Exhibit 10.7






Exhibit 10.7




HILL-ROM HOLDINGS, INC.

STOCK AWARD

(EFFECTIVE <date>)




1. Purpose. The purpose of the Hill-Rom Holdings, Inc. Stock Award (hereinafter
called the “Award”), which is granted under the Hill-Rom Holdings, Inc. Stock Incentive Plan (the
“Plan”), is to promote profitability and growth of Hill-Rom Holdings, Inc. (the “Company”) by
offering an incentive payable in Company common stock to <Name> (the “Employee”) who
contributes to such profitability and growth.



2. Amount of Award. Solely for purposes of this Award, the Company shall cause an
account to be established in the name of the Employee (“Deferred Stock Account”), which shall be
assumed to be invested in <Units> shares (“Initial Deferred Stock Award”) of common stock, no
par value of the Company (“Common Stock”). The Initial Deferred Stock Award represents the number
of shares of Common Stock that would be earned if the performance goal described in Section 3 were
attained at the “Target” performance level, as described in Section 3. No actual shares of Common
Stock shall be held in the Deferred Stock Account, and the number of hypothetical shares of Common
Stock maintained in the Deferred Stock Account (“Deferred Stock”) shall be a book entry which
states the number of shares of Common Stock the Employee would have a right to receive in
accordance with the terms of this Award. Any stock dividends, stock splits and other similar
rights inuring to Common Stock shall be assumed to inure to the Deferred Stock, which may increase
or decrease the number of shares of Deferred Stock in the Deferred Stock Account. Notwithstanding
anything herein to the contrary, no cash dividends paid on Common Stock by the Company shall be
paid or credited to the account of the Employee with respect to any Deferred Stock in the Deferred
Stock Account.




3. Vested Deferred Stock.




(a) Subject to Section 4, the shares of Deferred Stock in the Employee’s Deferred Stock
Account will become non-forfeitable (“Vested Deferred Stock”) based on the Company’s total
shareholder return (“TSR”) performance over a period beginning on October 1, 2010 and ending
on September 30, 2013 (“Performance Period”) relative to the Peer Companies’ (as defined in
Exhibit A) TSR during the Performance Period, as determined by the Compensation and
Management Development Committee of the Company’s Board of Directors (the “Committee”), in
accordance with the following schedule:



	 	 	 	 	 	 	 	 	 
	Company’s Relative TSR	 	Percentage of Deferred Stock	 	 	 	 
	Percentile Ranking	 	Becoming Vested Deferred Stock	 	 	Performance Level	 
	 
	 	 	 	 	 	 	 	 
	Less than 25th percentile
	 	 	0	%	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	25th percentile
	 	 	25	%	 	Threshold
	 
	 	 	 	 	 	 	 	 
	60th percentile
	 	 	100	%	 	Target





 


 









 






If the Company’s TSR relative to the Peer Companies’ TSR during the Performance Period
is above the 25th percentile but below the 60th percentile, the number
of shares of Deferred Stock that become Vested Deferred Stock shall be determined by
interpolation based on the schedule set forth above. Subject to Section 4, any portion of
the Deferred Stock that does not become Vested Deferred Stock in accordance with the
schedule set forth above based on the Company’s TSR performance during the Performance
Period shall be forfeited by Employee without the payment of any consideration or further
consideration by the Company.




If the Company’s TSR relative to the Peer Companies’ TSR during the Performance Period
is above the 60th percentile, (i) all of the Deferred Stock in the Employee’s
Deferred Stock Account on September 30, 2013 shall become Vested Deferred Stock, and (ii)
the Committee, in its discretion, may grant to Employee additional Deferred Stock equal to a
percentage of the shares of Deferred Stock in the Employee’s Deferred Stock Account on
September 30, 2013, determined according to the following schedule, with the appropriate
percentage determined by interpolation as necessary:



	 	 	 	 	 
	 	 	Percentage of September 30, 2013	 
	 	 	Deferred Stock Account Balance	 
	Company’s Relative TSR	 	That May Be Granted	 
	Percentile Ranking	 	As Additional Deferred Stock	 
	 
	 	 	 	 
	60th percentile
	 	 	0	%
	 
	 	 	 	 
	65th percentile
	 	 	33	%
	 
	 	 	 	 
	70th percentile
	 	 	67	%
	 
	 	 	 	 
	75th percentile or above
	 	 	100	%







Any additional Deferred Stock granted by the Committee shall immediately be Vested
Deferred Stock as of the date of such grant by the Committee. Any fractional shares of
Vested Deferred Stock determined under this Section 3 shall be rounded up to the next whole
share of Vested Deferred Stock.




