Document:

exv10w1

 

Exhibit 10.1

EMPLOYMENT AGREEMENT

P R E A M B L E

This Employment Agreement defines the essential terms and conditions of our employment relationship
with you. The subjects covered in this Agreement are vitally important to you and to the Company.
Thus, you should read the document carefully and ask any questions before signing the Agreement.

     This EMPLOYMENT AGREEMENT between Peter H. Soderberg (“Executive”) and Hillenbrand Industries,
Inc. (“Company”) is dated February 7, 2006 to be effective and binding between the parties hereto
if and only if, and as of the date ( “Effective Date”), Executive is elected by the Board of
Directors of the Company to be the President a Chief Executive Officer of the Company.

W I T N E S S E T H:

     WHEREAS, the Company is primarily engaged, through its various subsidiary entities, in the
business of providing various products and services to the death care, funeral and healthcare
industries throughout the United States and abroad.

     WHEREAS, the Company is willing to employ Executive in an executive or managerial position and
Executive desires to be employed by the Company in such capacity based upon the terms and
conditions set forth in this Agreement;

     WHEREAS, in the course of the employment contemplated under this Agreement, it will be
necessary for Executive to acquire and maintain knowledge of certain trade secrets and other
confidential and proprietary information regarding the Company as well as any of its parent,
subsidiary and/or affiliated entities (hereinafter jointly referred to as the “Companies”); and

     WHEREAS, the Company and Executive (collectively referred to as the “Parties”) acknowledge and
agree that the execution of this Agreement is necessary to memorialize the terms and conditions of
their employment relationship as well as safeguard against the unauthorized disclosure or use of
the Company’s confidential information and to otherwise preserve the goodwill and ongoing business
value of the Company;

     NOW THEREFORE, in consideration of Executive’s employment, the Company’s willingness to
disclose certain confidential and proprietary information to Executive and the mutual covenants
contained herein as well as other good and valuable consideration, the receipt of which is hereby
acknowledged, the Parties agree as follows:

	1.	 	Employment. As of Executive’s first date of employment with the Company as
determined by, and reflected in a resolution approved by, the Board of Directors of the
Company (“Start Date”), the Company agrees to employ Executive and Executive agrees to serve
as President and Chief Executive Officer of the Company. Executive agrees to perform all
duties and responsibilities traditionally assigned to, or falling within the normal
responsibilities of, an individual employed as President and Chief Executive Officer of the
Company. Executive also agrees to perform any and all additional

 

 

	 	 	duties or responsibilities consistent with such position as may be assigned by the Board of
Directors of the Company in its sole discretion.
	 
	2.	 	Efforts and Duty of Loyalty. During the term of employment with the Company,
Executive covenants and agrees to exercise reasonable efforts to perform all assigned duties
in a diligent and professional manner and in the best interest of the Company. Executive
agrees to devote his full working time, attention, talents, skills and reasonable best efforts
to further the Company’s business interests. Executive agrees not to engage in any outside
business activity, whether or not pursued for gain, profit or other pecuniary advantage,
without the express written consent of the Company. Executive shall act at all times in
accordance with the Hillenbrand Industries, Inc. Code of Ethical Business Conduct, and all
other applicable policies which may exist or be adopted by the Company from time to time.
Notwithstanding the foregoing, Executive shall be allowed to serve as a director of any
company or entity of which he is currently a director consistent with the Company’s Corporate
Governance Standards for Board of Directors and applicable laws. Executive shall continue to
serve as a member of the Company’s Board of Directors, subject to the requirement that he
stand for re-election at the next annual meeting of shareholders of the Company at which he
otherwise would have been required under the Company’s Articles of Incorporation or Bylaws to
stand for re-election. However, during the period of time that he serves as the Company’s
President and Chief Executive Officer, his membership on all Board committees of Directors of
the Company, including the Audit, Nominating/Corporate Governance and Compensation and
Management Development Committees, shall be suspended. Executive shall not be entitled to
receive compensation for his service as a member of the Board of Directors of the Company from
and after the Start Date. The fees for the Board and committee meetings up to and including
the Start Date, 2006 need not be repaid. Because of the proximity of the contemplated Start
Date to the date that fiscal 2006 annual Board retainer payment and annual restricted stock
unit award grant will be made, Executive shall not be entitled to receive such compensation.
	 
	3.	 	At-Will Employment. Subject to the terms and conditions set forth below, Executive
specifically acknowledges and accepts such employment on an “at-will” basis and agrees that
both Executive and the Company retain the right to terminate this relationship at any time,
with or without cause, for any reason not prohibited by applicable law upon proper notice.
Executive acknowledges that nothing in this Agreement is intended to create, nor should be
interpreted to create, an employment contract for any specified length of time between the
Company and Executive.
	 
	4.	 	Compensation. For all services rendered by Executive on behalf of, or at the request
of, the Company, in his capacity as President and Chief Executive Officer of the Company,
Executive shall be compensated as follows from and after the Start Date, subject to
withholding for payment of any and all applicable federal, state and local payroll and
withholding taxes:

	 	(a)	 	Base Salary. For the services performed by him under this Agreement, the
Company shall pay Executive a base salary of Eight Hundred Thousand Dollars ($800,000) per
year, pro rated for the period which Executive serves (“Base Salary”). The Base Salary
shall be paid in the same increments as the Company’s normal payroll, but no less
frequently than monthly and prorated for any period less than a full month. Executive’s
Base Salary shall be reviewed at least annually, with the initial review taking place
during the fourth quarter of 2006 .
	 
	 	(b)	 	Signing Award. On the Start Date, Executive will receive an award with a value
on the date of grant of $1,300,000 of restricted stock units (otherwise known as deferred
stock awards) (“RSUs”) under the terms and conditions of a Stock Award Agreement and the
related Company Stock Incentive Plan. Such RSUs (“Signing Award RSUs”) shall vest in equal
one third

2

 

	 	 	 	increments on the day after the dates of each of the six month, twelve month and twenty four
month anniversaries of the Start Date.
	 
	 	(c)	 	STIC. Incentive compensation, payable solely at the discretion of the Board of
Directors of the Company, pursuant to the Company’s existing Incentive Compensation Program
or any other program as the Company may establish in its sole discretion and Executive’s
incentive compensation for the 2006 fiscal year under the existing Incentive Compensation
Program shall be calculated based on a full year’s performance rather than a pro rata share
of that performance.
	 
	 	(d)	 	RSUs. On the Start Date, Executive will receive an award with a value
on the date of grant of $1,000,000 of RSUs under the terms and conditions of a Stock Award
Agreement and the related Company Stock Incentive Plan. Such RSUs shall vest in twenty
percent, twenty five percent, twenty five percent and thirty percent increments on the day
after the dates of each of the second, third, fourth and fifth year anniversaries of the
Start Date, respectively.
	 
	 	(e)	 	Stock Options. On the Start Date, Executive will receive a grant of stock
options, with a value on the date of grant of $1,000,000 on such date using the
Black-Scholes valuation method, under the terms and conditions of a Stock Option Agreement
and the related Company Stock Incentive Plan. Each option will terminate in ten
years, have an exercise price per share equal to the average of the high and low prices of
the Common Stock on the Start Date and vest in one-third increments over a three-year
period from the Start Date.
	 
	 	(f)	 	Retirement Plans. Commencing on the Start Date, Executive will be
entitled to participate in Company retirement plans (e.g., 401(k) Savings Plan and
Supplemental Executive Retirement Plan) consistent with plans, programs or policies
available to other senior executive officers of the Company and subject to
satisfaction of any applicable eligibility requirements. Commencing on the Start Date, a
Supplemental Retirement Account shall be established for the benefit of the Executive as
set forth in Exhibit C to this Agreement.
	 
	 	(g)	 	Aircraft Use. During the term of his employment as President and Chief
Executive Officer of the Company, Executive may use the Company’s aircraft for travel to
and from his primary and or secondary residences up to a maximum of 100 hours of flight
time per calendar year.
	 
	 	(h)	 	Other Benefits.  Commencing on the Start Date, Executive
will be entitled to participate in and receive such additional compensation, benefits
and perquisites, including standard relocation benefits, as are available to other senior
executives of the Company and as the Board of Directors of Company may deem appropriate.

	5.	 	Changes to Compensation. Notwithstanding anything contained herein to the contrary,
Executive acknowledges that the Company specifically reserves the right to make changes to
Executive’s compensation in its sole discretion including, but not limited to, modifying or
eliminating a compensation component. The Parties agree that such changes shall be deemed
effective immediately and a modification of this Agreement unless, within thirty (30) days
after receiving notice of such change, Executive exercises his right to terminate this
Agreement without cause or for “Good Reason” as provided below in Paragraph No. 11.
	 
	6.	 	Direct Deposit. As a condition of employment, and within thirty (30) days of the
Start Date of this Agreement, Executive agrees to make all necessary arrangements to have all
sums paid pursuant to this Agreement direct deposited into one or more bank accounts as
designated by Executive.

3

 

	7.	 	Predecessor Employers. Except as otherwise disclosed in writing to the Compensation
Committee of the Board prior to the date hereof Executive warrants that he is not a party to
any contract, restrictive covenant, or other agreement purporting to limit or otherwise
adversely affecting his ability to secure employment with any third party. Alternatively,
should any such agreement exist, Executive warrants that the contemplated services to be
performed hereunder will not violate the terms and conditions of any such agreement.
	 
	8.	 	Restricted Duties. Executive agrees not to disclose, or use for the benefit of the
Company, any confidential or proprietary information belonging to any predecessor employer(s)
that otherwise has not been made public and further acknowledges that the Company has
specifically instructed him not to disclose or use such confidential or proprietary
information. Based on his understanding of the anticipated duties and responsibilities
hereunder, Executive acknowledges that such duties and responsibilities will not compel the
disclosure or use of any such confidential and proprietary information.
	 
	9.	 	Termination Without Cause. The Parties agree that either party may terminate this
employment relationship at any time, without cause, upon sixty (60) days’ advance written
notice or, if terminated by the Company, pay in lieu of notice. In such event, Executive
shall only be entitled to such compensation, benefits and perquisites that have been paid or
fully accrued as of the effective date of his separation and as otherwise explicitly set forth
in this Agreement.
	 
	10.	 	Termination With Cause. Executive’s employment may be terminated by the Company at
any time “for cause” without notice or prior warning. For purposes of this Agreement, “cause”
shall mean the Company’s good faith determination that Executive has:

	 	(a)	 	Acted with gross neglect or willful misconduct in the discharge of his duties and
responsibilities or refused to follow the lawful direction of the Board of Directors of the
Company or the terms and conditions of this Agreement;
	 
	 	(b)	 	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 Board of Director’s reasonable opinion, to cause the
Company, it officers or its directors significant embarrassment or ridicule;
	 
	 	(c)	 	Violated a material requirement of any Company policy or procedure, specifically
including a violation of Hillenbrand Industries, Inc.’s Code of Ethics or Associate Policy
Manual;
	 
	 	(d)	 	Disclosed without proper authorization any trade secrets or other Confidential
Information (as defined            herein).
	 
