Document:

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                                                                    EXHIBIT 10.5
                                    AGREEMENT

         THIS AGREEMENT (the "Agreement") is made and entered into as of the
tenth (10th) day of October, 2000 (the "Effective Date"), by and between W
August Hillenbrand ("Executive") and Hillenbrand Industries, Inc., an Indiana
corporation (the "Company").

         STATEMENT OF PURPOSE

         Executive serves as Chief Executive Officer of the Company and intends
to retire from his position as Chief Executive Officer on December 2, 2000. He
shall continue to serve as a member of the Board of Directors of the Company and
shall make himself available as a consultant to the Company.

         Executive's employment with the Company and service as Chief Executive
Officer shall cease on December 2, 2000 (the "Date of Termination"). The Company
and Executive wish to confirm in this Agreement that Executive's employment
shall terminate and to specify the payments and other benefits that shall be
provided to Executive by the Company under documents, contracts and plans, as
well as certain other consideration, and to settle in full all matters relating
to Executive's employment with the Company.

         NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements contained herein, the parties hereto agree as follows:

         1.       Termination of Employment; Payments.

                  (a) The Company and Executive acknowledge that Executive shall
serve as an officer and employee of the Company, and shall remain on the
Company's payroll and receive base salary at an annual rate of $902,700, through
the Date of Termination, at which date Executive's employment with the Company
shall be terminated, and Executive shall receive any bonus due him as Chief
Executive Officer for the fiscal year 2000, payable in a lump sum on or before
February 28, 2001. In addition, Executive shall receive payments and benefits as
provided in this Agreement, including, without limitation, the payments and
benefits described in the following subsections of this Section 1.

                  (b) In consideration of Executive's obligations under Sections
11(b) and (c) and 15 below, commencing on the Date of Termination and ending on
September 18, 2005 (the "Consulting/Noncompetition Period"), Executive shall
receive compensation of $34,911.54 biweekly, annualized at $907,700. Executive
and the Company hereby agree that $227,000 of the annualized payments is for
Executive's obligations under Section 11(b) and (c) below, and $680,700 of the
annualized payments is for Executive's obligations under Section 15 below.

                  (c) In consideration of Executive's obligations under Section
11(b) and (c) below, payouts in respect of performance share awards shall be
made based on actual results for full cycles as follows: on or before February
28, 2002 for the 1999-2001 cycle; on or before February 28, 2003 for the
2000-2002 cycle.

                  (d) On the first day of the first calendar month that
commences after the end of the Consulting/Noncompetition Period, payment of
retirement benefits shall commence as provided in Section 4 below.

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                  (e) In the event of Executive's death before payments due
under Section 1(b) or 1(c) above are completed, remaining payments shall become
due and payable to Executive's beneficiary (or estate, as the case may be) in a
lump sum, without discount and in the case of payments due under Section 1(c)
above, assuming achievement in full of target goals for full cycles.

         2.       Continuation of Medical and Dental Benefits. For the remainder
of Executive's life and that of his spouse, the Company shall continue to
provide Executive and his spouse with medical and dental benefits on no less
favorable a basis than such benefits are provided to other senior executives of
the Company. In the event that Executive or his spouse shall cease to be
eligible for coverage under any plan or program of the Company, the Company
shall pay Executive no less frequently than quarterly in advance an amount which
is sufficient for Executive to purchase coverage equivalent to that otherwise
required to be provided pursuant to this Section 2.

         3.       Stock Awards. Executive has been granted stock options on the
Company's common stock under the 1996 Stock Option Plan. The Company agrees that
all stock options, to the extent not already exercisable, shall become
exercisable as of the Date of Termination and that all stock options shall
remain exercisable through their respective originally scheduled expiration
dates.

         4.       Retirement Benefit.

                  (a) Executive shall be entitled to a retirement benefit under
the Hillenbrand Industries, Inc. Pension Plan (the "Pension Plan") and the
Hillenbrand Industries, Inc. Senior Executive Compensation Program (the "SECP")
as in effect on the Effective Date, provided, however, that

                      (i)    the retirement benefit payments shall commence on
the first day of the first calendar month that commences after the end of the
Consulting/Noncompetition Period,

                      (ii)   the retirement benefit payments shall not be
reduced for commencement prior to Executive's Normal Retirement Age (as defined
in the Pension Plan),

                      (iii)  for purposes of determining the retirement benefit
payments, Executive shall be credited with the number of years of Credited
Service (as defined in the Pension Plan) that he would have had if he had
continued to be employed by the Company until Normal Retirement Age, and

                      (iv)   for purposes of determining the amount of the
retirement benefit payments, $902,700 of the annual payments made pursuant to
Section 1(b) above shall be included in the computation of Average Monthly
Earnings (as defined in the Pension Plan).

                  (b) To the extent that any retirement benefit payment
determined as provided in this Section 4 cannot be made under either the Pension
Plan or the SECP, such payment shall be made pursuant to this Section 4.

