BOARD OF DIRECTORS
DEFERRED COMPENSATION PLAN
BOARD OF DIRECTORS
DEFERRED COMPENSATION PLAN
WHEREAS, in accordance with that certain Distribution Agreement (as defined below), Hillenbrand
Industries, Inc. (to be re-named Hill-Rom Holdings, Inc. prior to or effective upon the
Distribution referred to below and hereinafter referred to in these recitals as RemainCo or
Hill-Rom Holdings, Inc.) proposes to distribute its entire ownership interest in Batesville
Holdings, Inc. (to be re-named Hillenbrand, Inc. prior to or effective upon the Distribution and
hereinafter referred to in these recitals as SpinCo or Hillenbrand, Inc.) through a pro-rata
distribution of all of the outstanding shares of SpinCo common stock then owned by RemainCo to the
holders of RemainCo common stock (Distribution); and
WHEREAS, RemainCo and SpinCo have entered into that certain Employee Matters Agreement (as
defined below) for the purpose of continuing benefits for the pre-Distribution directors, employees
and consultants of RemainCo and its subsidiaries; and
WHEREAS, in accordance with Section 6.2 of the Employee Matters Agreement, SpinCo is to adopt
and implement a Board of Directors Deferred Compensation Plan with features that are comparable to
the Hillenbrand Industries, Inc. Board of Directors Deferred Compensation Plan to be effective as
of the date of the consummation of the transactions contemplated by the Distribution Agreement; and
WHEREAS, effective as of the date of the consummation of the transactions contemplated by the
Distribution Agreement (the Effective Date), Hillenbrand, Inc. establishes the Hillenbrand, Inc.
Board of Directors Deferred Compensation Plan (the Plan) to provide nonqualified deferred
compensation benefits to members of the Board of Directors of SpinCo.
Section 1.01. Administrator. The term Administrator means Hillenbrand.
Section 1.02. Beneficiary. The term Beneficiary means, for a Participant,
the individual or individuals designated by that Participant in the last Beneficiary Designation
Form executed by that Participant to receive benefits in the event of that Participants death. If
no such beneficiary shall have been designated, or if no designated beneficiary shall survive the
Participant, the beneficiary shall be the Participants estate.
Section 1.03. Board. The term Board means the Board of Directors of
Section 1.04. Cash Participation Account. The term Cash Participation
Account means the bookkeeping account maintained by the Administrator for each Participant
reflecting amounts deferred under this Plan and the Prior Deferrals and accruing interest monthly
at the Interest Rate.
Section 1.05. Compensation. The term Compensation means for each
Participant in any Plan Year the total amount of remuneration (including retainers and meeting
fees) for director services and consulting fees and continuing director fees for former Directors
as paid to that Participant by the Company in that Plan Year.
Section 1.06. Director. The term Director means each non-employee member
of the Board of Directors of the Company.
Section 1.07. Distribution Agreement. The term Distribution Agreement
means the Distribution Agreement by and between Hillenbrand Industries, Inc. and Batesville
Holdings, Inc. dated effective as of March 14, 2008.
Section 1.08. Effective Date. The term Effective Date means the date of
the consummation of the transactions contemplated by the Distribution Agreement.
Section 1.09. Employee Matters Agreement. The term Employee Matters
Agreement means the Employee Matters Agreement by and between Hillenbrand Industries,
Inc. and Batesville Holdings, Inc. dated effective as of March 31, 2008.
Section 1.10. Fiscal Year. The term Fiscal Year means the fiscal year of the
Section 1.11. Forms. The term Forms means the forms used by the Company
for Plan operation and shall include the following:
(a) Deferral Elections Checklist. The term Deferral Elections Checklist means the
form on which a Director designates the amount of Compensation to be deferred under the Plan, the
Participation Account(s) to which such amounts shall be credited and when his Participation Account
shall be distributed.
(b) Beneficiary Designation Form. The term Beneficiary Designation Form means the
form on which a Director designates his Beneficiary.
Section 1.12. Hillenbrand. The term Hillenbrand or the Company means
Hillenbrand, Inc. and any successor thereof.
Section 1.13. Hillenbrand Common Stock. The term Hillenbrand Common Stock
means the common stock, without par value, of Hillenbrand.
