10-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

(Mark One)

þ Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the fiscal year ended September 30, 2010

OR

o Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from                      to                     

Commission File No. 1-6651

HILL-ROM HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

Indiana	35-1160484
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
1069 State Route 46 East
Batesville, Indiana	47006-8835
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (812) 934-7777

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class	Name of Each Exchange on Which Registered
Common Stock, without par value	New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes þ No o

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

Yes o No þ

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes þ No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes þ No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company (as defined in Rule 12b-2 of the Exchange Act).

Large accelerated filer þ Accelerated filer o Non-accelerated filer o Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes o No þ

The aggregate market value of the registrant’s voting common equity, held by non-affiliates of the registrant, was approximately $1.7 billion, based on the closing sales price of $27.21 per share as of March 31, 2010 (the last business day of the registrant’s most recently completed second fiscal quarter). There is no non-voting common equity held by non-affiliates.

The registrant had 63,054,687 shares of its common stock, without par value, outstanding as of November 9, 2010.

Documents incorporated by reference.

Certain portions of the registrant’s definitive Proxy Statement to be delivered to shareholders in connection with the Annual Meeting of Shareholders to be held on March 8, 2011 are incorporated by reference into Part III of this Annual Report on Form 10-K.

HILL-ROM HOLDINGS, INC.

Annual Report on Form 10-K

For the Fiscal Year Ended September 30, 2010

TABLE OF CONTENTS

	Page
PART I
Disclosure Regarding Forward Looking Statements
Item 1. Business		3
Item 1A. Risk Factors		8
Item 1B. Unresolved Staff Comments		13
Item 2. Properties		14
Item 3. Legal Proceedings		14
Item 4. Reserved		14
PART II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities		15
Item 6. Selected Financial Data		17
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations		18
Item 7A. Quantitative and Qualitative Disclosures About Market Risk		37
Item 8. Financial Statements and Supplementary Data		39
Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure		82
Item 9A. Controls and Procedures		82
Item 9B. Other Information		82
PART III
Item 10. Directors, Executive Officers and Corporate Governance		83
Item 11. Executive Compensation		83
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters		83
Item 13. Certain Relationships and Related Transactions and Director Independence		83
Item 14. Principal Accounting Fees and Services		83
PART IV
Item 15. Exhibits and Financial Statement Schedules		84
SIGNATURES		86
Exhibit 10.18
Exhibit 10.50
Exhibit 10.51
Exhibit 10.52
Exhibit 10.53
Exhibit 10.54
Exhibit 10.55
Exhibit 10.56
Exhibit 10.57
Exhibit 10.58
Exhibit 10.59
Exhibit 10.60
Exhibit 10.61
Exhibit 10.62
Exhibit 10.63
Exhibit 10.64
Exhibit 10.65
Exhibit 21
Exhibit 23
Exhibit 31.1
Exhibit 31.2
Exhibit 32.1
Exhibit 32.2
EX-101 INSTANCE DOCUMENT
EX-101 SCHEMA DOCUMENT
EX-101 CALCULATION LINKBASE DOCUMENT
EX-101 LABELS LINKBASE DOCUMENT
EX-101 PRESENTATION LINKBASE DOCUMENT
EX-101 DEFINITION LINKBASE DOCUMENT

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PART I

DISCLOSURE REGARDING FORWARD LOOKING STATEMENTS

Certain statements in this Annual Report on Form 10-K (“Form 10-K”) contain forward-looking statements within the meanings of the Private Securities Litigation Reform Act of 1995 regarding our future plans, objectives, beliefs, expectations, representations and projections. We have tried, whenever possible, to identify these forward-looking statements by using words such as “intend,” “anticipate,” “believe,” “plan,” “encourage,” “expect,” “may,” “goal,” “become,” “pursue,” “estimate,” “strategy,” “will,” “projection,” “forecast,” “continue,” “accelerate,” “promise,” “increase,” “higher,” “lower,” “reduce,” “improve,” “expand,” “progress,” “potential” or the negative of those terms or other variations of them or by comparable terminology. The absence of such terms, however, does not mean that the statement is not forward-looking.

Forward-looking statements are not guarantees of future performance, and our actual results could differ materially from those set forth in any forward-looking statements. Factors that could cause actual results to differ from forward-looking statements include but are not limited to the factors discussed under the heading “Risk Factors” in this Annual Report on Form 10-K. We assume no obligation to update or revise any forward-looking statements.

Item 1. BUSINESS

General

Hill-Rom Holdings, Inc. (the “Company,” “Hill-Rom,” “we,” “us,” or “our”) (formerly known as Hillenbrand Industries, Inc.) was incorporated on August 7, 1969 in the State of Indiana and is headquartered in Batesville, Indiana. We are a leading worldwide manufacturer and provider of medical technologies and related services for the health care industry, including patient support systems, safe mobility and handling solutions, non-invasive therapeutic products for a variety of acute and chronic medical conditions, medical equipment rentals and information technology solutions. Our comprehensive product and service offerings are used by health care providers across the health care continuum in hospitals, extended care facilities and home care settings worldwide, to enhance the safety and quality of patient care.

On March 31, 2008, we completed the spin-off to our shareholders of our funeral services business operating under the Batesville Casket name, through a tax-free stock dividend. In connection with the distribution, the Company (formerly known as Hillenbrand Industries, Inc.) changed its name to Hill-Rom Holdings, Inc. and began trading under the symbol “HRC” on the New York Stock Exchange. The results of operations of the funeral services business have been presented as a discontinued operation for all periods presented in this Form 10-K.

Segment Information

We operate and manage our business within three reportable segments, each of which are generally aligned by customer type. The segments are as follows:

• North America Acute Care- sells and rents our hospital patient support and near-patient technologies, as well as our health information technology solutions, to acute care facilities in North America.

• North America Post-Acute Care- sells and rents a variety of products outside of the hospital setting including long-term acute care, extended care and home care, offering patient support systems and respiratory care products.

• International and Surgical- sells and rents similar products as our North America businesses to Europe and the rest of the world, as well as sales of surgical accessories to facilities worldwide.

Net revenues, segment profitability and other measures of segment reporting for each reporting segment are set forth in Note 14 of Notes to the Consolidated Financial Statements included under Part II, Item 8 of this Form 10-K. No single customer accounts for more than 10 percent of our revenue in any segment.

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Products and Services

We have extensive distribution capabilities and broad reach across all health care settings. We sell and rent primarily to acute and extended care health care facilities worldwide through both a direct sales force and distributors. An emerging business involves the direct to consumer (“DTC”) sales for patients and families desiring the same level of product while at home. Through our network of approximately 190 North American and 20 international service centers, and approximately 1,240 North American and 300 international service professionals, we are able to provide technical support and services and rapidly deliver our products to customers on an as-needed basis, providing our customers flexibility to purchase or rent our products. This extensive network is critical to securing contracts with Group Purchasing Organizations (“GPOs”) and serving our customers.

Our products and services are outlined below. Except where noted, we generally sell products and services and rent from each of our product categories in all of our business segments.

Patient Support Systems. Our innovative patient support systems include a variety of bed systems, along with integrated and non-integrated therapeutic bed surfaces that we rent and sell worldwide. These patient support systems can be designed for use in high, mid and low acuity settings, depending on the specific design options. Our advanced patient support systems can also provide patient data reporting (e.g., weight and therapy statistics), real time caregiver decision support, patient safety alarms and caregiver alerts concerning such things as bed exit, bed height, patient positioning, wound healing and prevention, pulmonary treatment, point of care controls, and patient turn assist and upright positioning. Approximately 52 percent, 45 percent and 53 percent of our revenues during fiscal 2010, 2009 and 2008, were derived from patient support systems.

Non-Invasive Therapeutic Products. We rent and sell non-invasive therapeutic products and surfaces designed for the prevention and treatment of a variety of acute and chronic medical conditions, including pulmonary, wound and bariatric conditions. These products are rented and sold across all of our segments, primarily in the U.S., Canada and Europe, with the exception of our respiratory care products, which are provided solely by our North America Post-Acute Care segment. Approximately 30 percent, 30 percent and 27 percent of our revenues were derived from these therapeutic products in fiscal 2010, 2009 and 2008.

Medical Equipment Management and Contract Services. We provide rentals and health care provider asset management services for a wide variety of moveable medical equipment, also known as MME, such as ventilators, defibrillators, intravenous pumps and patient monitoring equipment. In addition, we also sell equipment service contracts for our capital equipment, primarily in the U.S. Approximately 10 percent, 10 percent and 9 percent of our revenues were derived from these products and services in fiscal 2010, 2009 and 2008.

Patient Environment and Mobilization Solutions. These products include mobility solutions (such as lifts and other devices used to safely move patients), architectural products (such as headwalls and power columns) and health care furniture. We sell patient environment and mobility solutions products across all of our segments, primarily to acute and extended care health care facilities worldwide.

Health Information Technology Solutions. We also develop and market a variety of communications technologies and software solutions. These are designed to improve patient safety and efficiency at the point of care by, among other things, enabling patient-to-staff and staff-to-staff communications, and aggregating and delivering patient data. These products are sold mainly to our North America Acute Care customers.

Raw Materials

Principal materials used in our products include carbon steel, aluminum, stainless steel, wood and laminates, petroleum based products, such as foams and plastics, and other materials, substantially all of which are available from several sources. Motors and electronic controls for electrically operated beds and certain other components are purchased from one or more manufacturers.

Prices fluctuate for raw materials and sub-assemblies used in our products based on a number of factors beyond our control. Specifically, over the past several years, the fluctuating prices of certain raw materials, including metals, fuel, plastics and other petroleum based products in particular, and fuel related delivery costs, had a direct effect on our profitability. Although we generally have not engaged in hedging transactions with respect to raw material purchases, we have entered into fixed price supply contracts at times.

Most of our extended contracts with hospital GPOs and other customers for the sale of products in North America permit us to institute annual list price increases, although we may not be able to raise prices sufficiently to offset all raw material cost inflation.

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Competition

In all our business segments, we compete on the basis of clinical expertise and resulting product clinical utility and ability to produce favorable outcomes, as well as value, quality, customer service, innovation and breadth and depth of product offerings. As all of our business segments generally sell products and services in all of our product categories, we evaluate our competition based on our product categories, rather than our business segments.

The following table displays our significant global competitors with respect to each product category:

Product Categories	Competitors
Patient Support Systems	Stryker Corporation ArjoHuntleigh (Division of Getinge AB) Linet/Wissner-Bosserhoff
Non-Invasive Therapeutic Products	Kinetic Concepts, Inc. SIZEWise Rentals, LLC RecoverCare, LLC
Medical Equipment Management and Contract Services	Universal Hospital Services, Inc. Freedom Medical, Inc.
Health Information Technology Solutions	Rauland-Borg Corporation GE Medical (owns Dukane) West-Com Nurse Call Systems, Inc.
Patient Environment and Mobility Solutions	Arjo/Huntleigh (Division of Getinge AB) Guldmann Waverly Glen

Additionally, we compete with a large number of smaller and regional manufacturers.

Regulatory Matters

FDA Regulation. We design, manufacture, install and distribute medical devices that are regulated by the Food and Drug Administration (“FDA”) in the U.S. and similar agencies in other countries. The regulations and standards of these agencies evolve over time and require us to make changes in our manufacturing processes and quality systems to remain in compliance. The FDA’s Quality System regulations and the regulatory equivalents under the Medical Device Directive in the European Union set forth standards for our product design and manufacturing processes, require the maintenance of certain records and provide for inspections of our facilities. From time to time, the FDA performs routine inspections of our facilities and may inform us of certain deficiencies in our processes or facilities; however, we currently have no outstanding so-called “warning letters” which would indicate that any material remediation actions are required. In addition, there are also certain state and local government requirements that must be complied with in the manufacturing and marketing of our products.

Environmental. We are subject to a variety of federal, state, local and foreign environmental laws and regulations relating to environmental and health and safety concerns, including the handling, storage, discharge and disposal of hazardous materials used in or derived from our manufacturing processes. When necessary, we provide for reserves in our financial statements for environmental matters. Based on the nature and volume of materials involved regarding onsite impacts and other currently known information, we do not expect the remediation costs for any onsite environmental issues in which we are currently involved to exceed $2 million.

Health Care Regulations. The Health Care industry is undergoing significant change. In March 2010, comprehensive health care reform legislation was signed into law through the passage of the Patient Protection and Affordable Health Care Act (H.R. 3590) and the Health Care and Education Reconciliation Act (H.R. 4872). In addition to health care reform, Medicare, Medicaid and managed care organizations, such as health maintenance organizations and preferred provider organizations, traditional indemnity insurers and third-party administrators are increasing pressure to both control health care utilization and to limit reimbursement, either through competitive bidding programs or otherwise. The potential impact of these changes to our business is discussed further in Item 1A. Risk Factors and Part II, Item 7-Management’s Discussion and Analysis of Financial Condition and Results of Operations included in this Annual Report on Form 10-K.

5

Product Development

Most of the Company’s products and product improvements have been developed internally. The Company maintains close working relationships with physicians and medical personnel in hospitals and universities who assist in product research and development. New and improved products play a critical role in the Company’s sales growth. The Company continues to place emphasis on the development of proprietary products and product improvements to complement and expand its existing product lines. Our significant research and development activities are located in an Innovation Center at our corporate headquarters in Batesville, Indiana, as well as our locations in Cary, North Carolina, Lulea, Sweden, Montpelier and Pluvigner, France and in the Asia Pacific in Singapore.

Research and development is expensed as incurred. Research and development expense included within continuing operations for the fiscal years ended September 30, 2010, 2009 and 2008, was $58.3 million, $55.7 million and $57.3 million.

In addition, certain software development technology costs are capitalized as intangibles and are amortized over a period of three to five years once the software is ready for its intended use. The amount spent during fiscal years 2010, 2009 and 2008 was approximately $4.8 million, $5.8 million and $9.5 million.

Patents and Trademarks

We own, and from time-to-time license, a number of patents on our products and manufacturing processes, but we do not believe any single patent or related group of patents is of material significance to our business as a whole. We also own a number of trademarks and service marks relating to our products and product services, but except for the mark “Hill-Rom,” we do not believe any single trademark or service mark is of material significance to our business as a whole.

Foreign Operations and Export Sales

Information about our foreign operations is set forth in tables relating to geographic information in Note 14 of Notes to Consolidated Financial Statements, which statements are included herein under Part II, Item 8 — Financial Statements and Supplementary Data.

Employees

At September 30, 2010, we had approximately 6,350 employees worldwide. Approximately 550 of our employees work in our logistics and manufacturing operations in the U.S., where there are collective bargaining agreements. We are also subject to various collective bargaining arrangements or national agreements outside the U.S. We have not experienced a work stoppage in the U.S. in over 40 years, and we believe that our employee relations are satisfactory.

Executive Officers

The following sets forth certain information regarding our executive officers. The term of office for each executive officer expires on the date his or her successor is chosen and qualified. No director or executive officer has a “family relationship” with any other director or executive officer of the Company, as that term is defined for purposes of this disclosure requirement. There is no understanding between any executive officer and any other person pursuant to which the executive officer was selected.

John J. Greisch, 55, was elected President and Chief Executive Officer of Hill-Rom in January 2010. Mr. Greisch was most recently President, International Operations for Baxter International, Inc., a position he held since 2006. Prior to this, he held several other positions with Baxter, serving as Baxter’s Chief Financial Officer and as President of Baxter’s BioScience division.

Gregory N. Miller, 47, was elected Senior Vice President and Chief Financial Officer of the Company effective July 2005, and has agreed with the Company to step down from this position effective December 13, 2010. He previously held the positions of Vice President — Controller and Chief Accounting Officer for the Company from May 2002 to July 2005 and Vice President — Controller from November 2001 to May 2002. Prior to joining the Company he held various leadership positions with Newell Rubbermaid, Inc., a manufacturer and marketer of name-brand consumer products.

Mark Guinan, age 48, has agreed to become the Senior Vice President and Chief Financial Officer of the Company effective December 13, 2010. Mr. Guinan previously held a variety of positions with Johnson & Johnson, most recently as the Chief Procurement Officer since October 2009. Prior to that, he served as their Vice President — Finance, Global Pharmaceutical Group, their Vice President — Finance, Global R&D and Business Operations, and also held several positions in their Ethicon Endo-Surgery business.

6

Abel Ang, 37, has served as the Chief Technology Officer and Vice-President of Global Product Platforms for Hill-Rom since May 2008. Prior to this, he held a variety of positions at Hill-Rom from 2006 on, and formerly headed the global Medical Technology and Biotechnology industry groups in the Singapore Economic Development Board’s (EDB) Biomedical Division.

Martha Goldberg Aronson, 43, was elected Senior Vice President and President North America for Hill-Rom in August 2010. Before joining Hill-Rom, she was most recently a Senior Vice President at Medtronic where she held a variety of marketing and general management roles, including Vice President and General Manager Gastroenterology/Urology, and Vice President and General Manager for Medtronic’s Neurological and Diabetes business in Europe.

Kimberly K. Dennis, 43, was elected Senior Vice President, North America Post-Acute Care effective October 2006. Prior to that, she served in various vice president roles at Hill-Rom leading its Turnaround Program, shared services and information technology efforts from August 2005 to October 2006.

Alejandro Infante Saracho, 49, was elected Senior Vice President and President International for Hill-Rom effective May 2010. Before joining the Company, he spent more than 25 years with Hospira and Abbott serving in a number of executive positions, including President of the Americas, General Manager International Operations and Regional Director Latin America for Hospira.

Scott Jeffers, 40, was elected Senior Vice President, Global Supply Chain for Hill-Rom in September 2010. Before joining Hill-Rom, he was General Manager for Global Lean Enterprise at GE Healthcare, a company for which he held various leadership positions over the course of 11 years.