	 	(e)	 	Engaged in any act that, in the reasonable opinion of the Board of Directors of the
Company would hold the Company, its officers or directors up to probable civil or criminal
liability, provided that, if Executive acts in good faith in compliance with applicable
legal or ethical standards, such actions shall not be grounds for termination for cause; or
	 
	 	(f)	 	Engaged in such other conduct recognized at law as constituting cause.

Upon the occurrence or discovery of any event specified above, the Company shall have the
right to terminate Executive’s employment, effective immediately, by providing notice thereof to
Executive without further obligation to him other than accrued wages or other accrued wages,
deferred compensation or other accrued benefits of employment (collectively referred to herein as
“Accrued

4

 

Obligations”), which shall be paid in accordance with the Company’s past practice and applicable
law. To the extent any violation of this Paragraph is capable of being promptly cured by Executive
(or cured within a reasonable period to the Company’s satisfaction), the Company agrees to provide
Executive with a reasonable opportunity to so cure such defect. Absent mutual agreement, the
Parties agree in advance that it is not possible for Executive to cure any violations of
sub-paragraph (b) or (d) and, therefore, no opportunity for cure need be provided in those
circumstances. Notwithstanding the foregoing, the Company may not terminate the Executive’s
employment for cause unless (A) a determination that cause exists is made and approved by a
majority of the Company’s Board, (B) if the circumstance giving rise to the issue are capable of
being cured the Executive is given at least ten (10) days’ written notice of the Board meeting
called to make such determination, and (C) the Executive is given the opportunity to address such
meeting.

	11.	 	Termination by Executive for Good Reason. Executive may terminate his employment and
declare that this Agreement to have been terminated “without cause” by the Company (and,
therefore, for “Good Reason”) upon the occurrence, without Executive’s consent, of any of the
following circumstances, unless agreed otherwise:

	 	(a)	 	The assignment to Executive of duties that are materially inconsistent with Executive’s
position as President and Chief Executive Officer or a material change in his reporting
relationship to the Board of Directors of the Company;
	 
	 	(b)	 	The failure to elect or reelect Executive as President and Chief Executive Officer of
the Company or as a member of the Board of Directors (unless such failure is related in any
way to the Company’s decision to terminate Executive for cause or Executive’s failure to
run for reelection to the Board);
	 
	 	(c)	 	The failure of the Company to continue to provide Executive with office space, related
facilities and support personnel (including, but not limited to, administrative and
secretarial assistance) within the Company’s principal executive offices commensurate with
his position as President and Chief Executive Officer of the Company;
	 
	 	(d)	 	A reduction by the Company in the amount of Executive’s base salary or the
discontinuation or reduction by the Company of Executive’s participation at previously
existing levels of eligibility in any incentive compensation, additional compensation or
equity programs, benefits, policies or perquisites; provided, however, that the Company may
make changes to its generally applicable benefits and perquisite programs without
implicating the provisions of this subsection (d) so long as Executive is treated in a
manner that is commensurate with the treatment of other senior executives of the Company;
	 
	 	(e)	 	The relocation of the Company’s principal executive offices or Executive’s place of
work to a location requiring a change of more than fifty (50) miles in Executive’s daily
commute; or
	 
	 	(f)	 	A failure by the Company to perform its obligations under this Employment Agreement
(other than inadvertent failures that are cured by the Company promptly upon notice from
the Executive).

	12.	 	Termination Due to Death or Disability. In the event Executive dies or suffers a
disability (as defined herein) during the term of employment, this Agreement shall
automatically be terminated on the date of such death or disability without further obligation
on the part of the Company other than the Accrued Obligations (as defined in Section 10),
which shall be paid in accordance with the award agreements, benefits plans, past practice and
applicable law. For purposes of this Agreement, Executive shall be considered to have
suffered a “disability”: (i) upon a good faith determination by the Company that, as a result
of any mental or physical impairment, Executive is and will likely

5

 

	 	 	remain unable to perform the essential functions of his duties or responsibilities hereunder on
a full-time basis for one hundred eighty (180) days, with or without reasonable accommodation,
or (ii) Executive becomes eligible for or receives any benefits pursuant to the Company’s
long-term disability policy.
	 
	 	 	Notwithstanding anything expressed or implied above to the contrary, the Company agrees
to fully comply with its obligations under the Americans with Disabilities Act as well as any
other applicable federal, state, or local law, regulation, or ordinance governing the protection
of individual with such disabilities as well as the Company’s obligation to provide reasonable
accommodation thereunder.
	 
	13.	 	Reaffirmation. Upon termination of Executive’s employment for any reason,
Executive agrees, if requested, to reaffirm in writing his post-employment obligations as set
forth in this Agreement.
	 
	14.	 	Section 409A Notification. Executive acknowledges that he has been advised of, and
received advice from his legal and/or tax advisor(s) of the American Jobs Creation Act of
2004, which added Section 409A to the Internal Revenue Code, and significantly changed the
taxation of nonqualified deferred compensation plans and understands that Section 409A may
affect Executive’s receipt of severance compensation, including the timing thereof.
	 
	15.	 	Section 409A Acknowledgement. Executive acknowledges that, notwithstanding anything
contained herein to the contrary, both Parties shall be independently responsible for
assessing their own risks and liabilities under Section 409A that may be associated with any
payment made under the terms of this Agreement or any other arrangement which may be deemed to
trigger Section 409A. Further, the Parties agree that each shall independently bear
responsibility for any and all taxes, penalties or other tax obligations as may be imposed
upon them in their individual capacity as a matter of law.
	 
	16.	 	Severance. In the event Executive’s employment is terminated by the Company without
cause, and subject to the normal terms and conditions imposed by the Company as set forth
herein and in the attached Separation and Release Agreement, Executive shall be eligible to
receive severance pay based upon his base salary at the time of termination for a period
determined in accordance with any guidelines as may be established by the Company or for a
period up to twelve (12) months (whichever is longer) and the Signing Award RSUs shall
immediately fully vest and shares shall be delivered to Executive as soon thereafter as will
not cause Executive adverse tax consequences under Code Section 409A. The foregoing severance
rights and obligations shall not exist if Executive voluntarily leaves the Company’s employ
without “Good Reason” (as defined above) or is terminated for “cause” (as defined above).
	 
	17.	 	Severance Payment Terms and Conditions. No severance pay shall be paid if Executive
voluntarily leaves the Company’s employ without “Good Reason” (as defined above) or is
terminated for cause. Any severance pay made payable under this Agreement shall be paid in
lieu of, and not in addition to, any other contractual, notice or statutory pay or other
accrued compensation obligation (excluding accrued wages and deferred compensation).
Additionally, such severance pay is contingent upon Executive fully complying with the
restrictive covenants contained herein and executing a Separation and Release Agreement in a
form not substantially different from that attached as Exhibit A. Further, the Company’s
obligation to provide severance hereunder shall be deemed null and void should Executive fail
or refuse to execute the Company’s then-standard Separation and Release Agreement (without
modification) within any time period as may be prescribed by law or, in absence thereof,
twenty-one (21) days. Severance pay benefits shall begin (i) six (6) months following
Executive’s Effective Termination Date if covered by Section 409A or (ii) for Executives not
covered by Section 409A (or payments deemed exempt from 409A), severance pay shall commence
upon the next regularly scheduled payroll following Executive’s Effective Termination Date.
Excluding any lump

6

 

	 	 	sum payment due as a result of the application of Section 409A (which shall be paid regardless
of reemployment), all other severance payments provided hereunder shall terminate upon
reemployment.
	 
	18.	 	Assignment of Rights.

	 	(a)	 	Copyrights. Executive agrees that all works of authorship fixed in any
tangible medium of expression by him during the term of this Agreement relating to the
Company’s business (“Works”), either solely or jointly with others, shall be and remain
exclusively the property of the Company. Each such Work created by Executive is a “work
made for hire” under the copyright law and the Company may file applications to register
copyright in such Works as author and copyright owner thereof. If, for any reason, a Work
created by Executive is excluded from the definition of a “work made for hire” under the
copyright law, then Executive does hereby assign, sell, and convey to the Company the
entire rights, title, and interests in and to such Work, including the copyright therein,
to the Company. Executive will execute any documents that the Company deems necessary in
connection with the assignment of such Work and copyright therein. Executive will take
whatever steps and do whatever acts the Company requests, including, but not limited to,
placement of the Company’s proper copyright notice on Works created by Executive to secure
or aid in securing copyright protection in such Works and will assist the Company or its
nominees in filing applications to register claims of copyright in such Works. The Company
shall have free and unlimited access at all times to all Works and all copies thereof and
shall have the right to claim and take possession on demand of such Works and copies.
	 
	 	(b)	 	Inventions. Executive agrees that all discoveries, concepts, and ideas,
whether patentable or not, including, but not limited to, apparatus, processes, methods,
compositions of matter, techniques, and formulae, as well as improvements thereof or
know-how related thereto, relating to any present or prospective product, process, or
service of the Company (“Inventions”) that Executive conceives or makes during the term of
this Agreement relating to the Company’s business, shall become and remain the exclusive
property of the Company, whether patentable or not, and Executive will, without royalty or
any other consideration:

	 	(i)	 	Inform the Company promptly and fully of such Inventions by written reports,
setting forth in detail the procedures employed and the results achieved;
	 
	 	(ii)	 	Assign to the Company all of his rights, title, and interests in and to such
Inventions, any applications for United States and foreign Letters Patent, any United
States and foreign Letters Patent, and any renewals thereof granted upon such
Inventions;
	 
	 	(iii)	 	Assist the Company or its nominees, at the expense of the Company, to obtain
such United States and foreign Letters Patent for such Inventions as the Company may
elect; and
	 
	 	(iv)	 	Execute, acknowledge, and deliver to the Company at the Company’s expense such
written documents and instruments, and do such other acts, such as giving testimony in
support of his inventorship, as may be necessary in the opinion of the Company, to
obtain and maintain United States and foreign Letters Patent upon such Inventions and
to vest the entire rights and title thereto in the Company and to confirm the complete
ownership by the Company of such Inventions, patent applications, and patents.

	19.	 	Company Property. All records, files, drawings, documents, data in whatever form,
business equipment (including computers, PDAs, cell phones, etc.), and the like relating to,
or provided by, the

7

 

	 	 	Company shall be and remain the sole property of the Company. Upon termination of employment,
Executive shall immediately return to the Company all such items without retention of any copies
and without additional request by the Company. De minimis items such as pay stubs, 401(k) plan
summaries, employee bulletins, and the like are excluded from this requirement.
	 
