Document:

Filed by Bowne Pure Compliance

	 	 	 	 	 

Exhibit 10.1

EMPLOYMENT AGREEMENT

PREAMBLE

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. Given the importance of these matters to you and the Company, you are

required to sign the Agreement as a condition of employment.

This EMPLOYMENT AGREEMENT, dated and effective this
 _____ 
day of June, 2008, is entered into by
and between Hillenbrand, Inc. (“Company”) and Joe A. Raver (“Employee”).

WITNESSETH:

WHEREAS, the Company is engaged in the design, manufacture, promotion and sale of funeral and
burial-related products and services throughout the United States and North America including, but
not limited to, burial caskets, cremation products and other memorial products.

WHEREAS, the Company is willing to employ Employee in an executive or managerial position at
one or more of the Companies (hereafter defined) and Employee desires to be employed by the Company
in such capacity or capacities 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 Employee 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 Employee (individually referred to as a “Party” and 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 to
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 Employee’s employment, the Company’s willingness to
disclose certain confidential and proprietary information to Employee 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 the effective date of this Agreement, the Company agrees to employ
Employee and Employee agrees to serve (a) as the President and Chief Operating Officer of
Batesville Casket Company, Inc. and of such other of the Company’s operating subsidiaries as
shall be determined by the Company from time to time, and (b) in such other offices and
positions in the Company and other Companies as the Company and Employee shall from time to
time mutually agree. Employee agrees to perform all duties and responsibilities traditionally
assigned to, or falling within the normal responsibilities of, an individual employed in the
above-referenced positions. Employee also agrees to perform any and all additional duties or
responsibilities as may be assigned by the Company in its sole discretion. The Parties
acknowledge that both Employee’s title and the underlying duties may change.

	 
	2.	 	Best Efforts and Duty of Loyalty.  During the term of employment with the Company,
Employee 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. Employee agrees
to devote Employee’s full working time, attention, talents, skills and best efforts to further
the Company’s business and agrees not to take any action, or make any omission, that deprives
the Company of any business opportunities or otherwise act in a manner that conflicts with the
best interest of the Company or is otherwise detrimental to its business. Employee 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. Employee shall act
at all times in accordance with the Company’s Code of Ethical Business Conduct, and all other
applicable policies which may exist or be adopted by the Company from time to time.

	 
	3.	 	At-Will Employment.  Subject to the terms and conditions set forth below, Employee
specifically acknowledges and accepts such employment on an “at-will” basis and agrees that
both Employee 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 notice as required
by this Agreement. Employee 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 Employee.

	 
	4.	 	Compensation.  For all services rendered by Employee on behalf of, or at the request
of, the Company, Employee shall be paid as follows:

	 	(a)	 	A base salary at the bi-weekly rate of Fifteen Thousand Three Hundred Eighty-Four
Dollars and Sixty-One Cents ($15,384.61), less usual and ordinary deductions;

	 
	 	(b)	 	The other compensation and benefits described in (and subject to the terms of) the
attached offer of employment letter to Employee dated June
 _____ 
, 2008, from Kenneth A. Camp,
as Chief Executive Officer of Hillenbrand, Inc., subject, however, to the terms of this
Agreement;

	 
	 	(c)	 	Incentive compensation, payable solely at the discretion 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

 

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	 	(d)	 	Such additional compensation, benefits and perquisites as the Company may deem
appropriate.

	5.	 	Changes to Compensation. Notwithstanding anything contained herein to the contrary,
Employee acknowledges that the Company specifically reserves the right to make changes to
Employee’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 seven (7) days after
receiving notice of such change, Employee exercises Employee’s right to terminate this
Agreement without cause or for “Good Reason” as provided below in Paragraph No. 11. The
Parties anticipate that Employee’s compensation structure will be reviewed on an annual basis
but acknowledge that the Company shall have no obligation to do so.

	 
	6.	 	Direct Deposit.  As a condition of employment, and within thirty (30) days of the
effective date of this Agreement, Employee 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 Employee.

	 
	7.	 	Warranties and Indemnification.  Employee warrants that Employee is not a party to
any contract, restrictive covenant, or other agreement purporting to limit or otherwise
adversely affecting Employee’s ability to secure employment with the Company or any other
potential employer. Alternatively, should any such agreement exist, Employee warrants that
the existence thereof has been disclosed to the Company and that the contemplated services to
be performed hereunder will not violate the terms and conditions of any such agreement. In
either event, Employee agrees to fully indemnify and hold the Company harmless from any and
all claims arising from, or involving the enforcement of, any such restrictive covenants or
other agreements.

	 
	8.	 	Restricted Duties.  Employee 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 Employee not to disclose or use such confidential or proprietary
information. Based on Employee’s understanding of the anticipated duties and responsibilities
hereunder, Employee 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 (hereinafter referred to as
“notice pay”) if the Company so elects. In such event, Employee shall only be entitled to
such compensation, benefits and perquisites that have been paid or fully accrued as of the
effective date of Employee’s separation and as otherwise explicitly set forth in this
Agreement. However, in no event shall Employee be entitled to notice pay if Employee is
eligible for and accepts severance payments pursuant to the provisions of Paragraphs 16 and
17, below.

 

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	10.	 	Termination With Cause.  Employee’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 Employee has:

	 	(a)	 	Acted with gross neglect or willful misconduct in the discharge of Employee duties and
responsibilities or refused to follow or comply with the lawful direction of the Company or
the terms and conditions of this Agreement, providing such refusal is not based primarily
on Employee’s good faith compliance with applicable legal or ethical standards;

	 
	 	(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 Company’s reasonable opinion, to cause the Company
or any of the Companies and/or their officers or directors embarrassment or ridicule;

	 
	 	(c)	 	Violated a material requirement of any Company policy or procedure, specifically
including a violation of the Company’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 Company, is contrary to the
best interests of any of the Companies or would hold any of them or their officers or
directors up to probable civil or criminal liability, provided that, if Employee 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 Employee’s employment, effective immediately, by providing notice thereof to
Employee without further obligation to Employee other than accrued wages or other accrued wages,
deferred compensation or other accrued benefits of employment (collectively referred to herein
as “Accrued 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 Employee (or cured within a reasonable period to the Company’s satisfaction), the
Company agrees to provide Employee with a reasonable opportunity to so cure such defect. Absent
written mutual agreement otherwise, the Parties agree in advance that it is not possible for
Employee to cure any violations of sub-paragraph (b) or (d) and, therefore, no opportunity for
cure need be provided in those circumstances.

 

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

	 	(a)	 	The assignment to Employee of duties lasting more than sixty (60) days that are
materially inconsistent with Employee’s then current position or a material change in
Employee’s reporting relationship;

	 
	 	(b)	 	The failure to elect or reelect Employee as President and Chief Operating Officer of
Batesville Casket Company, Inc. (unless such failure is related in any way to the Company’s
decision to terminate Employee for cause);

	 
	 	(c)	 	The failure of the Company to continue to provide Employee 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 responsibilities to, and position within, the Company;

	 
	 	(d)	 	A reduction by the Company in the amount of Employee’s base salary or the
discontinuation or reduction by the Company of Employee’s participation at the same level
of eligibility as compared to other peer employees in any incentive compensation,
additional compensation, benefits, policies or perquisites subject to Employee
understanding that such reduction(s) shall be permissible if the change applies in a
similar way to other peer level employees;

	 
	 	(e)	 	The relocation of the Company’s principal executive offices or Employee’s place of work
to a location requiring a change of more than fifty (50) miles in Employee’s daily commute;
or

	 
	 	(f)	 	A failure by the Company to perform its obligations under this Employment Agreement
that is not cured by the Company promptly after written notice of such failure is given to
the Company by Employee.

	12.	 	Termination Due to Death or Disability. In the event Employee 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 payment of Accrued Obligations. For purposes of
this Agreement, Employee shall be considered to have suffered a “disability” upon a
determination by the Company, or an admission by Employee, that Employee cannot perform the
essential functions of Employee’s position as a result of a such a disability and the
occurrence of one or more of the following events:

	 	(a)	 	Employee becomes eligible for or receives any benefits pursuant to any disability
insurance policy as a result of a determination under such policy that Employee is
permanently disabled;

	 
	 	(b)	 	Employee becomes eligible for or receives any disability benefits under the Social
Security Act; or

	 
	 	(c)	 	A good faith determination by the Company that Employee is and will likely remain
unable to perform the essential functions of Employee’s duties or responsibilities
hereunder on a full-time basis, with or without reasonable accommodation, as a result of
any mental or physical impairment.

 

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	 	 	Notwithstanding anything expressed or implied above to the contrary, the Company agrees to fully
comply with its obligations under the Family and Medical Leave Act of 1993 and the Americans
with Disabilities Act as well as any other applicable federal, state, or local law, regulation,
or ordinance governing the provision of leave to individuals with serious health conditions or
the protection of individuals with disabilities as well as the Company’s obligation to provide
reasonable accommodation thereunder.