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         5.       Deferral Program. Pursuant to the terms of the SECP as
supplemented by the policies and practices of the Company, Executive has
deferred certain amounts of base salary, incentive compensation and/or
perquisite compensation, resulting in a Deferred Compensation Account ("DCA")
for Executive, credited in part at a prime interest rate and in part at a rate
equal to the change in the S&P 500 index (which includes, for clarification,
reinvested dividends). Further, under the SECP, certain amounts of "Performance
Share Compensation", as defined in the SECP, have been deferred, resulting in a
Deferred Stock Ownership Program ("DSOP") for Executive, which are assumed to be
invested in common stock of the Company. The Company agrees that any unvested
stock in the DSOP shall vest and become nonforfeitable on the Date of
Termination. The Company further agrees that Executive shall, both before and
after the Date of Termination, continue to be eligible to continue to defer the
deferred funds in the DCA and the stock in the DSOP on the Date of Termination
until November 30, 2019, under the same terms and conditions as are available to
continuing senior executives. To the extent that the Company's deferral plans do
not permit such continued deferral arrangements, Executive shall be provided
with equivalently beneficial deferral arrangements under this Agreement.

          6.      Other Benefits.  In addition to the foregoing, in
consideration of Executive's obligations under Section 11(b) and (c) below, the
Company agrees as follows:

                           (a)  The Company shall through the
Consulting/Noncompetition Period continue to provide Executive with perquisites
and perquisite compensation (including, without limitation, a car allowance) on
no less favorable a basis than the basis on which Executive received such
benefits as of the Effective Date.

                           (b)  The Split Dollar Life Insurance Agreement
("Split Dollar Agreement") between the Company and Executive dated as of March
11, 1998 shall continue in effect until the date Executive reaches age 72 or, if
later, the date on which the difference between (i) the cash value of the life
insurance policy attached to the Split Dollar Agreement as Exhibit A to such
Agreement (the "Policy") and (ii) the Company's total net outlay with respect to
the Policy is sufficient to fully fund a death benefit in the amount of $5
million. In this regard, the Company and Executive shall continue to pay
premiums on the Policy as contemplated in the Split Dollar Agreement and the
Policy.

                           (c)  The Company shall, at its sole expense, provide
Executive for life with:

                                (i)    an office, comparable in both quality
                                       and location to Executive's office as of
                                       the Effective Date;

                                (ii)   a secretary, who may be his current
                                       secretary or another secretary of his
                                       choosing; and

                                (iii)  security systems and services on no less
                                       favorable a basis than the basis as of
                                       the Effective Date.

                           (d)  As of the Date of Termination, the Company
shall transfer ownership to Executive of his current office furniture and
equipment (as well as any home-office equipment supplied by the Company).

                           (e)  Following the Date of Termination, the Company
shall continue to take telephone, e-mail and other messages for Executive and
forward such messages and any personal mail received by the Company addressed to
him (other than mail relating to the Company's business and not to Executive in
his personal capacity).

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                           (f)  Executive shall, through the
Consulting/Noncompetition Period, and thereafter to the extent reasonable (as
determined by the Company), continue to have access to the use of Company
aircraft on no less favorable a basis than such access and use are made
available to other senior executives of the Company for personal use. The use of
Company aircraft shall be for Executive's individual personal use only and he
shall reimburse the Company for such use in the same manner as he had reimbursed
the Company in the past. In the event the Company determines to lease aircraft
rather than own aircraft, Executive shall continue to have access to the use of
such leased aircraft on a basis no less favorable than such access and use are
made available to other senior executives of the Company for personal use, and
Executive shall reimburse the Company based on the actual leasing cost to the
Company for the aircraft.

                           (g)  The Company shall promptly reimburse to
Executive any reasonable business expenses properly incurred before the Date of
Termination in accordance with the Company's expense reimbursement policies and
practices.

         7.       Tax Withholding and Reporting.  The Company shall be entitled
to withhold from the benefits and payments described herein all federal, state
and local taxes required to be withheld by applicable law.

         8.       Release of the Company. Executive agrees that on the Date of
Termination he will execute and deliver to the Company the Release attached
hereto as Exhibit A. Any revocation by Executive of such Release during the
revocation period provided for therein shall cancel any and all undertakings,
promises, and obligations of the Company set forth in this Agreement. Provision
to Executive by the Company of the considerations provided for in this Agreement
shall be conditional upon Executive not revoking the Release.

         9.       Release of Executive. In consideration of Executive's
entering into this Agreement and only to the extent permitted by applicable law,
the Company, for itself, its affiliates, their respective predecessors and
successors, and all of the present and former directors, officers, employees,
agents, representatives, successors and assigns of any of the foregoing, hereby
releases and forever discharges Executive and his heirs, personal
representatives, successors and assigns from any and all claims, demands,
damages, actions, and causes of action, of whatever kind or nature, in law,
equity or otherwise, that the Company or any of said persons or entities now
has, may ever have had or may have hereafter upon or by reason of any matter,
cause or thing occurring, done or omitted to be done prior to the Effective
Date, including without limitation all rights and claims the Company or any of
said persons or entities have or might have as a result of Executive's status as
an officer, director, agent, representative or employee of the Company or any of
said entities or the termination of that status; provided, however, that this
release shall not apply to (i) any claim by the Company for repayment of costs
and expenses advanced to Executive pursuant to Section 10 of this Agreement to
the extent that it is ultimately determined that Executive is not entitled to be
indemnified against such costs and expenses or (ii) any rights the Company may
have to obtain contribution in the event of the entry of judgment against the
Company as a result of any act or failure to act for which both Executive and
the Company are jointly responsible. As of the Effective Date, the Company has
no knowledge of any claim, or potential claim, against Executive arising out of
any of the events described above.

