Document:

EX-10.1

EXHIBIT 10.1

Description of 2005 Non-Employee Director Compensation

Annual Retainers and Meeting Fees. Each of our non-employee directors, upon election to our
board of directors at our 2005 annual meeting of shareholders, will receive a $25,000 annual
retainer for service on our board of directors in 2005, with 50% of the annual retainer fee payable
on or about the date of the annual meeting and 50% payable on or about August 15, 2005. In
addition, each non-employee director also will receive a fee of $1,250 for each board of directors
meeting attended in person or by conference call, and $1,250 for each board committee meeting
attended by the non-employee director. Each member of our audit committee will receive an annual
retainer of $4,000 for serving as a member of our audit committee and the chair of the audit
committee will receive an additional $8,000 annual retainer. The chairs of our compensation
committee and governance and nominating committee each will receive an annual retainer of $4,000
for serving in these roles. The committee retainer fees are payable on or about August 15, 2005.
Each non-employee director may elect to receive, in lieu of the cash retainer fees, shares of
restricted stock issued under our 1996 Incentive Plan.

Option Grants. Following our 2005 annual meeting of shareholders, each non-employee director
elected to our board of directors on that date will receive an option pursuant to our 1996
Incentive Plan to purchase 3,000 shares of common stock at the fair market value per share of our
common stock at the time the option is granted. These options will not be exercisable for one year
after the date of grant.EX-10.2

EXHIBIT 10.2

HUTCHINSON TECHNOLOGY INCORPORATED

RESTRICTED STOCK AGREEMENT

THIS AGREEMENT is made as of    , 200   , between Hutchinson Technology Incorporated, a
Minnesota corporation (the “Company”), and    (the “Director”).

Recitals

A. The Board of Directors of the Company (the “Board”) has approved a restricted stock program
for non-employee directors whereby said directors may irrevocably elect to receive, in lieu of cash
payments, all or any portion of the annual retainer fee of $   (the “Annual Retainer”)
paid to each non-employee director in the form of restricted stock. *[In addition, non-employee
directors may elect to receive, in lieu of cash payments, all or any portion of the fees related to
service on committees of the Board (the “Committee Retainer”), other than individual meeting
attendance fees, in the form of restricted stock.]

B. The Hutchinson Technology Incorporated 1996 Incentive Plan (the “Plan”) permits the Company
to make certain awards to non-employee directors, including awards of Shares, as defined in the
Plan.

C. The Director has made an election, dated as of December 31, 200   , *[(i)] to receive    %,
or $   , of the Annual Retainer for the six-month period commencing *[on the date of / six
months after the date of] the Company’s Annual Meeting of Shareholders in the year first above
written (at which meeting the Director was elected to the Board), *[and (ii) to receive    %, or
$   , of the Committee Retainer for the year commencing as of the date of the Company’s Annual
Meeting of Shareholders in the year first above written] in the form of restricted stock, provided
that said Director remains a member of the Board and committee on the dates such Annual Retainer
*[and Committee Retainer] become*[s] payable, and the Company has determined to make an award of
restricted stock to the Director under the Plan, such award to be governed by the terms of the Plan
and this Agreement.

Terms and Conditions

NOW, THEREFORE, the Company and the Director mutually agree as follows:

1. Grant of Restricted Stock.

(a) Subject to the terms and conditions of the Plan and of this Agreement (and subject to
execution of this Agreement by the Director), the Company hereby grants to the Director    
Shares, which number of Shares (rounded down to the nearest whole share) is equal to (i) 1.25 times
the dollar amount of the portion of the Annual Retainer *[and Committee Retainer] payable as of the
date hereof and as to which an election by the Director has been made, divided by (ii) the fair
market value of a Share. Such Shares are subject to the restrictions provided for herein and are
referred to collectively as the “Restricted Shares” and each as a “Restricted Share.” For purposes
of this Agreement, “fair market value” of a Restricted Share shall be defined as the mean between
the high and low sale prices of a share of Company common stock on the date hereof or the most
recent Nasdaq National Market trading date to the date hereof.

