Exhibit 10.1
EMPLOYMENT AGREEMENT
P R E A M B L E
This Employment Agreement defines the essential terms and conditions of our
employment relationship with you. The subject covered in the Agreement are
vitally important to you and to the Company. Thus, you should read the document
carefully and ask any questions before signing the Agreement.
This EMPLOYMENT AGREEMENT between John J. Greisch (“Executive”) and Hill-Rom
Holdings, Inc. (“Company”) is dated this 6th day of January, 2010 and effective
on the 8th day of January, 2010.
W I T N E S S E T H:
WHEREAS, the Company and its affiliated entities are engaged in the healthcare
industry throughout the United States and abroad including, but not limited to,
the design, manufacture, sale, service and rental of hospital beds and
stretchers, hospital furniture, medical-related architectural products,
specialty sleep surfaces (including therapeutic surfaces), air clearing devices,
biomedical and asset management services, as well as other medical-related
accessories, devices, products and services;

 

 

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WHEREAS, the Company is willing to employ Executive in an executive or
managerial position and Executive desires to be employed by the Company in such
capacity based upon the terms and conditions set forth in this Agreement;
WHEREAS, in the course of the employment contemplated under this Agreement, it
will be necessary for Executive to acquire and maintain knowledge of certain
trade secrets and other confidential and proprietary information regarding the
Company as well as any of its parent, subsidiary and/or affiliated entities
(hereinafter jointly referred to as the “Companies”); and
WHEREAS, the Company and Executive (collectively referred to as the “Parties”)
acknowledge and agree that the execution of this Agreement is necessary to
memorialize the terms and conditions of their employment relationship as well as
safeguard against the unauthorized disclosure or use of the Company’s
confidential information and to otherwise preserve the goodwill and ongoing
business value of the Company;
NOW THEREFORE, in consideration of Executive’s employment, the Company’s
willingness to disclose certain confidential and proprietary information to
Executive and the mutual covenants contained herein as well as other good and
valuable consideration, the receipt of which is hereby acknowledged, the Parties
agree as follows:

1.  
Employment. As of January 8, 2010, Executive’s first date of employment with the
Company as determined by, and reflected in a resolution approved by, the Board
of Directors of the Company (“Start Date”), the Executive agrees to serve as
President and Chief Executive Officer of the Company, reporting to the Board of
Directors of the Company. Executive agrees to perform all duties and
responsibilities traditionally assigned to, or falling within the normal
responsibilities of, an individual employed as President and Chief Executive
Officer of the Company. Executive also agrees to perform any and all additional
duties or responsibilities consistent with such position as may be assigned by
the Board of Directors of the Company in its sole discretion.

 

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2.  
Best Efforts and Duty of Loyalty. During the term of employment with the
Company, Executive covenants and agrees to exercise reasonable efforts to
perform all assigned duties in a diligent and professional manner and in the
best interest of the Company. Executive agrees to devote his full working time,
attention, talents, skills and best efforts to further the Company’s business
interests. Executive agrees not to engage in any outside business activity,
whether or not pursued for gain, profit or other pecuniary advantage, without
the express written consent of the Company. Executive shall act at all times in
accordance with the Company’s Code of Ethical Business Conduct, and all other
applicable policies which may exist or be adopted by the Company from time to
time. The Executive may serve on other boards of directors as shall not
interfere with the proper performance of his duties and obligations hereunder
consistent with the Company’s Corporate Governance Standards for Board of
Directors and applicable laws, with the prior consent of the Company. The
Company’s Board of Directors (“Board”), has appointed the Executive to the Board
on the date of this Agreement subject to the requirement that he stand for
re-election at the next annual meeting of shareholders of the Company at which
he otherwise would have been required under the Company’s Articles of
Incorporation or Bylaws to stand for re-election. Executive shall not be
entitled to receive compensation for his service as a member of the Board of
Directors of the Company.

 

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3.  
At-Will Employment. Subject to the terms and conditions set forth below,
Executive specifically acknowledges and accepts such employment on an “at-will”
basis and agrees that both Executive and the Company retain the right to
terminate this relationship at any time, with or without cause, for any reason
not prohibited by applicable law upon notice as required by this Agreement.
Executive acknowledges that nothing in this Agreement is intended to create, nor
should be interpreted to create, an employment contract for any specified length
of time between the Company and Executive.

4.  
Compensation. For all services rendered by Executive on behalf of, or at the
request of, the Company, in his capacity as President and Chief Executive
Officer of the Company, Executive shall be compensated as follows from and after
the Start Date, subject to withholding for payment of any and all applicable
federal, state and local payroll and withholding taxes.

  (a)  
Base Salary. For the services performed by him under this Agreement, the Company
shall pay Executive a base salary of Eight Hundred Thousand Dollars ($800,000)
per year, pro rated for the period which Executive serves (“Base Salary”). The
Base Salary shall be paid in the same increments as the Company’s normal
payroll, but no less frequently than monthly and prorated for any period less
than a full month. Executive’s Base Salary shall be reviewed at least annually,
with the initial review taking place during the fourth quarter of 2010.

 

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  (b)  
STIC Bonus. Incentive compensation, payable solely at the discretion of the
Board of Directors of the Company, pursuant to the Company’s existing Incentive
Compensation Program or any other program as the Company may establish from time
to time in its sole discretion. For each fiscal year, the annual performance
bonus target will be not less than 100% of base salary earned during such fiscal
year. Bonus will be based upon the performance measure and objectives
established by the Board from time to time, in consultation with the Executive,
but ultimately subject to the Compensation and Management Development
Committee’s (“CMDC”) discretion. Minimum bonus will be 0% of target and maximum
bonus will be 200% of target. Solely for fiscal year ending September 30, 2010,
guaranteed minimum payout will be 60% of base salary earned during the
performance year, or whatever is earned under the plan program, whichever is
greater, subject to Executive’s employment not having been terminated by the
Company or by the Executive, for any reason, prior to the end of the Company’s
2010 fiscal year.

  (c)  
Sign-On Restricted Stock Units. On the Start Date, Executive will receive an
award with a value on the date of grant of $800,000 of restricted stock units
(otherwise known as deferred stock awards) (“RSUs”) under the terms and
conditions of a Stock Award Agreement and the related Company Stock Incentive
Plan. Such RSUs shall vest in twenty percent, thirty percent, and fifty percent
increments on the day after the dates of each of the second, third, and fourth
year anniversaries of the Start Date, respectively.

 

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  (d)  
Stock Options. On the Start Date, Executive will receive a grant of stock
options, with a value on the date of grant of $2,000,000 on such date using the
Black-Scholes valuation method, under the terms and conditions of a Stock Option
Agreement and the related Company Stock Incentive Plan. Each option will
terminate in ten years, have an exercise price per share equal to the average of
the high and low prices of the Common Stock on the Start Date in accordance with
Company practice and vest in one-quarter increments over a four-year period from
the Start Date.

  (e)  
Long-Term Incentive Plan. The Executive will be eligible to participate in the
long-term incentive plan in place at the time and as authorized by the CMDC, at
the time of the normal equity grant, with the first year’s value of 350% of base
salary. The Award is expected to be comprised of stock options and performance
shares, in combination or exclusively, realizing the proportional mix may change
over time in consultation with the Executive and the Board. It is expected that
the first year grant will consist of stock options and performance shares with
each comprising 50% of the overall value with the number of options based upon
the Black-Scholes value of such options. These guidelines may change from time
to time as determined by the CMDC in its sole discretion.

  (f)  
Retirement Plans. Commencing on the Start Date, Executive will be entitled to
participate in Company retirement plans (e.g., 401(k) Savings Plan and
Supplemental Executive Retirement Plan) consistent with plans, programs or
policies available to other senior executive officers of the Company and subject
to satisfaction of any applicable eligibility requirements.

 

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  (g)  
Other Benefits. Commencing on the Start Date, Executive will be entitled to
participate in and receive such additional benefits and perquisites, including
health and welfare benefits, as are available to other senior executives of the
Company and as the Board of Directors of Company may deem appropriate and as
pre-approved by the Compensation and Management Development Committee of the
Board.

  (h)  
Relocation. Executive will be paid a flat fee of $200,000 to cover all
relocation costs once a residence is purchased by him within 75 miles of
Batesville, IN. Up to $50,000 of this amount may be used during the first
6 months of his employment to obtain temporary housing.

5.  
Changes to Compensation. Notwithstanding anything contained herein to the
contrary, Executive acknowledges that the Company specifically reserves the
right to make changes to Executive’s compensation in its sole discretion
including, but not limited to, modifying or eliminating a compensation
component. The Parties agree that such changes shall be deemed effective
immediately and a modification of this Agreement unless, within thirty (30) days
after receiving notice of such change, Executive exercises his right to
terminate this Agreement without cause or for “Good Reason” in the event
Executive is not treated in a manner that is commensurate with the treatment of
other senior executives of the Company, if applicable, as provided below in
Paragraphs Nos. 9 and 11.

 

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6.  
Direct Deposit. As a condition of employment, and within thirty (30) days of the
Start Date of this Agreement, Executive agrees to make all necessary
arrangements to have all sums paid pursuant to this Agreement direct deposited
into one or more bank accounts as designated by Executive.