Richard G. Keller, 49, was elected Vice President, Controller and Chief Accounting Officer of the Company effective August 2005. He had served as Executive Director — Controller of Hill-Rom since March 2004 and as Director, Financial Planning and Analysis of the Company from May 2002 to March 2004. Prior to joining the Company, Mr. Keller served as a Director in the Audit and Business Advisory Services group of PricewaterhouseCoopers LLP.

Susan R. Lichtenstein, 53, was elected Senior Vice President, Corporate Affairs, Chief Legal Officer and Secretary for Hill-Rom effective May 2010. Previously she was Corporate Vice President and General Counsel at Baxter International, where she was responsible for global legal matters, corporate communications and government affairs.

Blair A. (Andy) Rieth, Jr., 52, was hired as Vice President of Investor Relations of the Company in June 2006. Prior to joining us, he was the Investor Relations Officer of Guidant Corporation from 2000 to 2006.

Philip Settimi, 33, was elected Senior Vice President Global Marketing & Corporate Strategy and Chief Marketing Officer for Hill-Rom effective May 2010. He joined Hill-Rom from Hospira, where he was Vice President Global Marketing for Hospira’s medical device business. Dr. Settimi previously worked for General Electric’s health care business, serving in a number of marketing and strategy roles.

Perry Stuckey, 51, was elected Senior Vice President and Chief Human Resources Officer in August 2010. Before joining Hill-Rom, he was with Rockwell Automation, where he most recently was Vice President, Human Resources for Rockwell’s Automation Control Products and Solutions Business Segment.

Availability of Reports and Other Information

Our website is www.Hill-Rom.com. We make available on this website, free of charge, access to our annual, quarterly and current reports and other documents we file with or furnish to the Securities and Exchange Commission (“SEC”) as soon as practicable after such reports or documents are filed or furnished. We also make available on our website position specifications for the Chairman, Vice Chairman, members of the Board of Directors and the Chief Executive Officer, our Code of Ethical Business Conduct, the Corporate Governance Standards of our Board of Directors and the charters of each of the standing committees of the Board of Directors. All of these documents are also available to shareholders in print upon request.

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All reports filed with the SEC are also available via the SEC website, www.sec.gov, or may be read and copied at the SEC Public Reference Room at 100 F Street, NE, Washington, DC 20549. Information on the operation of the Public Reference Room may be obtained by calling the SEC at 1-800-SEC-0330.

Item 1A. RISK FACTORS

Our business involves risks. The following information about these risks should be considered carefully together with the other information contained herein. The risks described below are not the only risks we face. Additional risks not currently known or deemed immaterial also may result in adverse effects on our business.

We face significant uncertainty in the industry due to government health care reform, and we cannot predict how these reforms will impact our operating results.

In March 2010, the U.S. Congress adopted and President Obama signed into law comprehensive health care reform legislation through the passage of the Patient Protection and Affordable Health Care Act (H.R. 3590) and the Health Care and Education Reconciliation Act (H.R. 4872). The new law is expected to increase the number of Americans with health insurance coverage by approximately 32 million through individual/employer mandates and subsidies offered to lower income individuals with smaller employers. The majority of the expected increase in the number of insured is expected to occur after 2014, as the insurance exchanges open and Medicaid eligibility is broadened. The increase in coverage could translate into increased utilization and associated use of our products and services. However, among other initiatives, these bills impose a 2.3 percent excise tax on medical devices beginning January 2013. We cannot predict with certainty what healthcare initiatives, if any, will be implemented at the state level, or what the ultimate effect of federal health care reform or any future legislation or regulation will have on us. However, the impact of the tax, coupled with reform-associated payment reductions to Medicare and Medicaid reimbursement (discussed below) could have a material adverse impact our business, results of operations and cash flows.

Changes in Medicare, Medicaid and other governmental medical programs could reduce the reimbursement we receive for our products and services.

In addition to health care reform, Medicare, Medicaid and managed care organizations, such as health maintenance organizations and preferred provider organizations, traditional indemnity insurers and third-party administrators are increasing pressure to both control health care utilization and to limit reimbursement. Changes in reimbursement programs or their regulation, including retroactive and prospective rate and coverage criteria changes, competitive bidding for certain products and services, and other changes, intended to reduce the program expenditures, could adversely affect our third-party reimbursement business. Historical changes to Medicare payment programs from traditional “cost-plus” reimbursement to a prospective payment system resulted in a significant change in how our customers acquire and utilize our products. This resulted in reduced utilization and downward pressure on prices. Similarly, future revenues and profitability will be subject to the effect of possible changes in the mix of our customers’ patients among Medicare, Medicaid, third-party and private payor categories, increases in case management and the review of services or reductions in coverage or reimbursement rates by such payors.

Failure by us or our suppliers to comply with the Food and Drug Administration (“FDA”) regulations and similar foreign regulations applicable to the products we manufacture or distribute could expose us to enforcement actions or other adverse consequences.

We design, manufacture, install and distribute medical devices that are regulated by the FDA in the U.S. and similar agencies in other countries. Failure to comply with applicable regulations could result in future product recalls, injunctions preventing the shipment of products or other enforcement actions that could have a material adverse effect on our revenues and profitability. Additionally, certain of our suppliers are subject to FDA regulations, and the failure of these suppliers to comply with regulations could adversely affect us. Moreover, our moveable medical equipment rental business is subject to product modifications executed by us on behalf of original medical equipment manufacturers that can result in unanticipated costs and temporary product shortages. Additionally, regulatory actions taken by the FDA against those manufacturers can result in product shortages, recalls or modifications.

We could be subject to substantial fines or damages and possible exclusion from participation in federal health care programs if we fail to comply with the laws and regulations applicable to our business.

We are subject to stringent laws and regulations at both the federal and state levels governing the participation of durable medical equipment suppliers in federal and state health care programs. We are subject to numerous legal requirements related to supplying our products to patients, billing and claims submission processes, and our relationships to referral sources.

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From time to time, the government seeks additional information related to our claims submissions, and in some instances government contractors perform audits of payments made to us under Medicare, Medicaid, and other federal health care programs. On occasion, these reviews identify overpayments for which we submit refunds. At other times, our own internal audits identify the need to refund payments. We anticipate that the frequency and effectiveness of the government audits and review processes will intensify in the future, due to increased resources allocated to these activities at both the federal and state Medicaid level, and greater sophistication in data review techniques.

Federal and state fraud and abuse laws are also complex and numerous. In the durable medical equipment field, fraud and abuse risks arise most frequently in the claims submission process and in dealings with potential referral sources. With respect to the former, we have been advised of a qui tam (whistleblower) action filed against us in 2005 under the federal False Claims Act. We are not yet a party to that case, having not been served, and the government has not yet reached a final decision as to whether or not to intervene in that matter. In the meantime, we are cooperating with the government in its investigation. Because qui tam (whistleblower) cases are filed under seal, there may be other whistleblower cases filed against us of which we are currently unaware. There is also a risk that the government itself would in the future file a False Claims Act case against us alleging improper claims activity.

Under federal (and many state) laws, it is a crime to offer or pay remuneration for the referral of any federal health care program business. In addition, the Foreign Corrupt Practices Act (“FCPA”) makes it a crime to offer bribes or kickbacks to foreign governmental officials. These activities are prosecuted under the federal criminal anti-kickback statute, the FCPA and parallel civil authorities. Durable medical equipment suppliers’ relationships with physicians, home health agencies and other referral sources are subject to anti-kickback scrutiny. We are not aware of any pending investigation or enforcement action against us relating to these statutes.

If we are deemed to have violated these laws and regulations, we could be subject to substantial fines or damages and possible exclusion from participation in federal health care programs such as Medicare and Medicaid. While we believe that our practices materially comply with applicable state and federal requirements, the requirements may be interpreted in a manner inconsistent with our interpretation. Failure to comply with applicable laws and regulations, even if inadvertent, could have a material adverse impact on our business.

Our future financial performance will depend in part on the successful introduction of new products into the marketplace on a cost-effective basis. The financial success of new products could be adversely impacted by competitors’ products, lack of differentiation or willingness of customers to pay for such differentiation, customer acceptance, difficulties in product development and manufacturing, quality issues and warranty claims, certain regulatory approvals and other factors. The introduction of new products may also cause customers to defer purchases of existing products, which could have an adverse effect on sales.

Our future financial performance will depend in part on our ability to influence, anticipate, identify and respond to changing consumer preferences and needs. We cannot assure that our new products will achieve the same degree of success that has been achieved historically by our products. We may not correctly anticipate or identify trends in consumer preferences or needs, or may identify them later than competitors do. Any strategies we may implement to address these trends may prove incorrect or ineffective. In addition, difficulties in manufacturing or in obtaining regulatory approvals may delay or prohibit introduction of new products into the marketplace. Further, we may not be able to develop and produce new products at a cost that allows us to meet our goals for profitability, particularly since downward pressure on health care product prices is expected to continue. Warranty claims and service costs relating to our products may be greater than anticipated, and we may be required to devote significant resources to address any quality issues associated with our new products, which could reduce the resources available for further new product development and other matters. For example, as part of the tradeoff between clinical effectiveness and comfort, which is inherent in most clinical products, we have at times dedicated research and development efforts to improving the comfort and customer acceptance of certain of our products. These efforts, together with the foregoing focus on enhancing the competitiveness of our core products, have sometimes resulted in the dedication of new product development resources to sustaining development efforts.

Failure to successfully introduce new products on a cost-effective basis, or delays in customer purchasing decisions related to the evaluation of new products, could cause us to lose market share and could materially adversely affect our business, financial condition, results of operations and cash flow.

9

Further adverse developments in general domestic and worldwide economic conditions and instability and disruption of credit markets could have further adverse affects on our operating results, financial condition, or liquidity.

We are subject to risks arising from adverse changes in general domestic and global economic conditions, including recession or economic slowdown and disruption of credit markets. The credit and capital markets experienced extreme volatility and disruption over the past two years, leading to recessionary conditions and depressed levels of consumer and commercial spending. These recessionary conditions caused customers to reduce, modify, delay or cancel plans to purchase our products and services. If worldwide economic conditions worsen, we would expect our customers to scrutinize costs resulting from pressures on operating margin due to rising supply costs, reduced investment income and philanthropic giving, increased interest expense, reimbursement pressure, reduced elective health care spending and uncompensated care.

Our pension plans invest in a variety of equity and debt securities, including securities that have been adversely affected by the recent disruption in the credit and capital markets. Our pension plans were underfunded at September 30, 2010 by approximately $51 million. Market volatility and disruption could cause further declines in asset value or fluctuations in assumptions used to value our liability and expenses. If this occurs, we may need to make additional pension plan contributions and our pension expense in future years may increase.

Our business is significantly dependent on major contracts with group purchasing organizations, or GPOs, and integrated delivery networks, or IDNs. Our relationships with these organizations pose several risks.

A majority of our North American hospital sales and rentals are made pursuant to contracts with hospital GPOs. At any given time, we are typically at various stages of responding to bids and negotiating and renewing expiring GPO agreements. Failure to be included in certain of these agreements could have a material adverse effect on our business, including capital and rental revenues.

The contracting practices of GPOs change frequently to meet the needs of their member hospitals. An emerging trend is for GPOs to offer committed programs or standardization programs, where one supplier may be chosen to serve designated members that elect to participate in the program. Participation by us in such programs may require increased discounting, and failure to participate or to be selected for participation in such programs may result in a reduction of sales to the member hospitals. In addition, the industry is showing an increased focus on contracting directly with health systems or IDNs (which typically represents influential members and owners of GPOs). IDNs and health systems often make key purchasing decisions and have influence over the GPO’s contract decisions. This presents an opportunity to have more contracts directly with customers, but customers may request additional discounts or other enhancements.

GPOs, IDNs, and large health care providers have communicated that their member hospitals are under cost pressure, and they have increased their focus on pricing and on limiting price increases. Some of our sales contracts contain restrictions on our ability to raise prices, therefore limiting our ability, in the short-term, to respond to significant increases in raw material prices or other factors.

Increased prices for, or unavailability of, raw materials or sub-assemblies used in our products could adversely affect profitability or revenues. In particular, our results of operations in recent years have been adversely affected by high prices for metals, fuel, plastics and other petroleum based products. We also procure several raw materials and sub assemblies from single suppliers.

Our profitability is affected by the prices of the raw materials and sub-assemblies used in the manufacture of our products. These prices may fluctuate based on a number of factors beyond our control, including changes in supply and demand, general economic conditions, labor costs, fuel related delivery costs, competition, import duties, tariffs, currency exchange rates and, in some cases, government regulation. Significant increases in the prices of raw materials or sub-assemblies that cannot be recovered through increases in the prices of our products could adversely affect our results of operations. Although we have to some extent historically been able to offset such rising costs with increases in the prices of our products or other productivity gains, there can be no assurance that the market place will support higher prices or that such prices and productivity gains will fully offset any commodity price increases in the future. Increases in prices resulting from a tightening supply of these or other commodities or fuel could adversely affect our profitability. We generally have not engaged in hedging transactions with respect to raw material purchases, but do enter into fixed price supply contracts at times. Future decisions not to engage in hedging transactions or ineffective hedging transactions may result in increased price volatility, with resulting adverse effects on profitability.

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Our dependency upon regular deliveries of supplies from particular suppliers means that interruptions or stoppages in such deliveries could adversely affect our operations until arrangements with alternate suppliers could be made. Several of the raw materials and sub-assemblies used in the manufacture of our products currently are procured only from a single source. If any of these sole-source suppliers were unable or unwilling to deliver these materials for an extended period of time as a result of financial difficulties, catastrophic events affecting their facilities or other factors, or if we were unable to negotiate acceptable terms for the supply of materials with these sole-source or alternate suppliers, our business could suffer. We may not be able to find acceptable alternatives, and any such alternatives could result in increased costs. Difficulties in the credit markets could adversely affect our suppliers’ access to capital and therefore their ability to continue to provide an adequate supply of the materials we use in our products. Extended unavailability of a necessary raw material or sub-assembly could cause us to cease manufacturing one or more products for a period of time.

We face significant competition as a result of low cost competitors entering the market as well as consolidation among competitors, which could reduce our share of the market and our net sales. Competition could also cause us to increase expenditures or cause us to reduce our prices thereby negatively impacting our margins.

Over the past several years, consolidation and the entrance of new low cost competitors has greatly increased competition in the U.S. and abroad. These companies have competed in all areas, but most effectively in our most price sensitive segments such as extended care. During the same time period, they have grown in size and scale. If we are unable to effectively differentiate ourselves from our competitors, our market share, sales and profitability, through increased expenditures or decreased prices, could be adversely impacted.

The majority of our products are manufactured at a single facility or location, and the loss of one or more of these facilities or locations could prevent us from manufacturing all the various products we sell.

We manufacture the majority of our products in only a single facility or location. If an event occurred that resulted in material damage to one or more of these manufacturing facilities or otherwise prevented us from fully utilizing the manufacturing capabilities of such facilities, we may be unable to transfer the manufacture of the relevant products to another facility or location in a cost-effective or timely manner, if at all. This potential inability to transfer production could occur for a number of reasons, including but not limited to a lack of necessary relevant manufacturing capability at another facility or the regulatory requirements of the FDA or other governmental regulatory bodies. Such an event would materially negatively impact our financial condition, results of operation and cash flows.

Our international sales and operations are subject to risks and uncertainties that vary by country which could have a material adverse effect on our business and/or results of operations.

International sales accounted for approximately 30 percent of our net sales in fiscal 2010. We anticipate that international sales will continue to represent a significant portion of our total sales in the future. In addition, we have manufacturing facilities in Monterrey, Mexico and Pluvigner, France, which produce products that are not produced inside the U.S., as well as other facilities and third-party suppliers that are located outside of the U.S. As a result, our international sales, as well as our sales inside the U.S. of products produced or sourced internationally, are subject to risks and uncertainties that can vary by country. Such risks include those related to political instability, economic conditions, foreign currency exchange rate fluctuations, changes in tax laws, regulatory and reimbursement programs and policies, and the protection of intellectual property rights.

Our Information Technology will require a material upgrade by 2013.

We utilize a company-wide information technology (“IT”) platform. This IT platform is integrated into substantially all of our company wide operations, and materially impacts our manufacturing, sales, accounting and other back-office functionality. We may not successfully complete the rollout of an upgrade to that platform and related features or services without diverting internal company resources from their current tasks, or hiring contractors. In addition, deployment of our upgrade may also adversely affect the performance or reliability of our current IT platform during the transition period. If we are unable to effectively manage the IT upgrade process, our future operating performance or cost structure may be negatively impacted.

Our agreements with Hillenbrand, Inc. may not reflect terms that would have resulted from arm’s-length negotiations among unaffiliated third parties.

The agreements related to the separation of Hillenbrand, Inc. from us, including the Distribution Agreement, Judgment Sharing Agreement, Tax Sharing Agreement, Shared Services Agreements and Transitional Services Agreements, were prepared in the context of the separation and, accordingly, may not reflect terms that would have resulted from arm’s-length negotiations among unaffiliated third parties. The terms of these agreements relate to, among other things, allocation of assets, liabilities, rights, indemnifications and other obligations between us and Hillenbrand, Inc. For descriptions of these agreements, see Note 3 of Notes to Consolidated Financial Statements included under Part II, Item 8 of this Form 10-K.

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Unfavorable outcomes related to uncertain tax positions could result in significant tax liabilities.

We have recorded tax benefits related to various uncertain tax positions taken or expected to be taken in a tax return. While we believe our positions are appropriate, the IRS, state or foreign tax authorities could disagree with our positions, resulting in a significant tax payment.

Our strategic initiatives may not produce the intended growth in revenue and operating income.

We have previously disclosed operational strategies and initiatives. These strategies include making significant investments to achieve revenue growth and margin improvement targets both organically and through strategic acquisitions. If we do not achieve the expected benefits from these investments or otherwise fail to execute on our strategic initiatives, we may not achieve the growth improvement we are targeting and our results of operations may be adversely affected.