Section 1.14. Interest Rate. The term Interest Rate means the rate of
return credited monthly at the end of each of Hillenbrands fiscal months to amounts held in the
Participants Cash Participation Account. The Interest Rate shall be equal to the prime rate
charged by JP Morgan Chase Bank, Indianapolis (or such other bank which is Hillenbrands principal
bank) as determined
as of the last day of the prior fiscal month; provided, however, that
Hillenbrand reserves the right to change the method of determining the Interest Rate on a
Section 1.15. Participant. The term Participant means (i) any individual
who fulfills the eligibility requirements contained in Article II of this Plan and elects to defer
Compensation under the Plan (ii) any individual who had a Phantom Stock Participating Account under
the Prior Plan and (iii) any former member of the Board of Directors of RemainCo as of the
Section 1.16. Participation Account. The term Participation Account means
the Cash Participation Account and/or the Phantom Stock Participation Account, as applicable. The
Participation Accounts are bookkeeping accounts and are not required to be funded in any manner.
Section 1.17. Phantom Shares. The term Phantom Shares means phantom shares
of Hillenbrand Common Stock (each representing one share).
Section 1.18. Phantom Stock Participation Account. The term Phantom Stock
Participation Account means the bookkeeping account maintained by the Administrator for each
Participant reflecting amounts deferred under this Plan and the Prior Deferrals and credited as
Phantom Shares (including adjustments as provided in Article III).
Section 1.19. Plan. The term Plan means the plan embodied by this
instrument as now in effect or hereafter amended.
Section 1.20. Plan Year. The term Plan Year means the calendar year.
Section 1.21. Prior Deferrals. The term Prior Deferrals means amounts of
Compensation deferred by Directors under Prior Plan in effect prior to January 1, 2005 (including
earnings credited on such amounts through and after January 1, 2005) and not distributed prior to
the January 1, 2005.
Section 1.22. Prior Plan. The term Prior Plan means the Hillenbrand Industries,
Inc. Board of Directors Deferred Compensation Plan.
Section 1.23. Prior Plan Participant. The term Prior Plan Participant means (i)
any participant in the Prior Plan who has a Phantom Stock Participant Account under the Prior Plan
as of the Effective Date, and (ii) any Director as of the Effective Date who was a participant in
the Prior Plan immediately prior to the Effective Date.
Section 1.24. RemainCo. The term RemainCo shall have meaning as set forth in
Section 1.1 of the Employee Matters Agreement.
Section 1.25. RemainCo Director. The term RemainCo Director means any member of
the Board of Directors of RemainCo on the Effective Date who is not a member of the Board of
Directors of the Company on the Effective Date.
Section 1.26. Tandem Director. The term Tandem Director means any person who is a
member of the Boards of Directors of both RemainCo and the Company as of the Effective Date.
PARTICIPATION IN THE PLAN
Section 2.01. Eligibility. As of the Effective Date, all Directors shall be
eligible to become Participants in this Plan, and former Directors shall be eligible to participate
to the extent they are entitled to consulting fees or continuing director fees.
Section 2.02. Deferral Amounts.
(a) Amount of Deferral. The amount of Compensation to be deferred in a Plan Year
shall be designated by each Participant in the Deferral Elections Checklist executed by that
Participant for that Plan Year prior to the beginning of the Fiscal Year in which the Plan Year
starts and within the time period established by the Administrator. Notwithstanding the foregoing,
any and all elections made by a Participant to defer as set forth in Section 2.02 of the Prior Plan
that are in effect as of the date before the Effective Date shall continue to be in effect as
deferral elections under Section 2.02 of this Plan as of the Effective Date.
(b) Special Rules for New Directors. Other than for any Director who immediately
prior to the Effective Date was a member of the Board of Directors of Hillenbrand Industries, Inc.,
for any Plan Year during which a person first becomes eligible to become a Participant, the
Participant may, within thirty (30) days from the date a Director first becomes eligible to
participate, designate the amount of Compensation during the remaining Plan Year to be deferred by
completing and executing a Deferral Election Checklist prior to the end of such thirty (30) day
(c) Timing of Deferral. The following rules govern the timing of the deferral of
Compensation under this Plan:
(i) Compensation deferred by Participants shall be as elected or on a pro rata
basis, if timing of deferral amounts is not stated, during the Plan Year.
(ii) The amount of Compensation which a Participant has elected to defer in his
Cash Participation Account shall be credited to such Account on the day the deferred
Compensation would have been paid but for the deferral. The amount of Compensation
which a Participant has elected to defer in his Phantom Stock Participation Account
shall be credited to such Account in the form of a number of Phantom Shares equal to
the number of shares of Hillenbrand Common Stock which could have been purchased
with the deferred Compensation at the average of the high and low price at which
Hillenbrand Common Stock traded on the fifth trading day following the day the
deferred Compensation would have been paid but for the deferral.
