Exhibit 10.11
AMENDED AND RESTATED
HILL-ROM HOLDINGS, INC.
STOCK INCENTIVE PLAN
R E C I T A L S
WHEREAS, in accordance with that certain Distribution Agreement (as defined
below), Hillenbrand Industries, Inc. (to be re-named Hill-Rom Holdings, Inc.
prior to or effective upon the Distribution referred to below and hereinafter
referred to in these recitals as “RemainCo” or “Hill-Rom Holdings, Inc.”)
proposes to distribute its entire ownership interest in Batesville Holdings,
Inc. (to be re-named Hillenbrand, Inc. prior to or effective upon the
Distribution and hereinafter referred to in these recitals as “SpinCo or
“Hillenbrand, Inc.”) through a pro-rata distribution of all of the outstanding
shares of SpinCo common stock then owned by RemainCo to the holders of RemainCo
common stock (“Distribution”); and
WHEREAS, RemainCo and SpinCo have entered into that certain Employee Matters
Agreement (as defined below) for the purpose of continuing benefits for the
pre-Distribution directors, employees and consultants of RemainCo and its
subsidiaries; and
WHEREAS, several amendments have been made to the Plan (as defined below) in
contemplation of the Distribution and it is intended by this restatement of the
Plan to incorporate all such amendments and any other changes needed upon the
occurrence of the Distribution into one plan document.
SECTION 1. Purpose and Types of Awards
1.1 The purposes of the Hill-Rom Holdings, Inc. Stock Incentive Plan (the
“Plan”) are to enable Hill-Rom Holdings, Inc., formerly Hillenbrand Industries,
Inc., (the “Company”) to attract, retain and reward its employees, officers and
directors, and strengthen the mutuality of interests between such persons and
the Company’s shareholders by offering such persons an equity interest in the
Company and thereby enabling them to participate in the long-term success and
growth of the Company.
1.2 Awards under the Plan may be in the form of (i) Stock Options; (ii) Stock
Appreciation Rights; (iii) Restricted Stock; (iv) Deferred Stock; and/or
(v) Bonus Stock. Awards may be free-standing or granted in tandem. If two awards
are granted in tandem, the award holder may exercise (or otherwise receive the
benefit of) one award only to the extent he or she relinquishes the tandem
award.
SECTION 2. Definitions
“Board” shall mean the Board of Directors of the Company.
“Bonus Stock” shall mean an award described in Section 10 of the Plan.

 

 

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“Code” shall mean the Internal Revenue Code of 1986, as amended from time to
time.
“Committee” shall mean the committee of the Board designated by the Board to
administer the Plan, or if no committee is designated, and in any case with
respect to awards to non-employee directors, the entire Board.
“Common Stock” shall mean the common stock of the Company, without par value.
“Company” shall mean Hill-Rom Holdings, Inc., formerly Hillenbrand Industries,
Inc., and its successors.
“Deferred Stock” shall mean an award described in Section 9 of the Plan and also
known as Restricted Stock Units.
“Distribution” shall have the meaning set forth in the recitals.
“Distribution Agreement” shall mean the Distribution Agreement by and between
Hillenbrand Industries, Inc. and Batesville Holdings, Inc. dated effective as of
March 14, 2008.
“Effective Time” shall mean the occurrence of the consummation of the
transaction contemplated by the Distribution Agreement.
“Employee” shall mean an employee of the Company or of any Subsidiary of the
Company.
“Employee Matters Agreement” shall mean the Employee Matters Agreement by and
between Hillenbrand Industries, Inc. and Batesville Holdings, Inc. dated
effective as of March 31, 2008.
“Fair Market Value” of the Common Stock on any date shall mean the value
determined in good faith by the Committee, by formula or otherwise; provided,
however, that unless the Committee determines to use a different measure, the
fair market value of the Common Stock shall be the average of the high and the
low sales prices of the Common Stock (on such exchange or market as is
determined by the Board to be the primary market for the Common Stock) on the
date in question (or if shares of Common Stock were not traded on such date,
then on the next preceding trading day on which a sale of Common Stock
occurred).
“Hillenbrand, Inc. Stock Incentive Plan” shall mean the Hillenbrand, Inc. Stock
Incentive Plan which is in effect immediately after the Effective Time.
“Incentive Option” shall mean a Stock Option granted under the Plan which both
is designated as an Incentive Option and qualifies as an incentive stock option
within the meaning of Section 422 of the Code.
“Non-Employee Director” shall mean a director of the Company who is not employed
by the Company or any of its Subsidiaries.