          10.     Indemnification.

                  (a) If Executive is made a party, or is threatened to be made
a party, to any action, suit or proceeding, whether civil, criminal,
administrative or investigative (a "Proceeding"), by reason of the fact that he
was a director, officer, employee, consultant, representative or agent of the
Company or was serving at the request of the Company as director, officer,
member, employee, consultant, representative or agent of another corporation,

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partnership, joint venture, trust or other entity or enterprise, including
service with respect to employee benefit plans, or if any claim, demand, threat,
discovery request, or request for testimony or information (a "Claim") is made
or is threatened to be made that arises out of or relates to Executive's service
in any of the foregoing capacities, Executive shall be indemnified and held
harmless by the Company to the fullest extent permitted or authorized by the
Company's certificate of incorporation, bylaws or the laws of the State of
Indiana against any and all costs, expenses, liabilities and losses (including
without limitation, attorney's fees, judgments, fines, ERISA excise taxes or
penalties and amounts paid or to be paid in settlement) incurred or suffered by
Executive in connection therewith, and such indemnification shall continue as to
Executive even though he has ceased to be a director, officer, member, employee,
consultant, representative or agent of the Company or other entity and shall
inure to the benefit of Executive's heirs, executors and administrators. To the
extent permitted or authorized by the Company's certificate of incorporation,
bylaws, or the laws of the State of Indiana the Company shall advance to
Executive all costs and expenses incurred by him in connection with any such
Proceeding or Claim promptly after receipt by the Company of a written request
for such advance. Such request shall, to the extent required by law, include an
undertaking by Executive to repay the amount advanced to the extent that it is
ultimately determined that he is not entitled to be indemnified against such
costs and expenses.

                  (b) The Company agrees to provide Executive with coverage
under its directors' and officers' liability insurance policy until such time as
suits against Executive are no longer permitted by law, to the extent and in the
amount that such coverage is then being provided to any other present or former
directors, or present or former senior executives, of the Company.

          11.     Confidentiality; Non-Competition.

                  (a) Executive shall not at any time without the prior approval
of the Company disclose to any person, firm, corporation or other entity any
trade secret, confidential customer information, or other Confidential
Information, except in the ordinary course of carrying out his duties under this
Agreement or if ordered to so disclose by a court or government agency with
apparent jurisdiction. For purposes of this Agreement, the term "Confidential
information" shall mean any proprietary information not known within the
industry or by the public generally regarding the business then being conducted
by the Company, including, without limitation, financial information, marketing
and sales information and business and strategic plans.

                  (b) Executive shall not at any time without the prior approval
of the Company during the Consulting/Noncompetition Period, directly or
indirectly (either individually or as an agent, employee, director, officer,
stockholder, partner or individual proprietor, consultant or as an investor who
has made advances on loan capital or contributions to equity capital), engage in
any activity which he knows (or reasonably should have known) to be competitive
with the business of the Company as being carried on both at the Date of
Termination and at the future date in question. Nothing in this Agreement,
however, shall prevent Executive from owning, as an investment, up to two (2%)
percent of the outstanding capital stock of any competitor of the Company,
shares of which are regularly traded on a national securities exchange or in
over-the-counter markets.

                  (c) Executive shall not at any time without the prior approval
of the Company during the Consulting/Noncompetition Period solicit any persons
who are employed by the Company to terminate their employment with the Company
(other than secretarial or clerical employees).

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                  (d) For purposes of this Section 11, the term "Company"
includes any corporation more than 50% of the voting stock of which is owned,
directly or indirectly, by the Company.

         12.      Mutual Nondisparagement. Executive shall not knowingly make
any public statement that disparages or defames the Company or any of its
directors or officers. The Company shall not knowingly make any public statement
that disparages or defames Executive. Notwithstanding the foregoing, nothing in
this Section 12 shall prohibit any person from (x) making truthful statements
when required by law or by order of a court or other body having jurisdiction or
(y) responding publicly to incorrect, disparaging or derogatory public
statements made in violation hereof to the extent reasonably necessary to
correct or refute such public statements.

         13.      Resolution of Disputes. Any dispute arising under or relating
to this Agreement, any other agreement to which Executive and the Company or any
of its affiliates are parties, Executive's employment with the Company, or the
termination of such employment shall, at the election of Executive or the
Company, be resolved by binding arbitration, to be held in Indianapolis, Indiana
in accordance with the Commercial Arbitration Rules (and not the National Rules
for the Resolution of Employment Disputes) of the American Arbitration
Association. Judgment upon the award rendered by the arbitrator(s) may be
entered in any court having jurisdiction thereof. Each party shall pay its own
costs and expenses relating to any such dispute, including, without limitation,
attorneys' fees.