We may not be successful in achieving expected operating efficiencies and sustaining or improving operating expense reductions, and may experience business disruptions, associated with announced restructuring, realignment and cost reduction activities.

Over the past few years we have announced several restructuring, realignment and cost reduction initiatives, including significant realignments of our businesses, employee terminations and product rationalizations in North America, continued restructuring, realignment and continuous improvement initiatives at our manufacturing facilities shifting a portion of our manufacturing capacity to a facility in Mexico, efforts to improve our medical equipment management services business and other streamlining initiatives. While we have started to realize the efficiencies of these actions, these activities may not produce the full efficiency and cost reduction benefits we expect. Further, such benefits may be realized later than expected, and the ongoing costs of implementing these measures may be greater than anticipated. If these measures are not successful or sustainable, we may undertake additional realignment and cost reduction efforts, which could result in future charges. Moreover, our ability to achieve our other strategic goals and business plans may be adversely affected and we could experience business disruptions with customers and elsewhere if our restructuring and realignment efforts prove ineffective.

Product liability or other liability claims could expose us to adverse judgments or could affect the sales of our products. We are also involved on an ongoing basis in claims, lawsuits and governmental proceedings relating to our operations, including environmental, antitrust, patent infringement, business practices, commercial transactions, and other matters.

We are involved in the design, manufacture and sale of health care products, which face an inherent risk of exposure to product liability claims if our products are alleged to have caused injury or are found to be unsuitable for their intended use. Any such claims could negatively impact the sales of products that are the subject of such claims or other products. We, from time-to-time, and currently, are a party to claims and lawsuits alleging that our products have caused injury or death or are otherwise unsuitable. It is possible that we will receive adverse judgments in such lawsuits, and any such adverse judgments could be material. Although we do carry insurance with respect to such matters, this insurance is subject to varying deductibles and self-insured retentions and may not be adequate to cover the full amount of any particular claim.

In addition, we are currently involved in a number of claims, lawsuits and governmental investigations more thoroughly described in Note 16 of Notes to Consolidated Financial Statements included under Part II, Item 8 of this Form 10-K. In particular, we are a codefendant with Batesville Casket Company, a subsidiary of Hillenbrand Inc., in a proposed class action lawsuit that, if adversely decided, could have a material adverse effect on our results of operations, financial condition and/or liquidity. The ultimate outcome of the various claims, lawsuits and governmental investigations in which we are involved cannot be predicted with certainty but could have a material adverse effect on our financial condition, results of operations and cash flow. We are also involved in other possible claims, including workers compensation, employment-related matters and auto liability. While we maintain insurance for certain of these exposures, the policies in place are high-deductible policies resulting in our assuming exposure for a layer of coverage with respect to such claims.

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We may not be able to grow if we are unable to successfully acquire and integrate, or form business relationships with, other companies.

Although we plan to continue to grow certain of our businesses by acquiring or forming partnerships, joint ventures and alliances with other companies, we expect to compete against other companies for acquisitions and may not be able to identify suitable acquisition candidates or business relationships, negotiate acceptable terms for such acquisitions or relationships or receive necessary financing for such acquisitions or relationships on acceptable terms. Moreover, once an acquisition, partnership, alliance or joint venture agreement is signed, various events or circumstances may either prevent the successful consummation of the contemplated acquisition or transaction, or make it unadvisable. Additionally, we may become responsible for liabilities associated with businesses that we acquire to the extent they are not covered by indemnification from the sellers or by insurance. Therefore, if we are able to consummate acquisitions, such acquisitions could be dilutive to earnings, and we could overpay for such acquisitions. Additionally, we may not be successful in our integration efforts or fully realize expected benefits from the integration, and our integration efforts may divert management and other resources from other important matters, and we could experience delays or unusual expenses in the integration process. Ineffective integration may also result in intangible asset impairments which could result in significant charges in our Statements of Consolidated Income (Loss).

We may not be able to attract, retain and develop key personnel. In addition, we have recently replaced a large number of key personnel.

Our future performance depends in significant part upon the continued service of our executive officers and other key personnel. The loss of the services of one or more of our executive officers or other key employees could have a material adverse effect on our business, prospects, financial condition and results of operations. This effect could be exacerbated if any officers or other key personnel left as a group. Our success also depends on our continuing ability to attract, retain and develop highly qualified personnel. Competition for such personnel is intense, and there can be no assurance that we can retain our key employees or attract, assimilate and retain other highly qualified personnel in the future.

Additionally, in 2010, we replaced a large number of our senior executives, including our President and CEO and many of his direct reports. Our continued success depends upon their ability to successfully manage their departments, and to successfully integrate into the company. If they are unable to effectively execute their assigned tasks, or if we are unable to successfully integrate these key personnel into the company, our operating results may suffer.

A portion of our workforce is unionized, and we could face labor disruptions that would interfere with our operations.

Approximately 9 percent of our employees as part of our logistics and manufacturing operations in the U.S. work under collective bargaining agreements. We are also subject to various collective bargaining arrangements or national agreements outside the U.S. covering approximately 14 percent of our employees. Although we have not recently experienced any significant work stoppages as a result of labor disagreements, we cannot ensure that such a stoppage will not occur in the future. Inability to negotiate satisfactory new agreements or a labor disturbance at one of our principal facilities could have a material adverse effect on our operations.

Item 1B. UNRESOLVED STAFF COMMENTS

We have not received any comments from the staff of the SEC regarding our periodic or current reports that remain unresolved.

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Item 2. PROPERTIES

The principal properties used in our operations are listed below, and, except for our leased facilities in Acton, Massachusetts; Cary, North Carolina, St. Paul, Minnesota and Singapore, are owned by us subject to no material encumbrances. All facilities are suitable for their intended purpose, are being efficiently utilized and are believed to provide adequate capacity to meet demand for the next several years.

Location	Description	Primary Use
Acton, MA	Light manufacturing and development facilities Office facilities	Manufacture and development of health care equipment Administration
Batesville, IN	Manufacturing, development and distribution facilities Office facilities	Manufacture and development of health care equipment Administration
Cary, NC	Manufacturing and development facilities Office facilities	Manufacture and development of health care equipment Administration
Charleston, SC	Development and distribution facilities Office facilities	Development and distribution of therapy units Administration
St. Paul, MN	Office facilities	Administration
Pluvigner, France	Manufacturing, development and distribution facilities Office facilities	Manufacture and development of health care equipment Administration
Montpellier, France	Manufacturing and development facilities	Manufacture and development of therapy units
Sydney, Australia	Manufacturing and development facilities Office facilities	Manufacture and development of health care equipment Administration
Monterrey, Mexico	Manufacturing facility	Manufacture of health care equipment
Lulea, Sweden	Manufacturing, development and distribution facilities Office facilities	Manufacture and development of safe mobility and handling solutions Administration
Singapore	Manufacturing and development facilities Office facilities	Manufacture and development of health care equipment Administration

In addition to the foregoing, we lease or own a number of other facilities, warehouse distribution centers, service centers and sales offices throughout the U.S., Canada, Western Europe, Mexico, Australia, Middle East and the Far East.

Item 3. LEGAL PROCEEDINGS

See Note 16 of Notes to Consolidated Financial Statements included under Part II, Item 8 of this Form 10-K for information regarding legal proceedings in which we are involved.

Item 4. RESERVED

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PART II

Item 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Market Information

Our common stock is traded on the New York Stock Exchange under the ticker symbol “HRC”. The closing price of our common stock on the New York Stock Exchange on November 9, 2010 was $40.47 per share. The following table reflects the range of high and low selling prices of our common stock and cash dividends declared by quarter for each of the last two fiscal years.

	Fiscal Years Ended September 30,
	2010						2009
					Cash						Cash
					Dividends						Dividends
Quarter Ended:	High		Low		Declared		High		Low		Declared
December 31	$	24.18	$	19.59	$	0.1025	$	30.04	$	15.64	$	0.1025
March 31	$	27.67	$	23.37	$	0.1025	$	16.95	$	8.89	$	0.1025
June 30	$	32.76	$	27.43	$	0.1025	$	16.59	$	9.97	$	0.1025
September 30	$	35.89	$	28.65	$	0.1025	$	23.35	$	14.59	$	0.1025

Holders

As of November 9, 2010, there were approximately 21,000 shareholders of record.

Dividends

The declaration and payment of cash dividends is at the sole discretion of our Board and depends upon many factors, including our financial condition, earnings potential, capital requirements, alternative uses of cash, covenants associated with debt obligations, legal requirements and other factors deemed relevant by our Board. We have paid cash dividends on our common stock every quarter since our initial public offering in 1971 (as Hillenbrand Industries, Inc.). We intend to continue to pay quarterly cash dividends comparable to those paid since the spin-off of our funeral services business on April 1, 2008. Our ability to pay cash dividends is limited by covenants contained in the Distribution Agreement entered into in connection with the spin-off. Specifically, until the antitrust litigation to which we are a party with Hillenbrand, Inc., is resolved in accordance with the Distribution Agreement, we are prohibited from paying regular quarterly cash dividends in excess of $0.1025 per share and from incurring indebtedness to finance the payment of any extraordinary cash dividend. For a description of the Distribution Agreement, see Note 3 of Notes to Consolidated Financial Statements included under Part II, Item 8 of this Form 10-K.

Issuer Purchases of Equity Securities

							Maximum
					Total Number		Number of
					of Shares		Shares That
	Total				Purchased as		May Yet Be
	Number		Average		Part of Publicly		Purchased
	of Shares		Price Paid		Announced Plans or		Under the Plans
Period	Purchased (1)		per Share		Programs (2)		or Programs (2)
July 1, 2010 – July 31, 2010		1,674	$	30.44		—		3,000,000
August 1, 2010 – August 31, 2010		1,000,000		34.55		1,000,000		2,000,000
September 1, 2010 – September 30, 2010		—		—		—		2,000,000
Total		1,001,674	$	34.54		1,000,000		2,000,000

(1)

All shares purchased during the quarter ended September 30, 2010 were in connection with employee payroll tax withholding for restricted and deferred stock distributions and the share repurchase program discussed below.

(2)

Effective October 2006, our Board approved the repurchase of a total of 25.7 million shares of our common stock through purchases on the open market or in private transactions. There were no repurchases under this approval during fiscal years 2008 and 2009 and through the third quarter of fiscal 2010. During August 2010, we repurchased 1.0 million shares of our common stock for $34.5 million, leaving 2.0 million shares still available for repurchase. The Board’s approval does not have an expiration date and currently there are no plans to terminate this program in the future.

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Stock Performance Graph

The following graph compares the return on our common stock (as Hillenbrand Industries, Inc. through March 31, 2008) with that of Standard & Poor’s 500 Stock Index (“S&P 500 Index”), and our Peer Group* for the five years ended September 30, 2010. The graph assumes that the value of the investment in our common stock, the S&P 500 Index, and our peer group was $100 on October 1, 2005 and that all dividends were reinvested. The spin-off of our funeral services business at March 31, 2008 was treated as a reinvestment of a special dividend effective April 1, 2008 pursuant to SEC rules. The special dividend was based on the value of one share of Hillenbrand, Inc. (the holding company for the funeral services business) which was distributed as part of the spin-off.

	2005		2006		2007		2008		2009		2010
HRC (HB through March 31, 2008)	$	100	$	124	$	122	$	127	$	94	$	157
S & P 500		100		109		124		95		86		93
Peer Group		100		101		122		115		110		131

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	April 1, 2008		September 30, 2008		March 31, 2009		September 30, 2009		March 31, 2010		September 30, 2010
HRC	$	100	$	115	$	38	$	85	$	107	$	142
S & P 500		100		85		58		77		85		83
Peer Group		100		99		72		95		113		113

* For purposes of the Stock Performance Graphs above, our Peer Group is comprised of: Alere Inc. (formerly Inverness Medical Innovations, Inc.); C.R. Bard, Inc.; Beckman Coulter, Inc.; Conmed Corporation; DENTSPLY International Inc.; Edwards Lifesciences Corporation; Getinge Group; Hospira, Inc.; Invacare Corporation; Integra Lifesciences Holdings Corporation; Kinetic Concepts, Inc.; Mettler-Toledo International Inc.; PerkinElmer, Inc.; ResMed Inc.; STERIS Corporation; The Cooper Companies, Inc.; and Varian Medical Systems, Inc.

Certain other information required by this item will be contained under the caption “Equity Compensation Plan Information” in our definitive Proxy Statement to be delivered to shareholders in connection with the Annual Meeting of Shareholders to be held on March 8, 2011, and such information is incorporated herein by reference.

Item 6. SELECTED FINANCIAL DATA

The following table presents our selected consolidated financial data for each of the last five fiscal years ended September 30. Statement of Consolidated Income (Loss) data reflects our consolidated results on a continuing operations basis with the results of our former funeral services business reflected as discontinued operations for all periods presented. Balance sheet and cash flow data, for periods prior to consummation of the spin-off of the funeral services business at the end of the second fiscal quarter of 2008, have not been adjusted. Also see Note 15 of Notes to Consolidated Financial Statements included under Part II, Item 8 of this Form 10-K for selected unaudited quarterly financial information for each of the last two fiscal years.

	2010		2009			2008		2007		2006
	(In millions except per share data)
Net revenues	$	1,469.6	$	1,386.9		$	1,507.7	$	1,356.5	$	1,288.3
Income (loss) from continuing operations	$	126.0	$	(405.0	)	$	67.1	$	70.4	$	78.5
Income from discontinued operations	$	—	$	—		$	48.7	$	120.2	$	142.7
Net income (loss) attributable to common shareholders	$	125.3	$	(405.0	)	$	115.8	$	190.6	$	221.2
Income (loss) attributable to common shareholders per share from continuing operations — Diluted	$	1.97	$	(6.47	)	$	1.07	$	1.13	$	1.28
Income per share from discontinued operations — Diluted	$	—	$	—		$	0.78	$	1.94	$	2.32
Net income (loss) attributable to common shareholders per share — Diluted	$	1.97	$	(6.47	)	$	1.85	$	3.07	$	3.59
Total assets	$	1,245.6	$	1,232.6		$	1,689.9	$	2,117.0	$	1,952.2
Long-term obligations	$	98.5	$	99.7		$	100.3	$	349.0	$	347.4
Cash flows from operating activities	$	139.8	$	225.7		$	270.5	$	285.3	$	29.1
Capital expenditures	$	64.7	$	63.9		$	102.6	$	135.2	$	92.6
Cash dividends per share	$	0.41	$	0.41		$	0.78	$	1.14	$	1.13

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Item 7.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Overview

Hill-Rom is a leading worldwide manufacturer and provider of medical technologies and related services for the health care industry, including patient support systems, safe mobility and handling solutions, non-invasive therapeutic products for a variety of acute and chronic medical conditions, medical equipment rentals and information technology software and communications solutions. Hill-Rom’s comprehensive product and service offerings are used by health care providers across the health care continuum in hospitals, extended care facilities and home care settings worldwide, to enhance the safety and quality of patient care.

Key Factors Impacting Our Business

Industry-wide Demand. We believe that over the long term, overall patient and provider demand for health care products and services will continue to grow as a result of a number of factors, including an aging population, longer life expectancies, greater access to medical insurance through government regulation and an increasing number of sicker patients across all care settings, including hospitals, extended care facilities and in the home. In contrast, however, health care providers across the care continuum are under continued pressure to improve efficiency and control costs, possibly reducing demand for our products and services. Although we believe that demand for our products will increase over time, a lack of demand growth could impact our ability to grow revenues.

Growing Desire Among Developed and Developing Countries to Invest in Health Care. While industry growth rates in more mature geographic markets such as western and northern Europe and Japan have moderated, in many other geographic markets, where the relative spending on health care is increasing, we are experiencing increasing demand for medical technologies. New hospital construction and hospital refurbishments have continued in regions such as Latin America, the Middle East and many parts of Asia. These trends could increase overall demand for our products and services.

Third-Party Payors. Our customers include hospitals and other acute and extended care facilities that receive reimbursement for certain products and services they provide from various third-party payors including Medicare, Medicaid, and managed care organizations, such as health maintenance organizations and preferred provider organizations, and traditional indemnity insurers. In our home care business and a small portion of our extended care business, we are reimbursed directly by such third-party payors. Accordingly, our home care business is significantly affected by changes in reimbursement practices of such third-party payors. In addition, our customers are significantly affected by changes that may result in reduced utilization and downward pressure on prices across our health care businesses.

Health Care Reform. In March 2010, comprehensive health care reform legislation was signed into law through the passage of the Patient Protection and Affordable Health Care Act (H.R. 3590) and the Health Care and Education Reconciliation Act (H.R. 4872). These bills impose a 2.3 percent excise tax on medical devices beginning January 2013. We cannot predict with certainty what healthcare initiatives, if any, will be implemented at the state level, or what the ultimate effect of federal health care reform or any future legislation or regulation will have on us. However, the impact of the tax, coupled with reform-associated payment reductions to Medicare and Medicaid reimbursement could have a materially adverse affect on our business, results of operations and cash flows.

Rising Acuities and Technological Impact. As a result of the growing population of the elderly, health care systems are challenged to treat rising incidences of complex diseases and conditions such as obesity, diabetes, congestive heart failure and respiratory disease. Patients are being moved through the hospital faster and generally desire to rapidly move to lower acuity settings. We believe that this increases the demand for more sophisticated means to care for these patients, such as improved medical technologies, communication tools and information technologies. The increasing utilization of these technologies and our ability to meet changing demand with new differentiated products will impact our ability to increase revenue and improve margins in the future.

Increasing Operational Efficiency. Over the past few years we have undertaken several initiatives to improve our operating efficiency, including significant realignments of our businesses, employee terminations, product rationalizations and continuous improvement initiatives in our manufacturing facilities. While we have started to realize the efficiencies of these actions and we believe our operating expenses and margins will continue to be positively impacted, these activities may not produce the full efficiency and cost reduction benefits we expect, in a timely fashion or at all.

