EX-10.1






Exhibit 10.1




HILLENBRAND INDUSTRIES, INC.




Amended and Restated Short-Term Incentive Compensation Program




ARTICLE I




PURPOSE AND DEFINITIONS





	 	1.1	 	Purpose. The purpose of this Program is to provide performance-based incentive awards, in
addition to regular salary, to eligible employees of Hillenbrand Industries, Inc. and its
Subsidiaries. The Program provides the mechanism to pay amounts above the average total cash
compensation when the Company experiences above average financial success. The Program is
designed to encourage high individual and group performance and is based on the philosophy
that employees should share in the success of the Company if above average value is created
for Company shareholders.






	 	1.2	 	Definitions:






	 	(a)	 	“Achievement Percentage” means a percentage determined in writing by the
Committee.






	 	(b)	 	“Base Incentive Compensation” means the amount determined in accordance with
Section 4.3.






	 	(c)	 	“Base Salary” means the annual calendar earnings of a Participant including
wages and salary as reported for federal income tax purposes, but excluding all bonus
payments of any kind, commissions, incentive compensation, equity based compensation,
long term performance compensation, perquisites and other forms of additional
compensation.






	 	(d)	 	“Board of Directors” or “Board” means the Board of Directors of Hillenbrand
Industries, Inc.






	 	(e)	 	“Business Criteria” means one or more of the following financial indexes of the
Company or a Subsidiary for a Plan Year determined in accordance with the Company’s
accounting principles less certain non-reoccurring and/or non-expected events happening
in any Plan Year, as determined by the Committee: revenue, earnings per share, net
income, shareholder value growth, return on equity, cash flow, comparisons against
Standard & Poor’s indices and/or other indices, criteria or comparator groups, as
selected and approved by the Committee. The Business Criteria may include both
financial and non-financial measures and may reflect achievement of tactical and
strategic plans of a Subsidiary.






	 	(f)	 	“Business Criteria Achievement” means the actual final result of a Business
Criteria for a Plan Year.






	 	(g)	 	“Cause” shall mean the Committee’s good faith determination that a Participant
has:






	 	(i)	 	Failed or refused to fully and timely comply with any
reasonable instructions or orders issued by the Employer, provided such
noncompliance is not based primarily on the Participant’s compliance with
applicable legal or ethical standards;






	 	(ii)	 	Acquiesced or participated in any conduct that is dishonest,
fraudulent, illegal (at the felony level), unethical, involves moral turpitude
or is otherwise illegal and involves conduct that has the potential, in the
Employer’s reasonable opinion, to cause the Employer, its related companies or
any of their respective officers or its directors embarrassment or ridicule;






	 	(iii)	 	Violated any Employer policy or procedure, specifically
including a violation of Hillenbrand Industries, Inc.’s Code of Ethical
Business Conduct; or






	 	(iv)	 	Engaged in any act, which is contrary to its best interests or
would hold the Employer, its related businesses or any of their respective
officers or directors up to probable civil or criminal liability, excluding the
Participant’s actions in compliance with applicable legal or ethical standards
        .






	 	(h)	 	“CEO” means the Chief Executive Officer of the Company.






	 	(i)	 	A “Change in Control” means:






	 	(i)	 	the date that both of the following occur:






	 	(A)	 	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 Subsidiaries or any employee
benefit plan of the Company or any 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), and






	 	(B)	 	members of the Hillenbrand Family cease to be,
directly or indirectly, the Beneficial Owners of Voting Securities
having a voting power equal to or greater than that of such person,
corporation, partnership, syndicate, trust, estate or group;






	 	(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 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 by the shareholders of Corporate of a plan
of complete liquidation of the Company.






	 	(j)	 	“Committee” means the Compensation and Management Development Committee of the
Board appointed to administer the Program under Article II. Each Committee member
shall be an outside director for purposes of Section 162(m)(4) of the Internal Revenue
Code of 1986, as amended.






	 	(k)	 	“Company” means Hillenbrand Industries, Inc. as a corporate holding company and
does not include Subsidiaries.






	 	(l)	 	“Disability” means a physical or mental disability by reason of which a
Participant is determined by the Office of the President or its delegate, to be
eligible (except for the waiting period) for permanent disability benefits under Title
II of the Federal Social Security Act.






	 	(m)	 	“Employer” means Hillenbrand Industries, Inc., an Indiana Corporation, and its
Subsidiaries.






	 	(n)	 	“Executive Management Team” means the officers of the Corporation who report
directly to the CEO.






	 	(o)	 	“Incentive Compensation” means the Incentive Compensation as provided for in
Article IV.






	 	(p)	 	“Incentive Compensation Pool” means the aggregate amount of Base Incentive
Compensation for all Participants for any Plan Year.






	 	(q)	 	“Incentive Compensation Opportunity” means the percentage of Base Salary as
determined in accordance with Section 4.2.






	 	(r)	 	“Participant” means any individual who is a non-bargained for, full-time or
regular part-time employee of the Employer and is selected for participation in the
Program pursuant to Article III.






