Exhibit 10.1





Exhibit 10.1




HILLENBRAND, INC.

STOCK INCENTIVE PLAN

(As of February 24, 2010)




APPENDIX A




HILLENBRAND, INC.

STOCK INCENTIVE PLAN




(As of February 24, 2010)




R E C I T A L S




WHEREAS, in accordance with that certain Distribution Agreement (as defined below),
Hillenbrand Industries, Inc. (re-named Hill-Rom Holdings, Inc. and hereinafter referred to in these
recitals as “RemainCo” or “Hill-Rom Holdings, Inc.”) has distributed its entire ownership interest
in Batesville Holdings, Inc. (re-named Hillenbrand, Inc. 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, in accordance with Section 2.5 of the Employee Matters Agreement, SpinCo did adopt
and implement a Stock Incentive Plan with features that are comparable to the Hillenbrand
Industries, Inc. Stock Incentive Plan, as amended, to be effective as of the date of the
consummation of the transactions contemplated by the Distribution Agreement; and



WHEREAS, the Board of Directors of Hillenbrand, Inc. (the “Company”) previously determined
that certain revisions to the Stock Incentive Plan as previously adopted were desirable for the
purpose of making the provisions of the Stock Incentive Plan compliant with Section 409A of the
Internal Revenue Code of 1986, as amended, and did adopt the Stock Incentive Plan (As of December
19, 2008) to amend, restate, supersede and replace the form of the Stock Incentive Plan previously
adopted; and



WHEREAS, the Board of Directors of the Company has determined that it is in the best interest
of the Company and its shareholders to increase the total number of shares of the Common Stock of
the Company that can potentially be issued under the Stock Incentive Plan from 4,635,436 shares to
8,635,436 shares, an increase of 4,000,000 shares; and



WHEREAS, the Board of Directors of the Company has, subject to shareholder approval of the
Stock Incentive Plan, re-adopted the Stock Incentive Plan (As of February 24, 2010) in the form
that follows to amend, restate, supersede, and replace the form thereof previously adopted (when
approved by the shareholders of the Company), for purposes of increasing the total number of shares
of Common Stock of the Company that can be issued under the Plan as stated above and making certain
other amendments thereto.


 


 









 





SECTION 1. Purpose and Types of Awards




1.1 The purposes of the Hillenbrand, Inc. Stock Incentive Plan (the “Plan”) are to enable
Hillenbrand, 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.




“Code” shall mean the Internal Revenue Code of 1986, as amended from time-to-time.



“Committee” shall mean the committee of independent (in accordance with Section 162(m) of the
Code) directors 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 Hillenbrand, 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 Date” shall mean the date of the consummation of the transactions contemplated by
the Distribution Agreement.



“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 other method consistent with the determination of fair market
value under Code Section 409A and its interpretive regulations; 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 Industries Common Stock” shall have the meaning set forth in Section 5.3.




“Hillenbrand Industries Deferred Stock” shall have the meaning set forth in Section 5.3.




“Hillenbrand Industries Options” shall have the meaning set forth in Section 5.3.



“Hillenbrand Industries Stock Incentive Plan” shall mean the Hillenbrand Industries, Inc.
Stock Incentive Plan, as amended, which is in effect immediately prior to 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.



“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 Hillenbrand, Inc. Stock Incentive Plan.



“Prior Plans” shall mean the Hillenbrand Industries, Inc. 1996 Stock Option Plan and the
Hillenbrand Industries Stock Incentive Plan.



“Relationship” shall mean the status of employee, officer, or director of the Company or any
Subsidiary of the Company.




“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.




“Spinoff Deferred Stock” shall have the meaning set forth in Section 5.3.




“Spinoff Options” shall have the meaning set forth in Section 5.3.




“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 authority and discretion with respect to awards under the
Plan to take the following actions, if consistent with Section 15.7 of the Plan and subject to the
conditions of Section 3.2A of 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;




(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, in establishing the terms of the award agreement, 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 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;




(g) after considering any accounting impact to the Company, as well as any applicable
provisions of Code Sections 409A and 422, 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;




(h) to determine the Fair Market Value of the Common Stock on a given date;




(i) 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;


 


 









 






(j) 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




(k) 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.