7.  
Predecessor Employers. Except as otherwise disclosed in writing to the
Compensation Committee of the Board prior to the date hereof Executive warrants
that he is not a party to any contract, restrictive covenant, or other agreement
purporting to limit or otherwise adversely affecting his ability to secure
employment with any third party. Alternatively, should any such agreement exist,
Executive warrants that the contemplated services to be performed hereunder will
not violate the terms and conditions of any such agreement.

8.  
Restricted Duties. Executive agrees not to disclose, or use for the benefit of
the Company, any confidential or proprietary information belonging to any
predecessor employer(s) that otherwise has not been made public and further
acknowledges that the Company has specifically instructed him not to disclose or
use such confidential or proprietary information. Based on his understanding of
the anticipated duties and responsibilities hereunder, Executive acknowledges
that such duties and responsibilities will not compel the disclosure or use of
any such confidential and proprietary information.

9.  
Termination Without Cause. The Parties agree that either party may terminate
this employment relationship at any time, without cause, upon sixty (60) days’
advance written notice or, if terminated by the Company, pay in lieu of notice
(hereinafter referred to as “notice pay”). In such event, Executive shall only
be entitled to such compensation, benefits and perquisites that have been paid
or fully accrued as of the effective date of his separation and as otherwise
explicitly set forth in this Agreement. However, in no event shall Employee be
entitled to notice pay if Employee is eligible for and accepts severance
payments pursuant to the provisions of Paragraphs 16 and 17, below.

 

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10.  
Termination With Cause. Executive’s employment may be terminated by the Company
at any time “for cause” without notice or prior warning. For purposes of this
Agreement, “cause” shall mean the Company’s good faith determination that
Executive has:

  (a)  
Acted with gross neglect or willful misconduct in the discharge of his duties
and responsibilities, or refused to follow or comply with the lawful direction
of the Board of Directors of the Company or the terms and conditions of this
Agreement providing such refusal is not based primarily on Employee’s good faith
compliance with applicable legal or ethical standards.

  (b)  
Acquiesced or participated in any conduct that is dishonest, fraudulent,
illegal, unethical, involves moral turpitude or is otherwise illegal and
involves conduct that has the potential, in the Board of Directors’ reasonable
opinion, to cause the Company, its officers or its directors significant
embarrassment or ridicule;

  (c)  
Violated a material requirement of any Company policy or procedure, specifically
including a violation of the Company’s Code of Ethics or Associate Policy
Manual;

 

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  (d)  
Disclosed without proper authorization any trade secrets or other Confidential
Information (as defined herein);

  (e)  
Engaged in any act that, in the reasonable opinion of the Board of Directors of
the Company would hold the Company, its officers or directors up to probable
civil or criminal liability, provided that, if Executive acts in good faith for
compliance with applicable legal or ethical standards, such actions shall not be
grounds for termination for cause;

  (f)  
Breached the warranties of Executive set forth in Paragraph 7 herein; or

  (g)  
Engaged in such other conduct recognized at law as constituting cause.

Upon the occurrence or discovery of any event specified above, the Company shall
have the right to terminate Executive’s employment, effective immediately, by
providing notice thereof to Executive without further obligation to him other
than accrued wages or other accrued wages, deferred compensation or other
accrued benefits of employment (collectively refereed to herein as “Accrued
Obligations”), which shall be paid in accordance with the Company’s past
practice and applicable law. To the extent any violation of this Paragraph is
capable of being promptly cured by Executive (or cured within a reasonable
period to the Company’s satisfaction), the Company agrees to provide Executive
with a reasonable opportunity to so cure such defect. Absent written mutual
agreement otherwise, the Parties agree in advance that it is not possible for
Executive to cure any violations of sub-paragraphs (b), (d) or (f) and,
therefore, no opportunity for cure need be provided in those circumstances.
Notwithstanding the foregoing, the Company may not terminate the Executive’s
employment for cause unless (A) a determination that cause exists is made and
approved by a majority of the Company’s Board, (B) if the circumstance giving
rise to the issue are capable of being cured the Executive is given at least ten
(10) days’ written notice of the Board meeting called to make such
determination, and (C) the Executive is given the opportunity to address such
meeting.

 

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11.  
Termination by Executive for Good Reason. Executive may terminate his employment
and declare this Agreement to have been terminated “without cause” by the
Company (and, therefore, for “Good Reason”) upon the occurrence, without
Executive’s consent, of any of the following circumstances:

  (a)  
The assignment to Executives of duties that are materially inconsistent with
Executive’s position as President and Chief Executive Officer;

  (b)  
The failure to elect or reelect Executive as President and Chief Executive
Officer of the Company or as a member of the Board of Directors (unless such
failure is related in any way to the Company’s decision to terminate Executive
for cause or Executive’s failure to run for reelection to the Board);

  (c)  
A reduction by the Company in the amount of Executive’s base salary or the
discontinuation or reduction by the Company of Executive’s participation at
previously existing levels of eligibility in any incentive compensation,
additional compensation or equity programs, benefits, policies or perquisites;
provided, however, that the Company may make such changes and/or reductions
without implicating the provisions of this subsection (c) so long as Executive
is treated in a manner that is commensurate with the treatment of other senior
executives of the Company;

 

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  (d)  
A failure by the Company to perform its obligations under this Employment
Agreement,

which, in each of subsections (a) through (d) above, is not remedied by the
Company within 30 days of receipt of written notice of such event or breach
delivered by Executive to the Company.

12.  
Termination Due to Death or Disability. In the event Executive dies or suffers a
disability (as defined herein) during the term of employment, this Agreement
shall automatically be terminated on the date of such death or disability
without further obligation on the part of the Company other than the Accrued
Obligations (as defined in Section 10) except that Executive will be immediately
vested in the Supplemental Executive Retirement Plan, which shall be paid in
accordance with the award agreements, benefits plans, past practice and
applicable law. For purposes of this Agreement, Executive shall be considered to
have suffered a “disability”: (i) upon a good faith determination by Company
that, as a result of any mental or physical impairment, Executive is and will
likely remain unable to perform the essential functions of his duties or
responsibilities hereunder on a full-time basis for one hundred eighty
(180) days, with or without reasonable accommodation, or (ii) Executive becomes
eligible for or receives any benefits pursuant to the Company’s long-term
disability policy. Notwithstanding anything expressed or implied above to the
contrary, the Company agrees to fully comply with its obligations under the
Family and Medical Leave Act of 1993 and the Americans with Disabilities Act as
well as any other applicable federal, state, or local law, regulation, or
ordinance governing the provision of leave to individuals with serious health
conditions or the protection of individuals with disabilities as well as the
Company’s obligation to provide reasonable accommodation thereunder.

 

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13.  
Reaffirmation. Upon termination of Executive’s employment for any reason,
Executive agrees, if requested to reaffirm in writing his post-employment
obligation as set forth in this Agreement.

14.  
Section 409A Notification. Employee acknowledges that he has been advised of the
American Jobs Creation Act of 2004, which added Section 409A to the Internal
Revenue Code (“Section 409A”), and significantly changed the taxation of
nonqualified deferred compensation plans and arrangements. Under proposed and
final regulations as of the date of this Agreement, Employee has been advised
that his severance pay and other termination benefits may be treated by the
Internal Revenue Service as providing “nonqualified deferred compensation,” and
therefore subject to Section 409A. In that event, several provisions in
Section 409A may affect Employee’s receipt of severance compensation, including
the timing thereof. These include, but are not limited to, a provision which
requires that distributions to “specified employees” of public companies on
account of separation from service may not be made earlier than six (6) months
after the effective date of such separation. If applicable, failure to comply
with Section 409A can lead to immediate taxation of such deferrals, with
interest calculated at a penalty rate and a 20% penalty. As a result of the
requirements imposed by the American Jobs

 

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Creation Act of 2004, Employee agrees if he is a “specified employee” at the
time of his termination of employment and if payments in connection with such
termination of employment are subject to Section 409A and not otherwise exempt,
such payments (and other benefits to the extent applicable) due Employee at the
time of termination of employment shall not be paid until a date at least six
(6) months after the effective date of Employee’s termination of employment
(“Employee’s Effective Termination Date”). Notwithstanding any provision of this
Agreement to the contrary, to the extent that any payment under the terms of
this Agreement would constitute an impermissible acceleration of payments under
Section 409A or any regulations or Treasury guidance promulgated thereunder,
such payments shall be made no earlier than at such times allowed under Section
409A. If any provision of this Agreement (or of any award of compensation) would
cause Employee to incur any additional tax or interest under Section 409A or any
regulations or Treasury guidance promulgated thereunder, the Company or its
successor may reform such provision; provided that it will (i) maintain, to the
maximum extent practicable, the original intent of the applicable provision
without violating the provisions of Section 409A and (ii) notify and consult
with Employee regarding such amendments or modifications prior to the effective
date of any such change.