(b) TSR shall be based on the trailing 20-day average closing stock prices of the
Company and the Peer Companies measured as of (and including the 20th day) the first and
last business days of the Performance Period and including the effect of any dividends
actually paid as if the dividends were invested in the stock of the Company or the Peer
Company, as the case may be, and proportionately adjusted for stock splits, reorganizations
or similar transactions occurring the during the Performance Period.




(c) The Peer Companies are set forth in Exhibit A. If a member of the Peer Companies
is acquired by a third party during the Performance Period, such member shall no longer be a
Peer Company. If a member of the Peer Companies declares
bankruptcy during the Performance Period, such member will remain a Peer Company for
purposes of determining the Company’s relative TSR percentile ranking for the Performance
Period, and such member’s TSR shall be considered to be at the lowest ranking.


 


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4. Employment Requirements.




(a) Except as otherwise provided herein, upon the Employee’s termination of employment
for any reason before the end of the Performance Period, any Deferred Stock maintained in
the Deferred Stock Account which is not Vested Deferred Stock shall be forfeited by the
Employee without the payment of any consideration or further consideration by the Company,
and neither the Employee nor any successors, heirs, assigns, or legal representatives of the
Employee shall thereafter have any further rights or interest in such forfeited Deferred
Stock. If the Employee remains continuously employed by the Company until the last day of
the Performance Period, the number of shares of Deferred Stock that are determined by the
Committee to be Vested Deferred Stock pursuant to Section 3 shall become Vested Deferred
Stock, regardless of whether the Employee remains employed with the Company until the date
of such determination. Temporary absences from employment because of illness, vacation or
leave of absence and transfers among the Company and/or any of its Subsidiaries (as defined
in the Plan) shall not be considered terminations of employment. For purposes of this
Agreement and the Plan, the Committee shall have absolute discretion to determine the date
and circumstances of termination of the Employee’s employment, and its determination shall
be final, conclusive and binding upon the Employee. Notwithstanding anything herein to the
contrary, the transfer of the Employee’s employment from the Company to any of its
Subsidiaries or from one of the Company’s Subsidiaries to the Company or another of the
Company’s Subsidiaries in connection with a Distribution (as defined below) or disposition
shall not constitute a termination of employment for purposes of this Agreement, and the
Employee’s employment will be deemed to continue for purposes of this Agreement until
otherwise terminated as provided herein. In particular, if the Employee transfers
employment from the Company to any of its Subsidiaries or from one of the Company’s
Subsidiaries to the Company or another of the Company’s Subsidiaries in connection with or
in anticipation of a Distribution or disposition, such transfer of employment shall not
constitute a termination of employment for purposes of this Agreement, and the Employee’s
employment will be deemed to continue for purposes of this Agreement until otherwise
terminated as provided herein.




(b) Notwithstanding the foregoing, any Deferred Stock maintained in the Deferred Stock
Account shall become Vested Deferred Stock upon the termination of the Employee’s employment
with the Company, one of its Subsidiaries or one of their respective divisions before the
end of the Performance Period by reason of disability (as determined by the Committee) or
death. The Employee shall have no right to any additional shares of Deferred Stock,
regardless of the Company’s TSR performance during the Performance Period. In the event of
the termination of Employee’s employment with the Company, one of its Subsidiaries or one of
their respective divisions before the end of the Performance Period by reason of Retirement
(as defined


 


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below), a pro rata portion (based on the number of days of Employee’s employment during the Performance Period) of the Deferred Stock that would have become Vested Deferred
Stock in accordance with Section 3, if any, shall become Vested Deferred Stock at the end of
the Performance Period, including any additional Deferred Stock that may be granted by the
Committee under Section 3 if the Company’s TSR relative to the Peer Companies’ TSR during
the Performance Period is above the 60th percentile. For purposes of this
paragraph, “Retirement” means a termination of employment after (i) the day after the first
anniversary date of the effective date of this Award, and (ii) attaining age fifty-five (55)
and completion of five (5) years of employment.




