium for two months of group medical and/or dental coverage under HTI’s
group benefit plan(s). This additional benefit is only available if you are enrolled in HTI’s
group medical and/or group dental coverage on the date of your termination of employment, and will
be calculated by reference to your coverage and enrollment level in effect as of your termination
of employment (i.e., medical employee only, medical and dental employee plus one, etc.).

10

 

Your coverage under HTI’s group benefit plan ceases as of the day of your termination of
employment. The payment of the additional benefit described above does not impact your right and
your family members’ right to continuation of medical and dental coverage under Internal Revenue
Code Section 4980B(f) or Section 602 of the Employee Retirement Income Security Act of 1974, as
amended (“COBRA”) or state law, nor does it provide for any payments or coverage under COBRA or
state law or HTI’s group benefit plan. You are solely responsible for timely electing and paying
all costs for continuation coverage under COBRA in accordance with the applicable group medical or
dental plan.

Reductions of Severance Benefits. The gross amount of your severance benefits under this Appendix
will be reduced by (1) the gross amount of any payments that HTI makes to you to satisfy its
obligations under the Worker Adjustment and Retraining Notification (“WARN”) Act or similar
federal, state, and local laws, (2) the gross amount of any salary or wages you are paid for a
period you are not working at HTI’s request after HTI has given you notice under the WARN Act (or
similar federal, state or local law) and prior to your termination of employment, and (3)
consistent with applicable laws, any amount you owe HTI as determined by HTI’s Human Resources
Department.

Outplacement Services. You will receive professional outplacement services at HTI’s expense. The
provider of outplacement services will be selected by HTI. The duration of these services will not
exceed three months, with such three-month period beginning immediately following your termination
of employment (and in no event will reimbursement occur later than the end of the calendar year
following your termination of employment).

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HUTCHINSON TECHNOLOGY INCORPORATED

SEVERANCE PAY PLAN

(As Amended and Restated Effective April 20, 2009)

Appendix II — Applicable to Employees of HTI Classified As Vice Presidents

If you meet the eligibility requirements in Section II of the Severance Pay Plan (“Plan”), have a
severance event that qualifies you under Section III and you are serving HTI in a position of Vice
President, your benefits will be determined under this Appendix rather than under Section IV of the
Plan. All other terms of the Plan apply to you.

Your severance benefit will be a lump sum payment. Your lump sum payment will equal one times your
annual “base pay” in effect immediately prior to your termination of employment, plus an additional
amount equal to your “average bonus.” Your “base pay” excludes overtime, bonuses, profit sharing,
shift premiums, or any other special compensation. Your “average bonus” is calculated by reference
to the bonus, if any, you received for the three annual bonus periods that ended with or
immediately prior to your termination of employment. If you were eligible to receive a bonus for
all three of such bonus periods, your “average” bonus is the sum of the bonuses received for such
periods (which may be zero if you did not receive a bonus for any of the periods), divided by
three. If you were eligible to receive a bonus for only one or two of such bonus periods (for
example, because you were recently employed), then your “average bonus” equals the amount of the
bonus received for such bonus period(s), divided by one or two, as applicable. If you were not
eligible to receive a bonus for any bonus period, your “average bonus” is zero.

The lump sum payment will be subject to all applicable withholding taxes and the net amount will be
paid to you as soon as administratively feasible after your release has become irrevocable. For
sake of clarity under Internal Revenue Code section 409A, the net amount will in no case be paid
later than March 15 of the calendar year following the calendar year in which your termination of
employment occurs.

Additional Benefits. Your lump sum amount as determined above will be increased by an additional
amount equal to the premium for six months of group medical and/or dental coverage under HTI’s
group benefit plan(s). This additional benefit is only available if you are enrolled in HTI’s
group medical and/or group dental coverage on the date of your termination of employment, and will
be calculated by reference to your coverage and enrollment level in effect as of your termination
of employment (i.e., medical employee only, medical and dental employee plus one, etc.).