 

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“Non-Qualified Option” shall mean a Stock Option granted under the Plan, which
either is designated as a Non-Qualified Option or does not qualify as an
incentive stock option within the meaning of Section 422 of the Code.
“Optionee” shall mean any person who has been granted a Stock Option under the
Plan or who is otherwise entitled to exercise a Stock Option.
“Option Period” shall mean, with respect to any portion of a Stock Option, the
period after such portion has become exercisable and before it has expired or
terminated.
“Plan” shall mean the Hill-Rom Holdings, Inc. Stock Incentive Plan.
“Relationship” shall mean the status of employee, officer, or director of the
Company or any Subsidiary of the Company.
“Restatement Effective Date” shall mean the date of the consummation of the
transactions contemplated by the Distribution Agreement.
“Restricted Stock” shall mean an award described in Section 8 of the Plan.
“Spinoff Awards” shall have the meaning set forth in Section 5.5 of the
Hillenbrand, Inc. Stock Incentive Plan.
“Stock Appreciation Right” shall mean an award described in Section 7 of the
Plan.
“Stock Option” shall mean an Incentive Option or a Non-Qualified Option, and,
unless the context requires otherwise, shall include Director Options.
“Subsidiary” shall mean any corporation, partnership, joint venture or other
entity in which the Company owns, directly or indirectly, more than 50% of the
ownership interests.
SECTION 3. Administration
3.1 The Plan shall be administered by the Committee. Notwithstanding anything to
the contrary contained herein, only the Board shall have authority to grant
awards to Non-Employee Directors and to amend and interpret such awards.
3.2 The Committee shall have the following authority and discretion with respect
to awards under the Plan: to grant and amend (provided however that no amendment
shall impair the rights of the award holder without his or her written consent)
awards to eligible persons under the Plan; to adopt, alter and repeal such
administrative rules, guidelines and practices governing the Plan as it shall
deem advisable; to interpret the terms and provisions of the Plan and any award
granted under the Plan; and to make all factual and other determinations
necessary or advisable for the administration of the Plan. In particular, and
without limiting its authority and powers, the Committee shall have the
authority and discretion:
(a) to select the persons to whom awards will be granted from among those
eligible;

 

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(b) to determine the number of shares of Common Stock to be covered by each
award granted hereunder subject to the limitations contained herein;
(c) to determine the terms and conditions of any award granted hereunder,
including, but not limited to, any vesting or other restrictions based on such
continued employment, performance objectives and such other factors as the
Committee may establish, and to determine whether the terms and conditions of
the award have been satisfied;
(d) to determine the treatment of awards upon an Employee’s retirement,
disability, death, termination for cause or other termination of employment, or
during a leave of absence or upon a Non-Employee Director’s termination of
Relationship as allowed by law;
(e) to determine that the award holder has no rights with respect to any
dividends declared with respect to any shares covered by an award or that
amounts equal to the amount of any dividends declared with respect to the number
of shares covered by an award (i) will be paid to the award holder currently or
(ii) will be deferred and deemed to be reinvested or (iii) will otherwise be
credited to the award holder;
(f) to determine whether, to what extent, and under what circumstances Common
Stock and other amounts payable with respect to an award will be deferred either
automatically or at the election of an award holder, including providing for and
determining the amount (if any) of deemed earnings on any deferred amount during
any deferral period;
(g) to amend the terms of any award, prospectively or retroactively; provided,
however, that no amendment shall impair the rights of the award holder without
his or her written consent;
(h) after considering any accounting impact to the Company, to substitute new
Stock Options for previously granted Stock Options, or for options granted under
other plans or agreements, in each case including previously granted options
having higher option prices;
(i) to determine, pursuant to a formula or otherwise, the Fair Market Value of
the Common Stock on a given date;
(j) after considering any accounting impact to the Company, to provide that the
shares of Common Stock received as a result of an award shall be subject to a
right of repurchase by the Company and/or a right of first refusal, in each case
subject to such terms and conditions as the Committee may specify;
(k) to adopt one or more sub-plans, consistent with the Plan, containing such
provisions as may be necessary or desirable to enable awards under the Plan to
comply with the laws of other jurisdictions and/or qualify for preferred tax
treatment under such laws; and
(l) to delegate such administrative duties as it may deem advisable to one or
more of its members or to one or more Employees or agents.