         14.      No Mitigation; No Offset. Executive shall be under no
obligation to seek other employment and there shall be no offset against amounts
due to him on account of any remuneration or benefit attributable to any
subsequent employment that he may obtain or on account of any claim the Company
may assert against him.

         15.      Consulting Services. Until the end of the
Consulting/Noncompetition Period, Executive shall make himself available, upon
reasonable notice, to provide such advice as may from time to time be reasonably
requested by the Company, provided, however, that the rendering of any such
advice shall be subject to Executive's personal and business commitments.
Executive shall be reimbursed on a fully-tax-grossed-up basis for any reasonable
out-of-pocket expenses that he incurs in connection with providing such advice.

         16.      Notices. All notices, requests, demands or other
communications under this Agreement shall be in writing and shall be deemed to
have been duly given (x) when delivered in person, (y) five days after being
deposited in the United States mail, postage prepaid, by registered or certified
mail, return receipt requested and addressed as set forth below, and two (2)
days after being sent via nationally-recognized overnight courier service to the
party to whom such notice is being given addressed as set forth below:

         If to Executive:    334 North Huntersville Road
                             Batesville, Indiana  47006

         If to the Company:  700 State Route, 46 East
                             Batesville, Indiana  47006
                             Attention:  General Counsel

Either party may change his or its address or the name of the person to whose
attention the notice or other communication shall be directed from time to time
by serving notice thereof upon the other party as provided herein.

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          17.     Miscellaneous.

                  (a) This Agreement, and the rights and obligations of the
parties hereto, shall be governed by and construed in accordance with the laws
of the State of Indiana, without regard to principles of conflicts of laws.

                  (b) If any provision hereof is unenforceable, such provision
shall be fully severable, and this Agreement shall be construed and enforced as
if such unenforceable provision had never comprised a part hereof. The remaining
provisions hereof shall remain in full force and effect and the arbitrators or
court construing the Agreement shall add as a part hereof a provision as similar
in terms and effect to such unenforceable provision as may be enforceable, in
lieu of the unenforceable provision.

                  (c) No provision of this Agreement may be modified, waived or
discharged unless such waiver, modification or discharge is agreed to in a
writing that is signed by Executive and an officer of the Company. No waiver by
any party hereto at any time of any breach by the other party hereto of, or of
compliance with, any condition or provision of this Agreement to be performed by
such other party shall be deemed a waiver of any similar or dissimilar provision
or condition at the same or any prior or subsequent time.

                  (d) The headings of sections contained in this Agreement are
for convenience only and shall not be deemed to control or affect the meaning or
construction of any provision of this Agreement.

                  (e) This Agreement (which includes for all purposes its
Exhibits), and the agreements, plans, contracts, documents, programs and
arrangements described or referenced herein, contain the entire agreement
between the Company and Executive in respect of the subject matter hereof, and
supersede any previous agreements or contracts in respect of such subject matter
that are not so described or referenced herein.

                  (f) As used in this Agreement, the term "affiliate" means any
entity which controls, is controlled by, or is under common control with the
Company.

                  (g) This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective heirs, personal
representatives, successors and assigns.

                  (h) Neither this Agreement nor any right or obligation
hereunder may be transferred or assigned by Executive (other than by will or by
operation of law) without the prior written consent of the Company.
Notwithstanding the foregoing, Executive shall be entitled, to the extent
permitted under applicable law and applicable Company plans, to select and
change a beneficiary or beneficiaries to receive any compensation or benefit
hereunder following Executive's death by giving the Company written notice
thereof.

                  (i) In the event of Executive's death or a judicial
determination of his incompetence, references in this Agreement to Executive
shall be deemed, where appropriate, to refer to his beneficiary, estate or other
legal representative.

                  (j) No rights or obligations of the Company under this
Agreement may be assigned or transferred by the Company except that such rights
or obligations may be assigned or transferred pursuant to a merger or
consolidation in which the Company is not the continuing entity, or the sale or
liquidation of all or substantially all of the assets of the Company, provided
that the assignee or transferee is the successor to all or substantially all of
the assets of the Company and such assignee or transferee assumes the
liabilities, obligations and duties of the Company as contained in this
Agreement, either contractually or as a matter of law. The Company further
agrees to require any successor (whether direct or indirect, by

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purchase, merger, consolidation or otherwise) to all or substantially all of
the business or assets of the Company in one or more related transactions
expressly to assume and agree to perform this Agreement 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.

                  (k) As used in this Agreement other than in Section 11, the
term "Company" shall mean (x) the Company as defined in the preamble to this
Agreement, (y) any entity that assumes or agrees to perform this Agreement, by
operation of law or otherwise, and (z) any successor to all or substantially all
of the business or assets of any of the foregoing.