	20.	 	Confidential Information. Executive acknowledges that the Company and its affiliated
entities (herein collectively referred to as “Companies”) possess certain trade secrets as
well as other confidential and proprietary information which they have acquired or will
acquire at great effort and expense. Such information may include, without limitation,
confidential information, whether in tangible or intangible form, regarding the Companies’
products and services, marketing strategies, business plans, operations, costs, current or
prospective customer information (including customer identities, contacts, requirements,
creditworthiness, preferences, and like matters), product concepts, designs, prototypes or
specifications, research and development efforts, technical data and know-how, sales
information, including pricing and other terms and conditions of sale, financial information,
internal procedures, techniques, forecasts, methods, trade information, trade secrets,
software programs, project requirements, inventions, trademarks, trade names, and similar
information regarding the Companies’ business(es) (collectively referred to herein as
“Confidential Information”). Executive further acknowledges that, as a result of his
employment with the Company, Executive will have access to, will become acquainted with,
and/or may help develop, such Confidential Information. Confidential Information shall not
include information readily available in the public through no fault of Executive or other
wrong doing.
	 
	21.	 	Restricted Use of Confidential Information. Executive agrees that all Confidential
Information is and shall remain the sole and exclusive property of the Company and/or its
affiliated entities. Except as may be expressly authorized by the Company in writing, or
other than in the course of the Executive’s employment and for the benefit of the
Company, Executive agrees not to disclose, or cause any other person or entity to
disclose, any Confidential Information to any third party while employed by the Company and
for as long thereafter as such information remains confidential (or as limited by applicable
law). Further, Executive agrees to use such Confidential Information only in the course of
Executive’s duties in furtherance of the Company’s business and agrees not to make use of any
such Confidential Information for Executive’s own purposes or for the benefit of any other
entity or person.
	 
	22.	 	Acknowledged Need for Limited Restrictive Covenants. Executive acknowledges that the
Companies have spent and will continue to expend substantial amounts of time, money and effort
to develop their business strategies, Confidential Information, customer identities and
relationships, goodwill and Executive relationships, and that Executive will benefit from
these efforts. Further, Executive acknowledges the inevitable use of, or near-certain
influence by his knowledge of, the Confidential Information disclosed to Executive during the
course of employment if allowed to compete against the Company in an unrestricted manner and
that such use would be unfair and extremely detrimental to the Company. Accordingly, based on
these legitimate business reasons, Executive acknowledges each of the Companies’ need to
protect their legitimate business interests by reasonably restricting Executive’s ability to
compete with the Company on a limited basis.
	 
	23.	 	Non-Solicitation. During Executive’s employment and for a period of twenty-four (24)
months thereafter, Executive agrees not to directly or indirectly engage in the following
prohibited conduct:

	 	(a)	 	Solicit, offer products or services to, or accept orders for, any Competitive Products
or otherwise transact any competitive business on behalf of a Competitor or in competition
with the Company, with, any customer or entity with whom Executive had contact or
transacted any business on behalf of the Company (or any Affiliate thereof) during the
eighteen (18) month period preceding

8

 

	 	 	 	Executive’s date of separation or about whom Executive possessed, or had access to,
confidential and proprietary information;
	 
	 	(b)	 	Attempt to entice or otherwise cause any third party to withdraw, curtail or cease
doing business with the Company (or any Affiliate thereof), specifically including
customers, vendors, independent contractors and other third party entities;
	 
	 	(c)	 	Except in the course of the Executive’s employment and for the benefit of the Company,
disclose to any person or entity the identities, contacts or preferences of any customers
of the Company (or any Affiliate thereof), or the identity of any other persons or entities
having business dealings with the Company (or any Affiliate thereof);
	 
	 	(d)	 	Induce any individual who has been employed by or had provided services to the Company
(or any Affiliate thereof) within the six (6) month period immediately preceding the
effective date of Executive’s separation to terminate such relationship with the Company
(or any Affiliate thereof);
	 
	 	(e)	 	Assist, coordinate or otherwise offer employment to, accept employment inquiries from,
or employ any individual who is or had been employed by the Company (or any Affiliate
thereof) at any time within the six (6) month period immediately preceding such offer, or
inquiry;
	 
	 	(f)	 	Communicate or indicate in any way to any customer of the Company (or any Affiliate
thereof), prior to formal separation from the Company, any interest, desire, plan, or
decision to separate from the Company other than by way of long term retirement plans; or
	 
	 	(g)	 	Otherwise attempt to directly or indirectly interfere with the Company’s business, the
business of any of the Companies or their relationship with their employees, consultants,
independent contractors or customers.

	24.	 	Limited Non-Compete. For the above-stated reasons, and as a condition of employment
to the fullest extent permitted by law, Executive agrees during the Relevant Non-Compete
Period not to directly or indirectly engage in the following competitive activities:

	 	(a)	 	Executive shall not have any ownership interest in, work for, advise, consult, or have
any business connection or business or employment relationship in any competitive capacity
with any Competitor unless Executive provides written notice to the Company of such
relationship prior to entering into such relationship and, further, provides sufficient
written assurances to the Company’s satisfaction that such relationship will not,
jeopardize the Company’s legitimate interests or otherwise violate the terms of this
Agreement;
	 
	 	(b)	 	Executive shall not engage in any research, development, production, sale or
distribution of any Competitive Products, specifically including any products or services
relating to those for which Executive had responsibility for the eighteen (18) month period
preceding Executive’s date of separation;
	 
	 	(c)	 	Executive shall not market, sell, or otherwise offer or provide any Competitive
Products within his Geographic Territory (if applicable) or Assigned Customer Base,
specifically including any products or services relating to those for which Executive had
responsibility for the eighteen (18) month period preceding Executive’s date of separation;
and
	 
	 	(d)	 	Executive shall not distribute, market, sell or otherwise offer or provide any
Competitive Products to any customer of the Company with whom Executive had contact or for
which

9

 

	 	 	 	Executive had responsibility at any time during the eighteen (18) month period preceding
Executive’s date of separation

	25.	 	Non-Compete Definitions. For purposes of this Agreement, the Parties agree that the
following terms shall apply:

	 	(a)	 	“Affiliate” includes any parent, subsidiary, joint venture, sister company, or other
entity controlled, owned, managed or otherwise associated with the Company;
	 
	 	(b)	 	“Assigned Customer Base” shall include all accounts or customers formally assigned to
Executive within a given territory or geographical area or contacted by him at any time
during the eighteen (18) month period preceding Executive’s date of separation;
	 
	 	(c)	 	“Competitive Products” shall include any product or service that directly or indirectly
competes with, is substantially similar to, or serves as a reasonable substitute for, any
product or service in research, development or design, or manufactured, produced, sold or
distributed by the Company;
	 
	 	(d)	 	“Competitor” shall include any person or entity that offers or is actively planning to
offer any Competitive Products and may include (but not be limited to) any entity
identified on the Company’s Illustrative Competitor List, attached hereto as Exhibit B,
which shall be amended from time to time to reflect changes in the Company’s business and
competitive environment (updated competitor lists will be provided to Executive upon
reasonable request);
	 
	 	(e)	 	“Geographic Territory” shall include any territory formally assigned to Executive as
well as all territories in which Executive has provided any services, sold any products or
otherwise had responsibility at any time during the twenty-four (24) month period preceding
Executive’s date of separation;
	 
	 	(f)	 	“Relevant Non-Compete Period” shall include the period of Executive’s employment with
the Company as well as a period of twenty-four (24) months after such employment is
terminated, regardless of the reason for such termination provided, however, that this
period shall be reduced to the greater of (i) twelve (12) months or (ii) the total length
of Executive’s employment with the Company, including employment with any parent,
subsidiary or affiliated entity, if such employment is less than twenty-four (24) months;
	 
	 	(g)	 	“Directly or indirectly” shall be construed such that the foregoing restrictions shall
apply equally to Executive whether performed individually or as a partner, shareholder,
officer, director, manager, employee, salesperson, independent contractor, broker, agent,
or consultant for any other individual, partnership, firm, corporation, company, or other
entity engaged in such conduct

	26.	 	Consent to Reasonableness. In light of the above-referenced concerns, including
Executive’s knowledge of and access to the Companies’ Confidential Information, Executive
acknowledges that the terms of the foregoing restrictive covenants are reasonable and
necessary to protect the Company’s legitimate business interests and will not unreasonably
interfere with Executive’s ability to obtain alternate employment. As such, Executive hereby
agrees that such restrictions are valid and enforceable, and affirmatively waives any argument
or defense to the contrary. Executive acknowledges that this limited non-competition
provision is not an attempt to prevent Executive from obtaining other employment in violation
of IC § 22-5-3-1 or any other similar statute. Executive further acknowledges that the
Company may need to take action, including litigation, to enforce this limited non-competition
provision, which efforts the Parties stipulate shall not be deemed an attempt to prevent
Executive from obtaining other employment.

10

 

	27.	 	Survival of Restrictive Covenants. Executive acknowledges that the above restrictive
covenants shall survive the termination of this Agreement and the termination of Executive’s
employment for any reason. Executive further acknowledges that any alleged breach by the
Company of any contractual, statutory or other obligation shall not excuse or terminate the
obligations hereunder or otherwise preclude the Company from seeking injunctive or other
relief. Rather, Executive acknowledges that such obligations are independent and separate
covenants undertaken by Executive for the benefit of the Company.
	 
	28.	 	[Intentionally Omitted]
	 
	29.	 	Post-Termination Notification. For the duration of his Relevant
Non-compete Period or other restrictive covenant period, which ever is longer, Executive
agrees to promptly notify the Company no later than five (5) business days of his acceptance
of any employment or consulting engagement. Such notice shall include sufficient information
to ensure Executive compliance with his non-compete obligations and must include at a minimum
the following information: (i) the name of the employer or entity for which he is providing
any consulting services; (ii) a description of his intended duties as well as (iii) the
anticipated start date. Such information is required to ensure Executive’s compliance with
his non-compete obligations as well as all other applicable restrictive covenants. Failure to
timely provide such notice shall be deemed a material breach of this Agreement and entitle the
Company to return of any severance paid to Executive plus attorneys’ fees. Executive further
consents to the Company’s notification to any new employer of Executive’s rights and
obligations under this Agreement.
	 
	30.	 	Scope of Restrictions. If the scope of any restriction contained in any preceding
paragraphs of this Agreement is deemed too broad to permit enforcement of such restriction to
its fullest extent, then such restriction shall be enforced to the maximum extent permitted by
law, and Executive hereby consents and agrees that such scope may be judicially modified
accordingly in any proceeding brought to enforce such restriction.
	 
	31.	 	Specific Enforcement/Injunctive Relief. Executive agrees that it would be
difficult to measure any damages to the Company from a breach of the above-referenced
restrictive covenants, but acknowledges that the potential for such damages would be great,
incalculable and irremediable, and that monetary damages alone would be an inadequate remedy.
Accordingly, Executive agrees that the Company shall be entitled to immediate injunctive
relief against such breach, or threatened breach, in any court having jurisdiction. In
addition, if Executive violates any such restrictive covenant, Executive agrees that the
period of such violation shall be added to the term of the restriction. In determining the
period of any violation, the Parties stipulate that in any calendar month in which Executive
engages in any activity in violation of such provisions, Executive shall be deemed to have
violated such provision for the entire month, and that month shall be added to the duration of
the non-competition provision. Executive acknowledges that the remedies described above shall
not be the exclusive remedies, and the Company may seek any other remedy available to it
either in law or in equity, including, by way of example only, statutory remedies for
misappropriation of trade secrets, and including the recovery of compensatory or punitive
damages. Executive further agrees that the Company shall be entitled to an award of all costs
and attorneys’ fees incurred by it in any attempt to enforce the terms of this Agreement if
the Company prevails.
	 