 

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3.3 The Committee shall have the right to designate awards as “Performance
Awards.” The grant or vesting of a Performance Award shall be subject to the
achievement of performance objectives established by the Committee based on one
or more of the following criteria, in each case applied to the Company on a
consolidated basis and/or to a business unit and which the Committee may use as
an absolute measure, as a measure of improvement relative to prior performance,
or as a measure of comparable performance relative to a peer group of companies:
sales, operating profits, operating profits before taxes, operating profits
before interest expense and taxes, net earnings, earnings per share, return on
equity, return on assets, return on invested capital, total shareholder return,
cash flow, debt to equity ratio, market share, stock price, economic value
added, and market value added.
3.4 All determinations and interpretations made by the Committee pursuant to the
provisions of the Plan shall be final and binding on all persons, including the
Company and award holders. Determinations by the Committee under the Plan
relating to the form, amount, and terms and conditions of awards need not be
uniform, and may be made selectively among persons who receive or are eligible
to receive awards under the Plan, whether or not such persons are similarly
situated.
3.5 The Committee shall act by a majority of its members at a meeting (present
in person or by conference telephone) or by majority written consent.
3.6 No member of the Board or the Committee, nor any officer or Employee of the
Company or its Subsidiaries acting on behalf of the Board or the Committee,
shall be personally liable for any action, determination or interpretation taken
or made with respect to the Plan or any award hereunder. The Company shall
indemnify all members of the Board and the Committee and all such officers and
Employees acting on their behalf, to the extent permitted by law, from and
against any and all liabilities, costs and expenses incurred by such persons as
a result of any act, or omission to act, in connection with the performance of
such persons’ duties, responsibilities and obligations under the Plan.
SECTION 4. Stock Subject to Plan
4.1 The total number of shares of Common Stock which may be issued under the
Plan shall be 9,797,578, subject to adjustment as provided in Section 4.4. The
amounts reflected in the prior sentence are adjusted amounts after taking into
account the Distribution as set forth in Section 4.4 below. Such shares may
consist of authorized but unissued shares or shares that have been issued and
reacquired by the Company. The exercise of a Stock Appreciation Right for cash
or the payment of any award in cash shall not count against this share limit.

 

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4.2 To the extent a Stock Option is surrendered for cash or terminates without
having been exercised, or an award terminates without the holder having received
payment of the award, or shares awarded are forfeited, the shares subject to
such award shall again be available for distribution in connection with future
awards under the Plan. Shares of Common Stock equal in number to the shares
surrendered in payment of the option price, and shares of Common Stock which are
withheld in order to satisfy federal, state or local tax liability shall count
against the share limit set forth in Section 4.1.
4.3 No Employee shall be granted Stock Options and/or Stock Appreciation Rights
with respect to more than 370,096 shares of Common Stock in any fiscal year, and
no Employee shall be granted Restricted Stock, Deferred Stock and/or Bonus Stock
awards with respect to more than 185,048 shares of Common Stock in any fiscal
year, subject to adjustment as provided in Section 4.4. The amounts reflected in
the prior sentence are adjusted amounts after taking into account the
Distribution as set forth in Section 4.4 below. Notwithstanding the foregoing,
any Spinoff Awards are not awards or grants under this Plan and shall not count
against the foregoing fiscal year award limits under this Plan.
4.4 In the event of any merger, reorganization, consolidation, sale of
substantially all assets, recapitalization, stock dividend, stock split,
spin-off, split-up, split-off, distribution of assets or other change in
corporate structure affecting the Common Stock such that an adjustment is
determined by the Board in its discretion to be appropriate, after considering
any accounting impact to the Company, in order to prevent dilution or
enlargement of benefits under the Plan, then the Board shall, in such a manner
as it may in its discretion deem equitable, adjust any or all of (i) the
aggregate number and kind of shares reserved for issuance under the Plan, and
(ii) the number and kind of shares as to which awards may be granted to any
individual in any fiscal year. In the event of any merger, reorganization,
consolidation, sale of substantially all assets, recapitalization, stock
dividend, stock split, spin-off, split-up, split-off, distribution of assets or
other change in corporate structure affecting the Common Stock subject to an
outstanding award, the number and kind of shares of Common Stock or other
securities which are subject to this Plan or subject to any awards theretofore
granted, and the exercise prices, shall be appropriately and equitably adjusted
by the Board so as to maintain the proportionate number of shares or other
securities without changing the aggregate exercise price, if any.
In addition, upon the dissolution or liquidation of the Company or upon any
reorganization, merger, or consolidation as a result of which the Company is not
the surviving corporation (or survives as a wholly-owned subsidiary of another
corporation), or upon a sale of substantially all the assets of the Company, the
Board may, after considering any accounting impact to the Company, take such
action as it in its discretion deems appropriate to (i) accelerate the time when
awards vest and/or may be exercised and/or may be paid, (ii) cash out
outstanding Stock Options and/or other awards at or immediately prior to the
date of such event, (iii) provide for the assumption of outstanding Stock
Options or other awards by surviving, successor or transferee corporations,
(iv) provide that in lieu of shares of Common Stock of Company, the award
recipient shall be entitled to receive the consideration he would have received
in such transaction in exchange for such shares of Common Stock (or the Fair
Market Value thereof in cash), and/or (v) provide that Stock Options shall be
exercisable for a period of at least 10 business days from the date of receipt
of a notice from the Company of such proposed event, following the expiration of
which period any unexercised Stock Options shall terminate.