15.  
Section 409A Acknowledgement. Executive acknowledges that, notwithstanding
anything contained herein to the contrary, both Parties shall be independently
responsible for assessing their own risks and liabilities under Section 409A
that may be associated with any payment made under the terms of this Agreement
or any other arrangement which may be deemed to trigger Section 409A. Further,
the Parties agree that each shall independently bear responsibility for any and
all taxes, penalties or other tax obligations as may be imposed upon them in
their individual capacity as a matter or law.

 

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16.  
Severance Payments. In the event Executive’s employment is terminated by the
Company without cause (including by Employee for Good Reason), and subject to
the normal terms and conditions imposed by the Company as set forth herein and
in the attached Separation and Release Agreement (Exhibit A), Executive shall be
eligible to receive severance pay based upon his base salary at the time of
termination for a period of twenty four (24) months and the Sign-On RSUs set
forth in paragraph 4(c) herein, to the extent not previously vested, will be
deemed to have been 50% vested in the event Executive’s employment is terminated
after the second anniversary of the Start Date and 75% vested if the Executive
is terminated after the third anniversary of his Start Date, and such shares
shall be delivered to Executive as soon thereafter as will not cause Executive
adverse tax consequences under Code Section 409A. Executive will be immediately
vested in the Supplemental Executive Retirement Plan. Additionally, the Company
shall arrange for the Executive to continue to participate (through COBRA or
otherwise), on substantially the same terms and conditions as in effect for the
Executive (including any required active employee contribution) immediately
prior to such termination, in the health and similar welfare benefits provided
to the Executive until the earlier of (i) the end of the 12 month period
beginning on the effective date of the termination of Executive’s employment
hereunder, or (ii) such time as the Executive is eligible to be covered by
comparable benefits of a subsequent employer. The Executive agrees to notify the
Company promptly if and when he begins employment with another employer and if
and when he becomes eligible to participate in any health or welfare plans of
another employer. The foregoing severance rights and obligations shall not exist
if Executive voluntarily leaves the Company’s employ without “Good Reason” (as
defined above) or is terminated for “cause” (as defined above).

 

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17.  
Severance Payment Terms and Conditions. No severance pay shall be paid if
Executive voluntarily leaves the Company’s employ without Good Reason, as
defined above, or is terminated for cause. Any severance pay made payable under
this Agreement shall be paid in lieu of, and not in addition to, any other
contractual, notice or statutory pay or other accrued compensation obligation
(excluding accrued wages and deferred compensation). Additionally, such
severance pay is contingent upon Executive fully complying with the restrictive
covenants contained herein and executing a Separation and Release Agreement in a
form not substantially different from that attached as Exhibit A. Further, the
Company’s obligation to provide severance hereunder shall be deemed null and
void should Executive fail or refuse to execute and deliver to the Company the
Company’s then-standard Separation and Release Agreement (without modification)
within any time period as may be prescribed by law or, in absence thereof,
twenty-one (21) days after the Employee’s Effective Termination Date.
Conditioned upon the execution and delivery of the Separation and Release
Agreement as set forth in the prior sentence, severance pay benefits shall be
paid as follows: (i) in one lump sum equivalent to six (6) months’ salary on the
day following the date which is six (6) months following Employee’s Effective
Termination Date with any remainder to be paid in bi-weekly installments
equivalent to the Employee’s salary commencing upon the next regularly scheduled
payroll date, if both the severance pay benefit is subject to Section 409A and
if Employee is a “specified employee” under Section 409A or (ii) for any
severance pay benefits not subject to clause (i), begin upon the next regularly
scheduled payroll following the earlier to occur of fifteen (15) days from the
Company’s receipt of an executed Separation and Release Agreement or the
expiration of sixty (60) days after Employee’s Effective Termination Date and
shall be paid on the Company’s regularly scheduled pay dates; provided, however,
that if the before-stated sixty (60) day period ends in a calendar year
following the calendar year in which the sixty (60) day period commenced, then
any benefits not subject to clause (i) shall only begin on the next regularly
scheduled payroll following the expiration of sixty (60) days after the
Employee’s Effective Termination Date.

 

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18.  
Assignment of Rights.

  (a)  
Copyrights.  Executive agrees that all works of authorship fixed in any tangible
medium of expression by him during the term of this Agreement relating to the
Company’s business (“Works”), either solely or jointly with others, shall be and
remain exclusively the property of the Company. Each such Work created by
Executive is a “work made for hire” under the copyright law and the Company may
file applications to register copyright in such Works as author and copyright
owner thereof. If, for any reason, a Work created by Executive is excluded from
the definition of a “work made for hire” under the copyright law, then Executive
does hereby assign, sell, and convey to the Company the entire rights, title,
and interests in and to such Work, including the copyright therein, to the
Company. Executive will execute any documents that the Company deems necessary
in connection with the assignment of such Work and copyright therein. Executive
will take whatever steps and do whatever acts the Company requests, including,
but not limited to, placement of the Company’s proper copyright notice on Works
created by Executive to secure or aid in securing copyright protection in such
Works and will assist the Company or its nominees in filing applications to
register claims of copyright in such Works. The Company shall have free and
unlimited access at all times to all Works and all copies thereof and shall have
the right to claim and take possession on demand of such Works and copies.

 

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  (b)  
Inventions.  Executive agrees that all discoveries, concepts, and ideas, whether
patentable or not, including, but not limited to, apparatus, processes, methods,
compositions of matter, techniques, and formulae, as well as improvements
thereof or know-how related thereto, relating to any present or prospective
product, process, or service of the Company (“Inventions”) that Executive
conceives or makes during the term of this Agreement relating to the Company’s
business, shall become and remain the exclusive property of the Company, whether
patentable or not, and Executive will, without royalty or any other
consideration:

  (i)  
Inform the Company promptly and fully of such Inventions by written reports,
setting forth in detail the procedures employed and the results achieved;

  (ii)  
Assign to the Company all of his rights, title, and interests in and to such
Inventions, any applications for United States and foreign Letters Patent, any
United States and foreign Letters Patent, and any renewals thereof granted upon
such Inventions;

  (iii)  
Assist the Company or its nominees, at the expense of the Company, to obtain
such United States and foreign Letters Patent for such Inventions as the Company
may elect; and

  (iv)  
Execute, acknowledge, and deliver to the Company at the Company’s expense such
written documents and instruments, and do such other acts, such as giving
testimony in support of his inventorship, as may be necessary in the opinion of
the Company, to obtain and maintain United States and foreign Letters Patent
upon such Inventions and to vest the entire rights and title thereto in the
Company and to confirm the complete ownership by the Company of such Inventions,
patent applications, and patents.

 

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19.  
Company Property.  All records, files, drawings, documents, data in whatever
form, business equipment (including computers, PDAs, cell phones, etc.), and the
like relating to, or provided by, the Company shall be and remain the sole
property of the Company. Upon termination of employment, Executive shall
immediately return to the Company all such items without retention of any copies
and without additional request by the Company. De minimis items such as pay
stubs, 401(k) plan summaries, employee bulletins, and the like are excluded from
this requirement.

20.  
Confidential Information.  Executive acknowledges that the Company and its
affiliated entities (herein collectively referred to as “Companies”) possess
certain trade secrets as well as other confidential and proprietary information
which they have acquired or will acquire at great effort and expense. Such
information may include, without limitation, confidential information, whether
in tangible or intangible form, regarding the Companies’ products and services,
marketing strategies, business plans, operations, costs, current or prospective
customer information (including customer identities, contacts, requirements,
creditworthiness, preferences, and like matters), product concepts, designs,
prototypes or specifications, research and development efforts, technical data
and know-how, sales information, including pricing and other terms and
conditions of sale, financial information, internal procedures, techniques,
forecasts, methods, trade information, trade secrets, software programs, project
requirements, inventions, trademarks, trade names, and similar information
regarding the Companies’ business(es) (collectively referred to herein as
“Confidential Information”). Executive further acknowledges that, as a result of
his employment with the Company, Executive will have access to, will become
acquainted with, and/or may help develop, such Confidential Information.
Confidential Information shall not include information readily available in the
public so long as such information was not made available through fault of
Executive or wrong doing by any other individual.

 

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21.  
Restricted Use of Confidential Information.  Executive agrees that all
Confidential Information is and shall remain the sole and exclusive property of
the Company and/or its affiliated entities. Except as may be expressly
authorized by the Company in writing, or other than in the course of the
Executive’s employment and for the benefit of the Company, Executive agrees not
to disclose, or cause any other person or entity to disclose, any Confidential
Information to any third party while employed by the Company and for as long
thereafter as such information remains confidential (or as limited by applicable
law). Further, Executive agrees to use such Confidential Information only in the
course of Executive’s duties in furtherance of the Company’s business and agrees
not to make use of any such Confidential Information for Executive’s own
purposes or for the benefit of any other entity or person.

22.  
Acknowledged Need for Limited Restrictive Covenants.  Executive acknowledges
that the Companies have spent and will continue to expend substantial amounts of
time, money and effort to develop their business strategies, Confidential
Information, customer identities and relationships, goodwill and Executive
relationships, and that Executive will benefit from these efforts. Further,
Executive acknowledges the inevitable use of, or near-certain influence by his
knowledge of, the Confidential Information disclosed to Executive during the
course of employment if allowed to compete against the Company in an
unrestricted manner and that such use would be unfair and extremely detrimental
to the Company. Accordingly, based on these legitimate business reasons,
Executive acknowledges each of the Companies’ need to protect their legitimate
business interests by reasonably restricting Executive’s ability to compete with
the Company on a limited basis.