	32.	 	Publicly Traded Stock. The Parties agree that nothing contained in this
Agreement shall be construed to prohibit Executive from investing his personal assets in any
stock or corporate security traded or quoted on a national securities exchange or national
market system provided, however, such investments do not require any services on the part of
Executive in the operation or the affairs of the business or otherwise violate the Hillenbrand
Industries, Inc. Code of Ethics.

11

 

	33.	 	Notice of Claim and Contractual Limitations Period. Executive acknowledges the
Company’s need for prompt notice, investigation, and resolution of any claims that may be
filed against it due to the number of relationships it has with employees and others (and due
to the turnover among such individuals with knowledge relevant to any underlying claim).
Accordingly, Executive agrees prior to initiating any litigation of any type (including, but
not limited to, employment discrimination litigation, wage litigation, defamation, or any
other claim) to notify the Company, within One Hundred and Eighty (180) days after the claim
accrued, by sending a certified letter addressed to the Company’s General Counsel setting
forth: (i) claimant’s name, address, and phone; (ii) the name of any attorney representing
Executive; (iii) the nature of the claim; (iv) the date the claim arose; and (v) the relief
requested. This provision is in addition to any other notice and exhaustion requirements that
might apply. For any dispute or claim of any type against the Company (including but not
limited to employment discrimination litigation, wage litigation, defamation, or any other
claim), Executive must commence legal action within the shorter of one (1) year of accrual of
the cause of action or such shorter period that may be specified by law.
	 
	34.	 	Non-Jury Trials. Notwithstanding any right to a jury trial for any claims,
Executive waives any such right to a jury trial, and agrees that any claim of any type
(including but not limited to employment discrimination litigation, wage litigation,
defamation, or any other claim) lodged in any court will be tried, if at all, without a jury.
	 
	35.	 	Choice of Forum. Executive acknowledges that the Companies are primarily based in
Indiana, and Executive understands and acknowledges the Company’s desire and need to defend
any litigation against it in Indiana. Accordingly, the Parties agree that any claim of any
type brought by Executive against the Company or any of its employees or agents must be
maintained only in a court sitting in Marion County, Indiana, or Ripley County, Indiana, or,
if a federal court, the Southern District of Indiana, Indianapolis Division. Executive
further understands and acknowledges that in the event the Company initiates litigation
against Executive, the Company may need to prosecute such litigation in such state where the
Executive is subject to personal jurisdiction. Accordingly, for purposes of enforcement of
this Agreement, Executive specifically consents to personal jurisdiction in the State of
Indiana.
	 
	36.	 	Choice of Law. This Agreement shall be deemed to have been made within the County of
Ripley, State of Indiana and shall be interpreted and construed in accordance with the laws of
the State of Indiana. Any and all matters of dispute of any nature whatsoever arising out of,
or in any way connected with the interpretation of this Agreement, any disputes arising out of
the Agreement or the employment relationship between the Parties hereto, shall be governed by,
construed by and enforced in accordance with the laws of the State of Indiana without regard
to any applicable state’s choice of law provisions.
	 
	37.	 	Titles. Titles are used for the purpose of convenience in this Agreement and shall
be ignored in any construction of it.
	 
	38.	 	Severability. The Parties agree that each and every paragraph, sentence, clause,
term and provision of this Agreement is severable and that, in the event any portion of this
Agreement is adjudged to be invalid or unenforceable, the remaining portions thereof shall
remain in effect and be enforced to the fullest extent permitted by law. Further, should any
particular clause, covenant, or provision of this Agreement be held unreasonable or contrary
to public policy for any reason, the Parties acknowledge and agree that such covenant,
provision or clause shall automatically be deemed modified such that the contested covenant,
provision or clause will have the closest effect permitted by applicable law to the original
form and shall be given effect and enforced as so modified to whatever extent would be
reasonable and enforceable under applicable law.

12

 

	39.	 	Assignment-Notices. The rights and obligations of the Company under this Agreement
shall inure to its benefit, as well as the benefit of its parent, subsidiary, successor and
affiliated entities, and shall be binding upon the successors and assigns of the Company.
This Agreement, being personal to Executive, cannot be assigned by Executive, but his personal
representative shall be bound by all its terms and conditions. Any notice required hereunder
shall be sufficient if in writing and mailed to the last known residence of Executive or to
the Company at its principal office with a copy mailed to the Office of the General Counsel.
	 
	40.	 	Amendments and Modifications. Except as specifically provided herein, no
modification, amendment, extension or waiver of this Agreement or any provision hereof shall
be binding upon the Company or Executive unless in writing and signed by both Parties. The
waiver by the Company or Executive of a breach of any provision of this Agreement shall not be
construed as a waiver of any subsequent breach. Nothing in this Agreement shall be construed
as a limitation upon the Company’s right to modify or amend any of its manuals or policies in
its sole discretion and any such modification or amendment which pertains to matters addressed
herein shall be deemed to be incorporated herein and made a part of this Agreement.
	 
	41.	 	Outside Representations. Executive represents and acknowledges that in signing this
Agreement he does not rely, and has not relied, upon any representation or statement made by
the Company or by any of the Company’s employees, officers, agents, stockholders, directors or
attorneys with regard to the subject matter, basis or effect of this Agreement other than
those specifically contained herein.
	 
	42.	 	Voluntary and Knowing Execution. Executive acknowledges that he has been offered a
reasonable amount of time within which to consider and review this Agreement; that he has
carefully read and fully understands all of the provisions of this Agreement; and that he has
entered into this Agreement knowingly and voluntarily.
	 
	43.	 	Liability Insurance. The Company shall cover the Executive under directors and
officers liability insurance both during and, while potential liability exists, after the term
of this Agreement in the same amount and to the same extent as the Company covers its other
officers and non independent director.
	 
	44.	 	Attorney’s Fees. The Company shall promptly pay the Executive’s reasonable costs of
entering into this Agreement, including the reasonable fees and expenses of the Executive’s
counsel and other professionals.
	 
	45.	 	Entire Agreement. This Agreement constitutes the entire employment agreement
between the Parties hereto concerning the subject matter hereof and shall supersede all prior
and contemporaneous agreements between the Parties in connection with the subject matter of
this Agreement. Any pre-existing Employment Agreements shall be deemed null and void.
Nothing in this Agreement, however, shall affect any separately-executed written agreement
addressing any other issues.

13

 

IN WITNESS WHEREOF, the Parties have signed this Agreement effective as of the day and year first
above written.

	 	 	 	 	 	 	 	 	 	 	 
	“EXECUTIVE”	 	 	 	HILLENBRAND INDUSTRIES, INC.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Signed:

	 	 	 	 	 	By:	 	 	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Printed:

	 	Peter H. Soderberg
	 	 	 	Title:	 	 	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Dated:

	 	 	 	 	 	Dated:	 	 	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	CAUTION: READ BEFORE SIGNING	 	 	 	 	 	 

14

 

Exhibit A

SAMPLE SEPARATION AND RELEASE AGREEMENT

     THIS SEPARATION and RELEASE AGREEMENT (“Agreement”) is entered into by and between
EMPLOYEE’S FULL NAME (“Executive”) and Hillenbrand Industries, Inc. (together with its subsidiaries and affiliates, the
“Company”). To wit, the Parties agree as follows:

	1.	 	Executive’s active employment by the Company shall
terminate effective [date of termination] (Executive’s
“Effective Termination Date”). Except as specifically provided by this Agreement, or in any
other non-employment agreement that may exist between the Company and Executive, Executive
agrees that the Company shall have no other obligations or liabilities to him/her following his/her
Effective Termination Date and that his/her receipt of the Severance Benefits provided herein shall
constitute a complete settlement, satisfaction and waiver of any and all claims he/she may have
against the Company.
	 
	2.	 	Executive further submits, and the Company hereby accepts, his resignation as an Executive,
officer and director, as of his Effective Termination Date for any position he may hold. The
Parties agree that this resignation shall apply to all such positions Executive may hold with
the Company or any parent, subsidiary or affiliated entity thereof. Executive agrees to
execute any documents needed to effectuate such resignation. Executive further agrees to take
whatever steps are necessary to facilitate and ensure the smooth transition of his duties and
responsibilities to others.
	 
	3.	 	Executive acknowledges that he has been advised of the American Jobs Creation Act of 2004,
which added Section 409A to the Internal Revenue Code, and significantly changed the taxation
of nonqualified deferred compensation plans. Under regulations not yet published as of the
date of this Agreement, Executive has been advised that if he is a “key Executive” covered by
Section 409A or any similar law, his severance pay may be treated by the Internal Revenue
Service as providing “nonqualified deferred compensation,” and therefore subject to Section
409A
	 
	4.	 	In consideration of the promises contained in this Agreement and contingent upon Executive’s
compliance with such promises, the Company agrees to provide Executive the following:

	 	(a)	 	Severance pay, inclusive of any contractual, notice or statutory pay obligations in
the total amount of [___] Dollars and [___] Cents ($___), less
applicable deductions or other set offs permitted or required by law, payable as follows:

	 	(i)	 	A lump payment in the gross amount of [___] Dollars and [___] Cents
($___) payable the day following the sixth (6tth) month anniversary of
Executive’s Effective Termination Date; and.

	 	(b)	 	Payment for any earned but unused vacation as of Executive’s Effective Termination
Date, less applicable deductions permitted or required by law; and
	 
	 	(c)	 	Group Life Insurance coverage until the above-referenced Severance Pay terminates.

	5.	 	Except as may be required by Section 409A, the above Severance Pay shall be paid in
accordance with the Company’s standard payroll practices (e.g. bi-weekly) and shall begin on
the first normally scheduled payroll following Executive’s Effective Termination Date or the
effective date of this Agreement, whichever occurs last. The Parties agree that the initial
two (2) weeks of the foregoing

 

 

	 	 	Severance Pay shall be allocated as consideration provided to Executive in exchange for
his/her execution of a release in compliance with the Older Workers Benefit Protection Act. The balance
of the severance benefits and other obligations undertaken by the Company pursuant to this
Agreement shall be allocated as consideration for all other promises and obligations undertaken
by Executive, including execution of a general release of claims.
	 
	6.	 	The Company further agrees to provide Executive with limited out-placement counseling
with a company of its choice provided that Executive participates in such counseling
immediately following termination of employment.
	 