 

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The Board’s determination as to which adjustments shall be made under this
Section 4.4 and the extent thereof shall be final, binding and conclusive.
4.5 No fractional shares shall be issued or delivered under the Plan. The
Committee shall determine whether the value of fractional shares shall be paid
in cash or other property, or whether such fractional shares and any rights
thereto shall be cancelled without payment.
SECTION 5. Eligibility, Spinoff Awards and Adjusted Awards
5.1 The persons who are eligible for awards under Sections 6, 7, 8, 9, and 10 of
the Plan are Employees, officers and directors of the Company or of any
Subsidiary of the Company. In addition, awards under such Sections may be
granted to prospective Employees, officers, or directors but such awards shall
not become effective until the recipient’s commencement of employment or service
with the Company or a Subsidiary. Incentive Options may be granted only to
Employees and prospective Employees. Award recipients under the Plan shall be
selected from time to time by the Committee, in its sole discretion, from among
those eligible. In addition to the persons eligible under Section 5.1 above, all
persons to receive awards of Stock Options or Deferred Stock with respect to the
Common Stock as set forth in Article 7 of the Employee Matters Agreement are
eligible for awards under Section 6 and Section 9 of the Plan.
5.2 Non-Employee Directors shall be granted awards under Section 12 in addition
to any awards which may be granted to them under other Sections of the Plan.
5.3 Any awards of Stock Options or Deferred Stock under this Plan which are
outstanding immediately prior to the Effective Time and are held by individuals
receiving Spinoff Awards under Section 5.3 of the Hillenbrand, Inc. Stock
Incentive Plan, other than awards of Stock Options or Deferred Stock held by
individuals who are receiving Spinoff Awards pursuant to Section 7.1(c) and/or
Section 7.2(c) or (d) of the Employee Matters Agreement, are cancelled as of the
Effective Time and shall have no force or effect hereunder, and any holder of
such cancelled award of Stock Option or Deferred Stock shall have no claim under
such cancelled award or under the Plan.
5.4 Except as provided in Section 5.3 above, all awards of Stock Options or
Deferred Stock which are outstanding immediately prior to the Effective Time
shall be adjusted as set forth in Section 7.1 and 7.2 of the Employee Matters
Agreement.
SECTION 6. Stock Options
6.1 The Stock Options awarded to eligible persons under the Plan may be of two
types: (i) Incentive Options and (ii) Non-Qualified Options. To the extent that
any Stock Option granted to an Employee does not qualify as an Incentive Option,
it shall constitute a Non-Qualified Option. All Stock Options awarded to persons
who are not Employees shall be Non-Qualified Options.

 

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6.2 Subject to the following provisions, Stock Options awarded under Section 6
of the Plan shall be in such form and shall have such terms and conditions as
the Committee may determine.
(a) Option Price. The option price per share of Common Stock purchasable under a
Stock Option shall be determined by the Committee and may not be less than the
Fair Market Value of the Common Stock on the date of the award of the Stock
Option (or, with respect to awards to prospective Employees, on the first date
of employment).
(b) Option Term. The term of each Stock Option shall be fixed by the Committee.
(c) Exercisability. Stock Options shall be exercisable and shall vest at such
time or times and subject to such terms and conditions as shall be determined by
the Committee. The Committee may impose different schedules for exercisability
and vesting. After considering any accounting impact to the Company, the
Committee may waive any exercise or vesting provisions or accelerate the
exercisability or vesting of the Stock Option at any time in whole or in part.
(d) Method of Exercise. Stock Options may be exercised in whole or in part at
any time during the Option Period by giving the Company notice of exercise in
the form approved by the Committee (which may be written or electronic)
specifying the number of whole shares to be purchased, accompanied by payment of
the aggregate option price for such shares. Payment of the option price shall be
made in such manner as the Committee may provide in the award, which may include
(i) cash (including cash equivalents), (ii) delivery (either by actual delivery
of the shares or by providing an affidavit affirming ownership of the shares) of
shares of Common Stock already owned by the Optionee for at least six months,
(iii) broker-assisted “cashless exercise” in which the Optionee delivers a
notice of exercise together with irrevocable instructions to a broker acceptable
to the Company to sell shares of Common Stock (or a sufficient portion of such
shares) acquired upon exercise of the Stock Option and remit to the Company a
sufficient portion of the sale proceeds to pay the total option price and any
withholding tax obligation resulting from such exercise, (iv) any other manner
permitted by law, or (v) any combination of the foregoing.
(e) No Shareholder Rights. An Optionee shall have no rights to dividends or
other rights of a shareholder with respect to shares subject to a Stock Option
until the Optionee has duly exercised the Stock Option and a certificate for
such shares has been duly issued (or the Optionee has otherwise been duly
recorded as the owner of the shares on the books of the Company).