Your coverage under HTI’s group benefit plan ceases as of the day of your termination of
employment. The payment of the additional benefit described above does not impact your right and
your family members’ right to continuation of medical and dental coverage under Internal Revenue
Code Section 4980B(f) or Section 602 of the Employee Retirement Income

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Security Act of 1974, as amended (“COBRA”) or state law, nor does it provide for any payments or coverage under COBRA or
state law or HTI’s group benefit plan. You are solely responsible for timely electing and paying
all costs for continuation coverage under COBRA in accordance with the applicable group medical or
dental plan.

Reductions of Severance Benefits. The gross amount of your severance benefits under this Appendix
will be reduced by (1) the gross amount of any payments that HTI makes to you to satisfy its
obligations under the Worker Adjustment and Retraining Notification (“WARN”) Act or similar
federal, state, and local laws, (2) the gross amount of any salary or wages you are paid for a
period you are not working at HTI’s request after HTI has given you notice under the WARN Act (or
similar federal, state or local law) and prior to your termination of employment, and (3)
consistent with applicable laws, any amount you owe HTI as determined by HTI’s Human Resources
Department.

Outplacement Services. You will receive professional outplacement services at HTI’s expense. The
provider of outplacement services will be selected by HTI. The duration of these services will not
exceed six months, with such six-month period beginning immediately following your termination of
employment (and in no event will reimbursement occur later than the end of the calendar year
following your termination of employment).

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HUTCHINSON TECHNOLOGY INCORPORATED

SEVERANCE PAY PLAN

(As Amended and Restated Effective April 20, 2009)

Appendix III — Applicable to Senior Executives of HTI

If you meet the eligibility requirements in Section II of the Severance Pay Plan (“Plan”), have a
severance event that qualifies you under Section III, and you are in one of the positions listed
below, your benefits will be determined under this Appendix rather than under Section IV of the
Plan. All other terms of the Plan apply to you.

This Appendix applies to employees serving HTI in the following positions:

	 	•	 	Chief Executive Officer
	 
	 	•	 	Chief Financial Officer
	 
	 	•	 	Chief Technology Officer
	 
	 	•	 	President (Company and/or Divisional)

Your severance benefit will be a lump sum payment. Your lump sum payment will equal one and
one-half (1.5) times your annual “base pay” in effect immediately prior to your termination of
employment, plus an additional amount equal to your “average bonus.” Your “base pay” excludes
overtime, bonuses, profit sharing, shift premiums, or any other special compensation. Your
“average bonus” is calculated by reference to the bonus, if any, you received for the three annual
bonus periods that ended with or immediately prior to your termination of employment. If you were
eligible to receive a bonus for all three of such bonus periods, your “average” bonus is the sum of
the bonuses received for such periods (which may be zero if you did not receive a bonus for any of
the periods), divided by three. If you were eligible to receive a bonus for only one or two of
such bonus periods (for example, because you were recently employed), then your “average bonus”
equals the amount of the bonus received for such bonus period(s), divided by one or two, as
applicable. If you were not eligible to receive a bonus for any bonus period, your “average bonus”
is zero.

The lump sum payment will be subject to all applicable withholding taxes and the net amount will be
paid to you as soon as administratively feasible after your release has become irrevocable. For
sake of clarity under Internal Revenue Code section 409A, the net amount will in no case be paid
later than March 15 of the calendar year following the calendar year in which your termination of
employment occurs.

Additional Benefits. Your lump sum amount as determined above will be increased by an additional
amount equal to the premium for 12 months of group medical and/or dental coverage under HTI’s group
benefit plan(s). This additional benefit is only available if you are enrolled in HTI’s group
medical and/or group dental coverage on the date of your

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termination of employment, and will be calculated by reference to your coverage and enrollment level in effect as of your termination of
employment (i.e., medical employee only, medical and dental employee plus one, etc.).

Your coverage under HTI’s group benefit plan ceases as of the day of your termination of
employment. The payment of the additional benefit described above does not impact your right and
your family members’ right to continuation of medical and dental coverage under Internal Revenue
Code Section 4980B(f) or Section 602 of the Employee Retirement Income Security Act of 1974, as
amended (“COBRA”) or state law, nor does it provide for any payments or coverage under COBRA or
state law or HTI’s group benefit plan. You are solely responsible for timely electing and paying
all costs for continuation coverage under COBRA in accordance with the applicable group medical or
dental plan.