(b) Each Restricted Share shall be evidenced by a duly issued stock certificate (which may
represent more than one Restricted Share) registered in the name of the Director. The Director
shall have all rights of a shareholder of the Company with respect to each Restricted Share
(including voting rights and the right to receive dividends and other distributions), except that
all restrictions provided for in this Agreement shall apply to each Restricted Share and to any
other securities distributed with respect to such Restricted Share. Each Restricted Share shall
remain restricted and subject to forfeiture by the Director to the Company unless and until such
Restricted Share has vested in the Director in accordance with all terms and conditions of this
Agreement. Each stock certificate evidencing any Restricted Share shall contain such legends and
stock transfer instructions or limitations as may be determined or authorized by the Board, in its
sole discretion, or the Chief Executive Officer of the Company, in his sole discretion; and the
Company may, in its sole discretion, retain custody of any such certificate throughout the period
during which any restrictions are in effect and require, as a condition to issuing any such
certificate, that the Director tender to the Company a stock power duly executed in blank relating
thereto.

2. Normal Vesting. Notwithstanding paragraph 4 of this Agreement, the Restricted
Shares that have not previously been forfeited shall vest immediately upon the first to occur of
the following events:

(a) Death of the Director;

	 	(b)	 	Disability of the Director preventing continued service as a
member of the Board;

	 	(c)	 	Retirement of the Director from the Board in accordance with
the policy on retirement of directors then in effect;

	 	(d)	 	Termination of service as a member of the Board with the
consent of a majority of the other members of the Board;

	 	(e)	 	Termination of service as a member of the Board resulting from
not being nominated for re-election or not being elected as a director of the
Company; or

(f) A Change in Control as defined in paragraph 12 of the Plan.

3. Issuance of Unrestricted Shares. Upon the vesting of any Restricted Shares, all
restrictions on such Restricted Shares will lapse, and the Company will, subject to the provisions
of the Plan, issue to the Director a certificate evidencing the Restricted Shares that is free of
any transfer or other restrictions arising under this Agreement.

4. Forfeiture and Transfer Restrictions.

(a) Upon the occurrence of a “Forfeiture Event” (as defined below), Restricted Shares that are
not vested pursuant to paragraph 2 of this Agreement shall be forfeited by the Director to the
Company. The Director shall thereafter have no right, title or interest whatever in such
Restricted Shares, and the Director shall immediately return to the Company any and all
certificates representing Restricted Shares so forfeited, duly endorsed in blank or accompanied by
a stock power duly endorsed in blank. A “Forfeiture Event” shall be defined as any of the
following events:

	 	(i)	 	the Director ceases to serve as a member of the
Board other than in the circumstances described in paragraph 2; or

	 	(ii)	 	the Director attempts to transfer or otherwise
dispose of any of the Restricted Shares.

(b) Until the Restricted Shares have become vested under paragraph 2 hereof, the Director
shall not transfer such Restricted Shares, and such Restricted Shares shall not be subject to
pledge, hypothecation, execution, attachment or similar process. Any attempt to sell, assign,
transfer, pledge, hypothecate or otherwise dispose of any Restricted Shares contrary to the
provisions hereof, and any attempt to levy any attachment or pursue any similar process with
respect to them, shall be null and void.

5. Miscellaneous. This Agreement is entered into pursuant to the Plan and is subject
to all of the terms and conditions contained in the Plan, a copy of which previously has been
delivered to the Director. This Agreement shall be binding in all respects on the Director’s
heirs, representatives, successors and assigns. This Agreement shall be binding upon and inure to
the benefit of any successor of the Company. This Agreement shall be governed by and construed in
accordance with the laws of the State of Minnesota. This Agreement contains all terms and
conditions with respect to the subject matter hereof, and no amendment, modification or other
change hereto shall be of any force or effect unless and until set forth in a writing executed by
the Director and the Company.

IN WITNESS WHEREOF, the Director has executed this Agreement and the Company has caused this
Agreement to be executed by its duly authorized officer, all as of the day and year first above
written.