 

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(f) Termination of Employment or Relationship. Following the termination of an
Optionee’s employment or other Relationship with the Company or its
Subsidiaries, the Stock Option shall be exercisable to the extent determined by
the Committee. The Committee may provide different post-termination exercise
provisions which may vary based on the nature of and reason for the termination.
The Committee may provide that, notwithstanding the option term fixed pursuant
to Section 6.2(b), a Non-Qualified Option which is outstanding on the date of an
Optionee’s death shall remain outstanding for an additional period after the
date of such death. The Committee shall have absolute discretion to determine
the date and circumstances of any termination of employment or other
Relationship.
(g) Non-transferability. Unless otherwise provided by the Committee, (i) Stock
Options shall not be transferable by the Optionee other than by will or by the
laws of descent and distribution, and (ii) during the Optionee’s lifetime, all
Stock Options shall be exercisable only by such Optionee. The Committee, in its
sole discretion, may permit Stock Options to be transferred to such other
transferees and on such terms and conditions as may be determined by the
Committee.
(h) Surrender Rights. The Committee may, after considering any accounting impact
to the Company, provide that Stock Options may be surrendered for cash upon any
terms and conditions set by the Committee.
6.3 Notwithstanding the provisions of Section 6.2, Incentive Options shall be
subject to the following additional restrictions:
(a) Option Term. No Incentive Option shall be exercisable more than ten years
after the date such Incentive Stock Option is awarded.
(b) Additional Limitations for 10% Shareholders. No Incentive Option granted to
an Employee who owns more than 10% of the total combined voting power of all
classes of stock of the Company or any of its parent or subsidiary corporations,
as defined in Section 424 of the Code, shall (i) have an option price which is
less than 110% of the Fair Market Value of the Common Stock on the date of award
of the Incentive Option or (ii) be exercisable more than five years after the
date such Incentive Option is awarded.
(c) Exercisability. The aggregate Fair Market Value (determined as of the time
the Incentive Option is granted) of the shares with respect to which Incentive
Options (granted under the Plan and any other plans of the Company, its parent
corporation or subsidiary corporations, as defined in Section 424 of the Code)
are exercisable for the first time by an Optionee in any calendar year shall not
exceed $100,000.
(d) Notice of Disqualifying Disposition. An Optionee’s right to exercise an
Incentive Option shall be subject to the Optionee’s agreement to notify the
Company of any “disqualifying disposition” (for purposes of Section 422 of the
Code) of the shares acquired upon such exercise.
(e) Non-transferability. Incentive Options shall not be transferable by the
Optionee, other than by will or by the laws of descent and distribution. During
the Optionee’s lifetime, all Incentive Options shall be exercisable only by such
Optionee.
(f) Last Grant Date. No Incentive Option shall be granted more than ten years
after the earlier of the date of adoption of the Plan by the Board or approval
of the Plan by the Company’s shareholders.

 

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The Committee may, with the consent of the Optionee, amend an Incentive Option
in a manner that would cause loss of Incentive Option status, provided the Stock
Option as so amended satisfies the requirements of Section 6.2.
6.4 Substitute Options. In connection with a merger or consolidation of an
entity with the Company or the acquisition by the Company of property or stock
of an entity, the Committee may grant Stock Options in substitution for any
options or other stock awards or stock-based awards granted by such entity or an
affiliate thereof. Such substitute Stock Options may be granted on such terms as
the Committee deems appropriate in the circumstances, notwithstanding any
limitations on Stock Options contained in other provisions of this Section 6.
SECTION 7. Stock Appreciation Rights
7.1 A Stock Appreciation Right shall entitle the holder thereof to receive, for
each share as to which the award is granted, payment of an amount, in cash,
shares of Common Stock, or a combination thereof, as determined by the
Committee, equal in value to the excess of the Fair Market Value of a share of
Common Stock on the date of exercise over the Fair Market Value of a share of
Common Stock on the day such Stock Appreciation Right was granted. Any such
award shall be in such form and shall have such terms and conditions as the
Committee may determine. The grant shall specify the number of shares of Common
Stock as to which the Stock Appreciation Right is granted.
7.2 The Committee may provide that a Stock Appreciation Right may be exercised
only within the 60-day period following occurrence of a Change in Control (as
defined in Section 14.2) (such Stock Appreciation Right being referred to herein
as a “Limited Stock Appreciation Right”). The Committee may also provide that in
the event of a Change in Control the amount to be paid upon exercise of a Stock
Appreciation Right shall be based on the Change in Control Price (as defined in
Section 14.3).
SECTION 8. Restricted Stock
Subject to the following provisions, all awards of Restricted Stock shall be in
such form and shall have such terms and conditions as the Committee may
determine:
(a) The Restricted Stock award shall specify the number of shares of Restricted
Stock to be awarded, the price, if any, to be paid by the recipient of the
Restricted Stock and the date or dates on which, or the conditions upon the
satisfaction of which, the Restricted Stock will vest. The grant and/or the
vesting of Restricted Stock may be conditioned upon the completion of a
specified period of service with the Company and/or its Subsidiaries, upon the
attainment of specified performance objectives, or upon such other criteria as
the Committee may determine.
(b) Stock certificates representing the Restricted Stock awarded under the Plan
shall be registered in the award holder’s name, but the Committee may direct
that such certificates be held by the Company on behalf of the award holder.
Except as may be permitted by the Committee, no share of Restricted Stock may be
sold, transferred, assigned, pledged or otherwise encumbered by the award holder
until such share has vested in accordance with the terms of the Restricted Stock
award. At the time Restricted Stock vests, a certificate for such vested shares
shall be delivered to the award holder (or his or her designated beneficiary in
the event of death), free of all restrictions.