 

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23.  
Non-Solicitation.  During Executive’s employment and for a period of twenty-four
(24) months thereafter, Executive agrees not to directly or indirectly engage in
the following prohibited conduct:

  (a)  
Solicit, offer products or services to, or accept orders for, any Competitive
Products or otherwise transact any competitive business on behalf of the Company
(or any Affiliate thereof) during the eighteen (18) month period preceding
Executive’s date of separation or about whom Executive possessed, or had access
to, confidential and proprietary information;

  (b)  
Attempt to entice or otherwise cause any third party to withdraw, curtail or
cease doing business with the Company (or any Affiliate thereof), specifically
including customers, vendors, independent contractors and other third party
entities;

  (c)  
Except in the course of the Executive’s employment and for the benefit of the
Company, disclose to any person or entity the identities, contacts or
preferences of any customers of the Company (or any Affiliate thereof), or the
identity of any other persons or entities having business dealings with the
Company (or any Affiliate thereof);

 

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  (d)  
Induce any individual who has been employed by or had provided services to the
Company (or any Affiliate thereof) within the six (6) month period immediately
preceding the effective date of Executive’s separation to terminate such
relationship with the Company (or any Affiliate thereof);

  (e)  
Assist, coordinate or otherwise offer employment to, accept employment inquiries
from, or employ any individual who is or had been employed by the Company (or
any Affiliate thereof) at any time within the six (6) month period immediately
preceding such offer, or inquiry;

  (f)  
Communicate or indicate in any way to any customer of the Company (or any
Affiliate thereof), prior to formal separation from the Company, any interest,
desire, plan, or decision to separate from the Company; other than by way of
long term retirement plans; or

  (g)  
Otherwise attempt to directly or indirectly interfere with the Company’s
business, the business of any of the Companies or their relationship with their
employees, consultants, independent contractors or customers.

24.  
Limited Non-Compete.  For the above-stated reasons, and as a condition of
employment to the fullest extent permitted by law, Executive agrees during the
Relevant Non-Compete Period not to directly or indirectly engage in the
following competitive activities:

  (a)  
Executive shall not have any ownership interest in, work for, advise, consult,
or have any business connection or business or employment relationship in any
competitive capacity with any Competitor unless Executive provides written
notice to the Company of such relationship prior to entering into such
relationship and, further, provides sufficient written assurances to the
Company’s satisfaction that such relationship will not, jeopardize the Company’s
legitimate interests or otherwise violate the terms of this Agreement;

 

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  (b)  
Executive shall not engage in any research, development, production, sale or
distribution of any Competitive Products;

  (c)  
Executive shall not market, sell, or otherwise offer or provide any Competitive
Products within any Geographic Territory;

  (d)  
Executive shall not distribute, market, sell or otherwise offer or provide any
Competitive Products to any customer of the Company.

25.  
Non-Compete Definitions.  For purposes of this Agreement, the Parties agree that
the following terms shall apply:

  (a)  
“Affiliate” includes any parent, subsidiary, joint venture, sister company, or
other entity controlled, owned, managed or otherwise associated with the
Company;

  (b)  
“Assigned Customer Base” shall include all accounts or customers formally
assigned to Executive within a given territory or geographical area or contacted
by him at any time during the eighteen (18) month period preceding Executive’s
date of separation;

  (c)  
“Competitive Products” shall include any product or service that directly or
indirectly competes with, is substantially similar to, or serves as a reasonable
substitute for, any product or service in research, development or design, or
manufactured, produced, sold or distributed by the Company;

 

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  (d)  
“Competitor” shall include any person or entity that offers or is actively
planning to offer any Competitive Products and may include (but not be limited
to) any entity identified on the Company’s Illustrative Competitor List attached
hereto as Exhibit B, which shall be amended from time to time to reflect changes
in the Company’s business and competitive environment (updated competitor lists
will be provided to Executive upon reasonable request).

  (e)  
“Geographic Territory” shall include any territory in which the Company has
provided any services or sold any products at any time during the twenty-four
(24) month period preceding Executive’s date of separation;

  (f)  
“Relevant Non-Compete Period” shall include the period of Executive’s employment
with the Company as well as a period of twenty-four (24) months after such
employment is terminated, regardless of the reason for such termination
provided, however, that this period shall be reduced to the greater of
(i) twelve (12) months or (ii) the total length of Executive’s employment with
the Company, including employment with any parent, subsidiary or affiliated
entity, if such employment is less than twenty-four (24) months;

  (g)  
“Directly or indirectly” shall be construed such that the foregoing restrictions
shall apply equally to Executive whether performed individually or as a partner,
shareholder, officer, director, manager, Executive, salesperson, independent
contractor, broker, agent, or consultant for any other individual, partnership,
firm, corporation, company, or other entity engaged in such conduct.

 

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26.  
Consent to Reasonableness.  In light of the above-referenced concerns, including
Executive’s knowledge of and access to the Companies’ Confidential Information,
Executive acknowledges that the terms of the foregoing restrictive covenants are
reasonable and necessary to protect the Company’s legitimate business interests
and will not unreasonably interfere with Executive’s ability to obtain alternate
employment. As such, Executive hereby agrees that such restrictions are valid
and enforceable, and affirmatively waives any argument or defense to the
contrary. Executive acknowledges that this limited non-competition provision is
not an attempt to prevent Executive from obtaining other employment in violation
of IC § 22-5-3-1 or any other similar statute. Executive further acknowledges
that the Company may need to take action, including litigation, to enforce this
limited non-competition provision, which efforts the Parties stipulate shall not
be deemed an attempt to prevent Executive from obtaining other employment.

27.  
Survival of Restrictive Covenants.  Executive acknowledges that the above
restrictive covenants shall survive the termination of this Agreement and the
termination of Executive’s employment for any reason. Executive further
acknowledges that any alleged breach by the Company of any contractual,
statutory or other obligation shall not excuse or terminate the obligations
hereunder or otherwise preclude the Company from seeking injunctive or other
relief. Rather, Executive acknowledges that such obligations are independent and
separate covenants undertaken by Executive for the benefit of the Company.

28.  
[Intentionally Omitted]

 

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29.  
Post-Termination Notification.  For the duration of his Relevant Non-compete
Period or other restrictive covenant period, which ever is longer, Executive
agrees to promptly notify the Company no later than five (5) business days of
his acceptance of any employment or consulting engagement. Such notice shall
include sufficient information to ensure Executive compliance with his
non-compete obligations and must include at a minimum the following
information:  (i) the name of the employer or entity for which he is providing
any consulting services; (ii) a description of his intended duties as well as
(iii) the anticipated start date. Such information is required to ensure
Executive’s compliance with his non-compete obligations as well as all other
applicable restrictive covenants. Such notice shall be provided in writing to
the Office of Vice President and General Counsel of the Company at 1069 State
Road 46 E, Batesville, Indiana 47006. Failure to timely provide such notice
shall be deemed a material breach of this Agreement and entitle the Company to
return of any severance paid to Executive plus attorneys’ fees. Executive
further consents to the Company’s notification to any new employer of
Executive’s rights and obligations under this Agreement.

30.  
Scope of Restrictions.  If the scope of any restriction contained in any
preceding paragraphs of this Agreement is deemed too broad to permit enforcement
of such restriction to its fullest extent, then such restriction shall be
enforced to the maximum extent permitted by law, and Executive hereby consents
and agrees that such scope may be judicially modified accordingly in any
proceeding brought to enforce such restriction.

 

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31.  
Specific Enforcement/Injunctive Relief.  Executive agrees that it would be
difficult to measure any damages to the Company from a breach of the
above-referenced restrictive covenants, but acknowledges that the potential for
such damages would be great, incalculable and irremediable, and that monetary
damages alone would be an inadequate remedy. Accordingly, Executive agrees that
the Company shall be entitled to immediate injunctive relief against such
breach, or threatened breach, in any court having jurisdiction. In addition, if
Executive violates any such restrictive covenant, Executive agrees that the
period of such violation shall be added to the term of the restriction. In
determining the period of any violation, the Parties stipulate that in any
calendar month in which Executive engages in any activity in violation of such
provisions, Executive shall be deemed to have violated such provision for the
entire month, and that month shall be added to the duration of the
non-competition provision. Executive acknowledges that the remedies described
above shall not be the exclusive remedies, and the Company may seek any other
remedy available to it either in law or in equity, including, by way of example
only, statutory remedies for misappropriation of trade secrets, and including
the recovery of compensatory or punitive damages. Executive further agrees that
the Company shall be entitled to an award of all costs and attorneys’ fees
incurred by it in any attempt to enforce the terms of this Agreement if the
Company prevails.

32.  
Publicly Traded Stock.  The Parties agree that nothing contained in this
Agreement shall be construed to prohibit Executive from investing his personal
assets in any stock or corporate security traded or quoted on a national
securities exchange or national market system provided, however, such
investments do not require any services on the part of Executive in the
operation or the affairs of the business or otherwise violate the Company’s Code
of Ethics.