	7.	 	As of his/her Effective Termination Date, Executive will become ineligible to participate in the
Company’s health insurance program and continuation of coverage requirements under COBRA (if
any) will be triggered at that time. However, as additional consideration for the promises
and obligations contained herein (and except as may be prohibited by law), the Company agrees
to continue to pay the employer’s share of such coverage as provided under the health care
program selected by Executive as of his/her Effective Termination Date, subject to any approved
changes in coverage based on a qualified election, until the above-referenced Severance Pay
terminates, Executive accepts other employment or Executive becomes eligible for alternative
healthcare coverage, which ever comes first, provided Executive (i) timely completes the
applicable election of coverage forms and (ii) continues to pay the Executive portion of the
applicable premium(s). Thereafter, if applicable, coverage will be made available to
Executive at his/her sole expense (i.e., Executive will be responsible for the full COBRA
premium) for the remaining months of the COBRA coverage period made available pursuant to
applicable law. The medical insurance provided herein does not include any disability
coverage.
	 
	8.	 	Should Executive become employed before the above-referenced Severance Benefits are exhausted
or terminated, Executive agrees to so notify the Company in writing within five (5) business
days of Executive’s acceptance of such employment, providing the name of such employer (or
entity to whom Executive may be providing consulting services), his/her intended duties as well as
the anticipated start date. Such information is required to ensure Executive’s compliance
with his/her non-compete obligations as well as all other applicable restrictive covenants. This
notice will also serve to trigger the Company’s right to terminate the above-referenced
severance pay benefits (specifically excluding any lump sum payment due) as well as all
Company-paid or Company–provided benefits consistent with the above paragraphs. Failure to
timely provide such notice shall be deemed a material breach of this Agreement entitling the
Company to recover as damages the value of all benefits provided to Executive hereunder plus
attorneys fees. All other severance benefits however, shall terminate upon reemployment.
	 
	9.	 	Intentionally omitted
	 
	10.	 	In exchange for the foregoing Severance Benefits, EMPLOYEE FULL NAME on behalf of himself/herself, his/her heirs, representatives,
agents and assigns hereby RELEASES, INDEMNIFIES, HOLDS HARMLESS, and FOREVER DISCHARGES (i) Company Name
(ii) its parent, subsidiary or affiliated entities, (iii) all of their present or former
directors, officers, Executives, shareholders, and agents, as well as, (iv) all predecessors,
successors and assigns thereof from any and all actions, charges, claims, demands, damages or
liabilities of any kind or character whatsoever, known or unknown, which Executive now has or
may have had through the effective date of this Agreement.
	 
	11.	 	Without limiting the generality of the foregoing release, it shall include: (i) all claims
or potential claims arising under any federal, state or local laws relating to the Parties’
employment relationship,

2

 

	 	 	including any claims Executive may have under the Civil Rights Acts of 1866 and 1964, as
amended, 42 U.S.C. §§ 1981 and 2000(e) et seq.; the Civil Rights Act of 1991;
the Age Discrimination in Employment Act, as amended, 29 U.S.C. §§ 621 et seq.;
the Americans with Disabilities Act of 1990, as amended, 42 U.S.C §§ 12,101 et
seq.; the Fair Labor Standards Act 29 U.S.C. §§ 201 et seq.; the Worker
Adjustment and Retraining Notification Act, 29 U.S.C. §§ 2101, et seq.; the
Sarbanes-Oxley Act of 2002, specifically including the Corporate and Criminal Fraud
Accountability Act, 18 USC §1514A et seq.; and any other federal, state or local
law governing the Parties’ employment relationship; (ii) any claims on account of, arising out
of or in any way connected with Executive’s employment with the Company or leaving of that
employment; (iii) any claims alleged or which could have been alleged in any charge or complaint
against the Company; (iv) any claims relating to the conduct of any Executive, officer,
director, agent or other representative of the Company; (v) any claims of discrimination,
harassment or retaliation on any basis; (vi) any claims arising from any legal restrictions on
an employer’s right to separate its Executives; (vii) any claims for personal injury,
compensatory or punitive damages or other forms of relief; and (viii) all other causes of action
sounding in contract, tort or other common law basis, including (a) the breach of any alleged
oral or written contract, (b) negligent or intentional misrepresentations, (c) wrongful
discharge, (d) just cause dismissal, (e) defamation, (f) interference with contract or business
relationship or (g) negligent or intentional infliction of emotional distress.
	 
	12.	 	Executive further agrees and covenants not to sue the Company or any entity or individual
subject to the foregoing General Release with respect to any claims, demands, liabilities or
obligations release by this Agreement provided, however, that nothing contained in this
Agreement shall prevent Executive from bringing an action under the Age Discrimination in
Employment Act (or any similar law) challenging the knowing and voluntary nature of this
Agreement.
	 
	13.	 	The Parties acknowledge that it is their mutual and specific intent that the above waiver
fully complies with the requirements of the Older Workers Benefit Protection Act (29 U.S.C. §
626) and any similar law governing release of claims. Accordingly, Executive hereby
acknowledges that:

	 	(a)	 	He/She has carefully read and fully understands all of the provisions of this Agreement and
that he/she has entered into this Agreement knowingly and voluntarily; (b) The Severance Benefits
offered in exchange for Executive’s release of claims exceed in kind and scope that to
which he/she would have otherwise been legally entitled absent the execution of this Agreement;
	 
	 	(c)	 	Prior to signing this Agreement, Executive had been advised, and is being advised by
this Agreement, to consult with an attorney of choice concerning its terms and conditions;
and
	 
	 	(d)	 	He/She has been offered at least [twenty-one (21)/forty-five (45)] days within which to
review and consider this Agreement.

	14.	 	The Parties agree that this Agreement shall not become effective and enforceable until the
date this Agreement is signed by both Parties or seven (7) calendar days after its execution
by Executive, whichever is later. Executive may revoke this Agreement for any reason by
providing written notice of such intent to the Company within seven (7) days after he/she has signed
this Agreement, thereby forfeiting Executive’s right to receive any Severance Benefits
provided hereunder and rendering this Agreement null and void in its entirety.
	 
	15.	 	The Parties agree that nothing contained herein shall purport to waive or otherwise affect
any of Executive’s rights or claims that may arise after he/she signs this Agreement. It is further
understood by the Parties that nothing in this Agreement shall affect any rights Executive may
have under any Company sponsored Deferred Compensation Program, Executive Life Insurance Bonus
Plan, Stock

3

 

	 	 	Grant Award, Stock Option Grant, Restricted Stock Unit Award, Pension Plan and/or Savings Plan
(i.e., 401(k) plan) provided by the Company as of the date of his termination, such
items to be governed exclusively by the terms of the applicable agreements or plan documents.
	 
	16.	 	Similarly, notwithstanding any provision contained herein to the contrary, this Agreement
shall not constitute a waiver or release or otherwise affect Executive’s rights with respect
to any vested benefits, any rights he has to benefits which can not be waived by law, any
coverage provided under any Directors and Officers (“D&O”) policy, any rights Executive may
have under any indemnification agreement he has with the Company prior to the date hereof, any
rights he/she has as a shareholder, or any claim for breach of this Agreement, including, but not
limited to the benefits promised by the terms of this Agreement.
	 
	17.	 	Except as provided herein, Executive acknowledges that he/she will not be eligible to receive or
vest in any additional stock options, stock awards or restricted stock units (“RSUs”) as of
[his/her] Effective Termination Date. Failure to exercise any vested options within the
applicable period as set for in the plan and/or grant will result in their forfeiture.
Executive acknowledges that any stock options, stock awards or RSUs held for less than the
required period shall be deemed forfeited as of the effective date of this Agreement. All
terms and conditions of such stock options, stock awards or RSUs shall not be affected by this
Agreement, shall remain in full force and effect, and shall govern the Parties’ rights with
respect to such equity based awards.]
	 
	18.	 	[Option A] Executive acknowledges that his/her termination and the Severance Benefits offered
hereunder were based on an individual determination and were not offered in conjunction with
any group termination or group severance program and waives any claim to the contrary.
	 
	 	 	[Option B] Executive represents and agrees that he/she has been provided relevant
cohort information based on the information available to the Company as of the date this
Agreement was tendered to Executive. This information is attached hereto as Exhibit A. The
Parties acknowledge that simply providing such information does not mean and should not be
interpreted to mean that the Company was obligated to comply with 29 C.F.R. § 1625.22(f).
	 
	19.	 	Executive hereby affirms and acknowledges his/her continued obligations to comply with the
post-termination covenants contained in his/her Employment Agreement, including but not limited to,
the non-compete, trade secret and confidentiality provisions. Executive acknowledges that a
copy of the Employment Agreement has been attached to this Agreement as Exhibit A [B] or has
otherwise been provided to him/her and, to the extent not inconsistent with the terms of this
Agreement or applicable law, the terms thereof shall be incorporated herein by reference.
Executive acknowledges that the restrictions contained therein are valid and reasonable in
every respect and are necessary to protect the Company’s legitimate business interests.
Executive hereby affirmatively waives any claim or defense to the contrary. Executive hereby
acknowledges that the definition of Competitor, as provided in his/her Employment Agreement shall
include but not be limited to those entities specifically identified in the updated Competitor
List, attached hereto as Exhibit B [C].
	 
	20.	 	Executive acknowledges that the Company as well as its parent, subsidiary and affiliated
companies (“Companies” herein) possess, and he/she has been granted access to, certain trade secrets
as well as other confidential and proprietary information that they have acquired at great
effort and expense. Such information includes, without limitation, confidential information
regarding products and services, marketing strategies, business plans, operations, costs,
current or, prospective customer information (including customer contacts, requirements,
creditworthiness and like matters), product concepts, designs, prototypes or specifications,
regulatory compliance issues, research and development efforts, technical data and know-how,
sales information, including pricing and other

4

 

	 	 	terms and conditions of sale, financial information, internal procedures, techniques, forecasts,
methods, trade information, trade secrets, software programs, project requirements, inventions,
trademarks, trade names, and similar information regarding the Companies’ business (collectively
referred to herein as “Confidential Information”).
	 
	21.	 	Executive agrees that all such Confidential Information is and shall remain the sole and
exclusive property of the Company. Except as may be expressly authorized by the Company in
writing, or as may be required by law after providing due notice thereof to the Company,
Executive agrees not to disclose, or cause any other person or entity to disclose, any
Confidential Information to any third party for as long thereafter as such information remains
confidential (or as limited by applicable law) and agrees not to make use of any such
Confidential Information for Executive’s own purposes or for the benefit of any other entity
or person. The Parties acknowledge that Confidential Information shall not include any
information that is otherwise made public through no fault of Executive or other wrong doing.
	 
	22.	 	On or before Executive’s Effective Termination Date or per the Company’s request,
Executive agrees to return the original and all copies of all things in his/her possession or control
relating to the Company or its business, including but not limited to any and all contracts,
reports, memoranda, correspondence, manuals, forms, records, designs, budgets, contact
information or lists (including customer, vendor or supplier lists), ledger sheets or other
financial information, drawings, plans (including, but not limited to, business, marketing and
strategic plans), personnel or other business files, computer hardware, software, or access
codes, door and file keys, identification, credit cards, pager, phone, and any and all other
physical, intellectual, or personal property of any nature that he/she received, prepared, helped
prepare, or directed preparation of in connection with his/her employment with the Company. Nothing
contained herein shall be construed to require the return of any non-confidential and de
minimis items regarding Executive’s pay, benefits or other rights of employment such as pay
stubs, W-2 forms, 401(k) plan summaries, benefit statements, etc.
	 