Section 3.01. Designation of Account. A Participant shall designate in his
Deferral Elections Checklist the Participation Account to which the amount of any Compensation
deferred hereunder shall be credited. A Participant may designate that such amounts be credited to
the Participants Cash Participation Account or his Phantom Stock Participation Account, or he may
designate that a portion of such amounts be credited to each.
Section 3.02. Cash Participation Account. Amounts credited to a
Participants Cash Participation Account shall accrue interest credited monthly at the end of each
of Hillenbrands fiscal months at the Interest Rate. Upon distribution as provided in Article IV,
the Company shall pay the Participant in cash the value of his Cash Participation Account.
Notwithstanding the foregoing and except for any RemainCo Directors, as of the Effective Date, the
Cash Participation Account balance of any Participant, including any Tandem Directors, under the
Prior Plan as of the day before the Effective Date shall be the opening Cash Participation Account
balance for such Participant under this Plan. Except for any Participants who are RemainCo
Directors, as of the Effective Date, a Participants Cash Participation Account under the Prior
Plan shall be cancelled and forfeited by the Participant for amounts accrued prior to the Effective
Date and earnings thereon.
Section 3.03. Phantom Stock Participation Account. Amounts deferred in a
Participants Phantom Stock Participation Account shall be credited in the form of a number of
Phantom Shares determined pursuant to Section 2.02(c). As of the Effective Date, the opening
Phantom Stock Participation Account balance of any Participant under Section 3.03 of this Plan
shall be the number of shares assumed to be invested in Common Stock as set forth in Section 6.2(c)
of the Employee Matters Agreement as of the Effective Date.
Any cash dividends or other distributions normally payable on Hillenbrand Common Stock prior
to pay-out of the Participation Account shall be assumed to be distributed on Phantom Shares and
reinvested in Phantom Shares at the closing price of Hillenbrand Common Stock on the applicable
distribution date; provided, however, that in the case of an extraordinary dividend or other
distribution, the Board in its discretion may determine to treat such distribution as a separate
phantom investment to be credited to the Participation Accounts in cash or in kind with earnings
thereon to be credited at such rate or rates as determined by the Board at the time of such
distribution. In the event of any stock split, stock dividend, merger, consolidation,
reorganization, recapitalization or other change in capital structure affecting Hillenbrand Common
Stock, the Phantom Shares then credited to a Participants Phantom Stock Participation Account
shall be adjusted in the same manner as the Hillenbrand Common Stock. If the adjustment results in
the Phantom Stock Participation Account being converted to cash, the Account shall thereafter be
credited with interest at the Interest Rate. Upon distribution as provided in Article IV, the
Company shall distribute to the Participant one share of Hillenbrand Common Stock for each Phantom
Share then credited to his Phantom Stock Participation Account.
Section 3.04. Merger. In the event of a merger, acquisition or other
corporate restructuring in which Hillenbrand is not the surviving entity (or survives as a
wholly-owned subsidiary of another
entity), each Participant shall have a one-time opportunity to elect to convert his Phantom Stock
Participation Account to a Cash Participation Account.
DISTRIBUTIONS FROM PLAN
Section 4.01. Manner of Payout of a Participants Participation Account. The
date on which a Participants Participation Account attributable to deferrals in a Plan Year is to
be distributed to that Participant under the provisions of this Plan shall be designated by that
Participant in the Deferral Elections Checklist executed by that Participant with respect to that
Plan Year. Amounts credited to a Participants Cash Participation Account shall be distributed in
cash on the date (or set of dates) designated by the Participant. Phantom Shares credited to a
Participants Phantom Stock Participation Account shall be distributed in shares of Hillenbrand
Common Stock on the date (or set of dates) designated by the Participant. Such election
notwithstanding, with respect to Prior Deferrals only, the Company, in its sole discretion, may
elect to pay Prior Deferrals in a single payment to the Participant, or in the case of a
Participants death, to the Participants Beneficiary, if the Participant ceases to serve on the
Board, dies, or becomes totally and permanently disabled.
Section 4.02. Special Distribution Rules. Notwithstanding anything contained
in this Plan to the contrary, the following special rule shall govern distributions made under this
A Participant shall be permitted to change the date on which his Participation Account shall be
distributed by completing a new Deferral Elections Checklist which is delivered to the
Administrator, on such advance time period as may be determined from time to time by the
Administrator before the earlier of the date on which the Participant ceases to be a Director or 12
months in advance of the date on which distribution of the Participants Participation Account
would have been made but for the change in election; provided, however, that any
completed Deferral Elections Checklist which was not received prior to the period described above
shall be null and void. Each new re-deferral must delay payment by at least five (5) years from
the applicable prior elected distribution date.