 

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(c) The Committee may provide that the award holder shall have the right to vote
and/or receive dividends on Restricted Stock. Unless the Committee provides
otherwise, Common Stock received as a dividend on, or in connection with a stock
split of, Restricted Stock shall be subject to the same restrictions as the
Restricted Stock.
(d) Except as may be provided by the Committee, in the event of an award
holder’s termination of employment or other Relationship before all of his or
her Restricted Stock has vested, or in the event any conditions to the vesting
of Restricted Stock have not been satisfied prior to any deadline for the
satisfaction of such conditions set forth in the award, the shares of Restricted
Stock which have not vested shall be forfeited, and the Committee may provide
that (i) any purchase price paid by the award holder shall be returned to the
award holder or (ii) a cash payment equal to the Restricted Stock’s Fair Market
Value on the date of forfeiture, if lower, shall be paid to the award holder.
(e) The Committee may waive, in whole or in part, any or all of the conditions
to receipt of, or restrictions with respect to, any or all of the award holder’s
Restricted Stock (except that the Committee may not waive conditions or
restrictions with respect to awards intended to qualify under Section 162(m) of
the Code unless such waiver would not cause the award to fail to qualify as
“performance-based compensation” within the meaning of Section 162(m) of the
Code).
SECTION 9. Deferred Stock Awards (also known as Restricted Stock Units)
Subject to the following provisions, all awards of Deferred Stock shall be in
such form and shall have such terms and conditions as the Committee may
determine:
(a) The Deferred Stock award shall specify the number of shares of Deferred
Stock to be awarded and the duration of the period (the “Deferral Period”)
during which, and the conditions under which, receipt of the Common Stock will
be deferred. The Committee may condition the grant or vesting of Deferred Stock,
or receipt of Common Stock or cash at the end of the Deferral Period, upon the
completion of a specified period of service with the Company and/or its
Subsidiaries, upon the attainment of specified performance objectives, or upon
such other criteria as the Committee may determine.
(b) Except as may be provided by the Committee, Deferred Stock awards may not be
sold, assigned, transferred, pledged or otherwise encumbered during the Deferral
Period.

 

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(c) At the expiration of the Deferral Period, the award holder (or his or her
designated beneficiary in the event of death) shall receive (i) certificates for
the number of shares of Common Stock equal to the number of shares covered by
the Deferred Stock award, (ii) cash equal to the Fair Market Value of such
Common Stock, or (iii) a combination of shares and cash, as the Committee may
determine.
(d) Except as may be provided by the Committee, in the event of an award
holder’s termination of employment or other Relationship before the Deferred
Stock has vested, his or her Deferred Stock award shall be forfeited.
(e) The Committee may waive, in whole or in part, any or all of the conditions
to receipt of, or restrictions with respect to, Common Stock or cash under a
Deferred Stock award (except that the Committee may not waive conditions or
restrictions with respect to awards intended to qualify under Section 162(m) of
the Code unless such waiver would not cause the award to fail to qualify as
“performance-based compensation” within the meaning of Section 162(m) of the
Code).
SECTION 10. Bonus Stock Awards
The Committee may award Bonus Stock to any eligible award recipient subject to
such terms and conditions as the Committee shall determine. The grant of Bonus
Stock may, but need not, be conditioned upon the attainment of specified
performance objectives or upon such other criteria as the Committee may
determine. The Committee may waive such conditions in whole or in part (except
that the Committee may not waive conditions or restrictions with respect to
awards intended to qualify under Section 162(m) of the Code unless such waiver
would not cause the award to fail to qualify as “performance-based compensation”
within the meaning of Section 162(m) of the Code). Unless otherwise specified by
the Committee, no money shall be paid by the recipient for the Bonus Stock.
Alternatively, the Committee may, after considering any accounting impact to the
Company, offer eligible employees the opportunity to purchase Bonus Stock at a
discount from its Fair Market Value. The Bonus Stock award shall be satisfied by
the delivery of the designated number of shares of Common Stock which are not
subject to restriction.
SECTION 11. Election to Defer Deferred Stock Awards or Bonus Stock Awards
The Committee may permit an award recipient to elect to defer payment of an
award for a specified period or until a specified event, upon such terms as are
determined by the Committee. An award holder may elect to defer the distribution
date of a Deferred Stock Award or Bonus Stock Award provided that such election
is made and delivered to the Company in compliance with Section 409A of the
Code, when applicable.