	23.	 	Executive hereby consents and authorizes the Company to deduct as an offset from the
above-referenced severance payments the value of any Company property not returned or returned
in a damaged condition as well as any monies paid by the Company on Executive’s behalf (e.g.,
payment of any outstanding American Express bill).
	 
	24.	 	Executive agrees to cooperate with the Company in connection with any pending or future
litigation, proceeding or other matter which has been or may be brought against or by the
Company before any agency, court, or other tribunal and concerning or relating in any way to
any matter falling within Executive’s knowledge or former area of responsibility. Executive
agrees to immediately notify the Company, through the Office of the General Counsel, in the
event he/she is contacted by any outside attorney (including paralegals or other
affiliated parties) unless (i) the Company is represented by the attorney, (ii) Executive is
represented by the attorney for the purpose of protecting his/her personal interests or
(iii) the Company has been advised of and has approved such contact. Executive agrees to
provide reasonable assistance and completely truthful testimony in such matters including,
without limitation, facilitating and assisting in the preparation of any underlying defense,
responding to discovery requests, preparing for and attending deposition(s) as well as
appearing in court to provide truthful testimony. The Company agrees to reimburse Executive
for all reasonable out of pocket expenses incurred at the request of the Company associated
with such assistance and testimony.
	 
	25.	 	Executive agrees not to make any written or oral statement that may defame, disparage or
cast in a negative light so as to do harm to the personal or professional reputation of (a)
the Company, (b) its Executives, officers, directors or trustees or (c) the services and/or
products provided by the Company and its subsidiaries or affiliate entities. Similarly, in
response to any written inquiry from any prospective employer or in connection with a written
inquiry in connection with any future business relationship involving Executive, the Company
agrees not to provide any information that may

5

 

	 	 	defame, disparage or cast in a negative light so as to do harm to the personal or professional
reputation of Executive. The Parties acknowledge, however, that nothing contained herein shall
be construed to prevent or prohibit the Company or the Executive from providing truthful
information in response to any court order, discovery request, subpoena or other lawful request.
	 
	26.	 	EXECUTIVE SPECIFICALLY AGREES AND UNDERSTANDS THAT THE EXISTENCE AND TERMS OF THIS AGREEMENT
ARE STRICTLY CONFIDENTIAL AND THAT SUCH CONFIDENTIALITY IS A MATERIAL TERM OF THIS AGREEMENT.
Accordingly, except as required by law or unless authorized to do so by the Company in
writing, Executive agrees that he/she shall not communicate, display or otherwise reveal any of the
contents of this Agreement to anyone other than his/her spouse, legal counsel or financial advisor
provided, however, that they are first advised of the confidential nature of this Agreement
and Executive obtains their agreement to be bound by the same. The Company agrees that
Executive may respond to legitimate inquiries regarding the termination of his/her employment by
stating that the Parties have terminated their relationship on an amicable basis and that the
Parties have entered into a Confidential Separation and Release
Agreement that prohibits him/her from
further discussing the specifics of separation. Nothing contained herein shall be construed
to prevent Executive from discussing or otherwise advising subsequent employers of the
existence of any obligations as set forth in his/her Employment Agreement. Further, nothing
contained herein shall be construed to limit or otherwise restrict the Company’s ability to
disclose the terms and conditions of this Agreement as may be required by business necessity.
	 
	27.	 	In the event that Executive breaches or threatens to breach any provision of this Agreement,
he/she agrees that the Company shall be entitled to seek any and all equitable and legal relief
provided by law, specifically including immediate and permanent injunctive relief. Executive
hereby waives any claim that the Company has an adequate remedy at law. In addition, and to
the extent not prohibited by law, Executive agrees that the Company shall be entitled to
discontinue providing any additional Severance Benefits upon such breach or threatened breach
as well as an award of all costs and attorneys’ fees incurred by the Company in any successful
effort to enforce the terms of this Agreement. Executive agrees that the foregoing relief
shall not be construed to limit or otherwise restrict the Company’s ability to pursue any
other remedy provided by law, including the recovery of any actual, compensatory or punitive
damages. Moreover, if Executive pursues any claims against the Company subject to the
foregoing General Release, or breaches the above confidentiality provision, Executive agrees
to immediately reimburse the Company for the value of all benefits received under this
Agreement to the fullest extent permitted by law.
	 
	28.	 	Similarly, in the event that the Company breaches or threatens to breach any provision of
this Agreement, Executive shall be entitled to seek any and all equitable or other available
relief provided by law, specifically including immediate and permanent injunctive relief. In
the event Executive is required to file suit to enforce the terms of this Agreement, the
Company agrees that Executive shall be entitled to an award of all costs and attorneys’ fees
incurred by him/her in any wholly successful effort (i.e. entry of a judgment in his/her favor) to enforce
the terms of this Agreement. In the event Executive is wholly unsuccessful, the Company shall
be entitled to an award of its costs and attorneys’ fees.
	 
	29.	 	Both Parties acknowledge that this Agreement is entered into solely for the purpose of
terminating Executive’s employment relationship with the Company on an amicable basis and
shall not be construed as an admission of liability or wrongdoing by the Company or Executive,
both Parties having expressly denied any such liability or wrongdoing.

6

 

	30.	 	Each of the promises and obligations shall be binding upon and shall inure to the benefit of
the heirs, executors, administrators, assigns and successors in interest of each of the
Parties.
	 
	31.	 	The Parties agree that each and every paragraph, sentence, clause, term and provision of this
Agreement is severable and that, if any portion of this Agreement should be deemed not
enforceable for any reason, such portion shall be stricken and the remaining portion or
portions thereof should continue to be enforced to the fullest extent permitted by applicable
law.
	 
	32.	 	This Agreement shall be governed by and interpreted in accordance with the laws of the State
of Indiana without regard to any applicable state’s choice of law provisions.
	 
	33.	 	Executive represents and acknowledges that in signing this Agreement does not rely, and has
not relied, upon any representation or statement made by the Company or by any of the
Company’s Executives, officers, agents, stockholders, directors or attorneys with regard to
the subject matter, basis or effect of this Agreement other than those specifically contained
herein.
	 
	34.	 	This Agreement represents the entire agreement between the Parties concerning the subject
matter hereof, shall supersede any and all prior agreements which may otherwise exist between
them concerning the subject matter hereof (specifically excluding, however, the
post-termination obligations contained in an Executive’s Employment Agreement, any
obligations contained in an existing and valid Indemnity Agreement or Change in Control
or any obligation contained in any other legally-binding document), and shall not be altered,
amended, modified or otherwise changed except by a writing executed by both Parties.

PLEASE READ CAREFULLY. THIS SEPARATION AND RELEASE

AGREEMENT INCLUDES A COMPLETE RELEASE OF ALL

KNOWN AND UNKNOWN CLAIMS.

     IN WITNESS WHEREOF, the Parties have themselves signed, or caused a duly authorized agent
thereof to sign, this Agreement on their behalf and thereby acknowledge their intent to be bound by
its terms and conditions.

	 	 	 	 	 	 	 	 	 	 	 
	[EXECUTIVE]	 	 	 	COMPANY NAME	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Signed:

	 	 	 	 	 	By:	 	 	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Printed:

	 	 	 	 	 	Title:	 	 	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Dated:

	 	 	 	 	 	Dated:	 	 	 	 
	 

	 	 
	 	 	 	 	 	 	 	 

7

 

Exhibit B

ILLUSTRATIVE COMPETITOR LIST

 

 

EXHIBIT C

Supplemental Retirement Account

Account. Within thirty days of the Start Date and as of each annual anniversary of the
Start Date, the Company shall record a credit of $75,000 to an account maintained by the Company
(“Account”) which shall be a bookkeeping account established for the Executive. The Account shall
be utilized solely as a device for measurement and determination of the amount to be paid to the
Executive and shall not constitute or be treated as a trust fund of any kind. The Account shall be
unfunded and shall maintain all credits made to the Account for the benefit of the Executive.

Earnings on Account. The balance of the Account, shall accrue interest credited monthly to
the Account balance at the end of the Company’s fiscal months at a rate which is equal to the
monthly prime interest rate (determined as of the first day of each month) charged by the Company’s
principal bank, or, at the election of the Compensation Committee of the Company (“Committee”) at
such other rate or rates as may be determined by the Committee.

Vesting in Account. The Executive shall be fully (100%) vested in all amounts credited to
his Account.

Distribution of Account. Except as provided below, on or as soon as administratively
possible after the six (6) month anniversary of the Executive’s termination of employment with the
Company, the Company shall pay the Executive in one lump sum cash payment the amount of the Account
balance as of the date of such six month anniversary of the Executive’s termination of employment.

Right of Executive. Payments under this Exhibit will not be segregated from the general
funds of the Company, and the Executive will not have any claim on any specific asset of the
Company. The Executive’s right as set forth in this Exhibit C will be no greater than the right
of any unsecured creditor of the Company and is not assignable or transferable except to his estate
upon his termination of employment on account of his death.exv10w2

 

Exhibit 10.2

TIER 1 — CEO

CHANGE IN CONTROL AGREEMENT

     This Change in Control Agreement (the “Agreement”) is made and entered into as of February 7,
2006 by and between Hillenbrand Industries, Inc., an Indiana corporation (the “Company”), and Peter
H. Soderberg (the “Executive”) to be effective and binding between the parties hereto if and only
if Executive is elected by the Board of Directors of the Company to be the President a Chief
Executive Officer of the Company, provided, however, that, Executive shall not be entitled to
receive any of the benefits or rights under this Agreement if a Change in Control (as defined
herein) occurs prior to the Start Date (as defined in the Employment Agreement dated of even date
herewith between the Company and Executive).

     WHEREAS, the Company considers it essential to the best interests of its shareholders to
foster continuous employment by the Company and its subsidiaries of their key management personnel;

     WHEREAS, the Compensation and Management Development Committee (the “Committee”) of the Board
of Directors (the “Board”) of the Company has recommended, and the Board has approved, that the
Company enter into Change in Control Agreements with key executives of the Company and its
subsidiaries who are from time to time designated by the management of the Company and approved by
the Committee;

     WHEREAS, the Committee and the Board believe that Executive has made valuable contributions to
the productivity and profitability of the Company and consider it essential to the best interests
of the Company and its shareholders that Executive be encouraged to remain with the Company; and

     WHEREAS, the Board believes it is in the best interests of the Company and its shareholders
that Executive continue in employment with the Company in the event of any proposed Change in
Control (as defined below) and be in a position to provide assessment and advice to the Board
regarding any proposed Change in Control without concern that Executive might be unduly distracted
by the personal uncertainties and risks created by any proposed Change in Control:

     NOW, THEREFORE, the Company and Executive agree as follows:

     1. Termination following a Change in Control. After the occurrence of a Change in Control,
the Company will provide or cause to be provided to Executive the rights and benefits described in
Section 2 hereof in the event that Executive’s employment with the Company and its subsidiaries is
terminated:

 

 

          (a) by the Company for any reason other than on account of his death, permanent disability,
retirement or for Cause at any time prior to the third anniversary of a Change in Control;

          (b) by Executive for Good Reason at any time prior to the third anniversary of a Change in
Control; or

          (c) by Executive for any reason at any time prior to the 30th day following the
first anniversary of the Change in Control.