*[Name], Director

HUTCHINSON TECHNOLOGY INCORPORATED

By:

Name:

Title:Exhibit 10.4

Exhibit 10.4

Beazer Homes USA, Inc.

2005 Value Created Incentive Plan 

Effective October 1, 2004

 

Participation

Participation in the 2005 Value Created Incentive Plan (“VCIP” or “Plan”) is at the discretion of the Compensation Committee of the Board of Directors and is generally available only to designated senior managers who are full-time employees of Beazer Homes USA, Inc. and its divisions and subsidiaries. Any participant who ceases to be a full-time employee will cease participation in the Plan at that time. Other employees may be compensated based on variations of the Plan; however, such variations will not be considered to be part of this Plan. Employees in Corporate positions of Senior Vice President and above are not participants in this Plan. Certain modifications to the Plan, described in Addendum A, apply to Senior Regional Presidents only.

Definitions

EBIT - Earnings Before Interest and Taxes. 

Value Created (VC) - EBIT less a Capital Charge based on Capital Employed. 

Incremental Value Created (IVC) - Increase or decrease in Value Created compared to the prior year. 

Capital Employed - Total Assets, excluding cash less Total Liabilities (other than debt). Also equal to total debt plus total equity, less cash on hand. This represents the total book value of the investment in the business. Capital Employed is determined monthly, and the annual measure is an average of the year’s twelve monthly measures. 

Capital Charge - A charge for the use of Capital Employed in the business. For the Plan, the basic Capital Charge is 14% of the Capital Employed. The Capital Charge for purposes of this Plan shall be determined from time to time by, and may be adjusted individually or for the participants as a whole, at the discretion of the Compensation Committee of the Board of Directors.

Adjustments to Capital Charge - The Compensation Committee, in its sole discretion, may approve objectively measurable adjustments to the Capital Charge, and therefore to VC and IVC, in recognition of special circumstances or to provide special incentives in the long term interests of value creation. As an example, in 2005, a credit will be granted for purchases of land in advance of the immediate need for developments which qualify for, and are designated as, parcels for the Beazer Strategic Land Bank, thereby encouraging commitments for future land developments.

	 
	 	 	 
	

	 

 

Beazer Homes USA, Inc.

2005 Value Created Incentive Plan 

 

 

Plan Rules

	1.	Initial Bank

		Each participant may have a bank set up when they enter the Plan. The maximum initial amount in the bank is half of the participant’s salary. The initial amount in the Bank under this Plan for participants who participated in any of the Company’s prior VCIPs is their former bank balance adjusted pursuant to Section 6.

 

	2.	Funding of the Potential Annual Awards, and Percentages of VC and IVC

		Each year, the participant’s potential award will be funded based upon a set percentage of VC (if positive) and a set percentage of IVC (if positive). The percentage used of VC will vary based upon the level of VC and will decrease as VC increases. The percentage of IVC is fixed regardless of the level of VC or IVC. Exact percentages are determined by the participant’s position. Actual incentive payments to each participant are subject to adjustments for three additional performance factors: (a) Profitable Growth, (b) Customer Satisfaction and (c) Construction Quality and Workplace Safety. These additional factors are outlined in Section 9.

	3.	Same Percentages of VC and IVC Put in Bank

		Each year, the same percentage of VC and the same percentage of IVC used in 2, above, are also put into a bank. Unlike the annual payment, however, both positive and negative numbers are put in the bank. The bank balance can become negative. The bank is subject to a maximum limit (see Section 6). 

	4.	One-Third of Bank Paid Out Each Year

		Each year, after adding or subtracting the current year’s amounts to the bank, one-third of the bank is paid out.

	5.	Maximum Cash Payment Under Plan Is Set Multiple of Salary; Excess in Bank

		Subject to Section 10 below, the maximum annual cash payment is determined as a set multiple of the participant’s annual salary for that year. The multiple increases as VC increases. Any excess over the maximum amount remains in the bank, subject to the limit described in Section 6. 