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Patient and Caregiver Safety and Quality. An increasing emphasis is being placed within hospitals to assure quality of care through increased accountability and public disclosure. At the same time, caregiver shortages, worker related injuries, the aging workforce and other staffing requirements have led to increasing emphasis on caregiver injury prevention. Several pieces of legislation have been enacted over the past few years to address these areas including the “pay for performance” initiative by the Centers for Medicare and Medicaid Services (“CMS”) which aims to better align reimbursement with improved patient outcomes and the reduction of adverse events including bedsores (or pressure ulcers), ventilator associated pneumonia, patient falls, deep vein thrombosis and patient entrapment. During fiscal 2008, CMS issued and put into effect its Final Rule for inpatient payment, a continuation in the agency’s efforts to align reimbursement more closely with cost of care and severity of illness. Within this measure, hospitals may experience reduced reimbursement for hospital acquired adverse events, marking a stronger connection with these adverse events and revenue levels. A number of the top adverse events and preventable medical errors in U.S. hospitals, including those listed above can be mitigated in part by our technologies, processes and services. We are well positioned to benefit from the emphasis being placed on patient safety due to our strong clinical capabilities, products and technologies that are designed to assist providers in materially improving outcomes associated with patients confined to beds across all care settings.

Related to caregiver safety, certain countries in Europe have established legislation that has mandated that patient lifts be available in hospitals. In the U.S. several states have enacted or introduced legislation and, most recently, The Nurse and Health CareWorker Protection Act of 2009 was introduced in Congress aimed at eliminating manual patient lifts and transfers. We believe that our products and services seek to address these concerns through novel application of technology, clinical and ergonomic science, and customer feedback. Overall increasing emphasis on patient and caregiver safely and quality could increase demand for our products and services.

GPO and IDN Contracts. A majority of our North American hospital sales and rentals are made pursuant to contracts with GPOs and IDNs. These groups strive to achieve significant health care savings for their members by aggregating buying volume and negotiating for the best value in their purchase of medical devices and other supplies and services. At any given time, we are typically at various stages of responding to bids and negotiating and renewing expiring agreements. These contracts are competitive and are generally terminable on short notice. The loss of a sole-source agreement or change of an agreement from sole or dual to multi-source agreement could have a significant impact on our revenues. In addition, some of our sales contracts contain restrictions on our ability to raise prices, therefore limiting our ability, in the short-term, to respond to significant increases in raw material prices or other factors thereby potentially negatively impacting our gross margins.

Use of Non-GAAP Financial Measures

These consolidated financial statements, including the related notes, are presented in accordance with accounting principles generally accepted in the U.S. (GAAP). We provide adjusted income before income taxes, income tax expense and diluted earnings per share results because we use these measures internally for planning, forecasting and evaluating the performance of the business.

In addition, the Company analyzes net revenues on a constant currency basis to better measure the comparability of results between periods. We believe that evaluating growth in net revenues on a constant currency basis provides an additional and meaningful assessment to both management and investors.

We believe the non-GAAP measures used contribute to an understanding of our financial performance and provide an additional analytical tool to understand our results from core operations and to reveal underlying trends. These measures should not, however, be considered in isolation, as a substitute for, or as superior to measures of financial performance prepared in accordance with GAAP.

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RESULTS OF OPERATIONS

The following table presents comparative operating results for the years discussed within Management’s Discussion and Analysis:

	Fiscal Year Ended
	September 30,			% of Related			September 30,			% of Related			September 30,			% of Related
	2010			Revenues			2009			Revenues			2008			Revenues
Net Revenues
Capital sales	$	996.6			67.8	%	$	921.5			66.4	%	$	1,044.0			69.2	%
Rental revenues		473.0			32.2	%		465.4			33.6	%		463.7			30.8	%
Total Revenues		1,469.6			100.0	%		1,386.9			100.0	%		1,507.7			100.0	%
Gross Profit
Capital sales		448.0			45.0	%		365.8			39.7	%		425.4			40.7	%
Rental revenues		268.6			56.8	%		262.1			56.3	%		244.1			52.6	%
Total Gross Profit		716.6			48.8	%		627.9			45.3	%		669.5			44.4	%
Research and development expenses		58.3			4.0	%		55.7			4.0	%		57.3			3.8	%
Selling and administrative expenses		474.6			32.3	%		461.6			33.3	%		486.6			32.3	%
Litigation credit		(21.2	)		-1.4	%		—			—			—			—
Impairment of goodwill and other intangibles		—			—			472.8			34.1	%		—			-
Special charges		13.2			0.9	%		20.5			1.5	%		22.8			1.5	%
Operating Profit (Loss)		191.7			13.0	%		(382.7	)		-27.6	%		102.8			6.8	%
Other income (expense), net		(8.8	)		-0.6	%		3.9			0.3	%		(10.5	)		-0.7	%
Income (Loss) from Continuing Operations Before Income Taxes		182.9			12.4	%		(378.8	)		-27.3	%		92.3			6.1	%
Income tax expense		56.9			3.9	%		26.2			1.9	%		25.2			1.7	%
Income (Loss) from Continuing Operations		126.0			8.6	%		(405.0	)		-29.2	%		67.1			4.5	%
Income from discontinued operations		—			—			—			—			48.7			3.2	%
Net Income (Loss)		126.0			8.6	%		(405.0	)		-29.2	%		115.8			7.7	%
Less: Net income attributable to noncontrolling interest		0.7			—			—			—			—			—
Net Income (Loss) Attributable to Common Shareholders	$	125.3			8.5	%	$	(405.0	)		-29.2	%	$	115.8			7.7	%
Income (loss) attributable to common shareholders per common share from continuing operations — Diluted	$	1.97					$	(6.47	)				$	1.07
Income attributable to common shareholder per common share from discontinued operations — Diluted		—						—						0.78
Net Income (Loss) Attributable to Common Shareholders per Common Share — Diluted	$	1.97					$	(6.47	)				$	1.85

Note: Certain percentage and per share amounts may not add due to rounding.

20

Fiscal Year Ended September 30, 2010 Compared to Fiscal Year Ended September 30, 2009

Consolidated Results of Operations

Net Revenues

	Fiscal Year Ended				Percentage Change
	September 30,		September 30,				Constant
(Dollars in millions)	2010		2009		As Reported		Currency
Revenues:
Capital sales	$	996.6	$	921.5		8.1		7.1
Rental revenues		473.0		465.4		1.6		1.2
Total Revenues	$	1,469.6	$	1,386.9		6.0		5.1

Capital sales increased as a result of volume increases in most major product categories within our North America Acute Care segment led by patient support systems, as well as volume growth in the Middle East, Latin America and Asia. These increases were offset in part by lower North America revenues related to the prior year divestiture of certain non-strategic product lines. Our pricing was also modestly favorable.

Rental revenues increased slightly due to increases in North America Acute Care therapy rentals and our North America Post-Acute Care extended care rentals. The increase in therapy rental revenue was due to continued growth of our Envision^® and P500 therapy wound surfaces.

Gross Profit

	Fiscal Year Ended
	September 30,			September 30,
(Dollars in millions)	2010			2009
Gross Profit
Capital sales	$	448.0		$	365.8
Percent of Related Revenues		45.0	%		39.7	%
Rental revenues	$	268.6		$	262.1
Percent of Related Revenues		56.8	%		56.3	%
Total Gross Profit	$	716.6		$	627.9
Percent of Related Revenues		48.8	%		45.3	%

Consolidated gross profit increased 14.1 percent and increased as a percentage of revenue 350 basis points.

Capital sales gross profit increased 22.5 percent and gross margin (as a percentage of revenues) for capital sales increased 530 basis points. The gross margin increase was primarily due to an improved mix towards higher margin products, modestly improved pricing, favorable material costs and several productivity initiatives executed over the past two years. In addition, the prior year included a charge of $4.8 million for performance issues associated with a discontinued product and a non-recurring charge of $2.9 million related to the acquisition accounting step-up of acquired Liko inventories sold during fiscal 2009.

Rental revenue gross profit increased 2.5 percent while gross margin (as a percentage of revenues) increased only slightly. The slight increase in gross margin is due mainly to continued leverage and cost improvements within our field service network.

21

Other

	Fiscal Year Ended
	September 30,			September 30,			Percentage
(Dollars in millions)	2010			2009			Change
Research and development expenses	$	58.3		$	55.7			4.7
Percent of Total Revenues		4.0	%		4.0	%
Selling and administrative expenses	$	474.6		$	461.6			2.8
Percent of Total Revenues		32.3	%		33.3	%
Litigation credit	$	(21.2	)	$	—			n/a
Impairment of goodwill and other intangibles	$	—		$	472.8			n/a
Special charges	$	13.2		$	20.5			(35.6	)
Gain on sale of non-strategic assets	$	—		$	(10.2	)		n/a
Interest expense	$	(8.7	)	$	(10.4	)		(16.3	)
Investment income	$	2.3		$	2.9			(20.7	)
Other	$	(2.4	)	$	1.2			(300.0	)

Research and development expense increased due to our continued investment in the development of innovative new products. Selling and administrative expenses increased related primarily to performance-based compensation expense. In addition, unfavorable foreign exchange rates of $4.0 million negatively impacted the expense. These increases were partially offset by savings from prior period restructuring actions and our continuous improvement activities.

During 2010, we reversed a $21.2 million litigation accrual as the statute of limitations expired for any additional claims to be filed from those plaintiffs that opted out of the Spartanburg antitrust settlement. See Note 16 of Notes to Consolidated Financial Statements included in Part II, Item 8 of this Form 10-K for additional discussion. Partially offsetting this reversal were restructuring actions and an asset write down charge of $3.9 million related to our aviation assets. Two separate restructuring actions resulted in the elimination of approximately 260 employees and cumulative special charges of $9.3 million primarily related to severance and other benefits provided to affected employees. The majority of the cash expenditures associated with the severance will be completed by the end of our 2011 fiscal year and we expect to realize benefits related to all of these actions of approximately $22 million on an annual basis.

During fiscal 2009, we recognized a charge of $472.8 million related to the impairment of goodwill and other intangibles, special charges of $20.5 million and a gain on sale of non-strategic assets of $10.2 million. For explanations of these items see “Fiscal Year Ended September 30, 2009 Compared to Fiscal Year Ended September 30, 2008” below. Also see Notes 4, 5 and 10 of Notes to Consolidated Financial Statements included under Part II, Item 8 of this Form 10-K.

The decline in interest expense resulted from lower interest rates and lower outstanding debt. Investment income decreased as well despite a larger cash balance period over period, similarly due to lower interest rates.

22

GAAP and Adjusted Earnings

	Fiscal Year Ended
	September 30, 2010									September 30, 2009
	Income									Loss
	Before									Before
	Income			Income Tax			Diluted			Income			Income Tax			Diluted
(Dollars in millions, except for per share amounts)	Taxes			Expense			EPS*			Taxes			Expense			EPS*
GAAP Earnings (Loss)	$	182.9		$	56.9		$	1.97		$	(378.8	)	$	26.2		$	(6.47	)
Adjustments:
Litigation credit		(21.2	)		(8.3	)		(0.20	)		—			—			—
Tax settlement		—			6.5			(0.10	)		—			—			—
Gain on sale of non-strategic assets		—			1.7			(0.03	)		(10.2	)		(2.0	)		(0.13	)
Special charges		13.2			5.0			0.13			20.5			7.7			0.20
Impairment of goodwill and other intangibles		—			—			—			472.8			2.2			7.52
Effect of Liko inventory valuation		—			—			—			2.9			0.8			0.03
Acquisition integration charges		—			—			—			2.3			0.8			0.02
Adjusted Earnings	$	174.9		$	61.8		$	1.76		$	109.5		$	35.7		$	1.18

* May not add due to rounding.

The tax rate for the fiscal year ended September 30, 2010 was 31.1 percent compared to a negative 6.9 percent in the prior year. The effective rates for fiscal 2010 and 2009 were favorably impacted by the discrete tax benefits associated with the sale of non-strategic assets and the utilization of previously unrecognized capital loss carry forwards. The effective tax rate for 2010 was also favorably impacted by the recognition of previously unrecognized tax benefits associated with the resolution of an income tax matter with the Internal Revenue Service (“IRS”) during the second quarter of $6.5 million and other items in the fourth quarter upon the expiration of various statutes of limitations. The effective tax rate for fiscal 2009 was impacted by the significant non-cash intangible impairment charge and the lack of deductibility of this charge for income tax purposes, along with the catch up related to the retroactive reinstatement of the research and development credit.

The adjusted effective tax rates were 35.3 and 32.6 percent for fiscal year 2010 and 2009. The higher rate in 2010 is due primarily to the research and development tax credit and the timing of its expiration in 2010 and its reinstatement in 2009. For fiscal 2009, we entered the year with no allowable credit, but its reinstatement in the first quarter required a retroactive “catch up” of previously unrecognized credits. For fiscal 2010, the credit expired at the end of our first quarter.

Net income attributable to common shareholders was $125.3 million in fiscal 2010. On an adjusted basis, net income attributable to common shareholders increased $38.6 million, representing an increase of 52.3 percent. Diluted earnings per share increased from a loss per share of $6.47 to earnings per share of $1.97. On an adjusted basis, diluted earnings per share increased 49.2 percent from $1.18 per share in 2009 to $1.76 per share in 2010.

23

Business Segment Results of Operations

	Fiscal Year Ended						Percentage Change
	September 30,			September 30,						Constant
(Dollars in millions)	2010			2009			As Reported			Currency
Revenues:
North America Acute Care	$	840.3		$	791.6			6.2			5.5
North America Post-Acute Care		205.7			200.8			2.4			2.4
International and Surgical		432.2			398.8			8.4			6.9
Total eliminations		(8.6	)		(4.3	)
Total revenues	$	1,469.6		$	1,386.9			6.0			5.1
Divisional income:
North America Acute Care	$	242.0		$	192.9			25.5
North America Post-Acute Care		61.2			58.0			5.5
International and Surgical		74.2			59.6			24.5
Functional costs		(193.7	)		(199.9	)		(3.1	)
Total divisional income	$	183.7		$	110.6			66.1

North America Acute Care

North America Acute Care capital sales increased 8.0 percent, while rental revenues increased 2.3 percent. The increase in capital sales was due mainly to higher volumes in most major product categories, led by our patient support systems, including the launch of our Advanta™ 2 med-surg bed, and modestly favorable pricing. Partially offsetting this favorability was the divestiture of certain non-strategic health information technology product lines, which generated revenues of $11.7 million during the prior year. Rental revenues reflect higher therapy rental revenues from continued growth of our Envision^® and P500 therapy wound care surfaces. In addition, rentals of moveable medical equipment increased due to a stronger influenza season in fiscal 2010 and we also realized an increase in bariatric frame rentals.

North America Acute Care divisional income increased primarily due to increases in total gross profit. The increase in total gross profit was driven by the increase in revenue and margin improvements from modestly favorable pricing, product mix, favorable material costs and several productivity initiatives. In addition, the prior year included a charge of $4.8 million related to performance issues associated with a discontinued product and the acquisition accounting step-up of acquired Liko inventories sold of $2.9 million. Selling and administrative costs decreased slightly due to cost improvement initiatives, including previously announced headcount actions, partially offset by increases in performance based compensation and administrative costs related to the joint venture with Encompass.

North America Post-Acute Care

North America Post-Acute Care capital sales increased by 6.0 percent, led by volume growth in The Vest^® respiratory care system and home care direct to consumer business, partially offset by a decline in our sales within the extended care environment due in part to the exit of the MedGas product line during 2009. Rental revenues increased by 1.4 percent primarily related to increased rentals in extended care. This was the fourth consecutive year of revenue growth for our North America Post-Acute Care segment.

The increase in North America Post-Acute Care divisional income was driven by increased revenue and gross margin improvements, partially offset by increased operating expenses. The improved gross margin is the result of favorable product mix, improved field service costs and the exit of the MedGas product line during 2009. The increase in operating expenses is related to investments in sales channel and new product development.

International

International and Surgical capital sales increased 9.9 percent, 8.4 percent on a constant currency basis. The increase was driven by volume growth in the Middle East, Latin America, Asia and our surgical business. Rental revenues decreased 1.1 percent and 2.2 percent on a constant currency basis. The decline in rental revenue was due to a rationalization of unprofitable business and other volume decreases in Europe.

24

International and Surgical divisional income improved compared to prior year due to increases in gross profit partially offset by increases in operating expenses. The increase in gross profit was the result of the increased revenue, favorable product and geographic mix, favorable material costs and several productivity initiatives. Operating expenses increased related to increased selling and marketing efforts to support our long-term growth strategies. In addition, the increase was impacted by $3.3 million related to the unfavorable impact of foreign exchange rates on costs.

Fiscal Year Ended September 30, 2009 Compared to Fiscal Year Ended September 30, 2008

Consolidated Results of Operations

Net Revenues

	Fiscal Year Ended				Percentage Change
	September 30,		September 30,					Constant
(Dollars in millions)	2009		2008		As Reported			Currency
Revenues:
Capital sales	$	921.5	$	1,044.0		(11.7	)		(8.7	)
Rental revenues		465.4		463.7		0.4			2.5
Total Revenues	$	1,386.9	$	1,507.7		(8.0	)		(5.2	)

Capital sales declined primarily due to North America Acute Care capital sales, where beginning in the second half of our first fiscal quarter of 2009 we experienced unfavorable volumes resulting from the tightening in provider capital spending budgets in the U.S. resulting from unprecedented economic pressures and reduced access to capital. To a lesser extent, this trend extended to other parts of the world during the second half of our fiscal year. These declines were partially offset by incremental revenue from our acquisition of Liko in October 2008. We also realized strong growth in the Middle East and Africa and Latin America, as well as within the Home Care portion of our North America Post-Acute Care segment.