 

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SECTION 12. Non-Employee Director Options
The Board shall have the discretion to determine the number and types of awards
to be granted to Non-Employee Directors and the terms of such awards, including
but not limited to the exercisability and the effect of a director’s termination
of service.
SECTION 13. Tax Withholding
13.1 Each award holder shall, no later than the date as of which an amount with
respect to an award first becomes includible in such person’s gross income for
applicable tax purposes, pay to the Company, or make arrangements satisfactory
to the Committee regarding payment of, any federal, state, local or other taxes
of any kind required by law to be withheld with respect to the award. The
obligations of the Company under the Plan shall be conditional on such payment
or arrangements. The Company (and, where applicable, its Subsidiaries), shall,
to the extent permitted by law, have the right to deduct the minimum amount of
any required tax withholdings from any such taxes from any payment of any kind
otherwise due to the award holder.
13.2 To the extent permitted by the Committee, and subject to such terms and
conditions as the Committee may provide, an Employee may elect to have the
minimum amount of any required tax withholdings with respect to any awards
hereunder, satisfied by (i) having the Company withhold shares of Common Stock
otherwise deliverable to such person with respect to the award or
(ii) delivering to the Company shares of unrestricted Common Stock already owned
by the Employee for at least six months. Alternatively, the Committee may
require that a portion of the shares of Common Stock otherwise deliverable be
applied to satisfy the withholding tax obligations with respect to the award.
SECTION 14. Change in Control
14.1 In the event of a Change in Control, unless otherwise determined by the
Committee at the time of grant or by amendment (with the award holder’s consent)
of such grant:
(a) all outstanding Stock Options (including Director Options) and all
outstanding Stock Appreciation Rights (including Limited Stock Appreciation
Rights) awarded under the Plan shall become fully exercisable and vested;
(b) the restrictions and vesting conditions applicable to any outstanding
Restricted Stock and Deferred Stock awards under the Plan shall lapse and such
shares and awards shall be deemed fully vested;
(c) the Committee may, in its sole discretion, accelerate the payment date of
all Restricted Stock and Deferred Stock awards; and
(d) to the extent the cash payment of any award is based on the Fair Market
Value of Common Stock, such Fair Market Value shall be the Change in Control
Price.

 

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14.2 A “Change in Control” shall be deemed to occur on:
(i) the date that any person, corporation, partnership, syndicate, trust, estate
or other group acting with a view to the acquisition, holding or disposition of
securities of the Company, becomes, directly or. indirectly, the beneficial
owner, as defined in Rule 13d-3 under the Securities Exchange Act of 1934
(“Beneficial Owner”), of securities of the Company representing 35% or more of
the voting power of all securities of the Company having the right under
ordinary circumstances to vote at an election of the Board (“Voting
Securities”), other than by reason of (x) the acquisition of securities of the
Company by the Company or any of its Subsidiaries or any employee benefit plan
of the Company or any of its Subsidiaries, (y) the acquisition of securities of
the Company directly from the Company, or (z) the acquisition of securities of
the Company by one or more members of the Hillenbrand Family (which term shall
mean descendants of John A. Hillenbrand and their spouses, trusts primarily for
their benefit or entities controlled by them);
(ii) the consummation of a merger or consolidation of the Company with another
corporation unless
(A) the shareholders of the Company, immediately prior to the merger or
consolidation, beneficially own, immediately after the merger or consolidation,
shares entitling such shareholders to 50% or more of the voting power of all
securities of the corporation surviving the merger or consolidation having the
right under ordinary circumstances to vote at an election of directors in
substantially the same proportions as their ownership, immediately prior to such
merger or consolidation, of Voting Securities of the Company;
(B) no person, corporation, partnership, syndicate, trust, estate or other group
beneficially owns, directly or indirectly, 35% or more of the voting power of
the outstanding voting securities of the corporation resulting from such merger
or consolidation except to the extent that such ownership existed prior to such
merger or consolidation; and
(C) the members of the Company’s Board, immediately prior to the merger or
consolidation, constitute, immediately after the merger or consolidation, a
majority of the board of directors of the corporation issuing cash or securities
in the merger;
(iii) the date on which a majority of the members of the Board consist of
persons other than Current Directors (which term shall mean any member of the
Board on the date hereof and any member whose nomination or election has been
approved by a majority of Current Directors then on the Board);
(iv) the consummation of a sale or other disposition of all or substantially all
of the assets of the Company; or
(v) the date of approval of the shareholders of the Company of a plan of
complete liquidation of the Company.
14.3 “Change in Control Price” means the highest price per share of Common Stock
paid in any transaction reported on any national market or securities exchange
where the Common Stock is traded, or paid or offered in any transaction related
to a Change in Control at any time during the 90-day period ending with the
Change in Control. Notwithstanding the foregoing sentence, in the case of Stock
Appreciation Rights granted in tandem with Incentive Options, the Change in
Control Price shall be the highest price paid on the date on which the Stock
Appreciation Right is exercised.