	6.	Bank Has Maximum Limit, Excess Paid in Restricted Stock and/or Deferred Compensation

		The maximum balance of the bank, after current year additions and payments, is equal to one time that year’s maximum cash payment. Twenty-five percent (25%) of any amount over this limit will be awarded in a combination of restricted stock and/or deferred compensation (see Section 13). The remaining 75% of that excess is forfeited. Any restricted stock and/or deferred compensation will vest three years after the end of the fiscal year and is forfeited upon severance, resignation, retirement, death, or termination for any reason before vesting.

	7.	Ten Percent of Bank Paid in Deferred Compensation

		At the end of each year, 10% of the ending bank, after current year adjustments, cash payments and any reduction for excess over maximum limit, will be awarded as deferred compensation. Such deferred compensation will vest three years after the end of the fiscal year and is forfeited upon severance, resignation, retirement, death, or termination for any reason before vesting.

	8.	Bank Is Carried Forward And Is Lost Upon Termination

		The bank balance, positive or negative, is carried forward to the next year. Any positive balance in the bank is at risk and may be reduced or eliminated by performance in subsequent years. The bank is forfeited upon severance, resignation, retirement, death, or termination for any reason. The bank is also forfeited when any participant ceases to be a full-time employee. The bank is not deferred compensation. It represents future bonus potential based upon a combination of both past and future performance.

	 
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Beazer Homes USA, Inc.

2005 Value Created Incentive Plan 

 

	9.	Additional Performance Factors-Adjustments to Potential Annual Payment 

		Actual Incentive Payments are funded based upon 100% of the calculated Value Created and Incremental Value Created results up to the maximum amount, and are adjusted by the following performance factors and percentages. The Compensation Committee shall adopt from time to time a schedule showing the percentage adjustments based on scores or other elements achieved with respect to the following:

	 	
(a)
	
Profitable Growth:
	
0% to +10%

	
 
	
(b)
	
Customer Satisfaction:
	
-10% to +5%

	
 
	
(c)
	
Construction Quality and Workplace Safety:
	
-10% to +5%

		Actual incentive payments adjustments can vary from -20% to +20% of the amount that would be payable under VCIP before performance factor adjustments. Each factor is outlined below.

		(a) Profitable Growth: To encourage growth in both revenue and profit margin, with a higher weighting toward improving profit margin as compared to revenue growth. However, no positive adjustment to the incentive payment would occur without revenue growth over the prior year.

		(b) Customer Satisfaction: To encourage customer service, referrals, and Beazer brand development, adjustments will occur based upon the results of customer satisfaction surveys:

	 	
Recommend to a Friend:
	
-5% to + 2.5%

	 	
Total Satisfaction:
	
-2.5% to + 1.25%

	 	
Overall Service Satisfaction: 
	
-2.5% to +1.25% 

(c) Construction Quality and Workplace Safety: To encourage high standards of construction, workplace safety, and administrative process, Construction and Safety Evaluation scores will be used to adjust incentive payments using the following percentages:

	 	
Construction Quality:
	
-2.5% to +1.25% 

	 	
Workplace Safety:
	
-2.5% to +1.25% 

	 	
Overall Score:
	
-5% to +2.5% 

	 	 	 
	 	 Overall Score incorporates Construction, Safety and the Administrative factors of Engineering, Purchasing, and Insurance.

 

 

	10.	Election to Defer Portion of Annual Cash Payment

		Participants may elect to defer a portion of the cash bonus under the Corporate Management Stock Purchase Program (CMSPP) and/or the Deferred Compensation Plan (DCP) no later than the December 31st preceding the calendar year to which a bonus relates, Details of the CMSPP and the DCP are available separately from the Corporate Human Resources Department.

	11.	Annual Total Award Limit

		The maximum total amount of cash, restricted stock (valued at the current stock price) and deferred compensation paid and/or awarded to any participant in any one year is $5,000,000 excluding the Performance Factor adjustments, and $6,000,000 including the Performance Factor adjustments.