Rental revenues increased mainly due to North America Acute Care growth in therapy rental revenues, despite a relatively weak influenza season, led by our Bariatric frames and Envision^® wound surface, accompanied by solid growth in our Respiratory Care business. The growth in rental revenue was partially offset by lower rentals in both extended care, and in moveable medical equipment, due mainly to the rationalization of unprofitable business and the loss of select extended care contracts during our 2008 fiscal year.

Gross Profit

	Fiscal Year Ended
	September 30,			September 30,
(Dollars in millions)	2009			2008
Gross Profit
Capital sales	$	365.8		$	425.4
Percent of Related Revenues		39.7	%		40.7	%
Rental revenues	$	262.1		$	244.1
Percent of Related Revenues		56.3	%		52.6	%
Total Gross Profit	$	627.9		$	669.5
Percent of Related Revenues		45.3	%		44.4	%

25

Consolidated gross profit decreased $41.6 million, or 6.2 percent, but increased as a percentage of revenues by 90 basis points.

Capital sales gross profit decreased 14.0 percent due to lower volumes within our North America Acute Care segment. Offsetting this decrease was the effect of the Liko acquisition and the strong performance of our International and Surgical segment. Gross margin (as a percentage of sales) for capital sales also decreased during the year, dropping 100 basis points. The decline was largely due to fixed cost components decreasing at a lower rate than sales volume, unfavorable geographic and product mix, costs related to performance issues associated with a discontinued product of $4.8 million, as well as the $2.9 million impact from the step-up of acquired Liko inventories sold during the year. Partially offsetting the decline were favorable fuel costs of $3.5 million in 2009.

Rental revenue gross profit increased 7.4 percent led by strong therapy rental revenues within our North America Acute Care segment. Gross margin for rental revenues increased 370 basis points related to the higher margins on recent product introductions, strong leverage and reduction of our field service costs, lower fuel costs, cost improvement initiatives and the effects of lower depreciation on our rental fleet.

Other

	Fiscal Year Ended
	September 30,			September 30,			Percentage
(Dollars in millions)	2009			2008			Change
Research and development expenses	$	55.7		$	57.3			(2.8	)
Percent of Total Revenues		4.0	%		3.8	%
Selling and administrative expenses	$	461.6		$	486.6			(5.1	)
Percent of Total Revenues		33.3	%		32.3	%
Impairment of goodwill and other intangibles	$	472.8		$	—			n/a
Special charges	$	20.5		$	22.8			(10.1	)
Gain on sale of non-strategic assets	$	(10.2	)	$	—			n/a
Interest expense	$	(10.4	)	$	(14.3	)		(27.3	)
Investment income	$	2.9		$	9.3			(68.8	)
Other, net	$	1.2		$	(5.5	)		(121.8	)

Research and development remained relatively consistent as a percentage of revenue year over year as we have continued to make appropriate investments in product development. As a percentage of revenues, selling and administrative expenses were slightly higher in fiscal 2009 than fiscal 2008 as selling and administrative expense decreased, but at a slightly slower rate compared to revenue. The decline in the expense is a result of August 2008 and January 2009 workforce reduction actions, performance-related compensation savings and other general and administrative continuous improvement activities aimed at reducing core operating expenses. These declines were also due in part to a favorable impact of foreign exchange rates of $7.8 million, offset by incremental expenses related to Liko of $30.3 million.

During fiscal 2009, we recorded a charge of $472.8 million related to the impairment of goodwill and other intangibles as a result of the decline in our market capitalization during the second quarter related to the overall macro-economic climate and its resulting unfavorable impact on hospital capital spending and our operating results. The significance of the charge was reflective of the significant value in our unrecorded intangible assets such as the Hill-Rom trade name, technology and know-how and customer lists which reduce the value of our implied goodwill when calculating the impairment charge. There could be an additional adjustment of this charge upon the finalization of the working capital and net debt adjustment associated with the Liko acquisition, with any such adjustment expected to be favorable and not material. For further information regarding the charge, refer to Note 5 of Notes to Consolidated Financial Statements included under Part II, Item 8 of this Form 10-K.

26

Special charges of $20.5 million were recognized in fiscal 2009 related primarily to a restructuring plan that we announced on January 14, 2009. In total, the plan resulted in a charge of $11.9 million related to severance, early retirement packages and discontinued use of a building under an operating lease. Additionally, postretirement health care costs, the waiver of an early retirement pension penalty offered in conjunction with a voluntary early retirement incentive and plan curtailments resulted in a charge of $4.2 million. Operating asset write-offs and other charges associated with these actions were also taken in the amount of $4.4 million.

Special charges of $22.8 million were recorded in fiscal 2008. Of this amount, $2.3 million resulted from a voluntary termination package offered to certain members of the Company’s manufacturing organization, which resulted in a special termination benefit charge for those employees who accepted such offers. The other $20.5 million of special charges in fiscal 2008 related to a global streamlining of the organization ($6.0 million) and a management initiated plan to restore growth and improve profitability of our medical equipment management services business ($14.5 million). See Note 10 of Notes to Consolidated Financial Statements, included under Part II, Item 8 of this Form 10-K for more detail on these actions.

During the third quarter of fiscal 2009, we completed two separate sales of non-strategic assets that resulted in a gain of $10.2 million, net of transaction related costs. A majority of the gain resulted from the sale of patents and intellectual property related to our Negative Pressure Wound Therapy technology. We also sold certain assets and liabilities related to our NaviCare^® Patient Flow product line in connection with a strategic development agreement with TeleTracking Technologies, Inc.

Interest expense declined in fiscal 2009 compared to fiscal 2008 due to a reduction of debt of $224.3 million in connection with the spin-off of the funeral services business. Investment income decreased in fiscal 2009 due to lower interest rates and cash balances related to cash paid for the Liko acquisition in 2009. Other income declined due primarily to favorable foreign currency effects, as well as a $3.2 million loss on the early extinguishment of debt and the termination of our previous credit facility in fiscal 2008.

GAAP and Adjusted Earnings

	Fiscal Year Ended
	September 30, 2009									September 30, 2008
	Loss									Income
	Before									Before
	Income			Income Tax			Diluted			Income		Income Tax		Diluted
(Dollars in millions, except for per share amounts)	Taxes			Expense			EPS*			Taxes		Expense		EPS*
GAAP Earnings (Loss)	$	(378.8	)	$	26.2		$	(6.47	)	$	92.3	$	25.2	$	1.07
Adjustments:
Impairment of goodwill and other intangibles		472.8			2.2			7.52			—		—		—
Effect of Liko inventory valuation		2.9			0.8			0.03			—		—		—
Liko acquisition integration charges		2.3			0.8			0.02			—		—		—
Gain on Sale of non-strategic assets		(10.2	)		(2.0	)		(0.13	)		—		—		—
Special charge		20.5			7.7			0.20			22.8		8.9		0.22
Stock modification charge		—			—			—			5.8		2.1		0.06
Loss on extinguishment of debt		—			—			—			3.2		1.2		0.03
Separation costs		—			—			—			1.6		0.4		0.02
Adjusted Earnings	$	109.5		$	35.7		$	1.18		$	125.7	$	37.8	$	1.40

* May not add due to rounding.

The effective tax rate for fiscal 2009 and 2008 was negative 6.9 percent and 27.3 percent. The effective tax rate for fiscal 2009 is unusual in light of the significance of the non-cash intangible impairment charge and the lack of deductibility of this charge for income tax purposes. Both years were favorably affected by a number of discrete tax benefits. The fiscal 2009 rate reflects favorable discrete period tax benefits of $6.4 million related to the release of valuation allowance on capital loss carryforwards, a deferred tax benefit associated with the non-cash intangible impairment charge and the “catch-up” related to the retroactive reinstatement of the research and development tax credit which had previously expired.

27

The rate in fiscal 2008 was favorably impacted by favorable discrete period tax benefits of $8.3 million related to the net release of valuation allowances on our foreign tax credit carryforwards and the net release of certain federal and state tax liabilities, including interest, associated with the completion of the federal audit of the Company’s fiscal years 2004 through 2006 and the expiration of certain state statutes.

The adjusted effective tax rate was 32.6 percent and 30.1 percent in 2009 and 2008. The higher rate in 2009 is due primarily to the slightly lower discrete tax benefits discussed above.

Income (loss) from continuing operations decreased $472.1 million to a loss of $405.0 million in fiscal 2009 primarily due to the impairment charge of goodwill and other intangibles. On an adjusted basis income from continuing operations decreased $14.1 million, or 16.0 percent. This equated to a diluted loss per share from continuing operations of $6.47 and diluted earnings per share of $1.18 on an adjusted basis.

As a result of the spin-off of Hillenbrand, Inc., the funeral services business and certain other costs were classified within discontinued operations in our Consolidated Statements of Income (Loss). The following table presents certain summary income statement information related to the discontinued funeral service operations and the spin-off transaction for the fiscal year ended September 30, 2008. Due to the timing of the spin-off, activities of the funeral services business are only included through March 31, 2008.

	Fiscal Year Ended
	September 30,
(Dollars in millions)	2008
Funeral services sales	$	354.3
Total expenses		275.5
Income from discontinued operations before income taxes		78.8
Income tax expense		30.1
Income from discontinued operations	$	48.7

Expenses classified within discontinued operations for fiscal 2008, as further discussed below, primarily related to non-recurring legal and professional costs related to the completion of the spin-off. For details of relative performance of the funeral services business during the first two quarters, please see our Quarterly Report on Form 10-Q for the quarter ended March 31, 2008.

Other costs included in discontinued operations were non-recurring costs directly related to the spin-off transaction ($24.5 million), one-time, non-cash stock-based compensation charges ($4.5 million in the second quarter) and a charge recorded upon the renegotiation of notes receivable and preferred stock distributed to Hillenbrand, Inc. in the spin-off ($6.4 million in the second quarter). The non-recurring separation costs were primarily for investment banking fees, legal, accounting and other professional and consulting fees. The one-time stock-based compensation charges were the result of the modification of stock options and the accelerated vesting of certain restricted stock awards held by employees of the funeral services business in connection with the spin-off. Finally, we renegotiated the terms of seller financing instruments provided to Forethought Financial Group, Inc. (“FFG”) in conjunction with the divestiture of our pre-need funeral insurance business in 2004. As a result, we received cash payments during the second quarter of fiscal 2008 of $39.0 million in exchange for the FFG Preferred Stock and the debt service note receivable. In connection with the renegotiation and the early redemption of the preferred stock and debt service note receivable, the estimate as to the timing of future expected cash flows associated with the remaining seller note receivable was revised, which resulted in an adjustment as to the timing of recognition of the unamortized discount on the seller note. This adjustment was included as part of total expense above.

28

Business Segment Results of Operations

	Fiscal Year Ended						Percentage Change
	September 30,			September 30,						Constant
(Dollars in millions)	2009			2008			As Reported			Currency
Revenues:
North America Acute Care	$	791.6		$	934.7			(15.3	)		(14.4	)
North America Post-Acute Care		200.8			197.0			1.9			1.9
International and Surgical		398.8			381.4			4.6			13.3
Total eliminations		(4.3	)		(5.4	)		(20.4	)
Total revenues	$	1,386.9		$	1,507.7			(8.0	)		(5.2	)
Divisional income:
North America Acute Care	$	192.9		$	247.8			(22.2	)
North America Post-Acute Care		58.0			55.7			4.1
International and Surgical		59.6			49.7			19.9
Functional costs		(199.9	)		(227.6	)		(12.2	)
Total divisional income	$	110.6		$	125.6			(11.9	)

North America Acute Care

North America Acute Care capital sales decreased 22.1 percent, while rental revenues were higher by 3.4 percent. The decline in capital sales during 2009 was the result of reductions in capital spending by our U.S. hospital customers partially offset by incremental capital sales associated with our Liko acquisition. Rental revenue increased due to growth in our therapy rental revenues, despite a relatively weak influenza season compared to the prior year, led by new product offerings in our rental fleet including our bariatric bed frames and wound surface products. Partially offsetting favorability in therapy rentals were lower rentals of our moveable medical equipment due mainly to our previously announced product rationalization.

Divisional income for North America Acute Care decreased primarily due to a decline in capital sales gross profit. Capital sales gross profit was down on a percentage basis somewhat in excess of revenues due to fixed cost components decreasing at a lower rate than sales volumes, unfavorable product mix, the impact of $4.8 million of costs incurred related to performance issues associated with a discontinued product and the impact of the step-up of acquired Liko inventories sold during the first half of fiscal 2008 of $2.9 million. Rental gross profit improved due to higher margins on new product offerings, increased leverage of our field services infrastructure, cost improvement initiatives, lower fuel costs and lower rental depreciation. Operating expenses declined as incremental expenses related to Liko and investments in our sales channels were more than offset by cost improvement actions, favorability in variable compensation, including commissions, and other cost controls.

North America Post-Acute Care

North America Post-Acute Care capital sales increased 18.1 percent primarily due to an increased sales channel focus, improved frame and therapy sales to our home care customers, the acquisition of Liko, and increased sales of The Vest^® respiratory products. Rental revenues decreased by 2.0 percent. The rental revenue reflected lower extended care rentals due to a loss in business during the second and third quarters of fiscal 2008 and rationalization of low profit offerings. Increases in rental revenues in Respiratory Care partially offset the decreased rentals to our extended care customers.

Divisional income for North America Post-Acute Care increased as a percentage of revenue in fiscal 2009 for the second year in a row. The increase was partly due to the higher revenues and the resulting increase in gross profit. The growth of respiratory care and home care revenues also led to a higher gross margin rate for fiscal 2009. Partially offsetting this increase were higher operating expenses, primarily related to Liko.

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International and Surgical

International and Surgical capital sales were up 6.5 percent due to the acquisition of Liko and growth in the Middle East, Africa, Latin America and Allen Medical. These were partially offset by a decline in Europe due to unfavorable foreign exchange rates and slightly lower volumes. Rental revenues decreased 6.4 percent, due to the unfavorable foreign exchange rates more than offsetting volume increases in Europe.

Divisional income as a percentage of revenue increased primarily due to gross profit improvements. Gross profit increased due to the Liko acquisition and the fact that fiscal 2008 was negatively impacted by unfavorable inventory adjustments and allowances for rental revenue reserves. Operating expenses increased due primarily to the Liko acquisition, partially offset by the favorable impact of exchange rates on cost.

LIQUIDITY AND CAPITAL RESOURCES

	Fiscal Year Ended
	September 30,			September 30,			September 30,
(Dollars in millions)	2010			2009			2008
Cash Flows Provided By (Used In):
Operating activities	$	139.8		$	225.7		$	270.5
Investing activities		(38.2	)		(234.2	)		(56.3	)
Financing activities		(87.4	)		(45.3	)		(63.8	)
Effect of exchange rate changes on cash		(0.3	)		2.7			(10.2	)
Increase (Decrease) in Cash and Cash Equivalents	$	13.9		$	(51.1	)	$	140.2

Cash flow information for the fiscal year ended September 30, 2008 is “as reported” and thus includes cash flows from our former funeral services business through March 31, 2008.

Net cash flows from operating activities and selected borrowings have represented our primary sources of funds for growth of the business, including capital expenditures and acquisitions. Our financing agreements contain no restrictive provisions or conditions relating to dividend payments, working capital or additional unsecured indebtedness (except to the extent that a dividend payment or incurrence of additional unsecured indebtedness would result in a default under our financing agreements), but there are limitations with respect to secured indebtedness. Our debt agreements also contain no credit rating triggers. Credit rating changes can, however, impact the cost of borrowings under our financing agreements. Additionally, we also have restrictive financial covenants within the Distribution Agreement with Hillenbrand, Inc. This agreement has certain limitations on our ability to incur indebtedness, increase dividend payments and make share repurchases or acquisitions.

Operating Activities

Our cash flows from operations during fiscal 2010 were driven primarily by net income, further adjusted by non-cash expenses related to depreciation and amortization, stock compensation, deferred taxes and the release of a $21.2 million reserve related to a litigation credit. Uses of cash included $52.3 million of pension funding, increased income tax payments on higher net income and the settlement of prior year tax audits, and investments in inventory to meet our increasing backlog position. In addition, while our receivables are up year-over-year, our days sales outstanding is down six days from last year.

The reduction in fiscal 2010 operating cash flows from fiscal 2009 was largely driven by the higher collection of year-end receivables in 2009 following record sales levels during the fourth quarter of fiscal 2008, current year investments in inventories to support higher revenue trends, increased pension contributions and the timing of tax payments related to both higher income levels in 2010 and settlements of prior year tax audits.

While our fiscal 2009 cash flows from operations and capital sales were unfavorably impacted by the macro-economic climate and its resulting unfavorable impact on hospital capital spending, strong expense controls and working capital improvement resulted in strong conversion to cash. Working capital improvements were led by strong collections of receivables and a reduction in inventory, offset by a decrease in trade payables related to lower production levels and the timing of payments, the payout of prior year incentive compensation, the timing of tax payments and payments made on our restructuring accruals. The recognition of the goodwill and intangible asset impairment charge of $472.8 million, which resulted in the net loss in fiscal 2009, was non-cash in nature and therefore had no impact on our cash flows from operations.

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The reduction in fiscal 2009 operating cash flows from fiscal 2008 was driven by the impact of our former funeral services business, which provided operating cash flows of $56.8 million in the first half of fiscal 2008. Absent the cash flows from our former funeral services business, cash flows from operations increased during fiscal 2009 as our strong expense controls and conversion to cash more than offset the reductions in our capital sales and higher pension funding of $11.7 million.

Our cash flows from operations during fiscal 2008, which included cash flows of our former funeral services business, were driven primarily by net income, further adjusted by non-cash expenses related to depreciation and amortization. Also, impacting operating cash flows were nonrecurring separation-related costs of $26.1 million, which provided little income tax benefit as such costs were largely nondeductible. Working capital improvements were also achieved through higher inventory turns and improved collections of accounts receivable.