(c) Any Deferred Stock maintained in the Deferred Stock Account shall become Vested
Deferred Stock upon the termination of the Employee’s employment by the Company for any
reason other than on account of his death, disability, retirement or for Cause (as defined
in the Employee’s employment agreement) or by Employee for Good Reason (as defined in the
Employee’s employment agreement)(i) after the day after the first anniversary date of the
effective date of this Award and (ii) after the occurrence, but before the third anniversary
of (A) a Change in Control (as defined in Section 14.2 of the Plan), or (B) a sale, transfer
or disposition of substantially all of the assets or capital stock of a Subsidiary (as
defined in the Plan) or division of the Company or one of its Subsidiaries for whom the
Employee is employed at the time of such Change in Control, sale, transfer, or disposition.
Notwithstanding anything herein to the contrary, the distribution by the Company to Company
shareholders of any or all of the shares of common stock of any of its Subsidiaries
(“Distribution”) shall not constitute an event causing Deferred Stock to become Vested
Deferred Stock as described in the preceding sentence.




In consideration of the grant of this Award, the Employee hereby agrees and
acknowledges that any provisions in an Employment Agreement and/or a Change in Control
Agreement between the Employee and the Company related to the vesting of awards granted
under the Plan shall not apply and have no effect with respect to this Award, and that the
vesting of this Award upon a Change in Control shall be governed solely by this Agreement.



5. Delivery of Shares. The Company shall deliver to the Employee shares of Common
Stock equal in number to the number of shares of Vested Deferred Stock. The shares of Common Stock
delivered to the Employee shall be from shares held by the Company as treasury stock or from shares
of Common Stock acquired by the Company in the open market. Subject to the Employee’s election to
defer, all shares of Common Stock to be delivered to the Employee shall be delivered as soon as
administratively possible after the day on which such shares become Vested Deferred Stock, but no
later than March 15th of the calendar year immediately following the calendar year in
which such shares become Vested Deferred Stock. However, shares of Vested Deferred Stock delivered
due to the Employee’s termination under Section 4(c) shall be delivered with ninety (90) days after
the Employee’s termination provided that the Employee shall have no right to designate the calendar
year in which the shares will be delivered. Notwithstanding the foregoing, if shares become
deliverable by reason of the Employee’s separation from service following a Change in Control and
at the time of the Employee’s separation from service the Employee is a “specified employee” as
defined in Code
Section 409A, then the shares of Common Stock to be delivered shall be delivered on the date which
is six months after the date of the Employee’s separation from service.


 


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6. Administration of the Award. The Committee shall administer the Award. The
Committee shall have complete and full discretion in the administration and interpretation of the
terms of the Award.




7. Right to Defer Payment of Award.




(a) Election to Defer Award. The Employee may elect to defer payment of the Award
otherwise due on the date shares become Vested Deferred Stock by completing a written
election and delivering such election to the Company at least one year prior to such date;
provided however, that the completion of such written election and the delivery of such
election may be at an earlier date as determined by the Committee or required by law to
insure the validity of such deferral. The Employee may not defer payment for a period that
is shorter than five (5) years after the date the shares become Vested Deferred Stock. At
the end of the deferral period elected by the Employee (or within a certain period of time
after the last day of the deferral period as determined by the Committee or required by law
to insure the validity of the deferral), the Company, subject to Sections 9, 10 and 11,
shall deliver to the Employee shares of Common Stock equal in number to the number of Vested
Deferred Stock held in the Employee’s Deferred Stock Account.




(b) Financial Hardship. A withdrawal from the Employee’s Deferred Stock Account of
Vested Deferred Stock shall be permitted prior to the termination of the deferral period in
the event that the Employee experiences an “unforeseeable emergency” as such term is defined
in Section 409A(a)(2)(B)(ii) of the Internal Revenue Code of 1986, as amended (“Code”) and
the regulations issued thereunder. The Employee must apply to the Committee for an
unforeseeable emergency withdrawal and demonstrate that the circumstances being experienced
were not under the Employee’s control and constitute a real emergency, which is likely to
cause a severe financial hardship. The Committee shall have the authority to require such
medical or other evidence as it may need to determine the necessity for the Employee’s
withdrawal request. If such application for withdrawal is permitted, the amount of such
withdrawal shall be limited to an amount reasonably necessary to satisfy the emergency need,
and the Committee must take into account any additional compensation available. If the
Employee makes a withdrawal, the amount of the Employee’s Deferred Stock Account under this
Award shall be proportionately reduced to reflect the withdrawal. Also, the withholding
requirements described in Section 11 shall also be effected before the withdrawal.
Notwithstanding anything in this Section 4(b) to the contrary, any withdrawal for any
unforeseeable emergency must comply with Code Section 409A(a)(2)(B).