     Anything in this Agreement to the contrary notwithstanding, if a Change in Control occurs and
if the Executive’s employment with the Company is terminated by the Company, without Cause, prior
to the date on which the Change in Control occurs, and if it is reasonably demonstrated by
Executive that such termination of employment (i) was at the request of a third party who has taken
steps reasonably calculated to effect a Change in Control or (ii) otherwise arose in connection
with or anticipation of a Change in Control which subsequently occurs within 3 months of such
termination, then for purposes of this Agreement (including Section 3 hereof) a Change in Control
shall be deemed to have occurred on the day immediately prior to such termination of employment and
all references in Section 2 to payments within a specified period as allowed by law following
“Termination” shall instead be references to the specified period following the Change in Control.

     The rights and benefits described in Section 2 and 3 hereof shall be in lieu of any severance
payments otherwise payable to Executive under any employment agreement or severance plan or program
of the Company or any of its subsidiaries but shall not otherwise affect Executive’s rights to
compensation or benefits under the Company’s compensation and benefit programs except to the extent
expressly provided herein.

2. Rights and Benefits Upon Termination.

     In the event of the termination of Executive’s employment under any of the circumstances set
forth in Section 1 hereof (“Termination”), the Company shall provide or cause to be provided to
Executive the following rights and benefits provided that Executive executes and delivers to the
Company within 30 days of the Termination a Release in the form attached hereto as Exhibit A:

          (a) a lump sum payment in cash in the amount of three times Executive’s Annual Base Salary (as
defined below), payable after (i) six (6) months following Termination if the Executive is covered
by Code Section 409A(a)(2)(B)(i) of the Internal Revenue Code (“Code”) (Section 409A of the Code is
hereunder referred to as “Section 409A”) or (ii) if executive is not covered by Code Section
409A(a)(2)(B)(i) (or payments deemed exempt from Section 409A), payment shall be made within 30
days of Termination;

          (b) for the 36 months following Termination, continued health and medical insurance coverage
for Executive and his dependents substantially comparable (with regard to both benefits and
employee contributions) to the coverage provided by the Company immediately

2

 

prior to the Change in Control for active employees of equivalent rank. From the
end of such 36-month period until Executive attains Social Security Retirement Age, Executive shall
have the right to purchase (at COBRA rates applicable to such coverage) continued coverage for
himself and his dependents under one or more plans maintained by the Company for its active
employees, to the extent Executive would have been eligible to purchase continued coverage under
the plan in effect immediately prior to the Change in Control had his employment terminated 36
months following Termination;

          (c) continuation for Executive, for a period of three years following Termination, of the
Executive Life Insurance Bonus Plan (if any) provided for Executive by the Company immediately
prior to the Change in Control and the group term life insurance program provided for executive
immediately prior to the Change in Control;

          (d) a lump sum payment in cash, payable within 30 days or six months, if payment is subject to
rules of Section 409A, of Termination, equal to all accrued and unpaid vacation, reimbursable
business expenses, and similar miscellaneous benefits as of the Termination; and

          (e) a monthly pension annuity benefit starting at age 62 or the current age, if later (in the
form of a joint and 50% survivor annuity) equal to the difference between (i) the monthly Pension
Plan annuity benefit, the monthly Supplemental Pension Plan annuity benefit if Executive is a
participant in the Supplemental Pension Plan, and any additional pension benefit provided in an
offer letter (or other written document signed by an authorized officer of the Company other than
Executive) if Executive is subject to any such letter or document, which Executive will receive
starting at age 62 or the current age, if later (in the form of a joint and 50% survivor annuity),
and (ii) the monthly pension annuity benefit he would have received starting at age 62 or the
current age, if later under such plan(s) and/or offer letter, as in effect on or after the date
hereof, (in the form of a joint and 50% survivor annuity) calculated as if Executive had earned
three additional years of service and pay at his Annual Base Salary (and for purposes of
calculating Average Monthly Earnings as defined in the Pension Plan, Executive Annual Base Salary
shall be annualized for any portion of the imputed service period which is less than a full
calendar year and such portion of the year shall be eligible to be counted). The monthly pension
annuity benefit described in the prior sentence shall be paid at the same time(s) and in the same
form as Executive’s benefit under the Pension Plan (with the same actuarial adjustments as used in
calculating benefits under the Pension Plan and subject to the payment election rules of Section
409A). The benefit provided for in this paragraph shall be funded in a rabbi trust prior to the
Change in Control. For purposes of this subparagraph (e), the benefit under clause (ii) will be
calculated as though the Pension Plan and any applicable Supplemental Pension Plan as in effect on
or after date hereof, remained the same.

          (f) a lump sum payment in cash for amounts accrued as of the Termination and an additional
amount equal to the amounts accrued for the last 12 months times three (3) immediately prior to the
Termination Date in any of the Defined Contribution, Matching Account and/or Supplemental
Contribution Account, payable after (i) six (6) months following Termination if the Executive is
covered by Code Section 409A(a)(2)(B)(i) of the Internal

3

 

Revenue Code or (ii) if executive is not covered by Code Section 409A(a)(2)(B)(i) (or payments
deemed exempt from Section 409A), payment shall be made within 30 days of Termination;

3. Additional Benefits Upon A Change in Control.

     Upon the occurrence of a Change in Control, so long as Executive is an employee of the Company
at that time, the Company will provide or cause to be provided to Executive the following rights
and benefits whether or not Executive’s employment with the Company or its subsidiaries is
terminated:

          (a) a lump sum payment in cash equal to the amount of Short-Term Incentive Compensation which
would be payable to Executive if the company performance targets (at 100%) with respect to such
incentive compensation in effect for the entire year in which the Change in Control occurred had
been achieved, payable within 30 days of the Change in Control;

          (b) the number of shares of common stock of the Company that would be payable to Executive
under the Company’s Stock Incentive Plan provided, however, that if the Change in Control involves
a merger, acquisition or other corporate restructuring where the Company is not the surviving
entity (or survives as a wholly-owned subsidiary of another entity), then, in lieu of such shares
of common stock of the Company, Executive shall be entitled to receive the consideration he would
have received in such transaction in exchange for such shares of common stock; and provided,
further, that the Company shall in any case have the right to substitute cash for such shares of
common stock of the Company or merger consideration in an amount equal to the fair market value of
such shares or merger consideration as determined by the Company including:

	 	(i)	 	immediate vesting of all Bonus Stock Awards [as
defined Company’s Stock Incentive Plan] held by Executive
	 
	 	(ii)	 	immediate vesting of all outstanding Stock
Options held by Executive under the Hillenbrand Industries, Inc. 1996
Stock Options Plan or the Company’s Stock Incentive Plan
	 
	 	(iii)	 	immediate vesting of all awards of Restricted
Stock held by Executive under any Stock Award Agreements (as defined in
the Company’s Stock Incentive Plan) with Executive and Hillenbrand
Industries, Inc.
	 
	 	(iv)	 	immediate vesting of all awards of Deferred
Stock (as defined in the Company’s Stock Incentive Plan) (also known as
Restricted Stock Units) held by Executive under the Company’s Stock
Incentive Plan and
	 
	 	(v)	 	the exercise of any Stock Appreciation Right
[(as defined in the Company’s Stock Incentive Plan) within 60 days of a
Change in Control as provided by section 7.2 of the Stock Incentive
Plan

4

 

     Any distribution to be made under this Section 3 shall be made no later than the
15th day of the third month following the Company’s first taxable year in which the
Change in Control occurs.

4. Gross-Up on Excess Parachute Payment.

          (a) If any benefit or payment by the Company or its subsidiaries to Executive (whether paid or
payable or distributed or distributable pursuant to the terms of this Agreement or otherwise,
including any acceleration of vesting or payment) (a “Payment”) is determined to be subject to the
excise tax imposed by Section 4999 of the Code or any interest or penalties are incurred by
Executive with respect to such excise tax (such excise tax, together with any such interest and
penalties, being herein collectively referred to as the “Excise Tax”), then Executive shall be
entitled to receive an additional payment (the “Gross-Up Payment”) in an amount such that the net
amount of such additional payment retained by Executive, after payment of all federal, state and
local income and employment taxes (including, without limitation, any federal, state, and local
income and employment taxes and Excise Tax imposed on the Gross-Up Payment), shall be equal to the
Excise Tax imposed on the Payment. The payment of any Gross-Up Payment shall be made no later than
the 15th day of the third month following the Company’s first taxable year in which the
Change in Control occurs.

          (b) Subject to the provisions of Section 4(c) hereto, all determinations required to be made
under this Section 4, including whether and when a Gross-Up Payment is required and the amount of
such Gross-Up Payment and the assumptions to be utilized in arriving at such determination, shall
be made by an independent accounting firm of nationally recognized standing selected by the Company
and which is not serving as accountant or auditor for the Company or the individual, entity or
group effecting the Change in Control (the “Accounting Firm”), which shall provide detailed
supporting calculations both to the Company and Executive within 15 business days of the receipt of
the notice from Executive that there has been a Payment or such earlier time as is requested by the
Company. All fees and expenses of the Accounting Firm shall be borne solely by the Company. Any
determination by the Accounting Firm shall be binding upon the Company and Executive. As a result
of the uncertainty in the application of Section 4999 of the Code at the time of the initial
determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments will not have
been made by the Company which should have been made (“Underpayment”), consistent with the
calculations required to be made hereunder. In the event that the Company exhausts its remedies
pursuant to Section 4(c) hereof and Executive thereafter is required to make a payment of any
Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred
and the amount of the Underpayment shall be promptly paid by the Company to or for the benefit of
Executive.