	 
	13.	 	Exit Interview. Upon termination of Employee’s employment for any reason, Employee
agrees, if requested, to participate in an exit interview with the Company and reaffirm in
writing Employee’s post-employment obligations as set forth in this Agreement 

	 
	14.	 	Section 409A Notification. Employee acknowledges that Employee has been advised of
the American Jobs Creation Act of 2004, which added Section 409A to the Internal Revenue Code
(“Section 409A”), and significantly changed the taxation of nonqualified deferred compensation
plans and arrangements. Under proposed and final regulations as of the date of this
Agreement, Employee has been advised that Employee’s severance pay and other termination
benefits may be treated by the Internal Revenue Service as providing “nonqualified deferred
compensation,” and therefore subject to Section 409A. In that event, several provisions in
Section 409A may affect Employee’s receipt of severance compensation, including the timing
thereof. These include, but are not limited to, a provision which requires that distributions
to “specified employees” of public companies on account of separation from service may not be
made earlier than six (6) months after the effective date of such separation. If applicable,
failure to comply with Section 409A can lead to immediate taxation of such deferrals, with
interest calculated at a penalty rate and a 20% penalty. As a result of the requirements
imposed by the American Jobs Creation Act of 2004, Employee agrees that if Employee is a
“specified employee” at the time of Employee’s termination of employment and if payments in
connection with such termination of employment are subject to Section 409A and not otherwise
exempt, such payments (and other benefits to the extent applicable) due Employee at the time
of termination of employment shall not be paid until a date at least six (6) months after the
effective date of Employee’s termination of employment (“Employee’s Effective Termination
Date”). Notwithstanding any provision of this Agreement to the contrary, to the extent that
any payment under the terms of this Agreement would constitute an impermissible acceleration
of payments under Section 409A or any regulations or Treasury guidance promulgated thereunder,
such payments shall be made no earlier than at such times as allowed under Section 409A. If
any provision of this Agreement (or of any award of compensation) would cause Employee to
incur any additional tax or interest under Section 409A or any regulations or Treasury
guidance promulgated thereunder, the Company or its successor may reform such provision;
provided that it will (i) maintain, to the maximum extent practicable, the original intent of
the applicable provision without violating the provisions of Section 409A and (ii) notify and
consult with Employee regarding such amendments or modifications prior to the effective date
of any such change.

	 
	15.	 	Section 409A Acknowledgement. Employee 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.

 

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	 	 	To the extent applicable, Employee
understands and agrees that Employee shall have the responsibility for, and Employee agrees to
pay, any and all appropriate income tax or other tax obligations for which Employee is
individually responsible and/or related to receipt of any compensation or benefits provided in
this Agreement. Employee agrees to fully indemnify and hold the Company harmless for any taxes,
penalties, interest, cost or attorneys’ fee assessed against or incurred by the Company on
account of such compensation or benefits having been provided to Employee or based on any
alleged failure to withhold taxes or satisfy any claimed obligation. Employee understands and
acknowledges that neither the Company, nor any of its employees, attorneys, or other
representatives has provided or will provide Employee with any legal or financial advice
concerning taxes or any other matter, and that Employee has not relied on any such advice in
deciding whether to enter into this Agreement.

	 
	16.	 	Severance. In the event Employee’s employment is terminated by the Company without
cause (including by Employee for Good Reason), and subject to the normal terms and conditions
imposed by the Company as set forth herein and in the attached Separation and Release
Agreement, Employee shall be eligible to receive severance pay based upon Employee’s 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).

	 
	17.	 	Severance Payment Terms and Conditions. No severance pay shall be paid if Employee
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 Employee 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 Employee fail
or refuse to execute and deliver to the Company 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 after the Employee’s Effective Termination Date.
Conditioned upon the execution and delivery of the Separation and Release Agreement as set
forth in the prior sentence, severance pay benefits shall be paid as follows: (i) in one lump
sum equivalent to six (6) months’ base salary on the day following the date which is six (6)
months following Employee’s Effective Termination Date with any remainder to be paid in
bi-weekly installments equivalent to Employee’s bi-weekly base salary commencing on the next
regularly scheduled payroll date, if both the severance pay benefit is subject to Section 409A
and if Employee is a “specified employee” under Section 409A or (ii) for any severance pay
benefits not subject to clause (i), in bi-weekly installments equivalent to Employee’s
bi-weekly base salary commencing upon the next regularly scheduled payroll date following the
earlier to occur of fifteen (15) days from the Company’s receipt of an executed Separation and
Release Agreement or the expiration of sixty (60) days after Employee’s Effective Termination
Date and shall be paid on the Company’s regularly scheduled pay dates; provided, however, that
if the before-stated sixty (60) day period ends
in a calendar year following the calendar year in which the sixty (60) day period commenced,
then any benefits not subject to clause (i) shall only begin on the next regularly scheduled
payroll following the expiration of sixty (60) days after the Employee’s Effective Termination
Date. Excluding any lump 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.

 

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	18.	 	Assignment of Rights.

	 	(a)	 	Copyrights.  Employee agrees that all works of authorship fixed in any tangible
medium of expression by Employee 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 Employee 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 Employee is excluded from the definition of a “work made for hire” under the
copyright law, then Employee 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. Employee will execute any documents that the Company deems necessary in
connection with the assignment of such Work and copyright therein. Employee 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 Employee 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.  Employee 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 Employee 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 Employee 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 Employee’s 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;

 

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	 	(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 Employee’s 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 Company shall be and remain the sole property of the Company. Upon
termination of employment, Employee 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.  Employee 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”). Employee further acknowledges that, as a result of Employee’s
employment with the Company, Employee 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 so long as such information was not made available
through fault of Employee or wrong doing by any other individual.

	 
	21.	 	Restricted Use of Confidential Information.  Employee 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,
Employee 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, Employee agrees to use such Confidential Information only in the course of Employee’s
duties in furtherance of the Company’s business and agrees not to make use of
any such Confidential Information for Employee’s own purposes or for the benefit of any other
entity or person.

 

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	22.	 	Acknowledged Need for Limited Restrictive Covenants.  Employee 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 employee relationships, and that Employee will benefit from these
efforts. Further, Employee acknowledges the inevitable use of, or near-certain influence by
Employee’s knowledge of, the Confidential Information disclosed to Employee 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, Employee acknowledges each of the Companies’ need to
protect their legitimate business interests by reasonably restricting Employee’s ability to
compete with the Company on a limited basis.

	23.	 	Non-Solicitation.  During Employee’s employment and for a period of twenty-four (24)
months thereafter, Employee 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 with, any customer or entity with whom
Employee had contact or transacted any business on behalf of the Company (or any Affiliate
thereof) during the eighteen (18) month period preceding Employee’s date of separation or
about whom Employee 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)	 	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 Employee’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; or

 

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	 	(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, Employee agrees during the Relevant Non-Compete Period
not to directly or indirectly engage in the following competitive activities:

	 	(a)	 	Employee 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 Employee 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)	 	Employee 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 Employee had responsibility for the eighteen (18) month period
preceding Employee’s date of separation;

	 
	 	(c)	 	Employee shall not market, sell, or otherwise offer or provide any Competitive Products
within Employee’s Geographic Territory (if applicable) or Assigned Customer Base,
specifically including any products or services relating to those for which Employee had
responsibility for the eighteen (18) month period preceding Employee’s date of separation;
and

	 
	 	(d)	 	Employee shall not distribute, market, sell or otherwise offer or provide any
Competitive Products to any customer of the Company with whom Employee had contact or for
which Employee had responsibility at any time during the eighteen (18) month period
preceding Employee’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, 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
Employee within a given territory or geographical area or contacted by Employee at any time
during the eighteen (18) month period preceding Employee’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;

 

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	 	(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 Employee upon
reasonable request);

	 
	 	(e)	 	“Geographic Territory” shall include any territory formally assigned to Employee as
well as all territories in which Employee has provided any services, sold any products or
otherwise had responsibility at any time during the twenty-four (24) month period preceding
Employee’s date of separation;

	 
	 	(f)	 	“Relevant Non-Compete Period” shall include the period of Employee’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 Employee’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 Employee 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.	 	Employment by National or Regional Accounts. Employee acknowledges that Employee
will have acquired and/or have access to confidential and proprietary information regarding
the Company’s business dealings with, and business strategies concerning, its national or
regional accounts (a/k/a Key Accounts, Prime Accounts, and National Accounts). Employee
further acknowledges that such knowledge would provide Employee with a competitive advantage
if used against the Company or used against a competitor of a national or regional account.
Accordingly, as a term and condition of employment, Employee agrees that the foregoing
restrictive covenants shall apply with equal force to restrict Employee from seeking any
employment or any other business relationship with such national or regional account, whether
or not serviced by Employee, for the duration of Employee’s Relevant Non-Compete Period.
Employee agrees that such accounts shall include, but not be limited to, the following:

	 	 	 	 	 	 	 	 	 
	 

	 	•
	 	Arbor Memorial Services
	 	•
	 	Brooke Funeral Services Co., LLC

(Brooke Franchise Corp.)
	 
	 	 	 	 	 	 	 	 
	 

	 	•
	 	Buckner Management Services
	 	•
	 	Calvert Group
	 
	 	 	 	 	 	 	 	 
	 

	 	•
	 	Carriage Funeral Holdings,
Inc.
	 	•
	 	Celebris Memorial Services, Inc.

(Urgel Bourgie)
	 
	 	 	 	 	 	 	 	 
	 

	 	•
	 	Citadel Funeral Service, Inc.
(Wisconsin Vault Company)
	 	•
	 	Concord Family Services, Inc.
	 
	 	 	 	 	 	 	 	 
	 

	 	•
	 	Family Choices
	 	•
	 	Gibralter Mausoleum Company
 (A
division of Matthews International)

 

12

 

	 	 	 	 	 	 	 	 	 
	 

	 	•
	 	Keystone Group Holdings, Inc.
	 	•
	 	Legacy Funeral Group (Legacy Funeral
Holdings, Inc.; Legacy Funeral Holdings of
Louisiana, LLC; Legacy Funeral Holdings of
Mississippi, LLC; Legacy Funeral Properties,
Inc.)
	 
	 	 	 	 	 	 	 	 
	 

	 	•
	 	Memory Gardens Management

Corporation
	 	•
	 	Newcomer Funeral Homes and Crematories
	 
	 	 	 	 	 	 	 	 
	 

	 	•
	 	Northstar Memorial Group
	 	•
	 	Paxus Services, Inc. (Paxus Services
(Kansas), Inc.; Paxus Services (Tennessee),
Inc.; Paxus Services (Lousiana), Inc.; Paxus
Services (Texas), Inc.; Paxus Services
(Oklahoma), Inc.)
	 