 

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33.  
Notice of Claim and Contractual Limitations Period.  Executive acknowledges the
Company’s need for prompt notice, investigation, and resolution of any claims
that may be filed against it due to the number of relationships it has with
employees and others (and due to the turnover among such individuals with
knowledge relevant to any underlying claim). Accordingly, Executive agrees prior
to initiating any litigation of any type (including, but not limited to,
employment discrimination litigation, wage litigation, defamation, or any other
claim) to notify the Company, within One Hundred and Eighty (180) days after the
claim accrued, by sending a certified letter addressed to the Company’s General
Counsel setting forth:  (i) claimant’s name, address, and phone; (ii) the name
of any attorney representing Executive; (iii) the nature of the claim; (iv) the
date the claim arose; and (v) the relief requested. This provision is in
addition to any other notice and exhaustion requirements that might apply. For
any dispute or claim of any type against the Company (including but not limited
to employment discrimination litigation, wage litigation, defamation, or any
other claim), Executive must commence legal action within the shorter of one
(1) year of accrual of the cause of action or such shorter period that may be
specified by law.

34.  
Non-Jury Trials. Notwithstanding any right to a jury trial for any claims,
Executive waives any such right to a jury trial, and agrees that any claim of
any type (including but not limited to employment discrimination litigation,
wage litigation, defamation, or any other claim) lodged in any court will be
tried, if at all, without a jury.

35.  
Choice of Forum.  Executive acknowledges that the Company is primarily based in
Indiana, and Executive understands and acknowledges the Company’s desire and
need to defend any litigation against it in Indiana. Accordingly, the Parties
agree that any claim of any type brought by Executive against the Company or any
of its employees or agents must be maintained only in a court sitting in Marion
County, Indiana, or Ripley County, Indiana, or, if a federal court, the Southern
District of Indiana, Indianapolis Division. Executive further understands and
acknowledges that in the event the Company initiates litigation against
Executive, the Company may need to prosecute such litigation in such state where
the Executive is subject to personal jurisdiction. Accordingly, for purposes of
enforcement of this Agreement, Executive specifically consents to personal
jurisdiction in the State of Indiana.

 

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36.  
Choice of Law.  This Agreement shall be deemed to have been made within the
County of Ripley, State of Indiana and shall be interpreted and construed in
accordance with the laws of the State of Indiana. Any and all matters of dispute
of any nature whatsoever arising out of, or in any way connected with the
interpretation of this Agreement, any disputes arising out of the Agreement or
the employment relationship between the Parties hereto, shall be governed by,
construed by and enforced in accordance with the laws of the State of Indiana
without regard to any applicable state’s choice of law provisions.

37.  
Titles.  Titles are used for the purpose of convenience in this Agreement and
shall be ignored in any construction of it.

38.  
Severability.  The Parties agree that each and every paragraph, sentence,
clause, term and provision of this Agreement is severable and that, in the event
any portion of this Agreement is adjudged to be invalid or unenforceable, the
remaining portions thereof shall remain in effect and be enforced to the fullest
extent permitted by law. Further, should any particular clause, covenant, or
provision of this Agreement be held unreasonable or contrary to public policy
for any reason, the Parties acknowledge and agree that such covenant, provision
or clause shall automatically be deemed modified such that the contested
covenant, provision or clause will have the closest effect permitted by
applicable law to the original form and shall be given effect and enforced as so
modified to whatever extent would be reasonable and enforceable under applicable
law.

 

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39.  
Assignment-Notices.  The rights and obligations of the Company under this
Agreement shall inure to its benefit, as well as the benefit of its parent,
subsidiary, successor and affiliated entities, and shall be binding upon the
successors and assigns of the Company. This Agreement, being personal to
Executive, cannot be assigned by Executive, but his personal representative
shall be bound by all its terms and conditions. Any notice required hereunder
shall be sufficient if in writing and mailed to the last known residence of
Executive or to the Company at its principal office with a copy mailed to the
Office of the General Counsel.

40.  
Amendments and Modifications.  Except as specifically provided herein, no
modification, amendment, extension or waiver of this Agreement or any provision
hereof shall be binding upon the Company or Executive unless in writing and
signed by both Parties. The waiver by the Company or Executive of a breach of
any provision of this Agreement shall not be construed as a waiver of any
subsequent breach. Nothing in this Agreement shall be construed as a limitation
upon the Company’s right to modify or amend any of its manuals or policies in
its sole discretion and any such modification or amendment which pertains to
matters addressed herein shall be deemed to be incorporated herein and made a
part of this Agreement.

41.  
Outside Representations.  Executive represents and acknowledges that in signing
this Agreement he does not rely, and has not relied, upon any representation or
statement made by the Company or by any of the Company’s employees, officers,
agents, stockholders, directors or attorneys with regard to the subject matter,
basis or effect of this Agreement other than those specifically contained
herein.

 

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42.  
Other Remedies. The Executive agrees to execute and be bound by the terms and
conditions of the Company’s Limited Recapture Agreement, and any applicable
laws, rules and regulations.

43.  
Voluntary and Knowing Execution.  Executive acknowledges that he has been
offered a reasonable amount of time within which to consider and review this
Agreement; that he has carefully read and fully understands all of the
provisions of this Agreement; and that he has entered into this Agreement
knowingly and voluntarily, with the assistance of counsel.

44.  
Liability Insurance. The Company shall cover the Executive under directors and
officers liability insurance both during and, while potential liability exists,
after the term of this Agreement in the same amount and to the same extent as
the Company covers its other officers and non independent director.

45.  
Attorney’s Fees. The Company shall promptly pay the Executive’s reasonable costs
of entering into this Agreement, including the reasonable fees and expenses of
the Executive’s counsel and other professionals, up to a maximum of $15,000.

46.  
Entire Agreement.  This Agreement constitutes the entire employment agreement
between the Parties hereto concerning the subject matter hereof and shall
supersede all prior and contemporaneous agreements between the Parties in
connection with the subject matter of this Agreement. Any pre-existing
Employment Agreements shall be deemed null and void. Nothing in this Agreement,
however, shall affect any separately-executed written agreement addressing any
other issues.

 

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IN WITNESS WHEREOF, the Parties have signed this Agreement effective as of the
day and year first above written.
“EXECUTIVE”

                                  HILL-ROM HOLDINGS, INC.    
 
                   
Signed:
          By:        
 
                   
 
                   
Printed:
          Title:        
 
                   
 
                   
Dated:
          Dated:        
 
                   

CAUTION: READ BEFORE SIGNING

 

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Exhibit A
SAMPLE SEPARATION AND RELEASE AGREEMENT
THIS SEPARATION and RELEASE AGREEMENT (“Agreement”) is entered into by and
between EMPLOYEE’S FULL NAME(“Executive”) and Hillenbrand Industries, Inc. (to
be renamed Hill-Rom Holdings, Inc.) (together with its subsidiaries and
affiliates, the “Company”). To wit, the Parties agree as follows:

1.  
Executive’s active employment by the Company shall terminate effective [date of
termination](Executive’s “Effective Termination Date”). Except as specifically
provided by this Agreement, or in any other non-employment agreement that may
exist between the Company and Executive, Executive agrees that the Company shall
have no other obligations or liabilities to him/her following his/her Effective
Termination Date and that his/her receipt of the Severance Benefits provided
herein shall constitute a complete settlement, satisfaction and waiver of any
and all claims he/she may have against the Company.

2.  
Executive further submits, and the Company hereby accepts, his resignation as an
Executive, officer and director, as of his Effective Termination Date for any
position he may hold. The Parties agree that this resignation shall apply to all
such positions Executive may hold with the Company or any parent, subsidiary or
affiliated entity thereof. Executive agrees to execute any documents needed to
effectuate such resignation. Executive further agrees to take whatever steps are
necessary to facilitate and ensure the smooth transition of his duties and
responsibilities to others.

 

 

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3.  
Executive acknowledges that he has been advised of the American Jobs Creation
Act of 2004, which added Section 409A (“Section 409A”) to the Internal Revenue
Code, and significantly changed the taxation of nonqualified deferred
compensation plans and arrangements. Under proposed and final regulations as of
the date of this Agreement, Executive has been advised that if he is a “key
Executive” covered by Section 409A or any similar law, his severance pay may be
treated by the Internal Revenue Service as providing “nonqualified deferred
compensation,” and therefore subject to Section 409A. In that event, several
provisions in Section 409A may affect Executive’s receipt of severance
compensation. These include, but are not limited to, a provision which requires
that distributions to “specified employees” of public companies on account of
separation from service may not be made earlier than six (6) months after the
effective date of such separation. If applicable, failure to comply with
Section 409A can lead to immediate taxation of deferrals, with interest
calculated at a penalty rate and a 20% penalty. As a result of the requirements
imposed by the American Jobs Creation Act of 2004, Employee agrees if he/she is
a “specified employee” at the time of his/her termination of employment and if
severance payments are covered as “non-qualified deferred compensation” or
otherwise not exempt, the severance pay benefits shall not be paid until a date
at least six (6) months after Executive’s Effective Termination Date from
Company, as more fully explained by Paragraph 4, below.