         18.       Representations of the Company. The Company represents and
warrants to Executive that the execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby have been
duly and validly authorized on behalf of the Company by its Board of Directors;
that this Agreement does not violate any other agreement to which the Company is
a party or any applicable law; that all action required to be taken by the
Company or any other person or entity for the execution, delivery and
performance of this Agreement has been duly and effectively taken; that any
action required to be taken by the Board of Directors or any person or committee
responsible for administering any plan of the Company to amend, interpret or
otherwise act with respect to such plans, has been duly and effectively taken;
and that this Agreement is legal, valid and binding, and enforceable in
accordance with its terms, except as may be limited by applicable bankruptcy,
insolvency or similar laws. The Company acknowledges that Executive has relied
upon such representations and warranties in entering into this Agreement.

         19.      Counterpart.  This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together shall constitute one and the same instrument. Signatures delivered by
facsimile shall be effective for all purposes.

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         IN WITNESS WHEREOF, Executive has hereunto set his hand and the Company
has caused this Agreement to be executed by its duly authorized representative,
all as of the date first above written.

Witness:

/s/ Merrilee W. Heinlein                 /s/ W August Hillenbrand
-----------------------------------      --------------------------------------
                                                W August Hillenbrand

                                         HILLENBRAND INDUSTRIES, INC.

                                         By: /s/ Frederick W. Rockwood
                                           -------------------------------------

                                             Name:     Frederick W. Rockwood

                                             Title:     President

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                                    EXHIBIT A

                                     RELEASE

         In consideration of the covenants, promises and undertakings set forth
in the Agreement, dated as of October 10, 2000, between W August Hillenbrand
("Executive") and Hillenbrand Industries, Inc., an Indiana corporation (the
"Agreement"), acceptance of which is hereby acknowledged, Executive, on behalf
of himself and his heirs, estate, executors, administrators, personal
representatives, successors and assigns, hereby releases and forever discharges
the Company, any successor to the Company, and any of their present, former and
future owners, partners, affiliates, subsidiaries, successors, directors,
officers, employees, agents, representatives, attorneys, heirs, and assigns (the
"Released Parties"), from and against any and all claims, demands, damages,
actions, causes of action, costs, expenses, obligations and liabilities of
whatever kind or nature, in law, equity or otherwise, which Executive now has,
may ever have had or may have hereafter with respect to the Released Parties,
whether known or unknown from the beginning of time to the date of the Release.
Without limiting the generality of the foregoing release, Executive releases the
Released Parties from any and all known and unknown Employment Related Claims
(as defined below) occurring from the beginning of time to the date of this
Release, whether based on contract, tort, or employment discrimination laws,
including, but not limited to any and all claims arising under the Worker
Adjustment and Retraining Notification Act, the Age Discrimination in Employment
Act of 1967 ("ADEA"), Title VII of the Civil Rights Act of 1964, the Americans
with Disabilities Act of 1990, the Rehabilitation Act of 1973, the Civil Rights
Act of 1866, the Civil Rights Act of 1991, the Employee Retirement Income
Security Act of 1974, the Family and Medical Leave Act, as each such act and law
may be amended, or any other federal or state or local labor law, civil rights
law, or human rights law, and whether or not Executive is presently aware of the
existence of such claim, damage, action and cause of action, suit or demand;
provided, however, that this Release shall not apply to any claims which
Executive may have for the payments or provision of the benefits under the
Agreement, or under any agreements, plans, contracts, documents or programs
described or referenced in the Agreement, and provided, further, that this
Release shall not apply (i) to Executive's eligibility for indemnification in
accordance with the Agreement, any other agreement, any insurance policy and
applicable laws and the corporate bylaws of the Company with respect to his
employment with or service as an officer, director or employee of the Company or
in any other capacity on behalf of the Company or its affiliates or (ii) to any
rights Executive may have to obtain contribution in the event of the entry of
judgment against him as a result of any act or failure to act for which both
Executive and the Company are jointly responsible. As of the date hereof,
Executive has no knowledge of any claim, or potential claim, against the Company
arising out of any of the events described in this Release. For purposes of this
Release, "Employment Related Claims" means all rights and claims Executive has
or may have related to his employment by or status as an employee, officer or
director of the Company or any of its affiliates or to the termination of that
employment or status or to any employment practices and policies of the Company
or its affiliates.

         Executive acknowledges and agrees that he has read this Release in its
entirety and that this Release is a general release of all known and unknown
claims, including rights and claims arising under ADEA. Executive and the
Company further acknowledge and agree that:

                           (i)   This Release does not release, waive or
discharge any rights or claims that may arise for actions or omissions after the
date hereof;

                           (ii)  Executive has entered into the Agreement and
is releasing, waiving and discharging rights or claims hereunder only in
exchange for consideration which he is not already entitled to receive;

                           (iii) Executive has been advised, and is being
advised by this Release, to consult with an attorney before executing this
Agreement;

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                           (iv)  Executive has been advised, and is being
advised by this Release, that he has up to twenty-one (21) days within which to
consider this Release; and

                           (v)   Executive is aware that this Release shall not
become effective or enforceable until seven (7) days following his execution of
this Release and that he may revoke this Release at any time during such period
by delivering (or causing to be delivered) to the Company at the address
provided in Section 16 of the Agreement written notice of his revocation of this
Release no later than 5:00 p.m., central time on the seventh (7th) day following
the day on which he executes this Release. Any such revocation by Executive
shall cancel any and all undertakings, promises, and obligations of the Company
set forth in the Agreement. Provision to Executive by the Company of the
considerations provided for in the Agreement shall be conditional upon Executive
not revoking this Release.