	 
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Beazer Homes USA, Inc.

2005 Value Created Incentive Plan 

	12.	Payments At Discretion of Compensation Committee; Review and Amendment

		Payments under this Plan are made subject to the sole discretion of the Compensation Committee of the Board of Directors. Without limiting the foregoing, the Committee may reduce or disallow any payment or award under this Plan on a case-by-case basis in appropriate circumstances, including the following: (a) if a participant has breached any corporate policy or ethical standard, or (b) if a participant has pursued any particular business policy to advance self-interest at the expense of the interests or policies of the Company, provided that no such reduction or disallowance shall be allowed to cause an increase in any other participant’s payment or award under this Plan. Annually, the Compensation Committee will review and confirm the calculations of payments and awards to be made and document such review in writing prior to such payments and awards being made. The Compensation Committee intends to review the Value Created Incentive Plan for potential changes at least every three years and reserves the right to amend it for any fiscal year prior to the commencement of such fiscal year, subject to shareholder approval if required by law or the rules of the NYSE.

	13.	Restricted Stock And Deferred Compensation

		Restricted stock awarded under this Plan is awarded based upon the closing stock price as of the date of such award. The combination of restricted stock and deferred compensation to be awarded under Section 6 will be determined by the Compensation Committee based upon an aggregate limitation of 40,000 shares of restricted stock in any one year. Restricted stock and deferred compensation awarded under this Plan are subject to the terms of any Beazer plan under which such restricted stock is issued or deferred compensation is awarded above; such reduction will be made pro rata among those participants receiving restricted stock.

	14.	Status of Value Created Incentive Plan and Tax Deductibility 

		This VCIP is effective October 1, 2004. The prior VCIP is terminated as of September 30, 2004 for the participants under this Plan.

	15.	Senior Regional Presidents 

		Senior Regional Presidents will be subject to variations of the Plan as described in Addendum A, provided to Senior Regional Presidents.

	 
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Beazer Homes USA, Inc.

2005 Value Created Incentive Plan 

Addendum A

Senior Regional Presidents (SRPs) will be subject to the terms of the 2005 VCIP with the following exceptions:

	 	1.	Capital Charge: The Capital Charge is currently 11% of Average Capital Employed, but may be adjusted by the Compensation Committee from time to time.

	 	2.	Adjustments to Capital Charge: Twenty percent (20%) of all land purchased each year will qualify as Strategic Land Bank acquisitions, the effect of which will be a reduction of the capital charge by 11% of the qualifying 20%.

	 	3.	Participation in the Consolidated Performance: To encourage inter-regional cooperation for the benefit of the Company as a whole, SRPs will have an upward or downward adjustment in their bonus payment by participation in the financial performance of the consolidated corporation. In principle, 75% of their bonus will be dependent on regional performance and 25% on the performance of the total Company. To determine the corporate bonus factor, a “corporate” sheet will be prepared using: 

	 	a.	Corporate financial performance data for VC, IVC, Profitable Growth, Customer Satisfaction and Construction Quality and Workplace Safety. Any appropriate adjustments in the corporate sheet for Land Bank acquisitions or excess cash balances will also be utilized.

	 	b.	The SRP’s individual salary and bonus cap multiples.

	 	c.	Percentages applied to VC and IVC as determined specifically for the SRPs by the Compensation Committee and subject to change by the Compensation Committee from time to time.

	 	d.	Opening bank that is the same each year as the SRP’s regional opening bank.

	 	4.	Combining: The resulting indicated corporate bonus is then combined with the bonus that would be paid on the region’s performance alone, with a 25% weight to the corporate bonus and a 75% weight applied to the regional bonus, to determine the actual bonus to be paid. The result could be higher or lower than the regional bonus alone. The regional performance calculations alone will be used to determine the SRP’s bank, deferred compensation, and conversion of excess bank balance, if any. The SRP’s cash payment will be calculated based on the weightings of 25% corporate and 75% regional performance, as outlined above.

	 
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