	 	 	 	 	 	 	 	 
	 

	 	•
	 	Pioneer Enterprises, Inc.
	 	•
	 	Rollings Funeral Service, Inc.
	 
	 	 	 	 	 	 	 	 
	 

	 	•
	 	Security National Financial

Corporation
	 	•
	 	 Service Corporation International
	 
	 	 	 	 	 	 	 	 
	 

	 	•
	 	Stewart Enterprises, Inc.
	 	•
	 	StoneMor Partners, L.P.
	 
	 	 	 	 	 	 	 	 
	 

	 	•
	 	Vertin Companies Family

Funeral Homes
	 	•
	 	Washburn-McReavy Funeral Chapels
	 
	 	 	 	 	 	 	 	 
	 

	 	•
	 	Wilson Financial Group, Inc.	 	 	 	 

	27.	 	Consent to Reasonableness.  In light of the above-referenced concerns, including
Employee’s knowledge of and access to the Companies’ Confidential Information, Employee
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 Employee’s ability to obtain alternate employment. As such, Employee hereby
agrees that such restrictions are valid and enforceable, and affirmatively waives any argument
or defense to the contrary. Employee acknowledges that this limited non-competition provision
is not an attempt to prevent Employee from obtaining other employment in violation of IC §
22-5-3-1 or any other similar statute. Employee 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 Employee from
obtaining other employment.

	28.	 	Survival of Restrictive Covenants.  Employee acknowledges that the above restrictive
covenants shall survive the termination of this Agreement and the termination of Employee’s
employment for any reason. Employee 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, Employee acknowledges that such obligations are independent and separate
covenants undertaken by Employee for the benefit of the Company.

 

13

 

	29.	 	Effect of Transfer.  Subject to the provisions of Paragraph 11 above, Employee agrees
that this Agreement shall continue in full force and effect notwithstanding any change in job
duties, job titles or reporting responsibilities. Employee further acknowledges that the
above restrictive covenants shall survive, and be extended to cover, the transfer of Employee
from the Company to its parent, subsidiary, or any other affiliated entity (hereinafter
collectively referred to as an “Affiliate”) or any subsequent transfer(s) among them.
Specifically, in the event of Employee’s temporary or permanent transfer to an Affiliate,
Employee agrees that the foregoing restrictive covenants shall remain in force so as to
continue to protect such company for the duration of the non-compete period, measured from
Employee effective date of transfer to an Affiliate. Additionally, Employee acknowledges that
this Agreement shall be deemed to have been automatically assigned to the Affiliate as of
Employee’s effective date of transfer such that the above-referenced restrictive covenants (as
well as all other terms and conditions contained herein) shall be construed thereafter to
protect the legitimate business interests and goodwill of the Affiliate as if Employee and the
Affiliate had independently entered into this Agreement. Employee’s acceptance of Employee’s
transfer to, and subsequent employment by, the Affiliate shall serve as consideration for (as
well as be deemed as evidence of Employee’s consent to) the assignment of this Agreement to
the Affiliate as well as the extension of such restrictive covenants to the Affiliate.
Employee agrees that this provision shall apply with equal force to any subsequent transfers
of Employee from one Affiliate to another Affiliate.

	 
	30.	 	Post-Termination Notification.  For the duration of Employee’s Relevant Non-compete
Period or other restrictive covenant period, which ever is longer, Employee agrees to promptly
notify the Company no later than five (5) business days of Employee’s acceptance of any
employment or consulting engagement. Such notice shall include sufficient information to
ensure Employee compliance with Employee’s non-compete obligations and must include at a
minimum the following information:  (i) the name of the employer or entity for which Employer
is providing any consulting services; (ii) a description of Employee’s intended duties as well
as (iii) the anticipated start date. Such information is required to ensure Employee’s
compliance with Employee’s non-compete obligations as well as all other applicable restrictive
covenants. Such notice shall be provided in writing to the Office of Vice President and
General Counsel of the Company at One Batesville Boulevard, Batesville, Indiana 47006.
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 Employee plus attorneys’ fees.
Employee further consents to the Company’s notification to any new employer of Employee’s
rights and obligations under this Agreement.

	 
	31.	 	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 Employee hereby consents and agrees that such scope may be judicially modified
accordingly in any proceeding brought to enforce such restriction.

 

14

 

	32.	 	Specific Enforcement/Injunctive Relief.  Employee 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,
Employee 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 Employee
violates any such restrictive covenant, Employee 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 Employee engages in any activity in
violation of such provisions, Employee 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.
Employee 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. Employee 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.

	 
	33.	 	Publicly Traded Stock.  The Parties agree that nothing contained in this Agreement
shall be construed to prohibit Employee from investing Employee’s 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 Employee
in the operation or the affairs of the business or otherwise violate the Company’s Code of
Ethics.

	 
	34.	 	Notice of Claim and Contractual Limitations Period.  Employee 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, Employee 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
Employee; (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), Employee 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.

	 
	35.	 	Non-Jury Trials.  Notwithstanding any right to a jury trial for any claims, Employee
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.

 

15

 

	36.	 	Choice of Forum.  Employee acknowledges that the Company is primarily based in
Indiana, and Employee 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 Employee 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. Employee further understands
and acknowledges that in the event the Company initiates litigation against Employee, the
Company may need to prosecute such litigation in such state where the Employee is subject to
personal jurisdiction. Accordingly, for purposes of enforcement of this Agreement, Employee
specifically consents to personal jurisdiction in the State of Indiana as well as any state in
which resides a customer assigned to the Employee. Furthermore, Employee consents to appear,
upon Company’s request and at Employee’s own cost, for deposition, hearing, trial, or other
court proceeding in Indiana or in any state in which resides a customer assigned to the
Employee.

	 
	37.	 	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.

	 
	38.	 	Titles.  Titles are used for the purpose of convenience in this Agreement and shall
be ignored in any construction of it.

	 
	39.	 	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.

	 
	40.	 	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 Employee, cannot be assigned by Employee, but Employee’s
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 Employee
or to the Company at its principal office with a copy mailed to the Office of the General
Counsel.

 

16

 

	41.	 	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 Employee unless in writing and signed by both Parties. The
waiver by the Company or Employee 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.

	 
	42.	 	Outside Representations.  Employee represents and acknowledges that in signing this
Agreement Employee 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.

	 
	43.	 	Voluntary and Knowing Execution.  Employee acknowledges that Employee has been
offered a reasonable amount of time within which to consider and review this Agreement; that
Employee has carefully read and fully understands all of the provisions of this Agreement; and
that Employee has entered into this Agreement knowingly and voluntarily.

	 
	44.	 	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 (e.g., the Inventions, Improvements, Copyrights and Trade Secrets Agreement,
etc.).

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

	 	 	 	 	 	 	 	 	 
	“EMPLOYEE”	 	“COMPANY”	 	 
	 	 	 	 	HILLENBRAND, INC.	 	 
	 
	 	 	 	 	 	 	 	 
	Signed:

	 	/S/ Joe A. Raver
 

Joe A. Raver
	 	By:
	 	/S/ Kenneth A. Camp
 

Kenneth A. Camp
	 	 
	 

	 	 	 	 	 	President and Chief Executive Officer	 	 

CAUTION: READ BEFORE SIGNING

 

17

 

Exhibit A

SAMPLE SEPARATION AND RELEASE AGREEMENT

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

	1.	 	Employee’s active employment by the Company shall terminate effective [date of termination]
(Employee’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 Employee,
Employee agrees that the Company shall have no other obligations or liabilities to him
following his Effective Termination Date and that his receipt of the Severance Benefits
provided herein shall constitute a complete settlement, satisfaction and waiver of any and all
claims he may have against the Company.

	 
	2.	 	Employee further submits, and the Company hereby accepts, his resignation as an employee,
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 Employee may hold with
the Company or any parent, subsidiary or affiliated entity thereof. Employee agrees to
execute any documents needed to effectuate such resignation. Employee further agrees to take
whatever steps are necessary to facilitate and ensure the smooth transition of his duties and
responsibilities to others.

	 
	3.	 	Employee acknowledges that he has been advised of the American Jobs Creation Act of 2004,
which added Section 409A (“Section 409A”) to the Internal Revenue Code, and significantly
changed the taxation of nonqualified deferred compensation plans and arrangements. Under
proposed and final regulations as of the date of this Agreement, Employee has been advised
that his severance pay may be treated by the Internal Revenue Service as providing
“nonqualified deferred compensation,” and therefore subject to Section 409A. In that event,
several provisions in Section 409A may affect Employee’s receipt of severance compensation.
These include, but are not limited to, a provision which requires that distributions to
“specified employees” of public companies on account of separation from service may not be
made earlier than six (6) months after the effective date of such separation. If applicable,
failure to comply with Section 409A can lead to immediate taxation of deferrals, with interest
calculated at a penalty rate and a 20% penalty. As a result of the requirements imposed by
the American Jobs Creation Act of 2004, Employee agrees if he is a “specified employee” at the
time of his termination of employment and if severance payments are covered as “non-qualified
deferred compensation” or otherwise not exempt, the severance pay benefits shall not be paid
until a date at least six (6) months after Employee’s Effective Termination Date from Company,
as more fully explained by Paragraph 4, below.