3.2A Notwithstanding anything in this Plan to the contrary, no “underwater” Stock Options or
Stock Appreciation Rights shall be (a) directly repriced, (b) exchanged for the grant of a new or
different type of award, or (c) bought out (cashed out), without in any such case first obtaining
the approval of the shareholders of the Company to the taking of such action. For purposes of this
Plan, a Stock Option or a Stock Appreciation Right is “underwater” at any time when the then
current Fair Market Value of a share of Common Stock is less than the per share exercise price or
grant price of the Stock Option or Stock Appreciation Right.



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 Subject to adjustment as provided in Section 4.4, the total number of shares of Common
Stock which may be issued under the Plan shall be 8,635,436, and the total number of shares which
may be issued as Incentive Options shall be 1,500,000. 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.



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 other than Incentive Options. 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 400,000 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 200,000 shares
of Common Stock in any fiscal year, subject to adjustment as provided in Section 4.4.
Notwithstanding the foregoing, any Spinoff Awards (as defined in Section 5.3) shall not count
against the foregoing fiscal year award limits.



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.



The Board shall exercise its discretion under this Section 4.4 only to the extent consistent
with Section 15.7 of the Plan. 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 and Spinoff 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.


 


 









 





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 In connection with the Distribution and except as provided below, Stock Options to
purchase Common Stock (“Spinoff Options”) are granted as of the Effective Time in accordance with
the terms of the Employee Matters Agreement to holders of options (“Hillenbrand Industries
Options”) to purchase shares of common stock, no par value, of Hillenbrand Industries, Inc.
(“Hillenbrand Industries Common Stock”) under the Prior Plans. The Spinoff Options granted to such
holders shall be under the same terms as the corresponding options to purchase Hillenbrand
Industries Common Stock held by such holders, including the rate at which the options vest and the
expiration date of such options, provided that the number of shares of Common Stock under the
Spinoff Options and the exercise prices of the Spinoff Options compared to their Hillenbrand
Industries Option counterparts will reflect the Distribution in the manner set forth in the
Employee Matters Agreement. In addition and except as provided below, Deferred Stock awards
(“Spinoff Deferred Stock”) are granted as of the Effective Time in accordance with the terms of the
Employee Matters Agreement to holders of deferred stock relating to Hillenbrand Industries Common
Stock (“Hillenbrand Industries Deferred Stock”) under the Hillenbrand Industries Stock Incentive
Plan. The Spinoff Deferred Stock awards granted to such holders shall be under the same terms as
the corresponding deferred stock relating to Hillenbrand Industries Common Stock held by such
holders, including the rate at which the awards vest, provided that the number of shares of Common
Stock under the Spinoff Deferred Stock awards compared to their Hillenbrand Industries Deferred
Stock counterparts will reflect the Distribution in the manner set forth in the Employee Matters
Agreement. It is intended that all grants of Spinoff Options and Spinoff Deferred Stock described
in this paragraph satisfy the requirements of Section 424 of the Code, to the extent applicable,
and avoid treatment as nonqualified deferred compensation subject to Section 409A of the Code. For
purposes of this Section 5.3, a director of Hillenbrand Industries, Inc., who will not be a
director of the Company after the Effective Time, and an employee of Hillenbrand Industries, Inc.
or its Subsidiaries, who will not be an employee of the Company or its Subsidiaries after the
Effective Time, shall not be treated as a holder of Hillenbrand Industries Options and/or
Hillenbrand Industries Deferred Stock, even though he or she may be such a holder prior to the
Effective Time and shall not be entitled to Spinoff Options and Spinoff Deferred Stock hereunder as
set forth above. Notwithstanding anything herein to the contrary and except for Spinoff Option
agreements and Spinoff Deferred Stock agreements for the individuals who are receiving Spinoff
Options and Spinoff Deferred Stock pursuant to Section 7.1(c) and/or Sections 7.2(c) or (d),
respectively, of the Employee Matters Agreement, all other Spinoff Option agreements and Deferred
Stock agreements for the grants of Spinoff Options and Spinoff Deferred Stock as set forth in this
Section 5.3 shall provide that as of the Effective Time, the corresponding Hillenbrand Industries
Options and Hillenbrand Industries Deferred Stock are cancelled and shall have no further force or
effect.