Reductions of Severance Benefits. The gross amount of your severance benefits under this Appendix
will be reduced by (1) the gross amount of any payments that HTI makes to you to satisfy its
obligations under the Worker Adjustment and Retraining Notification (“WARN”) Act or similar
federal, state, and local laws, (2) the gross amount of any salary or wages you are paid for a
period you are not working at HTI’s request after HTI has given you notice
under the WARN Act (or similar federal, state or local law) and prior to your termination of
employment, and (3) consistent with applicable laws, any amount you owe HTI as determined by HTI’s
Human Resources Department.

Outplacement Services. You will receive professional outplacement services at HTI’s expense. The
provider of outplacement services will be selected by HTI. The duration of these services will not
exceed 12 months, with such 12-month period beginning immediately following your termination of
employment (and in no event will reimbursement occur later than the end of the second calendar year
following your termination of employment).

15EX-4.1

Exhibit 4.1

FIRST AMENDMENT TO CREDIT AGREEMENT

     THIS FIRST AMENDMENT (this “Amendment”), dated as of April 21, 2009, amends and modifies a
certain Amended and Restated Credit Agreement, dated as of December 23, 2008 (the “Credit
Agreement”), among VARISTAR CORPORATION, a Minnesota corporation (the “Borrower”), BANK OF AMERICA,
N.A., KEYBANK NATIONAL ASSOCIATION and WELLS FARGO BANK, NATIONAL ASSOCIATION, as Co-Documentation
Agents, U.S. BANK NATIONAL ASSOCIATION, as Agent (in such capacity, the “Agent”), and the Banks, as
defined therein. Terms not otherwise expressly defined herein shall have the meanings set forth in
the Credit Agreement.

     FOR VALUE RECEIVED, the Borrower, the Banks and the Agent agree as follows.

ARTICLE I — AMENDMENTS TO THE CREDIT AGREEMENT

     The Credit Agreement is amended as follows.

     1.1 ERISA Affirmative Covenant. Section 8.9 is amended to read as follows (for
convenience of reference, added wording is underlined):

     “Section 8.9 ERISA. Maintain each Plan in compliance with all material
applicable requirements of ERISA and of the Code and with all material applicable rulings
and regulations issued under the provisions of ERISA and of the Code, including without
limitation minimum funding standards.”

     1.2 ERISA Negative Covenant. Section 9.3 is amended to read as follows:

     “Section 9.3 Plans. Permit any condition to exist in connection with any Plan
which might constitute grounds for the PBGC to institute proceedings to have such Plan
terminated or a trustee appointed to administer such Plan, permit any Plan to terminate
under any circumstances which would cause the lien provided for in Section 4068 of ERISA to
attach to any property, revenue or asset of the Borrower or any Subsidiary.”

For convenience of reference, prior to this Amendment, Section 9.3 had read as follows:

     “Section 9.3 Plans. Permit any condition to exist in connection with any Plan
which might constitute grounds for the PBGC to institute proceedings to have such Plan
terminated or a trustee appointed to administer such Plan, permit any Plan to terminate
under any circumstances which would cause the lien provided for in Section 4068 of ERISA to
attach to any property, revenue or asset of the Borrower or any Subsidiary or permit the
underfunded amount of Plan benefits guaranteed under Title IV of ERISA to exceed
$5,000,000.”

     1.3 ERISA Default. Section 10.1(i) is amended to read as follows:

 

 

“(i) The institution by the Borrower or any ERISA Affiliate of steps to terminate any Plan
if in order to effectuate such termination, the Borrower or any ERISA Affiliate would be
required to make a contribution to such Plan, or would incur a liability or obligation to
such Plan, and the requirement to make such contribution or the incurrence of such liability
or obligations shall constitute an Adverse Event, or the institution by the PBGC of steps to
terminate any Plan;”

For convenience of reference, prior to this Amendment, Section 10.1(i) had read as follows:

     “(i) The institution by the PBGC of steps to terminate any Plan;”

     1.4 Quarterly Financial Statements. Section 8.1(b) is amended by deleting “after the
end of each quarter of each fiscal year” and inserting “after the end of the first three quarters
of each fiscal year” in place thereof.