 

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SECTION 15. General Provisions
15.1 Each award under the Plan shall be subject to the requirement that, if at
any time the Committee shall determine that (i) the listing, registration or
qualification of the Common Stock subject or related thereto upon any securities
exchange or market or under any state or federal law, or (ii) the consent or
approval of any government regulatory body or (iii) an agreement by the
recipient of an award with respect to the disposition of Common Stock, is
necessary or desirable in order to satisfy any legal requirements, or (iv) the
issuance, sale or delivery of any shares of Common Stock is or may in the
circumstances be unlawful under the laws or regulations of any applicable
jurisdiction, the right to exercise such Stock Option shall be suspended, such
award shall not be granted and such shares will not be issued, sold or
delivered, in whole or in part, unless such listing, registration,
qualification, consent, approval or agreement shall have been effected or
obtained free of any conditions not acceptable to the Committee, and the
Committee determines that the issuance, sale or delivery of the shares is
lawful. The application of this Section shall not extend the term of any Stock
Option or other award. The Company shall have no obligation to effect any
registration or qualification of the Common Stock under federal or state laws or
to compensate the award holder for any loss caused by the implementation of this
Section 15.1.
15.2 The Committee may provide, at the time of grant or by amendment with the
award holder’s consent, that an award and/or Common Stock acquired under the
Plan shall be forfeited, including after exercise or vesting, if within a
specified period of time the award holder engages in any of the conduct
described below (“Disqualifying Conduct”). Disqualifying Conduct shall mean
(i) the award holder’s performance of service for a competitor of the Company
and/or its Subsidiaries, including service as an employee, director, or
consultant, or the establishing by the award holder of a business which competes
with the Company and/or its Subsidiaries, (ii) the award holder’s solicitation
of employees or customers of the Company and/or its Subsidiaries (iii) the award
holder’s improper use or disclosure of confidential information of the Company
and/or its Subsidiaries or (iv) material misconduct by the award holder in the
performance of such award holder’s duties for the Company and/or its
Subsidiaries, as determined by the Committee.
15.3 Nothing set forth in this Plan shall prevent the Board from adopting other
or additional compensation arrangements.
15.4 Nothing in the Plan nor in any award hereunder shall confer upon any award
holder any right to continuation of his or her employment by or other
Relationship with the Company or its Subsidiaries, or interfere in any way with
the rights of any such company to terminate such employment or other
Relationship.
15.5 Neither the Plan nor any award shall create or be construed to create a
trust or separate fund of any kind or a fiduciary relationship between the
Company or Subsidiary and an award recipient, and no award recipient will, by
participation in the Plan, acquire any right in any specific Company property,
including any property the Company may set aside in connection with the Plan. To
the extent that any award recipient acquires a right to receive payments from
the Company or any Subsidiary pursuant to an award, such right shall not be
greater than the right of an unsecured general creditor of the Company or its
Subsidiaries.

 

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15.6 The Plan and all awards hereunder shall be governed by the laws of the
State of Indiana without giving effect to conflict of laws principles.
SECTION 16. Amendments and Termination
16.1 The Plan shall be of unlimited duration. The Board may discontinue the Plan
at any time and may amend it from time to time. No amendment or discontinuation
of the Plan shall adversely affect any award previously granted without the
award holder’s written consent. Amendments may be made without shareholder
approval except as required to satisfy applicable laws or regulations or the
requirements of any stock exchange or market on which the Common Stock is listed
or traded.
16.2 The Committee may amend the terms of any award prospectively or
retroactively; provided, however, that no amendment shall impair the rights of
the award holder without his or her written consent.
SECTION 17. Effective Date of Plan as Amended and Restated
17.1 The Plan was originally effective January 15, 2002. The Plan is amended and
restated effective as of the Restatement Effective Date.

 

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