Another item that positively impacted our operating cash flows in fiscal 2008 was the collection of $11.2 million of interest on previously held seller financing instruments.

Investing Activities

Our use of investing cash flows during fiscal 2010 was driven primarily by capital expenditures and an investment in a joint venture, partially offset by proceeds from the sale of a portion of our auction rate securities.

The decrease in net cash used in investing activities from fiscal 2009 was driven by our fiscal 2009 acquisition of Liko. In addition, in 2010 we received $29.2 million more in proceeds from auction rate securities than in the prior year.

The increased usage of cash for investing activities from fiscal 2008 to fiscal 2009 related primarily to our acquisition of Liko, a decline in net distributions from our investment portfolio and proceeds received in fiscal 2008 on seller financing provided on a previously disposed business, offset by proceeds received on our sale of non-strategic assets in 2009. In addition, in fiscal 2009, capital spending was down $38.7 million, $34.4 million associated with the timing of new product introductions into our rental fleet and efforts to preserve cash and liquidity in response to our then-decreasing capital sales and the remainder related to capital spending of the former funeral services business included in 2008.

Net cash used in investing activities in fiscal 2008 was driven by additions to our rental fleet and included six months of capital expenditures related to our former funeral services business. Investment activity in fiscal 2008 included $325.6 million of purchases and capital calls, which was more than offset by $343.5 million provided from sales and maturities. We historically invested a portion of our excess cash into auction rate securities, but discontinued this practice when liquidity issues with these securities surfaced. Investing cash flows in 2008 also benefited from proceeds from the renegotiation and early settlement of seller financing related to a prior business disposition.

Financing Activities

Our use of cash for financing activities during fiscal 2010 consisted mainly of a $45.0 million payment on our revolving credit facility during the first quarter, $34.5 million related to our share repurchases during the fourth quarter and $25.8 million in dividend payments to our shareholders. These uses of cash were partially offset by cash proceeds from stock option exercises. Our change in use of cash in 2010 compared to fiscal 2009 was due to higher debt repayments on our revolving credit facility and share repurchases, offset partially by cash provided from increased stock option exercises in 2010.

Net cash used for financing activities during fiscal 2009 consisted mainly of $25.7 million related to the final payment of senior notes issued in 2004 and $25.6 million in cash dividend payments to our shareholders.

The reductions in our use of cash for financing activities during fiscal 2009, compared to fiscal 2008, were primarily related to cash payments related to the spin-off of funeral services business in 2008, lower dividend payments since the spin-off and lower cash proceeds from option exercises, offset by borrowings in 2008 for our then pending acquisition of Liko.

Our debt-to-capital ratio was 17.6 percent, 24.9 percent and 17.1 percent at September 30, 2010, 2009 and 2008. The change from fiscal 2009 to fiscal 2010 was primarily due to the $45.0 million payment on our revolver and higher net income, which improved shareholders’ equity. The increase from fiscal 2008 to fiscal 2009 was driven by the goodwill and other intangibles impairment charge, which reduced shareholders’ equity, partially offset by the repayment of debt during fiscal 2009.

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Other Liquidity Matters

Net cash flows from operating activities and selected borrowings have represented our primary sources of funds for growth of the business, including capital expenditures and acquisitions.

As of September 30, 2010, we held investment securities with a fair value of $12.1 million, which consisted primarily of AAA rated student loan auction rate securities. We have estimated the current fair value of our portfolio of auction rate securities based upon guidance provided by our investment advisors, including consideration of the credit quality of the underlying securities and the provisions of the respective security agreements. At September 30, 2010, we have recorded temporary unrealized losses totaling $1.1 million on these securities to reflect the estimated decline in fair value associated with the current illiquidity in the auction rate market. See Notes 1 and 7 of Notes to Consolidated Financial Statements included under Part II, Item 8 of this Form 10-K for more information pertaining to these securities and the fair value of our portfolio. If current market conditions do not improve or worsen, the result could be further realized or unrealized losses or impairments and liquidity and earnings could be adversely affected.

We have a $500.0 million five-year senior revolving credit facility. As of September 30, 2010, we had outstanding borrowings of $45.0 million and $5.8 million of outstanding, undrawn letters of credit under the facility, leaving $449.2 million of borrowing capacity available.

We also have trade finance credit lines and uncommitted letter of credit facilities. These lines are associated with the normal course of business and do not currently, nor have they historically, been of a material size to the overall business.

We have $95.8 million of senior notes outstanding at various fixed rates of interest as of September 30, 2010, which are classified as long-term in the Consolidated Balance Sheets. See Note 6 of Notes to Consolidated Financial Statements included under Part II, Item 8 of this Form 10-K for more details on our financing agreements.

Our pension plans invest in a variety of equity and debt securities, including securities that have been adversely affected by the disruption in the credit and capital markets. As mentioned previously, during the fourth quarter of fiscal 2010, we contributed $50.0 million to our primary pension plan. At September 30, 2010, our latest measurement date, our pension plans were underfunded by approximately $51 million. We also repurchased approximately 134,000 shares of our common stock from our primary pension plan, liquidating the pension plan’s entire investment in our common stock. This share repurchase was part of the 1.0 million shares that we repurchased during August 2010 under our Board’s 2006 authorization. Given the significant funding contribution made during fiscal 2010, we currently do not anticipate any further contributions to our primary pension plan in fiscal 2011.

As previously disclosed, we intend to continue to pay quarterly cash dividends comparable to those paid following the completion of the spin-off of the funeral services business. However, the declaration and payment of dividends by us will be subject to the sole discretion of our Board and will depend upon many factors, including our financial condition, earnings, capital requirements, covenants associated with debt obligations, legal requirements and other factors deemed relevant by our Board.

We intend to continue to pursue selective acquisition candidates in certain areas of our business, but the timing, size or success of any acquisition effort and the related potential capital commitments cannot be predicted. We expect to fund future acquisitions primarily with cash on hand, cash flow from operations and borrowings, within our set limits. The Distribution Agreement executed in conjunction with our spin-off of the funeral services business contains certain restrictions with respect to additional indebtedness we may take on to make acquisitions. We do not anticipate, however, such restrictions will limit our ability to execute our current growth strategy.

During August 2010, we repurchased 1.0 million shares of our common stock for $34.5 million. As of September 30, 2010, 2.0 million shares remain available for purchase under our existing board authorization, which does not have an expiration date. Repurchases may be made on the open market or via private transactions, and are used for general business purposes.

We believe that cash on hand and generated from operations, along with amounts available under our credit facility, will be sufficient to fund operations, working capital needs, capital expenditure requirements and financing obligations. However, disruption and volatility in the credit markets could impede our access to capital. Our $500.0 million credit facility is with a syndicate of banks. The syndication group consists of 11 financial institutions, which we believe reduces our exposure to any one institution and would still leave us with significant borrowing capacity in the event that any one of the institutions within the group is unable to comply with the terms of our agreement.

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Credit Ratings

For fiscal 2010, Standard and Poor’s Rating Services and Moody’s Investor Service provided a credit rating of BBB- and Baa3 with stable outlooks.

Other Uses of Cash

We expect capital spending in 2011 to be between $75 and $85 million. Capital spending will be monitored and controlled as the year progresses.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements.

Contractual Obligations, Contingent Liabilities and Commitments

To give a clear picture of matters potentially impacting our liquidity position, the following table outlines our contractual obligations as of September 30, 2010:

	Payments Due by Period
			Less Than		1 - 3		4 - 5		After 5
(Dollars in millions)	Total		1 Year		Years		Years		Years
Contractual Obligations
Long-Term Debt Obligations	$	98.5	$	—	$	48.4	$	—	$	50.1
Interest Payments Relating to Long-Term Debt (1)		60.2		7.3		8.7		6.6		37.6
Information Technology Infrastructure (2)		40.7		10.9		20.0		9.8		—
Operating Lease Obligations		59.0		19.5		21.9		9.4		8.2
Pension and Postretirement
Health Care Benefit Funding (3)		18.0		1.5		3.2		3.4		9.9
Purchase Obligations (4)		25.9		15.5		10.0		0.4		—
Other Long-Term Liabilities (5)		27.2		—		14.2		11.1		1.9
Total Contractual Cash Obligations	$	329.5	$	54.7	$	126.4	$	40.7	$	107.7

(1)	Interest payments on our long-term debt are projected based on the contractual rates of remaining debt securities.
(2)	We have a long term agreement with IBM to manage our global information technology environment that expires in September of 2014. The expected aggregate cost from September 30, 2010 through the duration of the contract is $40.7 million.
(3)	Given the significant funding contribution made during fiscal 2010, we currently do not anticipate any further contributions to our master pension plan in fiscal 2011.
(4)	Purchase obligations represent contractual obligations under various take-or-pay arrangements executed in the normal course of business. These commitments represent future purchases in line with expected usage to obtain favorable pricing. Also included are obligations arising from purchase orders for which we have made firm commitments. As a result, we believe that the purchase obligations portion of our contractual obligations is substantially those obligations for which we are certain to pay, regardless of future facts and circumstances. We expect to fund purchase obligations with operating cash flows and current cash balances.
(5)	Other long-term liabilities include deferred compensation arrangements, self-insurance reserves, and other various liabilities.

We also had commercial commitments related to standby letters of credit at September 30, 2010 of $6.3 million.

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In addition to the contractual obligations and commercial commitments disclosed above, we also have a variety of other agreements related to the procurement of materials and services and other commitments. While many of these agreements are long-term supply agreements, some of which are exclusive supply or complete requirements-based contracts, we are not committed under these agreements to accept or pay for requirements which are not needed to meet production needs. Also, we have an additional $26.1 million of other liabilities as of September 30, 2010, which represents uncertain tax positions for which it is not possible to determine in which future period the tax liability might be settled.

In conjunction with our acquisition and divestiture activities, we have entered into certain guarantees and indemnifications of performance, as well as, non-competition agreements for varying periods of time. Potential losses under the indemnifications are generally limited to a portion of the original transaction price, or to other lesser specific dollar amounts for certain provisions. Guarantees and indemnifications with respect to acquisition and divestiture activities, if triggered, could have a materially adverse impact on our financial condition and results of operations.

We are also subject to potential losses from adverse litigation results that are not accounted for by a self-insurance or other reserve; however, such potential losses are not quantifiable at this time, and may never occur.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Our accounting policies, including those described below, require management to make significant estimates and assumptions using information available at the time the estimates are made. Such estimates and assumptions significantly affect various reported amounts of assets, liabilities, revenues and expenses. If future experience differs materially from these estimates and assumptions, results of operations and financial condition could be affected. Our most critical accounting policies are described below.

Revenue Recognition

Net revenues reflect gross revenues less sales discounts and allowances and customer returns for product sales and rental revenue reserves. Revenue is evaluated under the following criteria and recognized when each is met:

• Evidence of an arrangement: An agreement with the customer reflecting the terms and conditions to deliver products or services serves as evidence of an arrangement.

• Delivery: For products, delivery is considered to occur upon receipt by the customer and the transfer of title and risk of loss. For rental services, delivery is considered to occur when the services are rendered.

• Fixed or determinable price: The sales price is considered fixed or determinable if it is not subject to refund or adjustment.

• Collection is deemed probable: At or prior to the time of a transaction, credit reviews of each customer are performed to determine the creditworthiness of the customer. Collection is deemed probable if the customer is expected to be able to pay amounts under the arrangement as those amounts become due. If collection is not probable, revenue is recognized when collection becomes probable, generally upon cash collection.

As a general interpretation of the above guidelines, revenues for health care products in the patient care environment are generally recognized upon delivery of the products to the customer and their assumption of risk of loss and other risks and rewards of ownership. Local business customs and non-standard sales terms can sometimes result in deviations to this normal practice in certain instances; however, in no case is revenue recognized prior to the transfer of risk of loss and rewards of ownership.

For non-invasive therapy products and medical equipment management services, the majority of product offerings are rental products for which revenues are recognized consistent with the rendering of the service and use of products. For The Vest^® product, revenue is generally recognized at the time of receipt of authorization for billing from the applicable paying entity as this serves as evidence of the arrangement and sets a fixed or determinable price.

For health care products and services aimed at improving operational efficiency and asset utilization, various revenue recognition techniques are used, depending on the offering. Arrangements to provide services, routinely under separately sold service and maintenance contracts, result in the deferral of revenues until specified services are performed. Service contract revenue is generally recognized ratably over the contract period, if applicable, or as services are rendered. Product-related goods are generally recognized upon delivery to the customer, similar to products in the patient care environment.

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Revenue and Accounts Receivable Reserves

Revenues are presented in the Statements of Consolidated Income (Loss) net of certain discounts and sales adjustments. For product sales, we record reserves resulting in a reduction of revenue for contractual discounts, as well as price concessions and product returns. Likewise, rental revenue reserves, reflecting contractual and other routine billing adjustments, are recorded as a reduction of revenues. Reserves for revenue are estimated based upon historical rates for revenue adjustments.

Provisions for doubtful accounts are recorded as a component of operating expenses and represent our best estimate of the amount of probable credit losses and collection risk in our existing accounts receivable. We determine such reserves based on historical write-off experience by industry. Receivables are generally reviewed on a pooled basis based on historical collection experience for each receivable type and are also reviewed individually for collectability. Account balances are charged against the allowance when we believe it is probable the receivable will not be recovered. We do not have any off-balance-sheet credit exposure related to our customers.

If circumstances change, such as higher than expected claims denials, payment defaults, adverse changes in general economic conditions, instability or disruption of credit markets, or an unexpected material adverse change in a major customer’s or payor’s ability to meet its obligations, our estimates of the realizability of trade receivables could be reduced by a material amount.

Liabilities for Loss Contingencies Related to Lawsuits

We are involved on an ongoing basis in claims, investigations and lawsuits relating to our operations, including environmental, antitrust, patent infringement, business practices, commercial transactions and other matters. The ultimate outcome of these actions cannot be predicted with certainty. An estimated loss from these contingencies is recognized when we believe it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated. However, it is difficult to measure the actual loss that might be incurred related to claims, investigations and lawsuits. The ultimate outcome of these actions could have a material adverse effect on our financial condition, results of operations and cash flow.

We have entered into a Judgment Sharing Agreement with Hillenbrand, Inc. to allocate any potential liability that may arise with respect to certain antitrust litigation matters. We apply the same methodology as described in the immediate preceding paragraph in evaluating and accounting for the Judgment Sharing Agreement. See Note 3 of Notes to Consolidated Financial Statements included under Part II, Item 8 of this Form 10-K, for further details.

We are also involved in other possible claims, including product and general liability, workers compensation, auto liability and employment related matters. Claims other than employment and related matters have deductibles and self-insured retentions ranging from $150 thousand to $1.5 million per occurrence or per claim, depending upon the type of coverage and policy period. Outside insurance companies and third-party claims administrators establish individual claim reserves and an independent outside actuary provides estimates of ultimate projected losses, including incurred but not reported claims, which are used to establish reserves for losses. Claim reserves for employment related matters are established based upon advice from internal and external counsel and historical settlement information for claims and related fees, when such amounts are considered probable of payment.

The recorded amounts represent our best estimate of the costs we will incur in relation to such exposures, but it is possible that actual costs could differ from those estimates. See Note 16 of Notes to Consolidated Financial Statements included under Part II, Item 8 of this Form 10-K for further information related to our legal proceedings.

Goodwill and Intangible Assets

We perform an impairment assessment on goodwill annually during the third fiscal quarter, or whenever events or changes in circumstances indicate that the carrying value of a reporting unit may not be recoverable. These events or conditions include, but are not limited to, a significant adverse change in the business environment; regulatory environment or legal factors; a current period operating or cash flow loss combined with a history of such losses or a projection of continuing losses; a substantial decline in market capitalization of our stock; or a sale or disposition of a significant portion of a reporting unit.

The goodwill impairment test involves a two-step process. The first step, used to identify potential impairment, is a comparison of each reporting unit’s estimated fair value to its carrying value, including goodwill. If the fair value of a reporting unit exceeds its carrying value, applicable goodwill is considered not to be impaired. If the carrying value exceeds fair value, there is an indication of impairment and the second step is performed to measure the amount of the impairment. The second step requires us to calculate an implied fair value of goodwill. The implied fair value of goodwill is determined in the same manner as the amount of goodwill recognized in a business combination, which is the excess of the fair value of the reporting unit, as determined in the first step, over the aggregate fair values of the individual assets, liabilities and identifiable intangibles as if the reporting unit was being acquired in a business combination. If the goodwill assigned to a reporting unit exceeds the implied fair value of the goodwill, an impairment charge is recorded for the excess.

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The fair value of our reporting units in the first step of our impairment process requires significant management judgment with respect to forecasted sales, gross margin and selling, general and administrative rates, capital expenditures, the selection and use of an appropriate discount rate, the selection of comparable public companies and the determination of an appropriate control premium. In addition, the use of third-party appraisals of significant tangible and intangible assets as part of the second step of the impairment test also requires management judgment related to certain inputs and assumptions. There are inherent uncertainties related to each of the above listed assumptions and inputs, and our judgment in applying them. The use of different assumptions, estimates or judgments in either step of the process could materially increase or decrease the related impairment charge.

During the second quarter of fiscal 2009, as a result of the decline in our market capitalization related to the overall macro-economic climate and its resulting unfavorable impact on hospital capital spending and our operating results, the Company recorded an impairment of its goodwill and certain other intangibles. See Note 5 of Notes to Consolidated Financial Statements included under Part II, Item 8 of this Form 10-K for further information related to the impairment charge.