Section 4.03. Withholding Tax Requirements. Each Participant shall, no later
than the date as of which the value of an amount payable under the Plan first becomes includible in
such persons gross income for applicable tax purposes, pay to the Company, or make arrangements
satisfactory to the Administrator regarding payment of, any federal, state, local, or other taxes
of any kind required by law to be withheld with respect to the award. The obligations of the
Company under the Plan shall be conditional on such payment or arrangements, and the Company shall,
to the extent permitted by law, have the right to deduct any such taxes from any payment of any
kind otherwise due to the Participant.
Section 4.04. Securities Law Requirements. Each distribution under the Plan
shall be subject to the requirement that, if at any time the Administrator shall determine that (i)
the listing, registration or qualification of the Hillenbrand Common Stock to be distributed upon
any securities exchange or market or under any state or federal law, or (ii) the consent or
approval of any government regulatory body with respect to such distribution or (iii) an agreement
by the Participant with respect to the disposition of Hillenbrand Common Stock distributed under
the Plan is necessary or desirable in order to satisfy any legal requirements, such distribution
shall not be made, in whole or in part, unless such listing, registration, qualification, consent,
approval or agreement shall have been effected or obtained free of any conditions not acceptable to
the Administrator. The Company shall have no obligation to effect any registration or
qualification of the Hillenbrand Common Stock under federal or state laws or to compensate a
Participant for any loss resulting from the application of this Section.
Section 4.05. Death Benefits. In the event of a Participants death, the
benefit payable to the Participant under the Plan shall be paid to his Beneficiary.
Section 5.01. Delegation of Responsibility. Hillenbrand may delegate duties
involved in the administration of this Plan to such person or persons whose services are deemed by
it to be necessary or convenient.
Section 5.02. Payment of Benefits. The amounts allocated to a Participants
Participation Account and payable as benefits under this Plan shall be paid solely from the general
assets of the Company. No Participant shall have any interest in any specific assets of the
Company under the terms of this Plan. This Plan shall not be considered to create an escrow
account, trust fund or other funding arrangement of any kind or a fiduciary relationship between
any Participant and the Company. The Companys obligations under this Plan are purely contractual
and shall not be funded or secured in any way.
AMENDMENT OR TERMINATION OF PLAN
Section 6.01. Termination. The Board of Directors of Hillenbrand may at any
time terminate this Plan. As of the date on which this Plan is terminated, no additional amounts
shall be deferred from any Participants Compensation. The Company shall pay to each such
Participant the balance contained in his Participation Account at such time and in the manner
designated by that Participant in the forms executed by that Participant; provided,
however, that Hillenbrand, in its sole and complete discretion, may, with respect to Prior
Deferrals only, pay out to the Participants their Prior Deferrals in a single payment of cash
(with respect to the Cash Participation Account) and Hillenbrand Common Stock (with respect to the
Phantom Stock Participation Account) as soon as practicable after the Plan termination.
Notwithstanding anything stated in this Section 6.01 to the contrary, all distributions upon the
termination of this Plan shall comply with Section 409A of the Internal Revenue Code of 1986, as
Section 6.02. Amendment. Hillenbrand may amend the provisions of this Plan
at any time; provided, however, that no amendment shall adversely affect the rights
of Participants or their Beneficiaries with respect to (1) the balances contained in their Cash
Participation Accounts immediately prior to the amendment, including the Interest Rate to be
credited on such amounts, and (2) the Phantom Shares credited to their Phantom Stock Participation
Accounts immediately prior to the amendment.
Section 7.01. Successors. This Plan shall be binding upon the successors of
Section 7.02. Choice of Law. This Plan shall be construed and interpreted
pursuant to, and in accordance with, the laws of the State of Indiana, without regard to conflicts
of law provisions.
Section 7.03. No Service Contract. This Plan shall not be construed as
affecting in any manner the rights or obligations of the Company or of any Participant to continue
or to terminate director status at any time.
Section 7.04. Non-Alienation. No Participant or his Beneficiary shall have
any right to anticipate, pledge, alienate or assign any of his rights under this Plan, and any
effort to do so shall be null and void. The benefits payable under this Plan shall be exempt from
the claims of creditors or other claimants and from all orders, decrees, levies and executions and
any other legal process to the fullest extent that may be permitted by law.
Section 7.05. Reservation of Shares. The Company shall reserve from time to
time a sufficient number of shares of Hillenbrand Common Stock to satisfy its obligations under the
Plan. This initial amount reserved under the Plan is 50,000 shares of Hillenbrand Common Stock.
Section 7.06. Board Approval. This Plan was approved by the Board on February 8,