December 2, 2000

                                                   ----------------------------
                                                           W August Hillenbrand
Subscribed and sworn to before me
this ______ day of December, 2000.

-----------------------------------
         Notary Public

                                       2<PAGE>   1

                                                                    EXHIBIT 10.6

                          DIRECTOR INDEMNITY AGREEMENT

         THIS AGREEMENT is made as of October 10, 2000 by and between
Hillenbrand Industries, Inc., an Indiana corporation (the "Corporation"), and
_____________________ (the "Director") residing at ___________________________.

         WHEREAS, the Corporation is aware that competent and experienced
persons are increasingly reluctant to serve as directors of corporations unless
they are protected by director liability insurance and/or indemnification, due
to the increasing amount of litigation against directors and the increasing
expense of defending such claims, and due to the fact that the exposure
frequently bears no reasonable relationship to the compensation of such
directors; and

         WHEREAS, it is essential to the Corporation to retain and attract as
directors the most capable and qualified persons available; and

         WHEREAS, it is now and has been the express policy of the Corporation
to indemnify its directors so as to provide them with the maximum possible
protection permitted by law; and

         WHEREAS, the Corporation's articles of incorporation and the Indiana
Business Corporation Law, by their nonexclusive nature, permit contracts between
the Corporation and its directors with respect to indemnification of directors.

         NOW, THEREFORE, the Corporation and the Director agree as follows:

         1.  Definitions.  As used in this Agreement:

         (a) "expenses" includes all direct and indirect costs of any type or
nature whatsoever (including, without limitation, all attorneys' fees and
related disbursements and other out-of-pocket costs) actually and reasonably
incurred by the Director in connection with the investigation, defense,
settlement or appeal of a proceeding or establishing or enforcing a right to
indemnification or advancement of expenses under this Agreement; provided,
however, that expenses shall not include any judgments, fines, ERISA excise
taxes or penalties or amounts paid in settlement of a proceeding.

         (b) "proceeding" includes, without limitation, any threatened, pending,
or completed action, suit, arbitration, alternate dispute resolution mechanism,
investigation, administrative hearing or any other proceeding, whether civil,
criminal, administrative, or investigative and whether formal or informal,
whether by a third party or by or in the right of the Corporation, by reason of
the fact that the Director is or was a director of the Corporation or, while a
director of the Corporation, is or was serving at the request of the Corporation
as a director, officer, partner, member, manager, trustee, employee, or agent of
another foreign or domestic corporation, partnership, limited liability company,
joint venture, trust, employee benefit plan, or other enterprise, or an
affiliate of the Corporation, whether for profit or not.

                                       1
<PAGE>   2

         2. Indemnity. The Corporation shall indemnify the Director in
accordance with the provisions of this Section 2 if the Director is a party to
or threatened to be made a party to any proceeding against all expenses,
judgments, fines (including any excise tax or penalty assessed with respect to
any employee benefit plan) and amounts paid in settlement actually and
reasonably incurred by the Director in connection with such proceeding, but only
(a) if the Director acted in good faith, and (b) (i) in the case of conduct in
the Director's official capacity with the Corporation, if the Director acted in
a manner which the Director reasonably believed to be in the best interests of
the Corporation, or (ii) in the case of conduct other than in the Director's
official capacity with the Corporation, if the Director acted in a manner which
the Director reasonably believed was at least not opposed to the best interests
of the Corporation, and (c) in the case of a criminal proceeding, the Director
had reasonable cause to believe that the Director's conduct was lawful or had no
reasonable cause to believe that the Director's conduct was unlawful, and (d) if
required by the Indiana Business Corporation Law, as amended or as may be
amended, revised or superseded (the "Act"), the Corporation makes a
determination that indemnification of the Director is permissible because the
Director has met the standard of conduct as set forth in the Act.

         3. Indemnification of Expenses of Successful Party. Notwith-standing
any other provisions of this Agreement, to the extent that the Director has been
wholly successful, on the merits or otherwise, in the defense of any proceeding
or in defense of any claim, issue or matter therein, including the dismissal of
an action without prejudice, the Corporation shall indemnify the Director
against all expenses incurred in connection therewith.

         4. Additional Indemnification. Notwithstanding any limitation in
Sections 2 or 3, the Corporation shall indemnify the Director to the full extent
authorized or permitted by any amendments to or replacements of the Act adopted
after the date of this Agreement that increase the extent to which a corporation
may indemnify its directors if the Director is a party to or threatened to be
made a party to any proceeding against all expenses, judgments, fines (including
any excise tax or penalty assessed with respect to any employee benefit plan)
and amounts paid in settlement actually and reasonably incurred by the Director
in connection with such proceeding.