 

18

 

	4.	 	In consideration of the promises contained in this Agreement and contingent upon Employee’s
compliance with such promises, the Company agrees to provide Employee the following:

	 	(a)	 	Severance pay, in lieu of, and not in addition to any other contractual, notice or
statutory pay obligations (other than accrued wages and deferred compensation) in the
maximum total amount of [_____] Dollars and [_____] Cents ($ _____), less
applicable deductions or other set offs, payable as follows:

[For 409A Severance Pay for Specified Employees Only]

	 	(i)	 	A lump payment in the gross amount of [insert amount equal to 6 months pay]
[_____] Dollars and [_____] Cents ($ _____) payable the day following the
sixth (6tth) month anniversary of Employee’s Effective Termination Date,
with any remaining amount to be paid in bi-weekly installments equivalent to Employee’s
base salary (i.e.  _____ Dollars and  _____ Cents ($ _____), less
applicable deductions or other setoffs) commencing upon the next regularly scheduled
payroll date after the payment of the lump sum for a period of up to  _____ (_____) weeks
or until the Employee becomes reemployed, whichever comes first.

[For Non- 409A Severance Pay or 409A Severance Pay for Non-Specified Employees Only]

	 	(i)	 	Commencing on the next regularly scheduled payroll immediately following the
earlier to occur of fifteen (15) days from the Company’s receipt of and Executed
Separation and Release Agreement or the expiration of sixty (60) days after Employee’s
Effective Termination Date, Employee shall be paid severance equivalent to his
bi-weekly base salary (i.e. [_____] Dollars and [_____] Cents
($[_____]), less applicable deductions or other set-offs), for a period up to
[weeks] ([_____]) weeks following Employee’s Effective Termination Date or until Employee
becomes reemployed, whichever occurs first; provided, however, that if the
before-stated sixty (60) day period ends in a calendar year following the calendar year
in which the sixty (60) day period commenced, then this severance pay shall only begin
on the next regularly scheduled payroll following the expiration of sixty (60) days
after the Employee’s Effective Termination Date.

	 	(b)	 	Payment for any earned but unused vacation as of Employee’s Effective Termination Date,
less applicable deductions permitted or required by law, payable in one lump sum within
fifteen (15) days after the Employee’s Effective Termination Date; 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). The Parties agree
that the initial two (2) weeks of the foregoing Severance Pay shall be allocated as
consideration provided to Employee in exchange for his 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 Employee, including
execution of a general release of claims.

 

19

 

	6.	 	The Company further agrees to provide Employee with limited out-placement counseling with a
company of its choice provided that Employee participates in such counseling immediately
following termination of employment. Notwithstanding anything in this Section 6 to the
contrary, the out-placement counseling shall not be provided after the last day of the second
calendar year following the calendar year in which termination of employment occurs.

	 
	7.	 	As of his Effective Termination Date, Employee 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 Employee as of his Effective Termination Date, subject to any approved
changes in coverage based on a qualified election, until the above-referenced Severance Pay
terminates, Employee accepts other employment or Employee becomes eligible for alternative
healthcare coverage, which ever comes first, provided Employee (i) timely completes the
applicable election of coverage forms and (ii) continues to pay the employee portion of the
applicable premium(s). Thereafter, if applicable, coverage will be made available to Employee
at his sole expense (i.e., Employee will be responsible for the full COBRA premium)
for the remaining months of the COBRA coverage period made available pursuant to applicable
law. In the event Employee is deemed to be a highly compensated employee under applicable
law, Employee acknowledges that the value of the benefits provided hereunder may be subject to
taxation. The medical insurance provided herein does not include any disability coverage.

	 
	8.	 	Should Employee become employed before the above-referenced Severance Benefits are exhausted
or terminated, Employee agrees to so notify the Company in writing within five (5) business
days of Employee’s acceptance of such employment, providing the name of such employer (or
entity to whom Employee may be providing consulting services), his intended duties as well as
the anticipated start date. Such information is required to ensure Employee’s compliance with
his 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 a result of the
application of Section 409A) 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 Employee hereunder plus attorneys fees. .In the event Employee accepts
employment at a lower rate of pay, the Company will agree to continue to pay Employee the
difference between the above severance pay and Employee’s total compensation to be paid by a
subsequent employer upon receipt of acceptable proof of such compensation. All other
severance benefits however, shall terminate upon reemployment.

	 
	9.	 	Employee agrees to fully indemnify and hold the Company harmless for any taxes, penalties,
interest, cost or attorneys’ fee assessed against or incurred by the Company on account of
such benefits having been provided to him or based on any alleged failure to withhold taxes or
satisfy any claimed obligation. Employee understands and acknowledges that neither the
Company, nor any of its employees, attorneys, or other representatives has provided him with any
legal or financial advice concerning taxes or any other matter, and that he has not relied on
any such advice in deciding whether to enter into this Agreement. To the extent applicable,
Employee understands and agrees that he shall have the responsibility for, and he agrees to pay,
any and all appropriate income tax or other tax obligations for which he is individually
responsible and/or related to receipt of any benefits provided in this Agreement not subject to
federal withholding obligations

 

20

 

	10.	 	In exchange for the foregoing Severance Benefits, EMPLOYEE FULL NAME on behalf of himself,
his 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, employees, 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 Employee 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, including any claims Employee 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 Employee Retirement Income Security Act, 29 U.S.C. §§ 1101
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 Employee’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
employee, 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 employees; (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.

 

21

 

	 
	12.	 	Employee 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:

	 	(a)	 	prevent Employee from filing an administrative charge with the Equal Employment Opportunity
Commission or any other federal, state or local agency; or

	 
	 	(b)	 	prevent Employee from challenging, under the Older Worker’s Benefit Protection Act (29
U.S.C. § 626), the knowing and voluntary nature of Employee release of any age claims in this
Agreement in court or before the Equal Employment Opportunity Commission. [INCLUDE THIS
SUBPARAGRAPH (b) IF EMPLOYEE IS AGE 40 OR OLDER]

	13.	 	Notwithstanding his right to file an administrative charge with the EEOC or any other
federal, state, or local agency, Employee agrees that with his release of claims in this
Agreement, he has waived any right he may have to recover monetary or other personal relief in
any proceeding based in whole or in part on claims released by him in this Agreement. For
example, Employee waives any right to monetary damages or reinstatement if an administrative
charge is brought against the Company whether by Employee, the EEOC, or any other person or
entity, including but not limited to any federal, state, or local agency. Further, with his
release of claims in this Agreement, Employee specifically assigns to the Company his right to
any recovery arising from any such proceeding.

	 
	14.	 	(ADD THIS LANGUAGE IF THE EMPLOYEE IS AGE 40 OR OLDER) 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, Employee hereby acknowledges that:

	 	(a)	 	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;

	 
	 	(b)	 	The Severance Benefits offered in exchange for Employee’s release of claims exceed in
kind and scope that to which he would have otherwise been legally entitled absent the
execution of this Agreement;

	 
	 	(c)	 	Prior to signing this Agreement, Employee had been advised, and is being advised by
this Agreement, to consult with an attorney of his choice concerning its terms and
conditions; and

	 
	 	(d)	 	He has been offered at least [twenty-one (21)/forty-five (45)] [SELECT 21 FOR AN
INDIVIDUAL TERMINATION AND 45 FOR A GROUP TERMINATION] days within which to review and
consider this Agreement.

	15.	 	(ADD THIS LANGUAGE IF EMPLOYEE IS AGE 40 OR OLDER) 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 Employee, whichever is later.
Employee may revoke this Agreement for any reason by providing written notice of such intent
to the Company within seven (7) days after he has signed this Agreement, thereby forfeiting
Employee’s right to receive any Severance Benefits provided hereunder and rendering this
Agreement null and void in its entirety. This revocation must be sent to the Employee’s HR
representative with a copy sent to
the Batesville Casket Company Office of General Counsel and must be received by the end of the
seventh day after the Employee signs this Agreement to be effective.

 

22

 

	16.	 	[ADD THIS LANGUAGE IF THE EMPLOYEE IS IN CALIFORNIA] Employee specifically acknowledges
that, as a condition of this Agreement, Employee expressly releases all rights and claims that
Employee knows about as well as those Employee may not know about. Employee expressly waives
all rights under Section 1542 of the Civil Code of the State of California, which reads as
follows:

“A general release does not extend to claims which the creditor does not know or
suspect to exist in Employee favor at the time of executing the release which if
known, must have materially affected Employee settlement with the debtor.”

Notwithstanding the provision by Section 1542, and for the purpose of implementing a full and
complete release and discharge of the Company as set forth above, Employee expressly
acknowledges that this Agreement is intended to include and does in its effect, without
limitation, include all claims which Employee does not know or suspect to exist in Employee
favor at the time of signing this Agreement and that this Agreement expressly contemplates the
extinguishment of all such claims.

	17.	 	The Parties agree that nothing contained herein shall purport to waive or otherwise affect
any of Employee’s rights or claims that may arise after he signs this Agreement. It is
further understood by the Parties that nothing in this Agreement shall affect any rights
Employee may have under any Company sponsored Deferred Compensation Program, Executive Life
Insurance Bonus Plan, Stock 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.

	 
	18.	 	Similarly, notwithstanding any provision contained herein to the contrary, this Agreement
shall not constitute a waiver or release or otherwise affect Employee’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 Employee may
have under any indemnification agreement he has with the Company prior to the date hereof, any
rights he 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.

	 
	19.	 	[Optional provision for equity-eligible employees Except as provided herein, Employee
acknowledges that he will not be eligible to receive or vest in any additional stock options,
stock awards or restricted stock units (“RSUs”) as of his 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. Employee 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.]

 

23

 

	20.	 	[Option A] Employee acknowledges that his 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] Employee represents and agrees that he has been provided relevant cohort information
based on the information available to the Company as of the date this Agreement was tendered to
Employee. 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).

	 
	21.	 	Employee hereby affirms and acknowledges his continued obligations to comply with the
post-termination covenants contained in his Employment Agreement, including but not limited
to, the non-compete, trade secret and confidentiality provisions. Employee 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 and, to the extent not inconsistent with the terms of this
Agreement or applicable law, the terms thereof shall be incorporated herein by reference.
Employee acknowledges that the restrictions contained therein are valid and reasonable in
every respect and are necessary to protect the Company’s legitimate business interests.
Employee hereby affirmatively waives any claim or defense to the contrary. Employee hereby
acknowledges that the definition of Competitor, as provided in his Employment Agreement shall
include but not be limited to those entities specifically identified in the updated Competitor
List, attached hereto as Exhibit B [C].