          (c) Executive shall notify the Company in writing of any claim by the Internal Revenue Service
that, if successful, would require the payment by the Company of a Gross-Up Payment. Such
notification shall be given as soon as practicable but no later than ten business days after
Executive is informed in writing of such claim and shall apprise the Company of the nature of such
claim and the date on which such claim is requested to be paid. Executive shall
not pay such claim prior to the expiration of the 30-day period following the date on which it

5

 

gives such notice to the Company (or such shorter period ending on the date that any payment of
taxes with respect to such claim is due). If the Company notifies Executive in writing prior to
the expiration of such period that it desires to contest such claim, Executive shall:

     (i) give the Company any information reasonably requested by the Company relating to
such claim;

     (ii) take such action in connection with contesting such claim as the Company shall
reasonably request in writing from time to time, including without limitation, accepting
legal representation with respect to such claim by an attorney reasonably selected by the
Company;

     (iii) cooperate with the Company in good faith in order effectively to contest such
claim; and

     (iv) permit the Company to participate in any proceedings relating to such claim;
provided, however, that the Company shall bear and pay directly all costs and expenses
(including additional interest and penalties) incurred in connection with such contest and
shall indemnify and hold Executive harmless, on an after-tax basis, for any Excise Tax or
federal, state and local income and employment tax (including interest and penalties with
respect thereto) imposed as a result of such representation and payment of costs and
expenses. Without limitation on the foregoing provisions of this Section 4(c), the Company
shall control all proceedings taken in connection with such contest and, at its sole option,
may pursue or forgo any and all administrative appeals, proceedings, hearings and
conferences with the taxing authority in respect of such claim and may, at its sole option,
either direct Executive to pay the tax claimed and sue for a refund or to contest the claim
in any permissible manner, and Executive agrees to prosecute such contest to a determination
before any administrative tribunal, in a court of initial jurisdiction and in one or more
appellate courts, as the Company shall determine; provided, however, that if the Company
directs Executive to pay such claim and sue for a refund, the Company shall advance the
amount of such payment to Executive, on an after-tax basis, and shall hold Executive
harmless from any Excise Tax or federal, state or local income or employment tax (including
interest or penalties with respect thereto) imposed with respect to such advance or with
respect to any imputed income with respect to such advance; and further provided that any
extension of the statute of limitations relating to payment of taxes for the taxable year of
Executive with respect to which such contested amount is claimed to be due is limited solely
to such contested amount. The Company’s control of the contest, however, shall be limited
to issues with respect to which a Gross-Up Payment would be payable hereunder, and Executive
shall be entitled to settle or contest, as the case may by, any other issue raised by the
Internal Revenue Service or any other taxing authority.

          (d) If, after the receipt by Executive of an amount advanced by the Company pursuant to
Section 4(c), Executive becomes entitled to receive any refund with respect to such
claim, Executive shall (subject to the Company’s complying with the requirements of Section
4(c)) promptly pay to the Company the amount of such refund (together with any interest

6

 

paid or
credited thereon after taxes applicable thereto). If, after the receipt by Executive of an amount
advanced by the Company pursuant to Section 4(c), a determination is made that Executive shall not
be entitled to any refund with respect to such claim and the Company does not notify Executive in
writing of its intent to contest such denial of refund prior to the expiration of 30 days after
such determination, then such advance shall be forgiven and shall not be required to be repaid and
the amount of such advance shall offset, to the extent thereof, the amount of Gross-Up Payment
required to be paid.

          (e) In the event that the Excise Tax is subsequently determined to be less than initially
determined by the Accounting Firm, Executive shall repay to the Company at the time that the amount
of such reduction in Excise Tax is determined (but, if previously paid to the taxing authorities,
not prior to the time the amount of such reduction is refunded to Executive or otherwise realized
as a benefit by Executive) the portion of the Gross-Up Payment that would not have been paid if the
Excise Tax as subsequently determined had been applied in initially calculating the Gross-Up
Payment, with the amount of such repayment determined by the Accounting Firm.

5. Confidentiality; Non-Competition.

          (a) This Section 5 is not operative unless or until a Change in Control has occurred.
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
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 during the term of this Agreement and within three years
following the termination of his employment with the Company, (i) solicit any persons who are
employed by the Company to terminate their employment with the Company, and (ii) 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 of 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 then being carried on. Nothing in
this Agreement, however, shall prevent Executive from owning, as an investment, up to two percent
(2%) of the outstanding equity capital of any competitor of the Company, shares of which are
regularly traded on a national securities exchange or in over-the-counter markets. The
restrictions set forth in this Section 5 shall not apply in the event of a termination of
Executive’s employment pursuant to Section 1.

	6.	 	Section 409A Acknowledgement.

     Executive acknowledges that he has been advised of, and received advice from his legal
and/or tax advisor(s) of, Section 409A, which has significantly changed the taxation of
nonqualified deferred compensation plans and arrangements and understands that. Section
409A may affect Executive’s receipt of severance compensation, including the timing thereof.

7

 

Executive acknowledges that, notwithstanding anything contained herein to the contrary, both
Executive and the Company shall each be independently responsible for assessing their own risks and
liabilities under Section 409A that may be associated with any payment made under the terms of this
Agreement which may be deemed to trigger Section 409A. Further, the Parties agree that each shall
independently bear responsibility for any and all taxes, penalties or other tax obligations as may
be imposed upon them in their individual capacity as a matter of law.

     7. Definitions. As used in this Agreement, the following terms shall have the following
meanings:

	 	(a)	 	“Annual Base Salary” means the annualized amount of
Executive’s rate of base salary in effect immediately before the Change in
Control or immediately before the date of Termination, whichever is greater.
	 
	 	(b)	 	“Cause” shall have the same meaning set forth in any
current employment agreement that the Executive has with the Company or any of
its subsidiaries.
	 
	 	(c)	 	A “Change in Control” shall be deemed to occur on:

	 	(i)	 	the date that both
	 
	 	 	 	(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
Company securities 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 Company securities by the Company or
any of its subsidiaries or any employee benefit plan of the Company
or any of its subsidiaries, (y) the acquisition of Company securities
directly from the Company, or (z) the acquisition of Company
securities 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

8

 

	 	 	 	(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 Company’s Board, immediately prior to the
merger or consolidation, constitute, immediately after the merger or
consolidation, a majority of the board of directors of the
corporation issuing cash or securities in the merger;
	 
	 	(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 the
Company of a plan of complete liquidation of the Company.

	 	(d)	 	“Good Reason” shall have the same meaning set forth in
any current employment agreement that the Executive has with the Company or any
of its subsidiaries.
	 
	 	(e)	 	“Normal Retirement Benefit” shall have the meaning set
forth in the Pension Plan.
	 
	 	(f)	 	“Pension Plan” means the Hillenbrand Industries Pension
Plan of January 1, 1994 as amended from time to time.
	 
	 	(g)	 	“Section 409A” means Code Section 409A of the Internal
Revenue Code.

9

 

	 	(h)	 	“Short-Term Incentive Compensation” means the Incentive
Compensation payable under the Short-Term Incentive Compensation Program, or
any successor or other short-term incentive plan or program.
	 
	 	(i)	 	“Early Retirement Benefits” early retirement benefits
shall have the meaning set forth in the pension plan which defines the age at
which full, unreduced benefits are available without any early retirement
reduction being applied.
	 
	 	(j)	 	“Executive Life Insurance Bonus Program” shall mean a
program under which the Company pays the annual premium for a whole life
insurance policy on the life of Executive.
	 
	 	(k)	 	“Supplemental Pension Plan” means the SERP or any
successor long-term supplemental pension plan or program or any other
commitment made by the company to provide retirement benefits in addition to
those provided by the pension plan trust.
	 
	 	(l)	 	“Defined Contribution Accounts”, “Matching Accounts”, and
“Supplemental Contribution Accounts” shall have the meanings set forth in
the Company’s Supplemental Executive Retirement Program (“SERP”).

8. Notice.

          (a) Any discharge or termination of Executive’s employment pursuant to Section 1 shall be
communicated in a written notice to the other party hereto setting forth the effective date of such
discharge or termination (which date shall not be more than 30 days after the date such notice is
delivered) and, in the case of a discharge for Cause or a termination for Good Reason the basis for
such discharge or termination.

          (b) For purposes of this Agreement, notices and all other communications provided for in this
Agreement shall be in writing and shall be deemed to have been duly given when delivered or mailed
by United States certified or registered mail, return receipt requested, postage prepaid, addressed
to 1069 Highway 46 East, Batesville, Indiana 47006 provided that all notices to the Company shall
be directed to the attention of the Board with a copy to Vice President and General Counsel, or to
such other address as either party may have furnished to the other in writing in accordance
herewith, except that notice of change of address shall be effective only upon receipt.

     9. No Duty to Mitigate. Executive is not required to seek other employment or otherwise
mitigate the amount of any payments to be made by the Company pursuant to this Agreement.

10

 

10. Assignment.

          (a) This Agreement is personal to Executive and shall not be assignable by Executive other
than by will or the laws of descent and distribution. This Agreement shall inure to the benefit of
and be enforceable by Executive’s legal representatives.

          (b) This Agreement shall inure to the benefit of and be binding upon the Company and its
successors. The Company shall require any successor to all or substantially all of the business
and/or assets of the Company, whether direct or indirect, by purchase, merger, consolidation,
acquisition of stock, or otherwise, to expressly assume and agree to perform this Agreement in the
same manner and to the same extent as the Company would be required to perform it if no such
succession had taken place.

     11. Arbitration. Any dispute or controversy arising under, related to or in connection with
this Agreement shall be settled exclusively by arbitration before a single arbitrator in
Cincinnati, Ohio, in accordance with the Commercial Arbitration Rules of the American Arbitration
Association. The arbitrator’s award shall be final and binding on all parties to this Agreement.
Judgment may be entered on an arbitrator’s award in any court having competent jurisdiction.

     12. Integration. This Agreement supersedes and replaces any prior oral or written agreements
or understandings in respect of the matters addressed hereby.

     13. Amendment. This Agreement may not be amended or modified otherwise than by a written
agreement executed by the parties hereto or their respective successors and legal representatives.
This Agreement supersedes and replaces any other agreement, document or understanding concerning
the subject matter hereof.

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

     15. Withholding. The Company may withhold from any amounts payable under this Agreement such
federal, state, local or foreign taxes as shall be required to be withheld pursuant to any
applicable law or regulation.

     16. Governing Law. This Agreement shall be governed by and construed in accordance with the
law of the State of Indiana without reference to principles of conflict of laws.

     17. Attorney’s Fees. If any legal proceeding (whether in arbitration, at trial or on appeal)
is brought under or in connection with this Agreement, each party shall pay its own expenses,
including attorneys’ fees.

     18. Term of Agreement. The term of this Agreement shall be one (1) year commencing on the date
hereof; provided however, that this Agreement shall be automatically renewed for successive
one-year terms commencing on each anniversary of the date of this Agreement unless the Company
shall have given notice of non-renewal to Executive at least 30

11

 

days prior to the scheduled
termination date; and further provided that notwithstanding the foregoing, this Agreement shall not
terminate (i) within three years after a Change in Control or (ii) during any period of time when a
transaction which would result in a Change in Control is pending or under consideration by the
Board. The termination of this Agreement shall not adversely affect any rights to which Executive
has become entitled prior to such termination. In addition, Section 5(a) shall survive the
termination of this Agreement.

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed and delivered
as of the day and year first above set forth.

	 	 	 	 	 	 	 
	 	 	HILLENBRAND INDUSTRIES, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	Patrick D. de Maynadier, Vice President, with
authority from the Compensation and Management
Development Committee of the Board of
Directors	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 
	 	 	Executive: Peter H. Soderberg	 	 

12

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00097-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00097-of-00352.parquet"}]]