Exhibit 10.18





EXHIBIT 10.18




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. 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 all Performance Goals (defined below) 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 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. The Initial Deferred Stock Award plus any increases or less any decreases
due to stock dividends, stock splits and any other similar rights inuring to Common Stock as set
forth in the two immediately preceding sentences shall herein after be referred to as the “Deferred
Stock Award.”



3. Earned Deferred Stock. The Deferred Stock Award will become “Earned Deferred
Stock” in accordance with the Company’s attainment of certain performance goals as described herein
(“Performance Goals”). With respect to each of three one-year “Performance Periods” (as defined
below), the Compensation and Management Development Committee of the Company’s Board of Directors
(the “Committee”) will establish Performance Goals no later than seventy-five (75) days after the
first day of each such Performance Period and will communicate the Performance Goals in writing to
the Employee. The Performance Periods are as follows:



	 	 	 
	First Performance Period:

	 	October 1, 2009 through September 30, 2010
	Second Performance Period:

	 	October 1, 2010 through September 30, 2011
	Third Performance Period:

	 	October 1, 2011 through September 30, 2012





 


 









 





With respect to the Performance Goals for each Performance Period, the Committee will
establish “Threshold,” “Target,” and “Maximum” performance levels. At the end of each Performance
Period, the Committee will determine the extent to which the Performance Goals for such Performance
Period have been satisfied, and a percentage of the Deferred Stock Award (rounded up to the nearest
whole share) will become Earned Deferred Stock in accordance with the following schedule:





	 	 	 	 	 
	 	 	Percentage of Deferred Stock Award	 
	Performance Level	 	Becoming Earned Deferred Stock	 
	 
	 	 	 	 
	Below Threshold
	 	 	0	%
	Threshold
	 	 	16.7	%
	Target
	 	 	33.3	%
	Maximum
	 	 	66.7	%






If, as a result of performance during the Second and/or Third Performance Periods, the amount
of the Deferred Stock Award that should become Earned Deferred Stock in accordance with the
foregoing schedule exceeds the actual Deferred Stock Award, the Committee, in its discretion, may
increase the Deferred Stock Award to an amount that equals the Earned Deferred Stock, and any such
additional Deferred Stock Award shall immediately be Earned Deferred Stock. If the Committee does
not increase the Deferred Stock Award, the Earned Deferred Stock shall be limited to the amount of
the Deferred Stock Award.




4. Vested Deferred Stock.




(a) If the Employee’s employment with the Company or any of its Subsidiaries (as
defined in the Plan) continues uninterrupted from the effective date of this Award through
the last day of the Third Performance Period, any Earned Deferred Stock on such date shall
be non-forfeitable (“Vested Deferred Stock”). In addition, any portion of the Deferred
Stock Award that becomes Earned Deferred Stock as a result of performance during the Third
Performance Period shall become Vested Deferred Stock on the date that the Committee
determines the extent to which the Performance Goals for such Performance Period have been
satisfied, regardless of whether the Employee remains employed until the date of such
determination; provided, however, that to the extent that any portion of such Earned
Deferred Stock constitutes an additional Deferred Stock Award authorized by the Committee in
accordance with Section 3, such portion shall become Vested Deferred Stock on the date of
such authorization by the Committee, regardless of whether the Employee remains employed
until the date of such authorization. Any fractional shares of Vested Deferred Stock shall
be rounded up to the next whole share of Vested Deferred Stock.




(b) Except as otherwise provided herein, any Deferred Stock maintained in the Deferred
Stock Account which is not Vested Deferred Stock shall, upon the Employee’s termination of
employment, 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.


 


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(c) Notwithstanding the foregoing, Earned Deferred Stock shall become Vested Deferred
Stock upon the termination of the Employee’s employment with the Company, one of its
Subsidiaries (as defined in the Plan) or one of their respective divisions by reason of: (i)
retirement after (A) the day after the first anniversary date of the effective date of this
Award, and (B) attaining age fifty-five (55) and completion of five (5) years of employment
(“Retirement”), (ii) disability, as determined by the
Committee, (iii) death, or (iv) an involuntary termination by the Company or a Subsidiary
(as applicable, the “Employer”) other than for “Cause” (as defined below). In addition,
with respect to the Performance Period during which occurs the Employee’s Retirement or
termination of employment by reason of disability or death, a pro rata portion (based on the
number of days of the Employee’s employment during the Performance Period) of the Deferred
Stock Award that would have become Earned Deferred Stock for such Performance Period, if
any, shall become Vested Deferred Stock at the time set forth in paragraph (a) of this
Section 4 applied as if such Performance Period were the Third Performance Period.