	 
	22.	 	Employee acknowledges that the Company as well as its parent, subsidiary and affiliated
companies (“Companies” herein) possess, and he 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 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”).

	 
	23.	 	Employee 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,
Employee 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 Employee’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 Employee or other wrong doing.

 

24

 

	24.	 	On or before Employee’s Effective Termination Date or per the Company’s request, Employee
agrees to return the original and all copies of all things in his 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 received, prepared, helped
prepare, or directed preparation of in connection with his employment with the Company.
Nothing contained herein shall be construed to require the return of any non-confidential and
de minimis items regarding Employee’s pay, benefits or other rights of employment such as pay
stubs, W-2 forms, 401(k) plan summaries, benefit statements, etc.

	 
	25.	 	Employee 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 Employee’s behalf (e.g.,
payment of any outstanding American Express bill).

	 
	26.	 	Employee 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 Employee’s knowledge or former area of responsibility. Employee
agrees to immediately notify the Company, through the Office of the General Counsel, in the
event he is contacted by any outside attorney (including paralegals or other affiliated
parties) unless (i) the Company is represented by the attorney, (ii) Employee is represented
by the attorney for the purpose of protecting his personal interests or (iii) the Company has
been advised of and has approved such contact. Employee 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 Employee for all reasonable out
of pocket expenses incurred at the request of the Company associated with such assistance and
testimony.

	 
	27.	 	Employee 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 employees, officers, directors or trustees or (c) the services and/or
products provided by the Company and its subsidiaries or affiliate entities. The Parties
acknowledge that nothing contained herein shall be construed to prevent or prohibit the
Company or the Employee from providing truthful information in response to any court order,
discovery request, subpoena or other lawful request.

 

25

 

	28.	 	EMPLOYEE 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, Employee agrees that he shall not communicate, display or otherwise reveal any of the
contents of this Agreement to anyone other than his spouse, legal counsel or financial advisor
provided, however, that they are first advised of the confidential nature of this Agreement
and Employee obtains their agreement to be bound by the same. The Company agrees that
Employee may respond to legitimate inquiries regarding the termination of his 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
from further discussing the specifics of his separation. Nothing contained herein shall be
construed to prevent Employee from discussing or otherwise advising subsequent employers of
the existence of any obligations as set forth in his 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.

	 
	29.	 	In the event that Employee breaches or threatens to breach any provision of this Agreement,
he 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. Employee
hereby waives any claim that the Company has an adequate remedy at law. In addition, and to
the extent not prohibited by law, Employee 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. Employee 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 Employee pursues any claims against the Company subject to the
foregoing General Release, or breaches the above confidentiality provision, Employee agrees to
immediately reimburse the Company for the value of all benefits received under this Agreement
to the fullest extent permitted by law.

	 
	30.	 	Similarly, in the event that the Company breaches or threatens to breach any provision of
this Agreement, Employee 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 Employee is required to file suit to enforce the terms of this Agreement, the
Company agrees that Employee shall be entitled to an award of all costs and attorneys’ fees
incurred by him in any wholly successful effort (i.e. entry of a judgment in his favor) to
enforce the terms of this Agreement. In the event Employee is wholly unsuccessful, the
Company shall be entitled to an award of its costs and attorneys’ fees.

	 
	31.	 	Both Parties acknowledge that this Agreement is entered into solely for the purpose of
terminating Employee’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 Employee, both
Parties having expressly denied any such liability or wrongdoing.

 

26

 

	32.	 	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.

	 
	33.	 	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.

	 
	34.	 	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.

	 
	35.	 	(USE THIS LANGUAGE IF OWBPA LANGUAGE (FOR EMPLOYEES AGE 40 OR OVER) IS NOT INCLUDED).
Employee acknowledges that Employee has been offered a period of twenty-one (21) days within
which to consider and review this Agreement; that Employee has carefully read and fully
understands all of the provisions of this Agreement; and that Employee has entered into this
Agreement knowingly and voluntarily.

	 
	36.	 	Employee 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.

	 
	37.	 	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 Employee’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.

 

27

 

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.

	 	 	 	 	 	 	 	 	 	 	 
	[EMPLOYEE]	 	 	 	COMPANY NAME	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Signed:

	 	 
 

	 	 	 	By:
	 	 
 

	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Printed:

	 	 	 	 	 	Title:	 	 	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Dated:

	 	 	 	 	 	Dated:	 	 	 	 
	 

	 	 
	 	 	 	 	 	 	 	 

 

28

 

Exhibit B

ILLUSTRATIVE COMPETITOR LIST

The following is an illustrative, non-exhaustive list of Competitors with whom Employee may
not, during his relevant non-compete period, directly or indirectly engage in any of the
competitive activities proscribed by the terms of his Employment Agreement.

	 	 	 	 	 	 	 	 	 
	 

	 	•
	 	Astral Industries,
Inc.
	 	•
	 	Aurora Casket Company, Inc.
	 
	 	 	 	 	 	 	 	 
	 

	 	•
	 	Goliath Casket, Inc.
	 	•
	 	Milso Industries, Inc.
	 
	 	 	 	 	 	 	 	 
	 

	 	•
	 	Milso Industries, LLC
	 	•
	 	New England Casket Company
	 
	 	 	 	 	 	 	 	 
	 

	 	•
	 	R and S Marble Designs
	 	•
	 	Reynoldsville Casket Company
	 
	 	 	 	 	 	 	 	 
	 

	 	•
	 	Schuykill Haven
Casket Company, Inc. (A
division of The Haven Line
Industries)
	 	•
	 	SinoSource International, Inc.
	 
	 	 	 	 	 	 	 	 
	 

	 	•
	 	Thacker Caskets, Inc.
	 	•
	 	The York Group (a division of
Matthews International Corp.) and its
distributors, including Warfield Rohr,
Artco, Newmark and AJ Distribution
	 
	 	 	 	 	 	 	 	 
	 

	 	•
	 	The Victoriaville Group
	 	•
	 	Wilbert Funeral Services, Inc.

While the above list is intended to identify the Company’s primary competitors, it should not
be construed as all encompassing so as to exclude other potential competitors falling within the
Non-Compete definitions of “Competitor.” The Company reserves the right to amend this list at any
time in its sole discretion to identify other or additional Competitors based on changes in the
products and services offered, changes in its business or industry as well as changes in the duties
and responsibilities of the individual employee. An updated list will be provided to Employee upon
reasonable request. Employees are encouraged to consult with the Company prior to accepting any
position with any potential competitor.Filed by Bowne Pure Compliance

Exhibit 10.1

CLEAR SKIES SOLAR, INC.

2008 EQUITY INCENTIVE PLAN

	 	1.	 	Purpose of the Plan.

This 2008 Equity Incentive Plan (the “Plan”) is intended as an incentive, to retain in
the employ of and as directors, officers and employees of and consultants and advisors to Clear
Skies Solar, Inc., a Delaware corporation (the “Company”), and any Subsidiary of the
Company, within the meaning of Section 424(f) of the United States Internal Revenue Code of 1986,
as amended (the “Code”), persons of training, experience and ability, to attract new
directors, officers, consultants, advisors and employees whose services are considered valuable, to
encourage the sense of proprietorship and to stimulate the active interest of such persons in the
development and financial success of the Company and its Subsidiaries.

It is further intended that certain options granted pursuant to the Plan shall constitute
incentive stock options within the meaning of Section 422 of the Code (the “Incentive
Options”) while certain other options granted pursuant to the Plan shall be nonqualified stock
options (the “Nonqualified Options”). Incentive Options and Nonqualified Options are
hereinafter referred to collectively as “Options.”

The Company intends that the Plan meet the requirements of Rule 16b-3 (“Rule 16b-3”)
promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and
that transactions of the type specified in subparagraphs (c) to (f) inclusive of Rule 16b-3 by
officers and directors of the Company pursuant to the Plan will be exempt from the operation of
Section 16(b) of the Exchange Act. Further, the Plan is intended to satisfy the performance-based
compensation exception to the limitation on the Company’s tax deductions imposed by Section 162(m)
of the Code with respect to those Options for which qualification for such exception is intended.
In all cases, the terms, provisions, conditions and limitations of the Plan shall be construed and
interpreted consistent with the Company’s intent as stated in this Section 1.

	 	2.	 	Administration of the Plan.

The Board of Directors of the Company (the “Board”) shall appoint and maintain as
administrator of the Plan a Committee (the “Committee”) consisting of two or more directors
who are (i) “Independent Directors” (as such term is defined under the rules of the NASDAQ Stock
Market), (ii) “Non-Employee Directors” (as such term is defined in Rule 16b-3) and (iii) “Outside
Directors” (as such term is defined in Section 162(m) of the Code), which shall serve at the
pleasure of the Board. The Committee, subject to Sections 3, 5 and 6 hereof, shall have full power
and authority to designate recipients of Options and restricted stock (“Restricted Stock”)
and to determine the terms and conditions of the respective Option and Restricted Stock agreements
(which need not be identical) and to interpret the provisions and supervise the administration of
the Plan. The Committee shall have the authority, without limitation, to designate which Options
granted under the Plan shall be Incentive Options and which shall be Nonqualified Options. To the
extent any Option does not qualify as an Incentive Option, it shall constitute a separate
Nonqualified Option.