     1.5 Power Company Obligations. Schedule 12.1 was inadvertently omitted from the
Credit Agreement. Schedule 12.1 is attached to this Amendment and such attachment is deemed to be
the Schedule to the Credit Agreement. Subsequent to the closing of the Credit Agreement, Senior
Notes listed as item number 5 in Schedule 12.1 were reallocated as Power Company Obligations.

     1.6 Construction. All references in the Credit Agreement to “this Agreement”,
“herein” and similar references shall be deemed to refer to the Credit Agreement as amended by this
Amendment.

ARTICLE II — REPRESENTATIONS AND WARRANTIES

     To induce the Agent and the Banks to enter into this Amendment and to make and maintain the
Loans under the Credit Agreement as amended hereby, the Borrower hereby warrants and represents to
the Agent and the Banks that it is duly authorized to execute and deliver this Amendment, and to
perform its obligations under the Credit Agreement as amended hereby, and that this Amendment
constitutes the legal, valid and binding agreement of the Borrower, enforceable in accordance with
its terms.

ARTICLE III — CONDITIONS PRECEDENT

     This Amendment shall become effective on the date first set forth above, provided, however,
that the effectiveness of this Amendment is subject to the satisfaction of each of the following
conditions precedent:

     3.1 Warranties. Before and after giving effect to this Amendment, the representations
and warranties in Article VII of the Credit Agreement shall be true and correct as though
made on the date hereof, except for changes that are permitted by the terms of the Credit
Agreement. The
execution by the Borrower of this Amendment shall be deemed a representation that the Borrower has
complied with the foregoing condition.

2

 

     3.2 Defaults. Before and after giving effect to this Amendment, no Default and no
Event of Default shall have occurred and be continuing under the Credit Agreement. The execution
by the Borrower of this Amendment shall be deemed a representation that the Borrower has complied
with the foregoing condition.

     3.3 Documents. The Borrower, the Agent and the Required Bank shall have executed and
delivered this Amendment and the Material Subsidiaries shall have executed an Acknowledgment in the
form attached hereto.

ARTICLE IV — GENERAL

     4.1 Expenses. The Borrower agrees to reimburse the Agent upon demand for all
reasonable expenses (including reasonable attorneys’ fees and legal expenses) incurred by the Agent
in the preparation, negotiation and execution of this Amendment and any other document required to
be furnished herewith.

     4.2 Counterparts. This Amendment may be executed in as many counterparts as may be
deemed necessary or convenient, and by the different parties hereto on separate counterparts, each
of which, when so executed, shall be deemed an original but all such counterparts shall constitute
but one and the same instrument.

     4.3 Severability. Any provision of this Amendment which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining portions hereof or
affecting the validity or enforceability of such provisions in any other jurisdiction.

     4.4 Law; Consent to Jurisdiction; Waiver of Jury Trial. This Amendment shall be a
contract made under the laws of the State of Minnesota, which laws shall govern all the rights and
duties hereunder. This Amendment shall be subject to the Consent to Jurisdiction and Waiver of
Jury Trial provisions of the Credit Agreement.

     4.5 Successors; Enforceability. This Amendment shall be binding upon the Borrower,
the Agent and the Banks and their respective successors and assigns, and shall inure to the benefit
of the Borrower, the Agent and the Banks and the successors and assigns of the Agent and the Banks.
Except as hereby amended, the Credit Agreement shall remain in full force and effect and is hereby
ratified and confirmed in all respects.

     IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by their
respective officers thereunto duly authorized as of the date first written above.

(signature pages follow)

3

 

	 	 	 	 	 	 	 
	 	 	VARISTAR CORPORATION	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Kevin Moug 	 	 
	 

	 	Title:
	 	 

Chief Financial Officer & Treasurer
	 	 
	 
	 	 	 	 	 	 
	 	 	U.S. BANK NATIONAL ASSOCIATION,

as Agent, and as a Bank	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Delton Steele 	 	 
	 

	 	Title:
	 	 

VP/Senior Lender
	 	 
	 
	 	 	 	 	 	 
	Banks:	 	BANK OF AMERICA, N.A.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ A. Quinn Richardson 	 	 
	 

	 	 	 	 

Title: Senior Vice President
	 	 
	 
	 	 	 	 	 	 
	 	 	KEYBANK NATIONAL ASSOCIATION	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 

[not executed]
	 	 