	 	(s)	 	“Percentage of Target One Achievement” means a percentage determined as of the
end of each Plan Year as follows:






(Business Criteria Achievement – Performance Base)  ̧ (Target One – Performance
Base.)




	 	(t)	 	“Percentage of Target Two Achievement” means a percentage determined as of the
end of each Plan Year as follows:






(Business Criteria Achievement – Target One)  ̧ (Target Two – Target One)




	 	(u)	 	“Performance Base” means the base level of achievement of the Company or a
Subsidiary with respect to the Business Criteria, as determined in accordance with
Section 4.1.






	 	(v)	 	“Plan Year” means the fiscal year beginning on October 1st and ending on
September 30th. The first Plan Year shall begin on October 1, 2003.






	 	(w)	 	“Program” means the Hillenbrand Industries, Inc. Short-Term Incentive
Compensation Program.






	 	(x)	 	“Subsidiary” means an operating company unit of which a majority equity
interest is owned directly or indirectly by the Company.






	 	(y)	 	“Target One” means a certain level of achievement of the Company or a
Subsidiary with respect to the Business Criteria, as determined in accordance with
Section 4.1.






	 	(z)	 	“Target Two” means a certain level of achievement of the Company or a
Subsidiary with respect to the Business Criteria which is greater than Target One as
determined in accordance with Section 4.1.





ARTICLE II




ADMINISTRATION




Full power and authority to construe, interpret, and administer the Program, including power
to establish, administer and certify performance goals related to Incentive Compensation is vested
in the Committee. Decisions of the Committee are final, conclusive and binding upon all parties,
including the Employer, the Company and its shareholders and the Participants. The Committee may
rely upon recommendations of the CEO, the Executive Management Team, or persons designated by the
Committee, in approving financial and non-financial goals recommended to it.



ARTICLE III




PARTICIPANTS




Participation in this Program by members of the Executive Management Team or any Company
corporate officer elected to such position by the Board shall be determined by the Committee.
Other Participants in this Program shall be determined by the CEO or if an eligible employee is
employed by a Subsidiary, then the Chief Executive Officer of such Subsidiary.



ARTICLE IV




INCENTIVE COMPENSATION





	 	4.1	 	Establishment of Performance Base and Target. A Performance Base, Target One and Target Two
for the Company Vice Presidents as a group shall be recommended by the CEO and approved by the
Committee. The Performance Base, Target One and Target Two of a Participant who is otherwise
employed by the Company shall be established and approved by the CEO. The Performance Base,
Target One and Target Two of a Participant who is employed by a Subsidiary shall be
established and approved by the CEO and the Chief Executive Officer of each Subsidiary,
respectively. The Performance Base, Target One and Target Two shall be established annually
for the Company and each Subsidiary and will be communicated to each Participant.






	 	4.2	 	Base Salary as a Part Incentive Compensation. Incentive Compensation Opportunity is
established in writing annually by the Committee (within ninety (90) days of the start of each
Plan Year) in percentages up to but not exceeding the following:





	 	 	 
	Class of Participant	 	Incentive Compensation Opportunities
	Chief Executive Officer of the Company

	 	90% of Base Salary
	 
	 	 
	Chief Executive Officer of a Subsidiary

	 	75% of Base Salary
	 
	 	 
	Company Chief Financial Officer

	 	50% of Base Salary
	 
	 	 
	Company or Subsidiary Senior Executives

	 	50% of Base Salary
	 
	 	 
	Company or Subsidiary Executives

	 	40% of Base Salary
	 
	 	 
	Other Key Executives

	 	30% of Base Salary







	 	4.3	 	Base Incentive Compensation Calculation. Except as set forth in Section 4.5, attainment of
the Performance Base or below for a Plan Year shall result in Base Incentive Compensation of
0% of the Incentive Compensation Opportunity as set forth in Section 4.2 above. If Target Two
is met or exceeded for a Plan Year, Base Incentive Compensation shall be equal to the
Achievement Percentage multiplied by the amount of a Participant’s Incentive Compensation
Opportunity as set forth in Section 4.2 above. If Business Criteria Achievement is between
the Performance Base and Target One for a Plan Year, the Base Incentive Compensation shall be
equal to the Percentage of Target One Achievement multiplied by both (i) the amount of a
Participant’s Incentive Compensation Opportunity as set forth in Section 4.2 above and (ii) a
percentage equal to one-half of the Achievement Percentage. If the Business Criteria
Achievement is between Target One and Target Two for a Plan Year, the Base Incentive
Compensation shall be equal to the amount of a Participant’s Incentive Compensation
Opportunities set forth in Section 4.2 above multiplied by a percentage as determined under
the following formula:






[1/2 Achievement Percentage plus (Percentage of Target Two Achievement times 1/2
Achievement Percentage)]




	 	4.4	 	Incentive Compensation. After the Business Criteria Achievement and Base Incentive
Compensation has been determined for each Plan Year, the Committee shall evaluate each
Participant on his or her individual performance goals. The Committee shall determine each
Participant’s Incentive Compensation based on individual financial and non-financial goals for
each Participant. The aggregate amount of Incentive Compensation that can be paid to all
Participants for any Plan Year shall not exceed the Incentive Compensation Pool for such Plan
Year. The Committee may create or authorize, with the assistance of the CEO, sub-pools for
Participants based on which Subsidiary they are employed by or any other criteria the
Committee deems appropriate, provided that the aggregate amount of all sub-pools cannot exceed
the Incentive Compensation Pool for any Plan Year. The aggregate amount of Incentive
Compensation that can be paid to all Participants in a sub-pool or combination of sub pools is
the aggregate amount of Base Incentive Compensation allocated by the Committee to such
sub-pool or combination of sub-pools.