 

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4.  
In consideration of the promises contained in this Agreement and contingent upon
Executive’s compliance with such promises, the Company agrees to provide
Executive the following:

  (a)  
Severance pay, in lieu of, and not in addition to any other contractual, notice
or statutory pay obligations (other than accrued wages and deferred
compensation) in the maximum total amount of [Insert Amount] Dollars and [_____]
Cents ($[_____]), less applicable deductions or other set offs, payable as
follows:

[For 409A Severance Pay for Specified Employees Only]

  (i)  
A lump payment in the gross amount of [INSERT AMOUNT EQUAL TO 6 MONTHS’ PAY]
Dollars and [  ] Cents ($[_____]) payable the day following the sixth (6th)
month anniversary of Employee’s Effective Termination Date, with any remaining
amount to be paid in bi-weekly installments equivalent to Employee’s base salary
(i.e., _____Dollars and _____Cents ($_____), less applicable deductions or other
setoffs) commencing upon the next regularly scheduled payroll date after the
payment of the lump sum for a period of up to _____ weeks or until the Employee
becomes reemployed, whichever comes first.

[For Non-409A Severance Pay or 409A Severance Pay for Non-Specified Employees
Only]

  (i)  
Commencing on the next regularly scheduled payroll immediately following the
earlier to occur of fifteen (15) days from the Company’s receipt of an executed
Separation and Release Agreement or the expiration of sixty (60) days after
Employee’s Effective Termination Date, Employee shall be paid severance
equivalent to his bi-weekly base salary (i.e. _____Dollars and _____Cents
($_____), less applicable deductions or other set-offs), for a period up to
[insert weeks] (_____) weeks following Employee’s Effective Termination Date or
until Employee becomes reemployed, whichever occurs first; provided, however,
that if the before-stated sixty (60) day period ends in a calendar year
following the calendar year in which the sixty (60) day period commenced, then
this severance pay shall only begin on the next regularly scheduled payroll
following the expiration of sixty (60) days after the Employee’s Effective
Termination Date.

 

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  (b)  
Payment for any earned but unused vacation as of Executive’s Effective
Termination Date, less applicable deductions permitted or required by law
payable in one lump sum within fifteen (15) days after the Employee’s Effective
Termination Date; and

  (c)  
Group Life Insurance coverage until the above-referenced Severance Pay
terminates.

5.  
Except as may be required by Section 409A, the above Severance Pay shall be paid
in accordance with the Company’s standard payroll practices (e.g. bi-weekly).
The Parties agree that the initial two (2) weeks of the foregoing Severance Pay
shall be allocated as consideration provided to Executive in exchange for his
execution of a release in compliance with the Older Workers Benefit Protection
Act. The balance of the severance benefits and other obligations undertaken by
the Company pursuant to this Agreement shall be allocated as consideration for
all other promises and obligations undertaken by Executive, including execution
of a general release of claims.

6.  
The Company further agrees to provide Executive with limited out-placement
counseling with a company of its choice provided that Executive participates in
such counseling immediately following termination of employment. Notwithstanding
anything in this Section 6 to the contrary, the out-placement counseling shall
not be provided after the last day of the second calendar year following the
calendar year in which termination of employment occurs.

 

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7.  
As of his/her Effective Termination Date, Executive will become ineligible to
participate in the Company’s health insurance program and continuation of
coverage requirements under COBRA (if any) will be triggered at that time.
However, as additional consideration for the promises and obligations contained
herein (and except as may be prohibited by law), the Company agrees to continue
to pay the employer’s share of such coverage as provided under the health care
program selected by Executive as of his/her Effective Termination Date, subject
to any approved changes in coverage based on a qualified election, until the
above-referenced Severance Pay terminates, Executive accepts other employment or
Executive becomes eligible for alternative healthcare coverage, which ever comes
first, provided Executive (i) timely completes the applicable election of
coverage forms and (ii) continues to pay the Executive portion of the applicable
premium(s). Thereafter, if applicable, coverage will be made available to
Executive at his sole expense (i.e., Executive will be responsible for the full
COBRA premium) for the remaining months of the COBRA coverage period made
available pursuant to applicable law. The medical insurance provided herein does
not include any disability coverage.

 

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8.  
Should Executive become employed before the above-referenced Severance Benefits
are exhausted or terminated, Executive agrees to so notify the Company in
writing within five (5) business days of Executive’s acceptance of such
employment, providing the name of such employer (or entity to whom Executive may
be providing consulting services), his/her intended duties as well as the
anticipated start date. Such information is required to ensure Executive’s
compliance with his/her non-compete obligations as well as all other applicable
restrictive covenants. This notice will also serve to trigger the Company’s
right to terminate all the above-referenced severance pay benefits (specifically
excluding any lump sum payment due) as well as all Company-paid or
Company-provided benefits consistent with the above paragraphs. Failure to
timely provide such notice shall be deemed a material breach of this Agreement
entitling the Company to recover as damages the value of all benefits provided
to Executive hereunder plus attorneys fees. All other severance benefits
however, shall terminate upon reemployment.

9.  
Intentionally omitted

10.  
In exchange for the foregoing Severance Benefits, EMPLOYEE FULL NAME on behalf
of himself/herself, his/her heirs, representatives, agents and assigns hereby
RELEASES, INDEMNIFIES, HOLDS HARMLESS, and FOREVER DISCHARGES (i) Company Name.
(ii) its parent, subsidiary or affiliated entities, (iii) all of their present
or former directors, officers, Executives, shareholders, and agents, as well as,
(iv) all predecessors, successors and assigns thereof from any and all actions,
charges, claims, demands, damages or liabilities of any kind or character
whatsoever, known or unknown, which Executive now has or may have had through
the effective date of this Agreement.

 

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11.  
Without limiting the generality of the foregoing release, it shall include:  (i)
all claims or potential claims arising under any federal, state or local laws
relating to the Parties’ employment relationship, including any claims Executive
may have under the Civil Rights Acts of 1866 and 1964, as amended, 42 U.S.C. §§
1981 and 2000(e) et seq.; the Civil Rights Act of 1991; the Age Discrimination
in Employment Act, as amended, 29 U.S.C. §§ 621 et seq.; the Americans with
Disabilities Act of 1990, as amended, 42 U.S.C §§ 12,101 et seq.; the Fair Labor
Standards Act 29 U.S.C. §§ 201 et seq.; the Worker Adjustment and Retraining
Notification Act, 29 U.S.C. §§ 2101, et seq.; the Sarbanes-Oxley Act of 2002,
specifically including the Corporate and Criminal Fraud Accountability Act, 18
U.S.C. §1514,A et seq.; and any other federal, state or local law governing the
Parties’ employment relationship; (ii) any claims on account of, arising out of
or in any way connected with Executive’s employment with the Company or leaving
of that employment; (iii) any claims alleged or which could have been alleged in
any charge or complaint against the Company; (iv) any claims relating to the
conduct of any Executive, officer, director, agent or other representative of
the Company; (v) any claims of discrimination, harassment or retaliation on any
basis; (vi) any claims arising from any legal restrictions on an employer’s
right to separate its Executives; (vii) any claims for personal injury,
compensatory or punitive damages or other forms of relief; and (viii) all other
causes of action sounding in contract, tort or other common law basis, including
(a) the breach of any alleged oral or written contract, (b) negligent or
intentional misrepresentations, (c) wrongful discharge, (d) just cause
dismissal, (e) defamation, (f) interference with contract or business
relationship or (g) negligent or intentional infliction of emotional distress.

12.  
Executive further agrees and covenants not to sue the Company or any entity or
individual subject to the foregoing General Release with respect to any claims,
demands, liabilities or obligations release by this Agreement provided, however,
that nothing contained in this Agreement shall:

  (a)  
prevent Executive from filing an administrative charge with the Equal Employment
Opportunity Commission or any other federal state or local agency; or

 

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  (b)  
prevent employee from challenging, under the Older Worker’s Benefit Protection
Act (29 U.S.C. § 626), the knowing and voluntary nature of his/her release of
any age claims in this Agreement in court or before the Equal Employment
Opportunity Commission. [INCLUDE THIS SUBPARAGRAPH (b) IF EMPLOYEE IS AGE 40 OR
OLDER]

13.  
Notwithstanding his/her right to file an administrative charge with the EEOC or
any other federal, state, or local agency, Executive agrees that with his/her
release of claims in this Agreement, he/she has waived any right he/she may have
to recover monetary or other personal relief in any proceeding based in whole or
in part on claims released by him/her in this Agreement. For example, Executive
waives any right to monetary damages or reinstatement if an administrative
charge is brought against the Company whether by Employee, the EEOC, or any
other person or entity, including but not limited to any federal, state, or
local agency. Further, with his/her release of claims in this Agreement,
Employee specifically assigns to the Company his/her right to any recovery
arising from any such proceeding.