Subject to the provisions of the Plan, the Committee shall interpret the Plan and all Options
and Restricted Stock granted under the Plan, shall make such rules as it deems necessary for the
proper administration of the Plan, shall make all other determinations necessary or advisable for
the administration of the Plan and shall correct any defects or supply any omission or reconcile
any inconsistency in the Plan or in any Options or Restricted Stock granted under the Plan in the
manner and to the extent that the Committee deems desirable to carry into effect the Plan or any
Options or Restricted Stock. The act or determination of a majority of the Committee shall be the
act or determination of the Committee and any decision reduced to writing and signed by all of the
members of the Committee shall be fully effective as if it had been made by a majority of the
Committee at a meeting duly held for such purpose. Subject to the provisions of the Plan, any
action taken or determination made by the Committee pursuant to this and the other Sections of the
Plan shall be conclusive on all parties.

 

 

 

In the event that for any reason the Committee is unable to act or if the Committee at the
time of any grant, award or other acquisition under the Plan does not consist of two or more
Non-Employee Directors, or if there shall be no such Committee, or if the Board otherwise
determines to administer the Plan, then the Plan shall be administered by the Board, and references
herein to the Committee (except in the proviso to this sentence) shall be deemed to be references
to the Board, and any such grant, award or other acquisition may be approved or ratified in any
other manner contemplated by subparagraph (d) of Rule 16b-3; provided, however,
that grants to the Company’s Chief Executive Officer or to any of the Company’s other four most
highly compensated officers that are intended to qualify as performance-based compensation under
Section 162(m) of the Code may only be granted by the Committee.

	 	3.	 	Designation of Optionees and Grantees.

The persons eligible for participation in the Plan as recipients of Options (the
“Optionees”) or Restricted Stock (the “Grantees” and together with Optionees, the
“Participants”) shall include directors, officers and employees of, and consultants and
advisors to, the Company or any Subsidiary; provided that Incentive Options may only be granted to
employees of the Company and any Subsidiary. In selecting Participants, and in determining the
number of shares to be covered by each Option or award of Restricted Stock granted to Participants,
the Committee may consider any factors it deems relevant, including, without limitation, the office
or position held by the Participant or the Participant’s relationship to the Company, the
Participant’s degree of responsibility for and contribution to the growth and success of the
Company or any Subsidiary, the Participant’s length of service, promotions and potential. A
Participant who has been granted an Option or Restricted Stock hereunder may be granted an
additional Option or Options, or Restricted Stock if the Committee shall so determine.

	 	4.	 	Stock Reserved for the Plan.

Subject to adjustment as provided in Section 8 hereof, a total of 2,500,000 shares of the
Company’s common stock, par value $0.001 per share (the “Stock”), shall be subject to the
Plan. The maximum number of shares of Stock that may be subject to Options granted under the Plan
to any individual in any calendar year shall not exceed 2,400,000 shares, and the method of
counting such shares shall conform to any requirements applicable to performance-based compensation
under Section 162(m) of the Code, if qualification as performance-based compensation under Section
162(m) of the Code is intended. The shares of Stock subject to the Plan shall consist of unissued
shares, treasury shares or previously issued shares held by any Subsidiary of the Company, and such
number of shares of Stock shall be and is hereby reserved for such purpose. Any of such shares of
Stock that may remain unissued and that are not subject to outstanding Options at the termination
of the Plan shall cease to be reserved for the purposes of the Plan, but until termination of the
Plan the Company shall at all times reserve a sufficient number of shares of Stock to meet the
requirements of the Plan. Should any Option or award of Restricted Stock expire or be canceled
prior to its exercise or vesting in full or should the number of shares of Stock to be delivered
upon the exercise or vesting in full of an Option or award of Restricted Stock be reduced for any
reason, the shares of Stock theretofore subject to such Option or Restricted Stock may be subject
to future Options or Restricted Stock under the Plan, except where such reissuance is inconsistent
with the provisions of Section 162(m) of the Code where qualification as performance-based
compensation under Section 162(m) of the Code is intended.

	 	5.	 	Terms and Conditions of Options.

Options granted under the Plan shall be subject to the following conditions and shall contain
such additional terms and conditions, not inconsistent with the terms of the Plan, as the Committee
shall deem desirable:

(a) Option Price. The purchase price of each share of Stock purchasable under an
Incentive Option shall be determined by the Committee at the time of grant, but shall not be less
than 100% of the Fair Market Value (as defined below) of such share of Stock on the date the Option
is granted; provided, however, that with respect to an Optionee who, at the time
such Incentive Option is granted, owns (within the meaning of Section 424(d) of the Code) more than
10% of the total combined voting power of all classes of stock of the Company or of any Subsidiary,
the purchase price per share of Stock shall be at least 110% of the Fair Market Value per share of
Stock on the date of grant. The purchase price of each share of Stock purchasable under a
Nonqualified Option shall not be less than 100% of the Fair Market Value of such share of Stock on the date the Option
is granted. The exercise price for each Option shall be subject to adjustment as provided in
Section 8 below.

 

- 2 -

 

“Fair Market Value” means the closing price on the final trading day
immediately prior to the grant date of the Stock on the principal securities exchange on which
shares of Stock are listed (if the shares of Stock are so listed), or on the NASDAQ Stock Market or
OTC Bulletin Board (if the shares of Stock are regularly quoted on the NASDAQ Stock Market or OTC
Bulletin Board, as the case may be), or, if not so listed, the mean between the closing bid and
asked prices of publicly traded shares of Stock in the over the counter market, or, if such bid and
asked prices shall not be available, as reported by any nationally recognized quotation service
selected by the Company, or as determined by the Committee in a manner consistent with the
provisions of the Code. Anything in this Section 5(a) to the contrary notwithstanding, in no event
shall the purchase price of a share of Stock be less than the minimum price permitted under the
rules and policies of any national securities exchange on which the shares of Stock are listed.

(b) Option Term. The term of each Option shall be fixed by the Committee, but no
Option shall be exercisable more than ten years after the date such Option is granted and in the
case of an Incentive Option granted to an Optionee who, at the time such Incentive Option is
granted, owns (within the meaning of Section 424(d) of the Code) more than 10% of the total
combined voting power of all classes of stock of the Company or of any Subsidiary, no such
Incentive Option shall be exercisable more than five years after the date such Incentive Option is
granted.

(c) Exercisability. Subject to Section 5(j) hereof, Options shall be exercisable at
such time or times and subject to such terms and conditions as shall be determined by the Committee
at the time of grant; provided, however, that in the absence of any Option vesting
periods designated by the Committee at the time of grant, Options shall vest and become exercisable
as to one-third of the total number of shares subject to the Option on each of the first, second
and third anniversaries of the date of grant; and provided further that no Options shall be
exercisable until such time as any vesting limitation required by Section 16 of the Exchange Act,
and related rules, shall be satisfied if such limitation shall be required for continued validity
of the exemption provided under Rule 16b-3(d)(3).

Upon the occurrence of a “Change in Control” (as hereinafter defined), the Committee may
accelerate the vesting and exercisability of outstanding Options, in whole or in part, as
determined by the Committee in its sole discretion. In its sole discretion, the Committee may also
determine that, upon the occurrence of a Change in Control, each outstanding Option shall terminate
within a specified number of days after notice to the Optionee thereunder, and each such Optionee
shall receive, with respect to each share of Company Stock subject to such Option, an amount equal
to the excess of the Fair Market Value of such shares immediately prior to such Change in Control
over the exercise price per share of such Option; such amount shall be payable in cash, in one or
more kinds of property (including the property, if any, payable in the transaction) or a
combination thereof, as the Committee shall determine in its sole discretion.

For purposes of the Plan, unless otherwise defined in an employment agreement between the
Company and the relevant Optionee, a Change in Control shall be deemed to have occurred if:

(i) a tender offer (or series of related offers) shall be made and consummated for the
ownership of 50% or more of the outstanding voting securities of the Company, unless as a result of
such tender offer more than 50% of the outstanding voting securities of the surviving or resulting
corporation shall be owned in the aggregate by the stockholders of the Company (as of the time
immediately prior to the commencement of such offer), any employee benefit plan of the Company or
its Subsidiaries, and their affiliates;

(ii) the Company shall be merged or consolidated with another corporation, unless as a result
of such merger or consolidation more than 50% of the outstanding voting securities of the surviving
or resulting corporation shall be owned in the aggregate by the stockholders of the Company (as of
the time immediately prior to such transaction), any employee benefit plan of the Company or its
Subsidiaries, and their affiliates;

 

- 3 -

 

(iii) the Company shall sell substantially all of its assets to another corporation that is
not wholly owned by the Company, unless as a result of such sale more than 50% of such assets shall
be owned in the aggregate by the stockholders of the Company (as of the time immediately prior to
such transaction), any employee benefit plan of the Company or its Subsidiaries and their
affiliates; or

(iv) a Person (as defined below) shall acquire 50% or more of the outstanding voting
securities of the Company (whether directly, indirectly, beneficially or of record), unless as a
result of such acquisition more than 50% of the outstanding voting securities of the surviving or
resulting corporation shall be owned in the aggregate by the stockholders of the Company (as of the
time immediately prior to the first acquisition of such securities by such Person), any employee
benefit plan of the Company or its Subsidiaries, and their affiliates.

Notwithstanding the foregoing, if Change of Control is defined in an employment agreement between
the Company and the relevant Optionee, then, with respect to such Optionee, Change of Control shall
have the meaning ascribed to it in such employment agreement.

For purposes of this Section 5(c), ownership of voting securities shall take into account and
shall include ownership as determined by applying the provisions of Rule 13d-3(d)(I)(i) (as in
effect on the date hereof) under the Exchange Act. In addition, for such purposes, “Person” shall
have the meaning given in Section 3(a)(9) of the Exchange Act, as modified and used in Sections
13(d) and 14(d) thereof; provided, however, that a Person shall not include (A) the
Company or any of its Subsidiaries; (B) a trustee or other fiduciary holding securities under an
employee benefit plan of the Company or any of its Subsidiaries; (C) an underwriter temporarily
holding securities pursuant to an offering of such securities; or (D) a corporation owned, directly
or indirectly, by the stockholders of the Company in substantially the same proportion as their
ownership of stock of the Company.