Retirement Benefit Plans

We sponsor retirement and postretirement benefit plans covering select employees. Expense recognized in relation to these defined benefit retirement plans and the postretirement health care plan is based upon actuarial valuations and inherent in those valuations are key assumptions including discount rates, and where applicable, expected returns on assets, projected future salary rates and projected health care cost trends. The discount rates used in the valuation of our defined benefit pension and postretirement plans are evaluated annually based on current market conditions. In setting these rates we utilize long-term bond indices and yield curves as a preliminary indication of interest rate movements, and then make adjustments to the respective indices to reflect differences in the terms of the bonds covered under the indices in comparison to the projected outflow of our obligations. Our overall expected long-term rate of return on pension assets is based on historical and expected future returns, which are inflation adjusted and weighted for the expected return for each component of the investment portfolio. Our rate of assumed compensation increase is also based on our specific historical trends of past wage adjustments.

Changes in retirement and postretirement benefit expense and the recognized obligations may occur in the future as a result of a number of factors, including changes to any of these assumptions. Our expected rate of return on pension plan assets was 7.5 percent for fiscal 2010 and 2009 and 8.0 percent for fiscal 2008. At September 30, 2010, we had pension plan assets of $215.7 million. A 25 basis point increase in the expected rate of return on pension plan assets reduces annual pension expense by approximately $0.6 million. Differences between actual and projected investment returns, especially in periods of significant market volatility, can also impact estimates of required pension contributions. The discount rate for our retirement obligation was 5.1 percent in 2010, 5.5 percent in 2009 and 7.5 percent in 2008. The discount rate for our postretirement obligation may vary up to 100 basis points from that of our retirement obligations. For each 50 basis point change in the discount rate, the impact to annual pension expense ranges from $1.7 million to $1.8 million, while the impact to our postretirement health care plan expense would be less than $0.1 million. Impacts from assumption changes could be positive or negative depending on the direction of the change in rates.

See Note 8 of Notes to Consolidated Financial Statements included under Part II, Item 8 of this Form 10-K for further information related to our retirement and postretirement plans.

Income Taxes

We compute our income taxes using an asset and liability approach to reflect the net tax effects of temporary differences between the financial reporting carrying amounts of assets and liabilities and the corresponding income tax amounts. We have a variety of deferred tax assets in numerous tax jurisdictions. These deferred tax assets are subject to periodic assessment as to recoverability and if it is determined that it is more likely than not that the benefits will not be realized, valuation allowances are recognized. We have recorded valuation allowances against certain of our deferred tax assets, primarily those related to foreign tax attributes in countries with poor operating results and certain other domestic tax attributes. In evaluating whether it is more likely than not that we would recover these deferred tax assets, future taxable income, the reversal of existing temporary differences and tax planning strategies are considered.

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We believe that our estimates for the valuation allowances recorded against deferred tax assets are appropriate based on current facts and circumstances. We currently have $28.5 million of valuation allowances on deferred tax assets, on a tax-effected basis, primarily related to foreign operating loss carryforwards and other tax attributes.

We account for uncertain income tax positions using a threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The difference between the tax benefit recognized in the financial statements for an uncertain income tax position and the tax benefit claimed in the tax return is referred to as an unrecognized tax benefit.

The Company also has on-going audits in various stages of completion with the IRS and several state and foreign jurisdictions, one or more of which may conclude within the next 12 months. Such settlements could involve some or all of the following: the payment of additional taxes, the adjustment of certain deferred taxes and/or the recognition of unrecognized tax benefits. The resolution of these matters, in combination with the expiration of certain statutes of limitations in various jurisdictions, make it reasonably possible that our unrecognized tax benefits may decrease as a result of either payment or recognition by approximately $5 to $13 million in the next twelve months, excluding interest. See Note 11 of Notes to Consolidated Financial Statements included under Part II, Item 8 of this Form 10-K for further information related to income taxes.

Guarantees

We routinely grant limited warranties on our products with respect to defects in material and workmanship. The terms of these warranties are generally one year, however, certain components and products have substantially longer warranty periods. We recognize a reserve with respect to these obligations at the time of product sale, with subsequent warranty claims recorded directly against the reserve. The amount of the warranty reserve is determined based on historical trend experience for the covered products. For more significant warranty-related matters which might require a broad-based correction, separate reserves are established when such events are identified and the cost of correction can be reasonably estimated.

Inventory

We review the net realizable value of inventory on an ongoing basis, considering factors such as excess, obsolescence, and other items. We record an allowance for estimated losses when the facts and circumstances indicate that particular inventories will not be sold at prices in excess of current carrying costs. These estimates are based on historical experience and expected future trends. If future market conditions vary from those projected, and our estimates prove to be inaccurate, we may be required to write-down inventory values and record an adjustment to cost of revenues.

Recently Issued Accounting Guidance

For a summary of recently issued accounting guidance applicable to us, see Note 1 of Notes to Consolidated Financial Statements included under Part II, Item 8 of this Form 10-K.

Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to various market risks, including fluctuations in interest rates, impact of the current economic downturn, collection risk associated with our accounts and notes receivable portfolio and variability in currency exchange rates. We have established policies, procedures and internal processes governing our management of market risks and the use of financial instruments to manage our exposure to such risks.

We are subject to variability in foreign currency exchange rates in our international operations. Exposure to this variability is periodically managed primarily through the use of natural hedges, whereby funding obligations and assets are both managed in the local currency. We, from time-to-time, enter into currency exchange agreements to manage our exposure arising from fluctuating exchange rates related to specific and forecasted transactions. We operate this program pursuant to documented corporate risk management policies and do not enter into derivative transactions for speculative purposes. The sensitivity of earnings and cash flows to variability in exchange rates is assessed by applying an appropriate range of potential rate fluctuations to our assets, obligations and projected results of operations denominated in foreign currencies.

37

Our currency risk consists primarily of foreign currency denominated firm commitments and forecasted foreign currency denominated intercompany and third-party transactions. At September 30, 2010, we had outstanding foreign exchange derivative contracts in notional amounts of $3.8 million with the fair value of these contracts approximating original contract value. The maximum length of time over which the Company is hedging transaction exposure is 15 months. Derivative gains/(losses), initially reported as a component of Accumulated Other Comprehensive Income (Loss), are reclassified to earnings in the period when the forecasted transaction affects earnings. A 10 percent fluctuation in the U.S. dollar’s value to the hedged currencies would have an immaterial impact on our derivative instruments’ fair value.

We hold auction rate securities, for which the market continues to experience liquidity issues. Due to the lack of liquidity, we have obtained guidance from our investment advisors as to the current fair value of our portfolio. If current market conditions do not improve or worsen, the result could be further temporary unrealized losses or impairments. During our first fiscal quarter of 2009, we entered into a settlement agreement with UBS, one of the brokers we utilized to purchase auction rate securities. The primary terms of the settlement stated that UBS would repurchase the auction rate securities held by UBS at full par value on or after June 30, 2010. On June 30, 2010, we successfully exercised our rights under the Put for all remaining auction rate securities held with UBS and received cash proceeds of $12.0 million, including accrued interest, in July 2010. At September 30, 2010, we had $11.8 million remaining in auction rate securities.

Our pension plan assets, which were approximately $216 million at September 30, 2010, are also subject to volatility that can be caused by fluctuations in general economic conditions. Our pension plans were underfunded at September 30, 2010 by approximately $51 million. During the fourth quarter of fiscal 2010, we contributed $50.0 million to our primary pension plan. Continued market volatility and disruption could cause further declines in asset values and if this occurs, we may need to make additional pension plan contributions and our pension expense in future years may increase. Investment strategies and policies are set by the plan’s fiduciaries. Long-term strategic investment objectives utilize a diversified mix of equity and fixed income securities to preserve the funded status of the trusts and balance risk and return. The plan fiduciaries oversee the investment allocation process, which includes selecting investment managers, setting long-term strategic targets and monitoring asset allocations. Target allocation ranges are guidelines, not limitations, and plan fiduciaries may occasionally approve allocations above or below a target range or elect to rebalance the portfolio within the targeted range.

Trust assets are invested subject to the following policy restrictions: short-term securities must be rated A2/P2 or higher; all fixed-income securities shall have a credit quality rating “BBB” or higher; investments in equities in any one company may not exceed 10 percent of the equity portfolio.

38

Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

	Page
Financial Statements:
Management’s Report on Internal Control Over Financial Reporting		40
Report of Independent Registered Public Accounting Firm		41
Statements of Consolidated Income (Loss) for the fiscal years ended September 30, 2010, 2009 and 2008		42
Consolidated Balance Sheets at September 30, 2010 and 2009		43
Statements of Consolidated Cash Flows for the fiscal years ended September 30, 2010, 2009 and 2008		44
Statements of Consolidated Shareholders’ Equity and Comprehensive Income (Loss) for the fiscal years ended September 30, 2010, 2009 and 2008		45
Notes to Consolidated Financial Statements		46
Financial Statement Schedule for the fiscal years ended September 30, 2010, 2009 and 2008:
Schedule II — Valuation and Qualifying Accounts		85

All other schedules are omitted because they are not applicable or the required information is shown in the financial statements or the notes thereto.

39

MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

Management is responsible for establishing and maintaining adequate internal control over financial reporting for Hill-Rom Holdings, Inc. (“we” or “our”). Our internal control over financial reporting is a process designed, under the supervision of our principal executive, principal financial and principal accounting officers, and effected by our Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of our Consolidated Financial Statements for external purposes in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Our internal control over financial reporting includes policies and procedures that:

1) Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets;

2) Provide reasonable assurance that transactions are recorded as necessary to permit preparation of our Consolidated Financial Statements in accordance with U.S. GAAP and that our receipts and expenditures are being made only in accordance with authorizations of our management and our Board of Directors; and

3) Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on our Consolidated Financial Statements.

Because of its inherent limitations, our internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies and procedures may deteriorate.

Management performed an assessment of the effectiveness of our internal control over financial reporting as of September 30, 2010 using criteria established in the Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on that criteria, management concluded that we maintained effective internal control over financial reporting as of September 30, 2010. There were no changes in our internal control over financial reporting during the quarter ended September 30, 2010 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

The effectiveness of our internal control over financial reporting as of September 30, 2010 has been audited by PricewaterhouseCoopers LLP, our independent registered public accounting firm, who also audited our Consolidated Financial Statements, as stated in their report included herein.

/s/ John J. Greisch  

John J. Greisch 

President and Chief Executive Officer 

/s/ Gregory N. Miller  

Gregory N. Miller 

Senior Vice President and Chief Financial Officer 

/s/ Richard G. Keller  

Richard G. Keller 

Vice President, Controller and Chief Accounting Officer 

40

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and Board of Directors of
Hill-Rom Holdings, Inc.

In our opinion, the consolidated financial statements listed in the accompanying index present fairly, in all material respects, the financial position of Hill-Rom Holdings, Inc. and its subsidiaries at September 30, 2010, and 2009, and the results of their operations and their cash flows for each of the three years in the period ended September 30, 2010, in conformity with accounting principles generally accepted in the United States of America. In addition, in our opinion, the financial statement schedule listed in the accompanying index presents fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of September 30, 2010, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Company’s management is responsible for these financial statements and financial statement schedule, for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express opinions on these financial statements, on the financial statement schedule, and on the Company’s internal control over financial reporting based on our integrated audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the financial statements included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ PricewaterhouseCoopers LLP  

PricewaterhouseCoopers LLP 

Indianapolis, Indiana
November 17, 2010 

41

Hill-Rom Holdings, Inc. and Subsidiaries

STATEMENTS OF CONSOLIDATED INCOME (LOSS)

(Dollars in millions except per share data)

	September 30,			September 30,			September 30,
Fiscal Year Ended:	2010			2009			2008
Net Revenues
Capital sales	$	996.6		$	921.5		$	1,044.0
Rental revenues		473.0			465.4			463.7
Total revenues		1,469.6			1,386.9			1,507.7
Cost of Revenues
Cost of goods sold		548.6			555.7			618.6
Rental expenses		204.4			203.3			219.6
Total cost of revenues		753.0			759.0			838.2
Gross Profit		716.6			627.9			669.5
Research and development expenses		58.3			55.7			57.3
Selling and administrative expenses		474.6			461.6			486.6
Litigation credit (Note 16)		(21.2	)		—			—
Impairment of goodwill and other intangibles (Note 5)		—			472.8			—
Special charges (Note 10)		13.2			20.5			22.8
Operating Profit (Loss)		191.7			(382.7	)		102.8
Gain on sale of non-strategic assets (Note 4)		—			10.2			—
Interest expense		(8.7	)		(10.4	)		(14.3	)
Investment income and other, net		(0.1	)		4.1			3.8
Income (Loss) from Continuing Operations Before Income Taxes		182.9			(378.8	)		92.3
Income tax expense (Note 11)		56.9			26.2			25.2
Income (Loss) from Continuing Operations		126.0			(405.0	)		67.1
Discontinued Operations (Note 3):
Income from discontinued operations before income taxes		—			—			78.8
Income tax expense		—			—			30.1
Income from discontinued operations		—			—			48.7
Net Income (Loss)		126.0			(405.0	)		115.8
Less: Net income attributable to noncontrolling interest		0.7			—			—
Net Income (Loss) Attributable to Common Shareholders	$	125.3		$	(405.0	)	$	115.8
Income (loss) attributable to common shareholders per common share from continuing operations — Basic	$	1.99		$	(6.47	)	$	1.07
Income attributable to common shareholders per common share from discontinued operations — Basic		—			—			0.78
Net Income (Loss) Attributable to Common Shareholders per Common Share — Basic	$	1.99		$	(6.47	)	$	1.86
Income (loss) attributable to common shareholders per common share from continuing operations — Diluted	$	1.97		$	(6.47	)	$	1.07
Income attributable to common shareholders per common share from discontinued operations — Diluted		—			—			0.78
Net Income (Loss) Attributable to Common Shareholders per Common Share — Diluted	$	1.97		$	(6.47	)	$	1.85
Dividends per Common Share	$	0.41		$	0.41		$	0.78
Average Common Shares Outstanding — Basic (thousands) (Note 12)		62,934			62,581			62,426
Average Common Shares Outstanding — Diluted (thousands) (Note 12)		63,739			62,581			62,622

Note: Certain per share amounts may not accurately add due to rounding.

See Notes to Consolidated Financial Statements.

42

Hill-Rom Holdings, Inc. and Subsidiaries

CONSOLIDATED BALANCE SHEETS

(Dollars in millions except share data)

	September 30,			September 30,
	2010			2009
ASSETS
Current Assets
Cash and cash equivalents	$	184.5		$	170.6
Short term investments (Notes 1 and 7)		—			26.4
Trade accounts receivable, less allowances of $29.0 in 2010 and $27.5 in 2009 (Note 1)		353.1			346.6
Inventories (Note 1)		108.5			92.0
Deferred income taxes (Notes 1 and 11)		40.4			46.0
Other current assets		52.7			13.5
Total current assets		739.2			695.1
Property, plant and equipment (Note 1)		805.0			821.2
Less accumulated depreciation		(561.3	)		(548.8	)
Property, plant and equipment, net		243.7			272.4
Investments and investment securities (Notes 1 and 7)		12.1			17.2
Intangible assets:
Goodwill (Notes 1 and 5)		81.1			73.1
Software and other, net (Note 1)		136.6			141.9
Other assets		32.9			32.9
Total Assets	$	1,245.6		$	1,232.6
LIABILITIES
Current Liabilities
Trade accounts payable	$	80.6		$	81.3
Short-term borrowings (Note 6)		53.1			102.2
Accrued compensation		88.9			72.7
Accrued litigation (Note 16)		—			21.2
Accrued product warranties (Note 1)		15.8			17.1
Other current liabilities		50.3			49.8
Total current liabilities		288.7			344.3
Long-term debt (Note 6)		98.5			99.7
Accrued pension and postretirement benefits (Note 8)		59.0			100.7
Deferred income taxes (Notes 1 and 11)		31.3			16.8
Other long-term liabilities		52.3			61.8
Total Liabilities		529.8			623.3
Noncontrolling interest (Note 2)		8.3			—
Commitments and Contingencies (Note 16)
SHAREHOLDERS’ EQUITY (Notes 9 and 13)
Capital Stock:
Preferred stock — without par value:
Authorized — 1,000,000 shares; none issued or outstanding		—			—
Common stock — without par value:
Authorized — 199,000,000
Issued — 80,323,912 shares in 2010 and 2009		4.4			4.4
Additional paid-in-capital		119.3			119.0
Retained earnings		1,203.6			1,105.2
Accumulated other comprehensive loss (Note 1)		(61.8	)		(59.9	)
Treasury stock, at cost: 2010 — 17,537,029 common shares, 2009 — 17,656,350 common shares		(558.0	)		(559.4	)
Total Shareholders’ Equity		707.5			609.3
Total Liabilities, Non-Controlling Interest and Shareholders’ Equity	$	1,245.6		$	1,232.6

See Notes to Consolidated Financial Statements.