8. No Rights as Stockholder. The Employee shall have no rights as a stockholder with
respect to any shares of Common Stock covered by this Award until shares of Common Stock are
delivered to the Employee. Until such time, the Employee shall not be entitled to dividends
(except where the Employee’s Deferred Stock Account is adjusted for stock dividends pursuant to
Section 2) or to vote at meetings of the stockholders of the Company.


 


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9. Compliance With Securities Laws. Prior to the receipt of any certificates for
shares of Common Stock pursuant to this Award, the Employee (or the Employee’s beneficiary or legal
representative upon the Employee’s death or disability) shall enter into such additional written
representations, warranties and Awards as the Company may reasonably request in order to comply
with applicable securities laws or with this Award.



10. Stock Ownership Guidelines. The Employee (or the Employee’s beneficiary or legal
representative upon the Employee’s death or disability) shall be bound by the “Stock Ownership
Guidelines” of the Company as may be in effect from time to time.



11. Withholding. Any payment of Common Stock under this Award shall be subject to
applicable federal and state withholding requirements. Hence, unless the Employee delivers a check
to the Company equal to the required withholding, the number of shares distributed shall be reduced
to meet the Employee’s applicable withholding requirements.



12. Designation of Beneficiary. The Employee shall be permitted to provide to the
Committee a beneficiary designation for receipt of his or her Award after death. If the Employee
fails to designate a beneficiary, or if the designated beneficiary predeceases the Employee, the
Award shall be paid to the deceased Employee’s spouse, if living, or if such spouse is not living,
to the deceased Employee’s estate.



13. Adjustments. 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 occurring after the
effective date of this Award affecting the Common Stock subject to this award, the Board of
Directors of the Company shall adjust the number and kind of shares of Common Stock subject to this
Award so as to maintain the proportionate number of shares subject to this award, and such
adjustment shall be conclusive and binding upon the Employee and the Company.




14. Non-Transferability.




(a) The Deferred Stock, the Deferred Stock Account and the Vested Deferred Stock may
not be sold, assigned, transferred, exchanged, pledged, hypothecated, or otherwise
encumbered and no such sale, assignment, transfer, exchange, pledge, hypothecation, or
encumbrance, whether made or created by a voluntary act of the Employee or any agent of the
Employee or by operation of law, shall be recognized by, or be binding upon, or shall in any
manner affect the rights of, the Company, its successors or any agent thereof.




(b) No amounts payable under the Award shall be transferable by the Employee other than
by his designation of a beneficiary pursuant to Section 12. The amounts payable under the
Award shall be exempt from the claims of creditors of the Employee and from all orders,
decrees, levies and executions and any other legal process to the fullest extent that may be
permitted by law.


 


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15. Amendments to Award. The Award may only be modified upon the mutual agreement of
the Company and the Employee.



16. Source of Benefit Payments. The payment of the Award to the Employee shall be
paid solely from the general assets of the Company. Until the actual delivery of the shares of
Common Stock, the Employee shall not have any interest in any specific assets of the Company,
including shares of Common Stock, under the terms of the Award. The Award shall not be considered
to create an escrow account, trust fund or other funding arrangement of any kind, or a fiduciary
relationship between the Employee and the Company. Until such time of payment, no shares of the
Common Stock shall be set aside by the Company for the Award.




17. Successors and Assigns.




(a) This Award is personal to the Employee and without the prior written consent of the
Company shall not be assignable by the Employee except by will or the laws of descent and
distribution. This Award shall inure to the benefit of and be enforceable by the Employee’s
guardian and legal representatives.




(b) This Award shall inure to the benefit of and be binding upon the Company and its
successors and assigns.




(c) The Company shall require any successor (whether direct or indirect, by purchase,
merger, consolidation or otherwise) to all or substantially all of the business and/or
assets of the Company to assume expressly and agree to perform this Award in the same manner
and to the same extent that the Company would be required to perform it if no such
succession had taken place.