(d) Method of Exercise. Options to the extent then exercisable may be exercised in
whole or in part at any time during the option period, by giving written notice to the Company
specifying the number of shares of Stock to be purchased, accompanied by payment in full of the
purchase price, in cash, or by check or such other instrument as may be acceptable to the
Committee. As determined by the Committee, in its sole discretion, at or after grant, payment in
full or in part may be made at the election of the Optionee (i) in the form of Stock owned by the
Optionee (based on the Fair Market Value of the Stock which is not the subject of any pledge or
security interest, (ii) in the form of shares of Stock withheld by the Company from the shares of
Stock otherwise to be received with such withheld shares of Stock having a Fair Market Value equal
to the exercise price of the Option, or (iii) by a combination of the foregoing, such Fair Market
Value determined by applying the principles set forth in Section 5(a), provided that the combined
value of all cash and cash equivalents and the Fair Market Value of any shares surrendered to the
Company is at least equal to such exercise price and except with respect to (ii) above, such method
of payment will not cause a disqualifying disposition of all or a portion of the Stock received
upon exercise of an Incentive Option. An Optionee shall have the right to dividends and other
rights of a stockholder with respect to shares of Stock purchased upon exercise of an Option at
such time as the Optionee (i) has given written notice of exercise and has paid in full for such
shares, and (ii) has satisfied such conditions that may be imposed by the Company with respect to
the withholding of taxes.

(e) Non-transferability of Options. Options are not transferable and may be exercised
solely by the Optionee during his lifetime or after his death by the person or persons entitled
thereto under his will or the laws of descent and distribution. The Committee, in its sole
discretion, may permit a transfer of a Nonqualified Option to (i) a trust for the benefit of the
Optionee, (ii) a member of the Optionee’s immediate family (or a trust for his or her benefit) or
(iii) pursuant to a domestic relations order. Any attempt to transfer, assign, pledge or otherwise
dispose of, or to subject to execution, attachment or similar process, any Option contrary to the
provisions hereof shall be void and ineffective and shall give no right to the purported
transferee.

(f) Termination by Death. Unless otherwise determined by the Committee, if any
Optionee’s employment with or service to the Company or any Subsidiary terminates by reason of
death, the Option may thereafter be exercised, to the extent then exercisable (or on such
accelerated basis as the Committee shall determine at or after grant), by the legal representative
of the estate or by the legatee of the Optionee under the will of the Optionee, for a period of one
(1) year after the date of such death (or, if later, such time as the Option may be
exercised pursuant to Section 14(d) hereof) or until the expiration of the stated term of such
Option as provided under the Plan, whichever period is shorter.

 

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(g) Termination by Reason of Disability. Unless otherwise determined by the Committee,
if any Optionee’s employment with or service to the Company or any Subsidiary terminates by reason
of Disability (as defined below), then any Option held by such Optionee may thereafter be
exercised, to the extent it was exercisable at the time of termination due to Disability (or on
such accelerated basis as the Committee shall determine at or after grant), but may not be
exercised after ninety (90) days after the date of such termination of employment or service (or,
if later, such time as the Option may be exercised pursuant to Section 14(d) hereof) or the
expiration of the stated term of such Option, whichever period is shorter; provided,
however, that, if the Optionee dies within such ninety (90) day period, any unexercised
Option held by such Optionee shall thereafter be exercisable to the extent to which it was
exercisable at the time of death for a period of one (1) year after the date of such death (or, if
later, such time as the Option may be exercised pursuant to Section 14(d) hereof) or for the stated
term of such Option, whichever period is shorter. “Disability” shall mean an Optionee’s total and
permanent disability; provided, that if Disability is defined in an employment agreement between
the Company and the relevant Optionee, then, with respect to such Optionee, Disability shall have
the meaning ascribed to it in such employment agreement.

(h) Termination by Reason of Retirement. Unless otherwise determined by the Committee,
if any Optionee’s employment with or service to the Company or any Subsidiary terminates by reason
of Normal or Early Retirement (as such terms are defined below), any Option held by such Optionee
may thereafter be exercised to the extent it was exercisable at the time of such Retirement (or on
such accelerated basis as the Committee shall determine at or after grant), but may not be
exercised after ninety (90) days after the date of such termination of employment or service (or,
if later, such time as the Option may be exercised pursuant to Section 14(d) hereof) or the
expiration of the stated term of such Option, whichever date is earlier; provided,
however, that, if the Optionee dies within such ninety (90) day period, any unexercised
Option held by such Optionee shall thereafter be exercisable, to the extent to which it was
exercisable at the time of death, for a period of one (1) year after the date of such death (or, if
later, such time as the Option may be exercised pursuant to Section 14(d) hereof) or for the stated
term of such Option, whichever period is shorter.

For purposes of this paragraph (h), “Normal Retirement” shall mean retirement from
active employment with the Company or any Subsidiary on or after the normal retirement date
specified in the applicable Company or Subsidiary pension plan or if no such pension plan, age 65,
and “Early Retirement” shall mean retirement from active employment with the Company or any
Subsidiary pursuant to the early retirement provisions of the applicable Company or Subsidiary
pension plan or if no such pension plan, age 55.

(i) Other Terminations. Unless otherwise determined by the Committee upon grant, if
any Optionee’s employment with or service to the Company or any Subsidiary is terminated by such
Optionee for any reason other than death, Disability, Normal or Early Retirement or Good Reason (as
defined below), the Option shall thereupon terminate, except that the portion of any Option that
was exercisable on the date of such termination of employment or service may be exercised for the
lesser of ninety (90) days after the date of termination (or, if later, such time as the Option may
be exercised pursuant to Section 14(d) hereof) or the balance of such Option’s term, which ever
period is shorter. The transfer of an Optionee from the employ of or service to the Company to the
employ of or service to a Subsidiary, or vice versa, or from one Subsidiary to another, shall not
be deemed to constitute a termination of employment or service for purposes of the Plan.

(i) In the event that the Optionee’s employment or service with the Company or any Subsidiary is
terminated by the Company or such Subsidiary for “cause” any unexercised portion of any Option
shall immediately terminate in its entirety. For purposes hereof, unless otherwise defined in an
employment agreement between the Company and the relevant Optionee, “Cause” shall exist upon a
good-faith determination by the Board, following a hearing before the Board at which an Optionee
was represented by counsel and given an opportunity to be heard, that such Optionee has been
accused of fraud, dishonesty or act detrimental to the interests of the Company or any Subsidiary
of Company or that such Optionee has been accused of or convicted of an act of willful and material
embezzlement or fraud against the Company or of a felony under any state or federal statute;
provided, however, that it is specifically understood that “Cause” shall not
include any act of commission or omission in the good-faith exercise
of such Optionee’s business judgment as a director, officer or employee of the Company, as the case
may be, or upon the advice of counsel to the Company. Notwithstanding the foregoing, if Cause is
defined in an employment agreement between the Company and the relevant Optionee, then, with
respect to such Optionee, Cause shall have the meaning ascribed to it in such employment agreement.

 

- 5 -

 

(ii) In the event that an Optionee is removed as a director, officer or employee by the
Company at any time other than for “Cause” or resigns as a director, officer or employee for “Good
Reason” the Option granted to such Optionee may be exercised by the Optionee, to the extent the
Option was exercisable on the date such Optionee ceases to be a director, officer or employee. Such
Option may be exercised at any time within one (1) year after the date the Optionee ceases to be a
director, officer or employee (or, if later, such time as the Option may be exercised pursuant to
Section 14(d) hereof), or the date on which the Option otherwise expires by its terms; which ever
period is shorter, at which time the Option shall terminate; provided, however, if
the Optionee dies before the Options terminate and are no longer exercisable, the terms and
provisions of Section 5(f) shall control. For purposes of this Section 5(i), and unless otherwise
defined in an employment agreement between the Company and the relevant Optionee, Good Reason shall
exist upon the occurrence of the following:

	 	(A)	 	the assignment to Optionee of any duties inconsistent with the
position in the Company that Optionee held immediately prior to the
assignment;

	 
	 	(B)	 	a Change of Control resulting in a significant adverse alteration in
the status or conditions of Optionee’s participation with the Company
or other nature of Optionee’s responsibilities from those in effect
prior to such Change of Control, including any significant alteration
in Optionee’s responsibilities immediately prior to such Change in
Control; and

	 
	 	(C)	 	the failure by the Company to continue to provide Optionee with
benefits substantially similar to those enjoyed by Optionee prior to
such failure.

Notwithstanding the foregoing, if Good Reason is defined in an employment agreement between the
Company and the relevant Optionee, then, with respect to such Optionee, Good Reason shall have the
meaning ascribed to it in such employment agreement.

(j) Limit on Value of Incentive Option. The aggregate Fair Market Value, determined as
of the date the Incentive Option is granted, of Stock for which Incentive Options are exercisable
for the first time by any Optionee during any calendar year under the Plan (and/or any other stock
option plans of the Company or any Subsidiary) shall not exceed $100,000.

	 	6.	 	Terms and Conditions of Restricted Stock.

Restricted Stock may be granted under this Plan aside from, or in association with, any other
award and shall be subject to the following conditions and shall contain such additional terms and
conditions (including provisions relating to the acceleration of vesting of Restricted Stock upon a
Change of Control), not inconsistent with the terms of the Plan, as the Committee shall deem
desirable:

(a) Grantee rights. A Grantee shall have no rights to an award of Restricted Stock
unless and until Grantee accepts the award within the period prescribed by the Committee and, if
the Committee shall deem desirable, makes payment to the Company in cash, or by check or such other
instrument as may be acceptable to the Committee. After acceptance and issuance of a certificate or
certificates, as provided for below, the Grantee shall have the rights of a stockholder with
respect to Restricted Stock subject to the non-transferability and forfeiture restrictions
described in Section 6(d) below.