5.4 In connection with the Distribution, Spinoff Deferred Stock is granted as of the Effective
Time in accordance with Section 7.2(d) of the Employee Matters Agreement to holders of Hillenbrand
Industries Deferred Stock who have made an election to defer payment of the Hillenbrand Industries
Deferred Stock pursuant to and under the Hillenbrand Industries Stock Incentive Plan. The Spinoff
Deferred Stock Awards granted to such holders shall be under the same terms as the corresponding
Hillenbrand Industries Deferred Stock held by such holders, provided that the number of shares of
Common Stock under the Spinoff Deferred Stock awards compared to their Hillenbrand Industries
Deferred Stock counterparts will reflect the Distribution in the manner set forth in the Employee
Matters Agreement. It is intended that all grants of Spinoff Deferred Stock described in this
paragraph satisfy the requirements of Section 424 of the Code, to the extent applicable, and avoid
treatment as nonqualified deferred compensation subject to Section 409A of the Code.


 


 









 





5.5 Spinoff Options and Spinoff Deferred Stock granted pursuant to Sections 5.3 and 5.4 above
shall be referred to collectively herein as “Spinoff Awards.”



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.



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 (other than a Spinoff 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).




(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.



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, consistent with Section 15.7, 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.




(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. The Committee may not, however, 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, and the Committee may not accelerate the payment of any dividends
subject to restrictions under Section 8.6(c) unless such acceleration is consistent with
Section 15.7.


 


 









 





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.




(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. The Committee may not, however, 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, and the Committee may not accelerate the payment of any Deferred
Stock awards unless such acceleration is consistent with Section 15.7.



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, and
the Committee may not accelerate the payment of any Bonus Stock unless such acceleration is
consistent with Section 15.7. 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 other than a
Stock Option 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.



SECTION 12. Non-Employee Director Awards




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.


 


 









 






14.2 A “Change in Control” shall be deemed to occur on:




(a) 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);




(b) the consummation of a merger or consolidation of the Company with another
corporation unless




(i) 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;




(ii) 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




(iii) 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;




(c) the date on which a majority of the members of the Board are replaced during any
12-month period by persons other than directors whose appointment or election was approved by
a majority of the members of the Board as constituted immediately prior to such appointment
or election;




(d) the consummation of a sale or other disposition of all or substantially all of the
assets of the Company; or




(e) the corporate dissolution of the Company if the corporate dissolution results,
within 12 months, in the complete termination and liquidation of the Plan.




Notwithstanding any other provision of this Section to the contrary, an occurrence shall
not constitute a Change in Control if it does not constitute a change in the ownership or
effective control, or in the ownership of a substantial portion of the assets of, the Company
or another allowable acceleration event under Section 409A of the Code and its interpretive
regulations.



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.


 


 









 





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.



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.


 


 









 





15.7 The Plan and all awards under the Plan shall be interpreted and applied in a manner
consistent with the applicable standards for nonqualified deferred compensation plans established
by Code Section 409A and its interpretive regulations and other regulatory guidance. To the extent
that any terms of the Plan or an award would subject an Employee to gross income inclusion,
interest, or additional tax pursuant to Code Section 409A, those terms are to that extent
superseded by, and shall be adjusted to the minimum extent necessary to satisfy or to be exempt
from, the Code Section 409A standards. If as of the date Employee’s employment terminates, an
Employee is a “key employee,” within the meaning of Code Section 416(i), without regard to
paragraph 416(i)(5), and if the Company has stock that is publicly traded on an established
securities market or otherwise, any payment of deferred compensation, within the meaning of Code
Section 409A, otherwise payable because of employment termination will be suspended until, and will
be paid to the Employee on, the first day of the seventh month following the month in which the
Employee’s last day of employment occurs.



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




17.1 The former version of the Plan was approved by the Board on December 19, 2008, and this
revised version of the Plan was approved and adopted by the Board on December 2, 2009. The Plan
was effective as of the date of the consummation of the transactions contemplated by the
Distribution Agreement (“Effective Date”). This February 24, 2010 version of the Plan is to be
effective, and is to amend, restate, supersede, and replace the version of the Plan adopted by the
Board on December 19, 2008, upon approval thereof by the shareholders of the Company.