14.  
[INCLUDE THIS LANGUAGE IF THE EMPLOYEE IS AGE 40 OR OLDER] The Parties
acknowledge that it is their mutual and specific intent that the above waiver
fully complies with the requirements of the Older Workers Benefit Protection Act
(29 U.S.C. § 626) and any similar law governing release of claims. Accordingly,
Executive hereby acknowledges that:

  (a)  
He/she has carefully read and fully understands all of the provisions of this
Agreement and that He/she has entered into this Agreement knowingly and
voluntarily;

 

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  (b)  
The Severance Benefits offered in exchange for Executive’s release of claims
exceed in kind and scope that to which he/she would have otherwise been legally
entitled absent the execution of this Agreement;

  (c)  
Prior to signing this Agreement, Executive had been advised, and is being
advised by this Agreement, to consult with an attorney of his/her choice
concerning its terms and conditions; and

  (d)  
He/she has been offered at least [twenty-one (21)/forty-five (45)] days within
which to review and consider this Agreement.

15.  
[ADD THIS LANGUAGE IF THE EMLOYEE IS AGE 40 OR OLDER] The Parties agree that
this Agreement shall not become effective and enforceable until the date this
Agreement is signed by both Parties or seven (7) calendar days after its
execution by Executive, whichever is later. Executive may revoke this Agreement
for any reason by providing written notice of such intent to the Company within
seven (7) days after he/she has signed this Agreement, thereby forfeiting
Executive’s right to receive any Severance Benefits provided hereunder and
rendering this Agreement null and void in its entirety.

16.  
[ADD THIS LANGUAGE IF THE EMPLOYEE IS IN CALIFORNIA] Executive specifically
acknowledges that, as a condition of this Agreement, he/she expressly releases
all rights and claims that he/she knows about as well as those he/she may not
know about. Executive expressly waives all rights under Section 1542 of the
Civil Code of the State of California, which reads as follows:

“A general release does not extend to claims which the creditor does not know or
suspect to exist in his favor at the time of executing the release which if
known, must have materially affected his settlement with the debtor.”

 

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Notwithstanding the provision by Section 1542, and for the purpose of
implementing a full and complete release and discharge of the Company as set
forth above, Executive expressly acknowledges that this Agreement is intended to
include and does in its effect, without limitation, include all claims which
Executive does not know or suspect to exist in his/her favor at the time of
signing this Agreement and that this Agreement expressly contemplates the
extinguishment of all such claims.

17.  
The Parties agree that nothing contained herein shall purport to waive or
otherwise affect any of Executive’s rights or claims that may arise after he/she
signs this Agreement. It is further understood by the Parties that nothing in
this Agreement shall affect any rights Executive may have under any Company
sponsored Deferred Compensation Program, Executive Life Insurance Bonus Plan,
Stock Grant Award, Stock Option Grant, Restricted Stock Unit Award, Pension Plan
and/or Savings Plan (i.e., 401(k) plan) provided by the Company as of the date
of his/her termination, such items to be governed exclusively by the terms of
the applicable agreements or plan documents.

18.  
Similarly, notwithstanding any provision contained herein to the contrary, this
Agreement shall not constitute a waiver or release or otherwise affect
Executive’s rights with respect to any vested benefits, any rights he/she has to
benefits which can not be waived by law, any coverage provided under any
Directors and Officers (“D&O”) policy, any rights Executive may have under any
indemnification agreement he/she has with the Company prior to the date hereof,
any rights he/she has as a shareholder, or any claim for breach of this
Agreement, including, but not limited to the benefits promised by the terms of
this Agreement.

 

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19.  
[Optional Provision for Equity Eligible Employees: Except as provided herein,
Executive acknowledges that he/she will not be eligible to receive or vest in
any additional stock options, stock awards or restricted stock units (“RSUs”) as
of [his/her] Effective Termination Date. Failure to exercise any vested options
within the applicable period as set for in the plan and/or grant will result in
their forfeiture. Executive acknowledges that any stock options, stock awards or
RSUs held for less than the required period shall be deemed forfeited as of the
effective date of this Agreement. All terms and conditions of such stock
options, stock awards or RSUs shall not be affected by this Agreement, shall
remain in full force and effect, and shall govern the Parties’ rights with
respect to such equity based awards.]

20.  
[Option A] Executive acknowledges that his/her termination and the Severance
Benefits offered hereunder were based on an individual determination and were
not offered in conjunction with any group termination or group severance program
and waives any claim to the contrary.

[Option B] Executive represents and agrees that he/she has been provided
relevant cohort information based on the information available to the Company as
of the date this Agreement was tendered to Executive. This information is
attached hereto as Exhibit A. The Parties acknowledge that simply providing such
information does not mean and should not be interpreted to mean that the Company
was obligated to comply with 29 C.F.R. § 1625.22(f).

 

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21.  
Executive hereby affirms and acknowledges his/her continued obligations to
comply with the post-termination covenants contained in his/her Employment
Agreement, including but not limited to, the non-compete, trade secret and
confidentiality provisions. Executive acknowledges that a copy of the Employment
Agreement has been attached to this Agreement as Exhibit A [B] or has otherwise
been provided to him/her and, to the extent not inconsistent with the terms of
this Agreement or applicable law, the terms thereof shall be incorporated herein
by reference. Executive acknowledges that the restrictions contained therein are
valid and reasonable in every respect and are necessary to protect the Company’s
legitimate business interests. Executive hereby affirmatively waives any claim
or defense to the contrary. Executive hereby acknowledges that the definition of
Competitor, as provided in his/her Employment Agreement shall include but not be
limited to those entities specifically identified in the updated Competitor
List, attached hereto as Exhibit B [C].

22.  
Executive acknowledges that the Company as well as its parent, subsidiary and
affiliated companies (“Companies” herein) possess, and he/she has been granted
access to, certain trade secrets as well as other confidential and proprietary
information that they have acquired at great effort and expense. Such
information includes, without limitation, confidential information regarding
products and services, marketing strategies, business plans, operations, costs,
current or, prospective customer information (including customer contacts,
requirements, creditworthiness and like matters), product concepts, designs,
prototypes or specifications, regulatory compliance issues, research and
development efforts, technical data and know-how, sales information, including
pricing and other terms and conditions of sale, financial information, internal
procedures, techniques, forecasts, methods, trade information, trade secrets,
software programs, project requirements, inventions, trademarks, trade names,
and similar information regarding the Companies’ business (collectively referred
to herein as “Confidential Information”).

 

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23.  
Executive agrees that all such Confidential Information is and shall remain the
sole and exclusive property of the Company. Except as may be expressly
authorized by the Company in writing, or as may be required by law after
providing due notice thereof to the Company, Executive agrees not to disclose,
or cause any other person or entity to disclose, any Confidential Information to
any third party for as long thereafter as such information remains confidential
(or as limited by applicable law) and agrees not to make use of any such
Confidential Information for Executive’s own purposes or for the benefit of any
other entity or person. The Parties acknowledge that Confidential Information
shall not include any information that is otherwise made public through no fault
of Executive or other wrong doing.

24.  
On or before Executive’s Effective Termination Date or per the Company’s
request, Executive agrees to return the original and all copies of all things in
his/her possession or control relating to the Company or its business, including
but not limited to any and all contracts, reports, memoranda, correspondence,
manuals, forms, records, designs, budgets, contact information or lists
(including customer, vendor or supplier lists), ledger sheets or other financial
information, drawings, plans (including, but not limited to, business, marketing
and strategic plans), personnel or other business files, computer hardware,
software, or access codes, door and file keys, identification, credit cards,
pager, phone, and any and all other physical, intellectual, or personal property
of any nature that he/she received, prepared, helped prepare, or directed
preparation of in connection with his/her employment with the Company. Nothing
contained herein shall be construed to require the return of any
non-confidential and de minimis items regarding Executive’s pay, benefits or
other rights of employment such as pay stubs, W-2 forms, 401(k) plan summaries,
benefit statements, etc.

 

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25.  
Executive hereby consents and authorizes the Company to deduct as an offset from
the above-referenced severance payments the value of any Company property not
returned or returned in a damaged condition as well as any monies paid by the
Company on Executive’s behalf (e.g., payment of any outstanding American Express
bill).

26.  
Executive agrees to cooperate with the Company in connection with any pending or
future litigation, proceeding or other matter which has been or may be brought
against or by the Company before any agency, court, or other tribunal and
concerning or relating in any way to any matter falling within Executive’s
knowledge or former area of responsibility. Executive agrees to immediately
notify the Company, through the Office of the General Counsel, in the event
he/she is contacted by any outside attorney (including paralegals or other
affiliated parties) unless (i) the Company is represented by the attorney,
(ii) Executive is represented by the attorney for the purpose of protecting
his/her personal interests or (iii) the Company has been advised of and has
approved such contact. Executive agrees to provide reasonable assistance and
completely truthful testimony in such matters including, without limitation,
facilitating and assisting in the preparation of any underlying defense,
responding to discovery requests, preparing for and attending deposition(s) as
well as appearing in court to provide truthful testimony. The Company agrees to
reimburse Executive for all reasonable out of pocket expenses incurred at the
request of the Company associated with such assistance and testimony.