(b) Issuance of Certificates. The Company shall issue in the Grantee’s name a
certificate or certificates for the shares of Common Stock associated with the award promptly after
the Grantee accepts such award.

 

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(c) Delivery of Certificates. Unless otherwise provided, any certificate or
certificates issued evidencing shares of Restricted Stock shall not be delivered to the Grantee
until such shares are free of any restrictions specified by the Committee at the time of grant.

(d) Forfeitability, Non-transferability of Restricted Stock. Shares of Restricted
Stock are forfeitable until the terms of the Restricted Stock grant have been satisfied. Shares of
Restricted Stock are not transferable until the date on which the Committee has specified such
restrictions have lapsed. Unless otherwise provided by the Committee at or after grant,
distributions in the form of dividends or otherwise of additional shares or property in respect of
shares of Restricted Stock shall be subject to the same restrictions as such shares of Restricted
Stock.

(e) Change of Control. Upon the occurrence of a Change in Control as defined in
Section 5(c), the Committee may accelerate the vesting of outstanding Restricted Stock, in whole or
in part, as determined by the Committee, in its sole discretion.

(f) Termination of Employment. Unless otherwise determined by the Committee at or
after grant, in the event the Grantee ceases to be an employee or otherwise associated with the
Company for any other reason, all shares of Restricted Stock theretofore awarded to him which are
still subject to restrictions shall be forfeited and the Company shall have the right to complete
the blank stock power. The Committee may provide (on or after grant) that restrictions or
forfeiture conditions relating to shares of Restricted Stock will be waived in whole or in part in
the event of termination resulting from specified causes, and the Committee may in other cases
waive in whole or in part restrictions or forfeiture conditions relating to Restricted Stock.

	 	7.	 	Term of Plan.

No Option or award of Restricted Stock shall be granted pursuant to the Plan on or after the
date which is ten years from the effective date of the Plan, but Options and awards of Restricted
Stock theretofore granted may extend beyond that date.

	 	8.	 	Capital Change of the Company.

In the event of any merger, reorganization, consolidation, recapitalization, stock dividend,
or other change in corporate structure affecting the Stock, the Committee shall make an appropriate
and equitable adjustment in the number and kind of shares reserved for issuance under the Plan and
in the number and option price of shares subject to outstanding Options granted under the Plan, to
the end that after such event each Optionee’s proportionate interest shall be maintained (to the
extent possible) as immediately before the occurrence of such event. The Committee shall, to the
extent feasible, make such other adjustments as may be required under the tax laws so that any
Incentive Options previously granted shall not be deemed modified within the meaning of Section
424(h) of the Code. Appropriate adjustments shall also be made in the case of outstanding
Restricted Stock granted under the Plan.

The adjustments described above will be made only to the extent consistent with continued
qualification of the Option under Section 422 of the Code (in the case of an Incentive Option) and
Section 409A of the Code.

 

- 7 -

 

	 	9.	 	Purchase for Investment/Conditions.

Unless the Options and shares covered by the Plan have been registered under the Securities
Act of 1933, as amended (the “Securities Act”), or the Company has determined that such
registration is unnecessary, each person exercising or receiving Options or Restricted Stock under
the Plan may be required by the Company to give a representation in writing that he is acquiring
the securities for his own account for investment and not with a view to, or for sale in connection
with, the distribution of any part thereof. The Committee may impose any additional or further
restrictions on awards of Options or Restricted Stock as shall be determined by the Committee at
the time of award.

	 	10.	 	Taxes.

(a) The Company may make such provisions as it may deem appropriate, consistent with
applicable law, in connection with any Options or Restricted Stock granted under the Plan with
respect to the withholding of any taxes (including income or employment taxes) or any other tax
matters.

(b) If any Grantee, in connection with the acquisition of Restricted Stock, makes the election
permitted under Section 83(b) of the Code (that is, an election to include in gross income in the
year of transfer the amounts specified in Section 83(b)), such Grantee shall notify the Company of
the election with the Internal Revenue Service pursuant to regulations issued under the authority
of Code Section 83(b).

(c) If any Grantee shall make any disposition of shares of Stock issued pursuant to the
exercise of an Incentive Option under the circumstances described in Section 421(b) of the Code
(relating to certain disqualifying dispositions), such Grantee shall notify the Company of such
disposition within ten (10) days hereof.

	 	11.	 	Effective Date of Plan.

The Plan shall be effective on July 28, 2008; provided, however, that if, and only if, certain
options are intended to qualify as Incentive Stock Options, the Plan must subsequently be approved
by majority vote of the Company’s stockholders no later than July 27, 2009, and further, that in
the event certain Option grants hereunder are intended to qualify as performance-based compensation
within the meaning of Section 162(m) of the Code, the requirements as to stockholder approval set
forth in Section 162(m) of the Code are satisfied.

	 	12.	 	Amendment and Termination.

The Board may amend, suspend, or terminate the Plan, except that no amendment shall be made
that would impair the rights of any Participant under any Option or Restricted Stock theretofore
granted without the Participant’s consent, and except that no amendment shall be made which,
without the approval of the stockholders of the Company would:

(a) materially increase the number of shares that may be issued under the Plan, except as is
provided in Section 8;

(b) materially increase the benefits accruing to the Participants under the Plan;

(c) materially modify the requirements as to eligibility for participation in the Plan;

(d) decrease the exercise price of an Incentive Option to less than 100% of the Fair Market
Value per share of Stock on the date of grant thereof or the exercise price of a Nonqualified
Option to less than 100% of the Fair Market Value per share of Stock on the date of grant thereof;
or

 

- 8 -

 

(e) extend the term of any Option beyond that provided for in Section 5(b).

(f) except as otherwise provided in Sections 5(d) and 8 hereof, reduce the exercise price of
outstanding Options or effect repricing through cancellations and re-grants of new Options.

Subject to the forgoing, the Committee may amend the terms of any Option theretofore granted,
prospectively or retrospectively, but no such amendment shall impair the rights of any Optionee
without the Optionee’s consent.

It is the intention of the Board that the Plan comply strictly with the provisions of Section
409A of the Code and Treasury Regulations and other Internal Revenue Service guidance promulgated
thereunder (the “Section 409A Rules”) and the Committee shall exercise its discretion in
granting awards hereunder (and the terms of such awards), accordingly. The Plan and any grant of an
award hereunder may be amended from time to time (without, in the case of an award, the consent of
the Participant) as may be necessary or appropriate to comply with the Section 409A Rules.

	 	13.	 	Government Regulations.

The Plan, and the grant and exercise of Options or Restricted Stock hereunder, and the
obligation of the Company to sell and deliver shares under such Options and Restricted Stock shall
be subject to all applicable laws, rules and regulations, and to such approvals by any governmental
agencies, national securities exchanges and interdealer quotation systems as may be required.

	 	14.	 	General Provisions.

(a) Certificates. All certificates for shares of Stock delivered under the Plan shall
be subject to such stop transfer orders and other restrictions as the Committee may deem advisable
under the rules, regulations and other requirements of the Securities and Exchange Commission, or
other securities commission having jurisdiction, any applicable Federal or state securities law,
any stock exchange or interdealer quotation system upon which the Stock is then listed or traded
and the Committee may cause a legend or legends to be placed on any such certificates to make
appropriate reference to such restrictions.

(b) Employment Matters. Neither the adoption of the Plan nor any grant or award under
the Plan shall confer upon any Participant who is an employee of the Company or any Subsidiary any
right to continued employment or, in the case of a Participant who is a director, continued service
as a director, with the Company or a Subsidiary, as the case may be, nor shall it interfere in any
way with the right of the Company or any Subsidiary to terminate the employment of any of its
employees, the service of any of its directors or the retention of any of its consultants or
advisors at any time.

(c) Limitation of Liability. No member of the Committee, or any officer or employee of
the Company acting on behalf of the Committee, shall be personally liable for any action,
determination or interpretation taken or made in good faith with respect to the Plan, and all
members of the Committee and each and any officer or employee of the Company acting on their behalf
shall, to the extent permitted by law, be fully indemnified and protected by the Company in respect
of any such action, determination or interpretation.

 

- 9 -

 

(d) Registration of Stock. Notwithstanding any other provision in the Plan, no Option
may be exercised unless and until the Stock to be issued upon the exercise thereof has been
registered under the Securities Act and applicable state securities laws, or are, in the opinion of
counsel to the Company, exempt from such registration in the United States. The Company shall not
be under any obligation to register under applicable federal or state securities laws any Stock to
be issued upon the exercise of an Option granted hereunder in order to permit the exercise of an
Option and the issuance and sale of the Stock subject to such Option, although the Company may in
its sole discretion register such Stock at such time as the Company shall determine. If the Company
chooses to comply with such an exemption from registration, the Stock issued under the Plan may, at
the direction of the Committee, bear an appropriate restrictive legend restricting the transfer or
pledge of the Stock
represented thereby, and the Committee may also give appropriate stop transfer instructions
with respect to such Stock to the Company’s transfer agent.

	 	15.	 	Non-Uniform Determinations.

The Committee’s determinations under the Plan, including, without limitation, (i) the
determination of the Participants to receive awards, (ii) the form, amount and timing of such
awards, (iii) the terms and provisions of such awards and (ii) the agreements evidencing the same,
need not be uniform and may be made by it selectively among Participants who receive, or who are
eligible to receive, awards under the Plan, whether or not such Participants are similarly
situated.

	 	16.	 	Governing Law.

The validity, construction, and effect of the Plan and any rules and regulations relating to
the Plan shall be determined in accordance with the internal laws of the State of Delaware, without
giving effect to principles of conflicts of laws, and applicable federal law.

 

- 10 -

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