	 	4.5	 	Non-Business Criteria Based Incentive Compensation. The Committee may establish a
“Non-Business Criteria Pool”. Once such a Non-Business Criteria Pool is established, the CEO
may, in his or her discretion (with approval from the Committee for Company Vice Presidents),
allocate all or some of the Non-Business Criteria Pool to all or some Participants and the
amount allocated to any Participants shall be the Participant’s Incentive Compensation under
the Program for the Plan Year.






	 	4.6	 	Payment of Incentive Compensation. Incentive Compensation shall be due and payable in cash
after forty (40) days but not later than seventy-five (75) days after the end of the Plan
Year.






	 	4.7	 	Election to Defer Compensation – Deferral Period. A Participant may elect to defer all or
any portion of his or her Incentive Compensation. A Participant’s written election to defer
any compensation must be made in the year before the beginning of the period of service,
ordinarily a Plan Year, during which such compensation would otherwise be paid.






	 	4.8	 	Termination of Employment. Subject to Section 4.9 below and the last sentence of this
section, termination of Participant’s employment prior to the last day of the Plan Year for
any reasons other than death, Disability or normal or early retirement (as determined under
the Company’s Pension Plan or Savings Plan) shall terminate a Participant’s right to any
non-deferred Incentive Compensation. Termination of employment because of death, Disability
or normal or early retirement shall result in a pro-ration of Incentive Compensation based on
the number of months employed during the Plan Year of a Participant’s termination of
employment. Upon a termination of employment for Cause at any time, a Participant shall
forfeit any and all payments due under this Program.






	 	4.9	 	Change in Control. Upon a Change in Control, a Participant’s unpaid Incentive Compensation
for a Plan Year ending prior to the Change in Control shall in all events be paid in
accordance with Section 4.6. In addition, a Participant’s Incentive Compensation for the Plan
Year during which the Change in Control occurred shall in no event be less than the amount
calculated pursuant to Sections 4.2, 4.3, 4.4 and 4.5 above as if the Target (at 100%) had
been achieved. For purposes of such calculation, Base Salary shall mean such Participant’s
annualized Base Salary for the calendar year in which the Change in Control occurred times a
fraction, the numerator of which is the number of months from the start of the Plan Year up to
and including the month during which the Change in Control occurred and the denominator of
which is 12. Following a Change in Control, the Incentive Compensation under the Program
shall be paid out at the time specified in Section 4.6 above, provided, however, and
notwithstanding Section 4.8 above, that in the case of a Participant whose employment is
terminated prior to payout (for any reason other than on account of termination of employment
by the Company for Cause) the Incentive Compensation shall be paid out within 30 days of such
termination of employment. In the event of termination for Cause, the Incentive Compensation
shall be forfeited.





ARTICLE V

FINALITY OF DETERMINATION




Each determination made by the Committee and the CEO shall be final, binding and conclusive
for all purposes and upon all persons. The Committee may rely conclusively on the determinations
made by and information received from the Company’s independent public accountants or the Employer
employees with respect to action of the Committee.



ARTICLE VI

LIMITATIONS




No employee of the Employer or any other persons shall have any claim or right (legal,
equitable or other) to be granted any award under the Program, and no director, officer or employee
of the Employer, or any other person, shall have the authority to enter into any agreement with any
person for the making or payment of any award under the Program or to make any representation or
warranty with respect thereto.



Neither the action of the Company in establishing the Program nor any action taken by the
Company, the Committee, the Board of Directors, CEO, Executive Management Team, or any persons
designated by them to administer the Program, nor any provision of the Program, shall be construed
as giving to any Participant or employee of the Employer the right to be retained in the employ of
the Employer.



ARTICLE VII

AMENDMENTS, SUSPENSION OR TERMINATION




The Board may discontinue the Program in whole or in part at any time and may from time to
time amend or revise the terms as permitted by applicable statute; provided, however, that no such
discontinuance, amendment, or revision shall effect adversely any right or obligation with respect
to any award theretofore made. No amendment shall require shareholder approval unless such
approval is otherwise required by law.



ARTICLE VIII

MISCELLANEOUS





	 	8.1	 	Effective Date. This Program was approved by the Board of Directors on August 18, 2003, and
became effective October 1, 2003.






	 	8.2	 	Governing Law. This Program shall be governed by and construed in accordance with the laws
of the State of Indiana.