 

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27.  
Executive agrees not to make any written or oral statement that may defame,
disparage or cast in a negative light so as to do harm to the personal or
professional reputation of (a) the Company, (b) its Executives, officers,
directors or trustees or (c) the services and/or products provided by the
Company and its subsidiaries or affiliate entities. Similarly, in response to
any written inquiry from any prospective employer or in connection with a
written inquiry in connection with any future business relationship involving
Executive, the Company agrees not to provide any information that may defame,
disparage or cast in a negative light so as to do harm to the personal or
professional reputation of Executive. The Parties acknowledge, however, that
nothing contained herein shall be construed to prevent or prohibit the Company
or the Executive from providing truthful information in response to any court
order, discovery request, subpoena or other lawful request.

28.  
EXECUTIVE SPECIFICALLY AGREES AND UNDERSTANDS THAT THE EXISTENCE AND TERMS OF
THIS AGREEMENT ARE STRICTLY CONFIDENTIAL AND THAT SUCH CONFIDENTIALITY IS A
MATERIAL TERM OF THIS AGREEMENT. Accordingly, except as required by law or
unless authorized to do so by the Company in writing, Executive agrees that
he/she shall not communicate, display or otherwise reveal any of the contents of
this Agreement to anyone other than his/her spouse, legal counsel or financial
advisor provided, however, that they are first advised of the confidential
nature of this Agreement and Executive obtains their agreement to be bound by
the same. The Company agrees that Executive may respond to legitimate inquiries
regarding the termination of his/her employment by stating that the Parties have
terminated their relationship on an amicable basis and that the Parties have
entered into a Confidential Separation and Release Agreement that prohibits
him/her from further discussing the specifics of his/her separation. Nothing
contained herein shall be construed to prevent Executive from discussing or
otherwise advising subsequent employers of the existence of any obligations as
set forth in his/her Employment Agreement. Further, nothing contained herein
shall be construed to limit or otherwise restrict the Company’s ability to
disclose the terms and conditions of this Agreement as may be required by
business necessity.

 

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29.  
In the event that Executive breaches or threatens to breach any provision of
this Agreement, he/she agrees that the Company shall be entitled to seek any and
all equitable and legal relief provided by law, specifically including immediate
and permanent injunctive relief. Executive hereby waives any claim that the
Company has an adequate remedy at law. In addition, and to the extent not
prohibited by law, Executive agrees that the Company shall be entitled to
discontinue providing any additional Severance Benefits upon such breach or
threatened breach as well as an award of all costs and attorneys’ fees incurred
by the Company in any successful effort to enforce the terms of this Agreement.
Executive agrees that the foregoing relief shall not be construed to limit or
otherwise restrict the Company’s ability to pursue any other remedy provided by
law, including the recovery of any actual, compensatory or punitive damages.
Moreover, if Executive pursues any claims against the Company subject to the
foregoing General Release, or breaches the above confidentiality provision,
Executive agrees to immediately reimburse the Company for the value of all
benefits received under this Agreement to the fullest extent permitted by law.

30.  
Similarly, in the event that the Company breaches or threatens to breach any
provision of this Agreement, Executive shall be entitled to seek any and all
equitable or other available relief provided by law, specifically including
immediate and permanent injunctive relief. In the event Executive is required to
file suit to enforce the terms of this Agreement, the Company agrees that
Executive shall be entitled to an award of all costs and attorneys’ fees
incurred by him/her in any wholly successful effort (i.e. entry of a judgment in
his/her favor) to enforce the terms of this Agreement. In the event Executive is
wholly unsuccessful, the Company shall be entitled to an award of its costs and
attorneys’ fees.

 

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31.  
Both Parties acknowledge that this Agreement is entered into solely for the
purpose of terminating Executive’s employment relationship with the Company on
an amicable basis and shall not be construed as an admission of liability or
wrongdoing by the Company or Executive, both Parties having expressly denied any
such liability or wrongdoing.

32.  
Each of the promises and obligations shall be binding upon and shall inure to
the benefit of the heirs, executors, administrators, assigns and successors in
interest of each of the Parties.

33.  
The Parties agree that each and every paragraph, sentence, clause, term and
provision of this Agreement is severable and that, if any portion of this
Agreement should be deemed not enforceable for any reason, such portion shall be
stricken and the remaining portion or portions thereof should continue to be
enforced to the fullest extent permitted by applicable law.

34.  
This Agreement shall be governed by and interpreted in accordance with the laws
of the State of Indiana without regard to any applicable state’s choice of law
provisions.

35.  
[USE THIS LANGUAGE IF OWBPA LANGUAGE (FOR EMPLOYEES AGE 40 OR OVER) IS NOT
INCLUDED] Employee acknowledges that he/she has been offered a period of
twenty-one (21) days within which to consider and review this Agreement; that
he/she has carefully read and fully understands all of the provisions of this
Agreement; and that he/she has entered into this Agreement knowingly and
voluntarily.

 

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36.  
Executive represents and acknowledges that in signing this Agreement he/she does
not rely, and has not relied, upon any representation or statement made by the
Company or by any of the Company’s Executives, officers, agents, stockholders,
directors or attorneys with regard to the subject matter, basis or effect of
this Agreement other than those specifically contained herein.

37.  
This Agreement represents the entire agreement between the Parties concerning
the subject matter hereof, shall supersede any and all prior agreements which
may otherwise exist between them concerning the subject matter hereof
(specifically excluding, however, the post-termination obligations contained in
an Executive’s Employment Agreement, any obligations contained in an existing
and valid Indemnity Agreement of Change in Control or any obligation contained
in any other legally-binding document), and shall not be altered, amended,
modified or otherwise changed except by a writing executed by both Parties.

PLEASE READ CAREFULLY. THIS SEPARATION AND RELEASE
AGREEMENT INCLUDES A COMPLETE RELEASE OF ALL
KNOWN AND UNKNOWN CLAIMS.

 

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IN WITNESS WHEREOF, the Parties have themselves signed, or caused a duly
authorized agent thereof to sign, this Agreement on their behalf and thereby
acknowledge their intent to be bound by its terms and conditions.

                      [EXECUTIVE]       COMPANY NAME    
 
                   
Signed:
          By:        
 
                   
 
                   
Printed:
          Title:        
 
                   
 
                   
Dated:
          Dated:        
 
                   

 

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Exhibit B
ILLUSTRATIVE COMPETITOR LIST
The following is an illustrative, non-exhaustive list of Competitors with whom
Executive may not, during his relevant non-compete period, directly or
indirectly engage in any of the competitive activities proscribed by the terms
of his Employment Agreement.

             
•
  Amico Corporation   •   Anodyne Medical Device, Inc.
 
           
•
  APEX Medical Corp.   •   Apria Healthcare Inc.
 
           
•
  Aramark Corporation   •   Ascom (Ascom US, Inc.)
 
           
•
  Barton Medical Corporation   •   B.G. Industries, Inc.
 
           
•
  CareMed Supply, Inc.   •   Comfortex, Inc.
 
           
•
  Corona Medical SAS   •   Custom Medical Solutions
 
           
•
  Dukane Communication Systems, a division of Edwards Systems Technology, Inc.  
•   Freedom Medical, Inc.
 
           
•
  Gaymar Holding Company, LLC (Gaymar Industries, Inc.)   •   GF Health
Products, Inc. (Graham Field)
 
           
•
  Getinge Group (Arjo; Getinge; Maquet; Pegasus; Huntleigh Technology Plc
(Huntleigh Healthcare, LLC))   •   Intego Systems, Inc. (formerly known as
Wescom Products, Inc.)

 

 

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•
  Industrie Guido Malvestio S.P.A.   •   Invacare Corporation
 
           
•
  Joerns Healthcare, Inc.   •   Joh. Stiegelmeyer & Co., GmbH (Stiegelmeyer)
 
           
•
  Kinetic Concepts, Inc. (KCI)   •   Linet (Linet France, Linet Far East)
 
           
•
  MedaSTAT, LLC   •   Medline Industries, Inc.
 
           
•
  Merivaara Corporation   •   Modular Services Company
 
           
•
  Nemschoff Chairs, Inc.   •   Nurture by Steelcase, Inc.
 
           
•
  Paramount Bed Company, Ltd.   •   Pardo
 
           
•
  Pegasus Airwave, Inc.   •   Premise Corporation
 
           
•
  Radianse, Inc.   •   Rauland-Borg Corporation
 
           
•
  Recovercare, LLC (Stenbar)   •   SIZEwise Rentals, LLC
 
           
•
  Statcom (Jackson Healthcare Solutions)   •   Stryker Corporation
 
           
•
  Tele-Tracking Technologies, Inc.   •   Tempur-Pedic Medical, Inc.
 
           
•
  Universal Hospital Services, Inc.   •   Voelker AG

While the above list is intended to identify the Company’s primary competitors,
it should not be construed as all encompassing so as to exclude other potential
competitors falling within the Non-Compete definitions of “Competitor.” The
Company reserves the right to amend this list at any time in its sole discretion
to identify other or additional Competitors based on changes in the products and
services offered, changes in its business or industry as well as changes in the
duties and responsibilities of the individual Executive. An updated list will be
provided to Executive upon reasonable request. Executives are encouraged to
consult with the Company prior to accepting any position with any potential
competitor.
(Revised list 1-1-2008)

 

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