	 
	 	 	 	 	 	 
	 	 	WELLS FARGO BANK, NATIONAL	 	 
	 	 	ASSOCIATION	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Keith Luettel 	 	 
	 

	 	Title:
	 	 

Assistant Vice President
	 	 

(signature page to First Amendment)

 

 

	 	 	 	 	 	 	 
	 	 	JPMORGAN CHASE BANK, N.A.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Nancy R. Barwig 	 	 
	 

	 	Title:
	 	 

Vice President
	 	 
	 
	 	 	 	 	 	 
	 	 	BANK OF THE WEST	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 

[not executed]
	 	 
	 
	 	 	 	 	 	 
	 	 	UNION BANK OF CALIFORNIA, N.A.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 

[not executed]
	 	 

(signature page to First Amendment)

 

 

GUARANTORS’ ACKNOWLEDGMENT

     Pursuant to the terms of a Guaranty, dated as of December 23, 2008 (the “Guaranty”), the
undersigned (the “Guarantors”) have jointly and severally guaranteed payment and performance of
obligations of Varistar Corporation (the “Borrower”) under that certain Amended and Restated Credit
Agreement, dated as of December 23, 2008 among the Borrower, the Banks named therein and U.S. Bank
National Association, as Agent (as amended, the “Credit Agreement”) and under agreements and
documents related to the Credit Agreement as specified in the Guaranty. Each Guarantor
acknowledges that it has received a copy of the proposed First Amendment to the Credit Agreement,
to be dated on or about April 21, 2009 (the “Amendment”). Each Guarantor agrees and acknowledges
that the Amendment shall in no way impair or limit the right of the Agent or the Banks under the
Guaranty, and confirms that by the Guaranty, such Guarantor continues to guaranty payment and
performance of the obligations of the Borrower to the Banks under the Credit Agreement as amended
pursuant to the Amendment. Each Guarantor hereby confirms that the Guaranty remains in full force
and effect, enforceable against such Guarantor in accordance with its terms.

Dated as of April 21, 2009

	 	 	 
	 

	 	BTD Manufacturing, Inc.
	 

	 	DMI Industries, Inc.
	 

	 	DMS Health Technologies, Inc.
	 

	 	DMS Imaging, Inc.
	 

	 	Foley Company
	 

	 	Idaho Pacific Holdings, Inc.
	 

	 	Aevenia, Inc. f/k/a/ Midwest Construction
Services, Inc.
	 

	 	Northern Pipe Products, Inc.
	 

	 	ShoreMaster, Inc.
	 

	 	Vinyltech Corporation
	 

	 	Idaho Pacific Corporation
	 

	 	Miller Welding & Iron Works, Inc.

	 	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Kevin Moug 	 	 
	 

	 	 	 	 

	 	 
	 

	 	Title:
	 	Treasurer	 	 

 

 

Schedule 12.1

Senior Indebtedness Agreements and Notes

to constitute Power Company Obligations following

Permitted Reorganization

     1. Notes issued under the Note Purchase Agreement, dated as of August 20, 2007, as thereafter
amended, between Otter Tail Corporation and the Noteholders named therein consisting of:

     (i) $33,000,000, 5.95% Senior Unsecured Notes, Series A, due 2017;

     (ii) $30,000,000, 6.15% Senior unsecured Notes, Series B, due 2022;

     (iii) $42,000,000, 6.37% Senior Unsecured Notes, Series C, due 2027; and

     (iv) $50,000,000, 6.47% Senior Unsecured Notes, Series D, due 2037.

     2. $20,790,000, Mercer County, North Dakota Pollution Control Refunding Revenue Bonds (Otter
Tail Corporation Project) Series 2001.

     3. $10,400,000, Grant County, South Dakota Pollution Control Refunding Revenue Bonds (otter
Tail Power Corporation Project) Series 1993.

     4. $5,185,000, Grant County, South Dakota Pollution Control Refunding Revenue Bonds (otter
Tail Power Corporation Project) Series 2001.

     5. $70,000,000, 6.63% Senior Notes due December 1, 2011, issued under the Note Purchase
Agreement, dated as of December 1, 2001, as thereafter amended, between Otter Tail Corporation and
the Noteholders party thereto.

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