For purposes of this Agreement, “Cause” shall mean the Employer’s good faith
determination that the Employee has:




(i) acted with gross neglect or willful misconduct in the discharge of the
Employee’s duties and responsibilities or refused to follow or comply with the
lawful direction of the Employer or the terms and conditions of any applicable
employment agreement, providing such refusal is not based primarily on the
Employee’s good faith 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 Company, a Subsidiary, its officers or its directors
embarrassment or ridicule;




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




(iv) disclosed without proper authorization any trade secrets or other
confidential information;




(v) engaged in any act that, in the reasonable opinion of the Employer, is
contrary to its best interests or would hold the Company, a Subsidiary, its officers
or directors up to probable civil or criminal liability, provided that, if the
Employee acts in good faith in compliance with applicable legal or ethical
standards, such actions shall not be grounds for termination for Cause; or




(vi) engaged in such other conduct recognized at law as constituting Cause.


 


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(d) Earned Deferred Stock shall become Vested Deferred Stock upon the occurrence, after
the day after the first anniversary date of the effective date of this Award, of (i) a
Change in Control (as defined in Section 14.2 of the Plan), or (ii) 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 individually or
collectively 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.
Temporary absences from employment because of illness, vacation or leave of absence and
transfers among the Company and/or any of its Subsidiaries 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 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.




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 the 15th day of the third month following the end of the calendar year in
which such shares become Vested Deferred Stock. Notwithstanding anything herein to the contrary,
with respect to any shares that become Earned Deferred Stock after the date the Employee becomes
eligible for Retirement (as described in Section 4(c)) and on or before the earlier to occur of (A)
the last day of the Third Performance Period or (B) the date of the Employee’s Retirement, such
shares shall not be delivered until the earliest to occur of: (i) the last day of the Third
Performance Period, (ii) the date of the Employee’s termination of employment (subject to the last
sentence of this paragraph), or (iii) a Change in Control (but only if the event constituting a
Change in Control satisfies the requirements for a distribution under Section 409A(a)(2)(A)(v) of
the Internal Revenue Code of 1986, as amended (“Code”) (a “409A Change in Control”)). Shares that
become deliverable in
accordance with the immediately preceding sentence may be delivered at any time within ninety (90)
days after the event that triggers delivery, provided that the Employee will have no right to
designate the calendar year in which the shares will be delivered. With respect to any shares that
become Earned Deferred Stock after the date the Employee becomes eligible for Retirement and after
the earlier to occur of (A) the last day of the Third Performance Period or (B) the date of the
Employee’s Retirement, such shares shall be delivered in accordance with the third sentence of this
paragraph. Notwithstanding the foregoing, if shares become deliverable by reason of the Employee’s
separation from service and at the time of the Employee’s separation from service the Employee is a
“specified employee” as defined in Section 409A of the Code, 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.
Notwithstanding the foregoing, with respect to any shares that become Vested Deferred Stock
after the date the Employee has attained age fifty-five (55) and completed five (5) years of
employment, the Employee may elect to defer payment of the Award to the later of a 409A
Change in Control or a date which is at least five (5) years after the date of the
Employee’s termination of employment, provided the Employee makes the election at least one
year prior to the date of the Employee’s termination of employment, and the election will
not take effect until the one-year anniversary of the date on which the election is made.
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 in defined
Section 409A(a)(2)(B)(ii) of the 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 Section 409A(a)(2)(B) of the Code.


 


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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.



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.


 


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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.



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.


 


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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.



22. 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.



23. 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:  	 	 
	 	 	John H. Dickey 	 
	 	 	Senior Vice President, Human Resources 	 
	 
	Accepted:  	 	 
	 	<Name>	 




 


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