         5. Exclusions.  Notwithstanding any provision in this Agreement, the
Corporation shall not be obligated under this Agreement to make any indemnity or
advance expenses in connection with any claim made against the Director:

         (a)  for which payment has actually been made to or on behalf of the
Director under any insurance policy or other indemnity provision, except with
respect to any excess beyond the amount paid under such insurance or other
indemnity provision;

         (b)  for any transaction from which the Director derived an improper
personal benefit;

         (c)  for recovery of profits resulting from the purchase and sale or
sale and purchase by the Director of securities of the Corporation in violation
of Section 16(b) of the Securities Exchange Act of 1934 and amendments thereto
or similar provisions of any federal, state or local statutory law or common
law;

         (d)  if a court having jurisdiction in the matter shall finally
determine that such indemnification is not lawful under any applicable statute
or public policy (in this respect, if applicable, both the Corporation and the
Director have been advised that the Securities and Exchange Commission takes the
position that indemnification for liabilities arising under the federal
securities laws is against public policy and is, therefore, unenforceable and
that claims for indemnification should be submitted to appropriate courts for
adjudication); or

                                       2

<PAGE>   3

         (e)  in connection with any proceeding (or part thereof) initiated by
the Director against the Corporation or its directors, officers or employees,
unless (i) such indemnification is expressly required to be made by law, (ii)
the proceeding was authorized by the Board of Directors of the Corporation,
(iii) such indemnification is provided by the Corporation, in its sole
discretion, pursuant to the powers vested in the Corporation under applicable
law, or (iv) the proceeding is initiated pursuant to Section 8 hereof and the
Director is successful in whole or in part in such proceeding.

         6. Advancement of Expenses.  The expenses incurred by the Director in
any proceeding shall be paid promptly by the Corporation upon demand and in
advance of final disposition of the proceeding at the written request of the
Director, if (a) the Director furnishes the Corporation with a written
affirmation of the Director's good faith belief that the Director has met the
standard of conduct required by the Act or this Agreement, (b) the Director
furnishes the Corporation with a written undertaking to repay such advance to
the extent that it is ultimately determined that the Director did not meet the
standard of conduct that would entitle the Director to indemnification, and (c)
if required by the Act, the Corporation makes a determination that the facts
known to those making the determination would not preclude indemnification under
the Act. Such advances shall be made without regard to the Director's ability to
repay such expenses.

         7. Notification and Defense of Claim.  As soon as practicable after
receipt by the Director of notice of the commencement of any proceeding, the
Director will, if a claim in respect thereof is to be made against the
Corporation under this Agreement, notify the Corporation of the commencement
thereof; provided, however, that the omission so to notify the Corporation will
not relieve the Corporation from any liability which it may have to the Director
otherwise than under this Agreement. With respect to any such proceeding as to
which the Director notifies the Corporation of the commencement thereof:

         (a)  The Corporation will be entitled to participate therein at its
own expense.

         (b)  Except as otherwise provided below, the Corporation may, at its
option and jointly with any other indemnifying party similarly notified and
electing to assume such defense, assume the defense thereof, with legal counsel
reasonably satisfactory to the Director. The Director shall have the right to
employ separate counsel in such proceeding, but the Corporation shall not be
liable to the Director under this Agreement, including Section 6 hereof, for the
fees and expenses of such counsel incurred after notice from the Corporation of
its assumption of the defense, unless (i) the Director reasonably concludes that
there may be a conflict of interest between the Corporation and the Director in
the conduct of the defense of such proceeding or (ii) the Corporation does not
employ counsel to assume the defense of such proceeding. The Corporation shall
not be entitled to assume the defense of any proceeding brought by the
Corporation or as to which the Director shall have made the conclusion provided
for in (i) above.

         (c)  If two or more persons who may be entitled to indemnification
from the Corporation, including the Director, are parties to any proceeding, the
Corporation may require the Director to engage the same legal counsel as the
other parties. The Director shall have the right to employ separate legal
counsel in such proceeding, but the Corporation shall not be liable to the
Director under this Agreement, including Section 6 hereof, for the fees and
expenses of such counsel incurred after notice from the Corporation of the
requirement to engage the same counsel as other parties, unless the Director
reasonably concludes that there may be a conflict of interest between the
Director and any of the other parties required by the Corporation to be
represented by the same legal counsel.

                                       3
<PAGE>   4

         (d)  The Corporation shall not be liable to indemnify the Director
under this Agreement for any amounts paid in settlement of any proceeding
effected without its written consent in advance which consent shall not be
unreasonably withheld. The Corporation shall be permitted to settle any
proceeding the defense of which it assumes, except the Corporation shall not
settle any action or claim in any manner which would impose any penalty or
limitation on the Director without the Director's written consent, which consent
shall not be unreasonably withheld.