18. Award Subject to Plan. This Award is subject to the terms of the Plan. The terms
and provisions of the Plan (including any subsequent amendments thereto) are hereby incorporated
herein by reference. In the event of a conflict between any terms and provisions contained herein
and the terms or provisions of the Plan, the applicable terms or provisions of the Plan will govern
and prevail.



19. Governing Law. This Award shall be governed by and construed in accordance with
the internal laws of the State of Indiana without reference to principles of conflict of laws. The
captions of this Award are not part of the provisions hereof and shall have no force or effect.
This Award may not be amended or modified except by a written Award executed by the parties hereto
or their respective successors and legal representatives.



20. Severability. The invalidity or unenforceability of any provision of this Award
shall not affect the validity or enforceability of any other provision of this Award.



 21. No Waiver. The failure of the Employee or the Company to insist upon
strict compliance with any provision of this Award or the failure to assert any right the Employee
or the Company may have under this Award shall not be deemed to be a waiver of such provision or
right or any other provision or right of this Award.


 


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22. Code Section 409A. The Plan is intended to comply with, or otherwise be exempt
from, Code Section 409A. The Plan shall be administered, interpreted, and construed in a manner
consistent with Code Section 409A or an exemption therefrom. Should any provision of the Plan be
found not to comply with, or otherwise be exempt from, the provisions of Code Section 409A, such
provision shall be modified and given effect (retroactively if necessary), in the sole discretion
of the Committee, and without the consent of the Employee, in such manner as the Committee
determines to be necessary or appropriate to comply with, or to effectuate an exemption from, Code
Section 409A. If any of the payments under this Agreement are subject to Code Section 409A and the
Company determines that the Employee is a “specified employee” under Code Section 409A at the time
of the Employee’s separation from service, then each such payment will not be made or commence
until the date which is the first day of the seventh month after the Employee’s separation from
service, and any payments that otherwise would have been paid during the first six months after the
Employee’s separation from service will be paid in a lump sum on the first day of the seventh month
after the Employee’s separation from service or upon the Employee’s death, if earlier. Such
deferral will be effected only to the extent required to avoid adverse tax treatment to the
Employee, including (without limitation) the additional twenty percent (20%) federal tax for which
the Employee would otherwise be liable under Code Section 409A(a)(l)(B) in the absence of such
deferral.



23. Entire Award. The Employee and the Company acknowledge that this Award
supersedes any prior agreement between the parties with respect to the subject matter of this
Award.



24. Counterparts. This Award may be executed in counterparts, which together shall
constitute one and the same original.



	 	 	 	 	 
	Effective Date:

	 	<date>
	 	 






	 	 	 	 	 	 	 
	 	 	HILL-ROM HOLDINGS, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ John Dickey	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	John Dickey

Senior Vice President	 	 
	 
	 	 	 	 	 	 
	Accepted:
	 	 	 	 	 	 
	 	 	 	 	 
	 	 	<Name>	 	 






 


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Exhibit A




Peer Companies




Affymetrix, Inc.

Alere, Inc.

Bard (C.R.)

Beckman Coulter, Inc.

Bio-Rad Laboratories, Inc.

Cerner Corporation

Charles River Laboratories International

Community Health Systems, Inc.

Conmed

Cooper Industries

Covance, Inc.

Dentsply

Edwards Lifesciences Corp.

Endo Pharmaceuticals Holdings, Inc.

Gen-Probe, Inc.

Health Management Associates, Inc.

Health Net, Inc.

Henry Schein, Inc.

Hologic, Inc.

Hospira

IDEXX Laboratories, Inc.

Immucor, Inc.

Integra Lifesciences

Invacare

Kindred Healthcare, Inc.

Kinetic Concepts, Inc.

LifePoint Hospitals, Inc.

Lincare Holdings, Inc.

Masimo Corp.

Medicis Pharmaceutical Corp.

Mettler-Toledo International, Inc.

Omnicare, Inc.

OSI Pharmaceuticals, Inc.

Owens & Minor, Inc.

Perkinelmer

Perrigo Co.

Pharmaceutical Product Development, Inc.

Psychiatric Solutions, Inc.

ResMed, Inc.

STERIS Corp.

Techne Corp.

Teleflex, Inc.

Thoratec Corp.

United Therapeutics Corp.

Universal Health Services, Inc.

Valeant Pharmaceuticals International

Varian, Inc.

VCA Antech, Inc.

Vertex Pharmaceuticals, Inc.

WellCare Health Plans, Inc.