         8. Enforcement.  Any right to indemnification or advances granted by
this Agreement to the Director shall be enforceable by or on behalf of the
Director in any court of competent jurisdiction if (i) the claim for
indemnification or advances is denied, in whole or in part, or (ii) no
disposition of such claim is made within 90 days of a written request therefor.
The Director, in such enforcement action, if successful in whole or in part,
shall be entitled to be paid also the expense of prosecuting the claim. Neither
the failure of the Corporation (including its Board of Directors or its
shareholders) to make a determination prior to the commencement of such
enforcement action that indemnification of the Director is proper in the
circumstances, nor an actual determination by the Corporation (including its
Board of Directors or its shareholders) that such indemnification is improper,
shall be a defense to the action or create a presumption that the Director is
not entitled to indemnification under this Agreement or otherwise. The
termination of any proceeding by judgment, order of court, settlement,
conviction or upon a plea of nolo contendere, or its equivalent, shall not, of
itself, create a presumption that the Director is not entitled to
indemnification under this Agreement or otherwise.

         9. Partial Indemnification.  If the Director is entitled under any
provisions of this Agreement to indemnification by the Corporation for some or a
portion of the expenses, judgments, fines (including any excise tax or penalty
assessed with respect to any employee benefit plan) and amounts paid in
settlement actually and reasonably incurred by the Director in the
investigation, defense, appeal or settlement of any proceeding but not, however,
for the total amount thereof, the Corporation shall indemnify the Director for
the portion of such expenses, judgments, fines (including any excise tax or
penalty assessed with respect to any employee benefit plan) and amounts paid in
settlement to which the Director is entitled.

         10. Nonexclusivity; Survival; Successors and Assigns.  The
indemnification and advance payment of expenses as provided by this Agreement
shall not be deemed exclusive of any other rights to which the Director may be
entitled under the Corporation's articles of incorporation, the by-laws, any
other agreement, any vote of shareholders or disinterested directors, the Act,
or otherwise, both as to action in the Director's official capacity and as to
action in another capacity while holding such office. The indemnification under
this Agreement shall survive any actual or purported termination of this
Agreement by the Corporation or its successors or assigns whether by operation
of law or otherwise and shall survive termination of the Director's services to
the Corporation and shall inure to the benefit of the heirs, personal
representatives and estate of the Director. This Agreement shall be binding, and
the Corporation shall take such action to ensure that it is binding, upon all
successors and assigns of the Corporation, including any transferee of all or
substantially all of its assets and any successor by merger, consolidation, or
operation of law.

         11. Severability.  If this Agreement or any portion thereof is
invalidated on any ground by any court of competent jurisdiction, the
Corporation shall indemnify the Director as to expenses, judgments, fines
(including any excise tax or penalty assessed with respect to any employee
benefit plan) and amounts paid in settlement with respect to any proceeding to
the full extent permitted by any applicable portion of this Agreement that is
not invalidated or by any other applicable law.

                                       4
<PAGE>   5

         12. Subrogation.  In the event of payment under this Agreement, the
Corporation shall be subrogated to the extent of such payment to all of the
rights of recovery of the Director, who shall execute all documents required and
shall do all acts necessary or desirable to secure such rights and to enable the
Corporation effectively to bring suit to enforce such rights.

         13. Modification and Waiver.  No supplement, modification or amendment
of this Agreement shall be binding unless executed in writing by both of the
parties hereto. No waiver of any of the provisions of this Agreement shall
constitute a waiver of any other provisions hereof (whether or nor similar) nor
shall such waiver constitute a continuing waiver.

         14. Notices.  All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed to have been duly given (i) if
delivered by hand and receipted for by the party to whom such notice or other
communication shall have been directed, at the time of such delivery, or (ii) if
mailed by certified or registered mail, return receipt requested, with postage
prepaid, three (3) business days after deposit into the United States mail if to
an address in the United States, or if delivered by recognized overnight courier
three (3) business days after receipt by such courier if to an address outside
the United States:

         (a)  If to the Director, at the address indicated above.

         (b)  If to the Corporation, to:

              Hillenbrand Industries, Inc.
              700 State Route 46 East
              Batesville, Indiana  47006
              Attention:  General Counsel

or to such other address as may have been furnished to either party by the other
party.

         15. Counterparts.  This Agreement may be executed in any number of
counterparts, which shall together constitute one agreement.

         16. Governing Law.  This Agreement shall be governed by and construed
in accordance with the laws of the State of Indiana, without giving effect to
conflicts of laws principles requiring application of the substantive laws of
another jurisdiction.

         17. Scope of Agreement.  This Agreement constitutes the entire
agreement between the parties hereto for the purposes herein contained, and this
Agreement shall supercede any other agreements, understandings, representations,
or warranties, oral or written, relating to the subject matter of this
Agreement, which shall be deemed to exist or to bind any of the parties hereto
or their respective successors or assigns, except as expressly referred to
herein.

         IN WITNESS WHEREOF, the parties hereto have entered into this Agreement
as of the date first written above.

HILLENBRAND INDUSTRIES, INC.  DIRECTOR

By:
   -----------------------------------      ------------------------------------
Printed Name:                               Printed Name:
             -------------------------                   -----------------------
Title:
      --------------------------------

                                       5

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