43

Hill-Rom Holdings, Inc. and Subsidiaries

STATEMENTS OF CONSOLIDATED CASH FLOWS

(Dollars in millions)

	September 30,			September 30,			September 30,
Fiscal Year Ended:	2010			2009			2008
Operating Activities
Net income (loss)	$	126.0		$	(405.0	)	$	115.8
Adjustments to reconcile net income (loss) to net cash flows from operating activities:
Depreciation and amortization		99.7			100.2			112.8
Impairment of goodwill and other intangibles		—			472.8			-
Net realized capital losses (gains) and equity method investment (income) loss		0.2			0.1			(6.8	)
Litigation credit		(21.2	)		—			—
Provision for deferred income taxes		21.2			3.5			(22.9	)
Loss on disposal of property, equipment leased to others, intangible assets and impairments		7.3			5.8			18.6
Gain on sale of non-strategic assets		—			(10.2	)		—
Stock compensation		12.0			12.1			23.2
Tax settlement		(8.2	)		—			—
Defined benefit plan funding		(52.3	)		(13.5	)		(1.8	)
Change in working capital excluding cash, current investments, current debt, acquisitions and dispositions:
Trade accounts receivable		(7.0	)		61.2			(2.8	)
Inventories		(16.2	)		23.7			5.2
Other current assets		(37.5	)		1.1			8.2
Trade accounts payable		(2.4	)		(23.9	)		15.1
Accrued expenses and other liabilities		12.5			(20.2	)		(2.6	)
Interest proceeds on seller financing		—			—			11.2
Other, net		5.7			18.0			(2.7	)
Net cash provided by operating activities		139.8			225.7			270.5
Investing Activities
Capital expenditures and purchase of intangibles		(64.7	)		(63.9	)		(102.6	)
Proceeds on disposal of property and equipment leased to others		2.5			2.9			0.6
Proceeds on sale of non-strategic assets		—			11.9			—
Payment for acquisition of businesses, net of cash acquired		(7.3	)		(187.2	)		—
Investment purchases and capital calls		—			—			(325.6	)
Proceeds on investment sales and maturities		31.3			2.1			343.5
Principal proceeds from liquidation of preferred stock investment and seller financing notes receivable		—			—			27.8
Net cash used in investing activities		(38.2	)		(234.2	)		(56.3	)
Financing Activities
Net change in short-term debt, net of debt issuance costs		(4.1	)		5.2			85.9
Payment on revolver		(45.0	)		—			—
Borrowings on revolver		—			—			250.0
Payment of long-term debt, net of proceeds from settlement of interest rate swaps		—			(25.7	)		(225.3	)
Payment of cash dividends		(25.8	)		(25.6	)		(48.2	)
Distribution to noncontrolling interest partner		(1.1	)		—			—
Proceeds from exercise of stock options		22.9			0.1			16.5
Proceeds from employee stock purchase plan		2.6			1.3			—
Treasury stock acquired		(36.9	)		(0.6	)		(1.4	)
Cash transferred to Hillenbrand, Inc. in spin-off		—			—			(141.3	)
Net cash used in financing activities		(87.4	)		(45.3	)		(63.8	)
Effect of Exchange Rate changes on Cash		(0.3	)		2.7			(10.2	)
Net Cash Flows		13.9			(51.1	)		140.2
Cash and Cash Equivalents
At beginning of period		170.6			221.7			81.5
At end of period	$	184.5		$	170.6		$	221.7
Supplemental cash flow information:
Cash paid for income taxes	$	87.3		$	19.3		$	99.6
Cash paid for interest	$	7.7		$	9.9		$	18.8
Non-cash financing activities:
Treasury stock issued under stock compensation plans	$	38.3		$	6.1		$	17.2

See Notes to Consolidated Financial Statements.

44

Hill-Rom Holdings, Inc. and Subsidiaries

STATEMENTS OF CONSOLIDATED SHAREHOLDERS’ EQUITY AND COMPREHENSIVE INCOME (LOSS)

(Dollars in millions)

												Accumulated
	Common Stock											Other			Common Stock
	Shares					Additional			Retained			Comprehensive			in Treasury
	Outstanding			Amount		Paid-in-Capital			Earnings			Income (Loss)			Shares			Amount			Total
Balance at September 30, 2007		61,991,652		$	4.4	$	98.4		$	1,753.4		$	2.3			18,332,260		$	(580.7	)	$	1,277.8
Adoption of uncertain tax position provisions		—			—		—			(10.3	)		—			—			—			(10.3	)
Comprehensive Income:
Net income		—			—		—			115.8			—			—			—			115.8
Foreign currency translation adjustment, net of tax of $1.5 million		—			—		—			—			(13.1	)		—			—			(13.1	)
Net change in unrealized gain on available-for-sale securities, net of tax of $1.9 million		—			—		—			—			(2.6	)		—			—			(2.6	)
Items not yet recognized as a component of net periodic pension costs, net of tax of $4.7 million		—			—		—			—			(4.9	)		—			—			(4.9	)
Total comprehensive income		—			—		—			—			—			—			—			95.2
Dividends		—			—		0.4			(48.6	)		—			—			—			(48.2	)
Treasury shares acquired		(27,554	)		—		—			—			—			27,554			(1.4	)		(1.4	)
Stock awards and option exercises		544,836			—		22.4			—			—			(544,836	)		17.2			39.6
Subtotal		62,508,934			4.4		121.2			1,810.3			(18.3	)		17,814,978			(564.9	)		1,352.7
Spin-off of funeral services business (Note 3)		—			—		(10.0	)		(274.2	)		14.1			—			—			(270.1	)
Balance at September 30, 2008		62,508,934			4.4		111.2			1,536.1			(4.2	)		17,814,978			(564.9	)		1,082.6
Comprehensive Income (Loss):
Net income (loss)		—			—		—			(405.0	)		—			—			—			(405.0	)
Foreign currency translation adjustment, net of tax of $0.9 million		—			—		—			—			(15.0	)		—			—			(15.0	)
Net change in unrealized gain on available-for-sale securities, net of tax of $0.1 million		—			—		—			—			(0.3	)		—			—			(0.3	)
Items not yet recognized as a component of net periodic pension costs, net of tax of $25.0 million		—			—		—			—			(40.4	)		—			—			(40.4	)
Total comprehensive income (loss)		—			—		—			—			—			—			—			(460.7	)
Dividends		—			—		0.3			(25.9	)		—			—			—			(25.6	)
Treasury shares acquired		(32,481	)		—		—			—			—			32,481			(0.6	)		(0.6	)
Stock awards and option exercises		191,109			—		7.5			—			—			(191,109	)		6.1			13.6
Balance at September 30, 2009		62,667,562			4.4		119.0			1,105.2			(59.9	)		17,656,350			(559.4	)		609.3
Comprehensive Income:
Net income		—			—		—			126.0			—			—			—			126.0
Foreign currency translation adjustment, net of tax of $1.3 million		—			—		—			—			0.7			—			—			0.7
Net change in unrealized gain on available-for-sale securities, net of tax of $0.1 million		—			—		—			—			0.2			—			—			0.2
Items not yet recognized as a component of net periodic pension costs, net of tax of $0.1 million		—			—		—			—			(2.8	)		—			—			(2.8	)
Total comprehensive income		—			—		—			—			—			—			—			124.1
Dividends		—			—		0.3			(26.1	)		—			—			—			(25.8	)
Treasury shares acquired		(1,092,469	)		—		—			—			—			1,092,469			(36.9	)		(36.9	)
Stock awards and option exercises		1,211,790			—		(2.4	)		—			—			(1,211,790	)		38.3			35.9
Impact of Joint Venture		—			—		2.4			(1.5	)		—			—			—			0.9
Balance at September 30, 2010		62,786,883		$	4.4	$	119.3		$	1,203.6		$	(61.8	)		17,537,029		$	(558.0	)	$	707.5

See Notes to Consolidated Financial Statements.

45

Hill-Rom Holdings, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions except per share data)

Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Operations

Hill-Rom Holdings, Inc. (the “Company,” “Hill-Rom,” “we,” “us,” or “our”) (formerly known as Hillenbrand Industries, Inc.) was incorporated on August 7, 1969 in the State of Indiana and is headquartered in Batesville, Indiana. We are a leading worldwide manufacturer and provider of medical technologies and related services for the health care industry, including patient support systems, safe mobility and handling solutions, non-invasive therapeutic products for a variety of acute and chronic medical conditions, medical equipment rentals and information technology solutions. Our comprehensive product and service offerings are used by health care providers across the health care continuum in hospitals, extended care facilities and home care settings worldwide, to enhance the safety and quality of patient care.

Basis of Presentation

On March 31, 2008, we completed the spin-off of our funeral services business operating under the Batesville Casket name, through a tax-free stock dividend to our shareholders. In connection with the distribution, we changed our name from Hillenbrand Industries, Inc. to Hill-Rom Holdings, Inc.

In accordance with our accounting for the impairment or disposal of long-lived assets, the results of operations of the funeral services business have been presented as a discontinued operation for the year ended September 30, 2008 in the Statement of Consolidated Income (Loss). The 2008 Statement of Consolidated Cash Flows is presented without separate classification of cash flows from the funeral services business through March 31, 2008. Unless otherwise noted, the Notes to Consolidated Financial Statements exclude information related to the funeral services business. See Note 3 for a further discussion of the spin-off of the funeral services business.

Principles of Consolidation

The Consolidated Financial Statements include the accounts of the Company and our majority-owned subsidiaries. All subsidiaries are wholly-owned with the exception of the 60 percent owned joint venture acquired during the first quarter of fiscal 2010 and discussed in Note 2. Intercompany accounts and transactions have been eliminated in consolidation.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires our management to make estimates and assumptions that affect the reported amounts of certain assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expense during the reporting period. Actual results could differ from those estimates. Examples of such estimates include our accounts receivable reserves (Note 1), accrued warranties (Note 1), the impairment of intangibles (Note 5), investments (Note 7), income taxes (Note 11) and commitments and contingencies (Note 16), among others.

Cash and Cash Equivalents

We consider investments in marketable securities and other highly liquid instruments with a maturity of three months or less at date of purchase to be cash equivalents. Investments which have no stated maturity are also considered cash equivalents. All of our marketable securities may be freely traded.

Investment and Investment Securities

At September 30, 2010, investment securities consisted primarily of AAA rated student loan auction rate securities (“ARS”). These securities are generally insured through the U.S. government’s Federal Family Education Loan Program, to the extent the borrowers meet certain prescribed criteria in their underlying lending practices. As of September 30, 2010, we held $11.8 million of ARS that were recorded at fair value and classified as available-for-sale with unrealized holding gains and losses recorded in Accumulated Other Comprehensive Income (Loss) (“AOCL”).

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We also previously held ARS with UBS Financial Services (“UBS”). During the first quarter of 2009, we entered into an enforceable, non-transferable right (the “Put”) with UBS, which allowed us to exercise this Put at anytime during the period of June 30, 2010 through July 2, 2012. During the quarter ended June 30, 2010, UBS redeemed $14.1 million of our ARS plus interest. On June 30, 2010, we successfully exercised our rights under this Put for all remaining ARS held with UBS and received cash proceeds of $12.0 million, including accrued interest, on July 1, 2010.

We regularly evaluate all investments classified as available-for-sale for possible impairment based on current economic conditions, credit loss experience and other criteria. The evaluation of investments for impairment requires significant judgments to be made including (i) the identification of potentially impaired securities; (ii) the determination of their estimated fair value; (iii) the assessment of whether any decline in estimated fair value is other-than-temporary; and (iv) the likelihood of selling before recovery. If there is a decline in a security’s net realizable value that is other-than-temporary, the decline is separated into the amount of impairment related to credit loss and the amount of impairment related to all other factors. The decline related to the credit loss is recognized in earnings, while the decline related to all other factors is recognized in AOCL.

See Note 7 for further details on our fair value measurements.

Trade Accounts Receivable

Trade accounts receivable are recorded at the invoiced amount and do not bear interest, unless the transaction is an installment sale with payment terms exceeding one year. Reserves for uncollectible accounts represent our best estimate of the amount of probable credit losses and collection risk in our existing accounts receivable. We determine such reserves based on historical write-off experience by industry and reimbursement platform. Receivables are generally reviewed on a pooled basis based on historical collection experience for each reimbursement and receivable type. Receivables for capital sales transactions are also reviewed individually for collectability. Account balances are charged against the allowance when we believe it is probable the receivable will not be recovered. We do not have any off-balance-sheet credit exposure related to our customers. If circumstances change, such as higher than expected claims denials, payment defaults, adverse changes in general economic conditions, instability or disruption of credit markets, or an unexpected material adverse change in a major customer’s or payor’s ability to meet its obligations, our estimates of the realizability of trade receivables could be reduced by a material amount.

Within rental revenues, the domestic third-party payor’s reimbursement process requires extensive documentation, which has had the effect of slowing both the billing and cash collection cycles relative to the rest of the business, and therefore, increasing total accounts receivable. Because of the extensive documentation required and the requirement to settle a claim with the primary payor prior to billing the secondary and/or patient portion of the claim, the collection period for a claim in a portion of our business may, in some cases, be extended.

We generally hold our trade accounts receivable until they are paid. Certain long-term receivables are occasionally sold to third parties; however, any recognized gain or loss on such sales has historically not been material.

Inventories

Inventories are valued at the lower of cost or market. Inventory costs are determined by the last-in, first-out (“LIFO”) method for approximately 65 percent and 55 percent of our inventories at September 30, 2010 and 2009. Costs for other inventories have been determined principally by the first-in, first-out (“FIFO”) method. During 2009, we made a change in cost method for certain domestic production inventory from the FIFO method to the LIFO method. The change impacted approximately 17 percent of our inventory and the effect on our Consolidated Financial Statements was not significant. Inventories at September 30 consist of the following:

	September 30,		September 30,
	2010		2009
Finished products	$	64.2	$	57.4
Work in process		4.7		2.0
Raw materials		39.6		32.6
Total	$	108.5	$	92.0

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If the FIFO method of inventory accounting, which approximates current cost, had been used for all inventories, they would have been approximately $1.2 million and $3.6 million higher than reported at September 30, 2010 and 2009.

Property, Plant and Equipment

Property, plant and equipment is recorded at cost and depreciated over the estimated useful life of the assets using principally the straight-line method. Ranges of estimated useful lives are as follows:

	Useful Life
Land improvements	6 – 25 years
Buildings and building equipment	20 – 40 years
Machinery and equipment	3 – 10 years
Equipment leased to others	2 – 10 years

When property, plant and equipment is retired from service or otherwise disposed of, the cost and related amount of depreciation or amortization are eliminated from the asset and accumulated depreciation accounts. The difference, if any, between the net asset value and the proceeds on sale are charged or credited to income. Total depreciation expense included within continuing operations on the Statements of Consolidated Income (Loss) for fiscal years 2010, 2009 and 2008 was $72.8 million, $74.3 million and $81.0 million. The major components of property and the related accumulated depreciation at September 30, were as follows:

	September 30,				September 30,
	2010				2009
			Accumulated				Accumulated
	Cost		Depreciation		Cost		Depreciation
Land and land improvements	$	12.5	$	3.7	$	12.0	$	3.5
Buildings and building equipment		112.8		75.7		112.7		74.5
Machinery and equipment		257.1		192.2		269.9		199.0
Equipment leased to others		422.6		289.7		426.6		271.8
Total	$	805.0	$	561.3	$	821.2	$	548.8

Intangible Assets

Intangible assets are stated at cost and consist predominantly of goodwill, software, patents and trademarks. With the exception of goodwill and certain trademarks, our intangible assets are amortized on a straight-line basis over periods generally ranging from 3 to 20 years.

We assess the carrying value of goodwill and non-amortizable intangibles annually, during the third quarter of each fiscal year, or more often if events or changes in circumstances indicate there may be impairment. Goodwill is allocated among the reporting units based on the relative fair value of those units.

Our goodwill and many of our intangible assets are not deductible for income tax purposes. A summary of intangible assets and the related accumulated amortization and impairment losses as of September 30 was as follows:

	September 30,				September 30,
	2010				2009
			Amortization				Amortization
	Cost		and Impairment		Cost		and Impairment
Goodwill	$	553.9	$	472.8	$	545.9	$	472.8
Software		150.5		91.7		141.7		75.7
Other		123.9		46.1		111.7		35.8
Total	$	828.3	$	610.6	$	799.3	$	584.3

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Amortization expense included within continuing operations in the Statements of Consolidated Income (Loss) for fiscal years 2010, 2009 and 2008 was $26.9 million, $25.9 million and $22.5 million. Amortization expense for all intangibles is expected to approximate the following for each of the next five fiscal years and thereafter: $29.7 million in 2011, $28.7 million in 2012, $23.8 million in 2013, $15.8 million in 2014, $10.1 million in 2015 and $9.3 million thereafter.

Software consists mainly of capitalized costs associated with internal use software, including applicable costs associated with the implementation/upgrade of our Enterprise Resource Planning system. In addition, software includes capitalized development costs for software products to be sold. The net book value of computer software costs, included within Intangible assets, was $58.8 million and $66.0 million at September 30, 2010 and 2009. Capitalized software costs are amortized on a straight-line basis over periods ranging from three to ten years. Amortization expense included within continuing operations in the Statements of Consolidated Income (Loss) approximated $17.5 million, $16.6 million and $14.8 million for fiscal years 2010, 2009 and 2008.

Guarantees

We routinely grant limited warranties on our products with respect to defects in material and workmanship. The terms of these warranties are generally one year, however, certain components and products have substantially longer warranty periods. We recognize a reserve with respect to these obligations at the time of product sale, with subsequent warranty claims recorded directly against the reserve. The amount of the warranty reserve is determined based on historical trend experience for the covered products. For more significant warranty-related matters which might require a broad-based correction, separate reserves are established when such events are identified and the cost of correction can be reasonably estimated.

A reconciliation of changes in our warranty reserve for fiscal years 2010, 2009 and 2008 is as follows:

	2010			2009			2008
Balance at October 1	$	17.1		$	16.9		$	19.8
Provision for warranties during the period		16.0			16.9			17.4
Warranty reserves acquired		—			3.6			—
Warranty claims incurred during the period		(17.3	)		(20.3	)		(20.3	)
Balance at September 30	$	15.8		$	17.1		$	16.9

In the normal course of business we enter into various other guarantees and indemnities in our relationships with suppliers, service providers, customers, business partners and others. Examples of these arrangements would include guarantees of product performance, indemnifications to service providers and indemnifications of our actions to business partners. These guarantees and indemnifications would not materially impact our financial condition or results of operations, although indemnifications associated with our actions generally have no dollar limitations.

In conjunction with our acquisition and divestiture activities, we have entered into select guarantees and indemnifications of performance with respect to the fulfillment of our commitments under applicable purchase and sale agreements. The arrangements generally indemnify the buyer or seller for damages associated with breach of contract, inaccuracies in representations and warranties surviving the closing date and satisfaction of liabilities and commitments retained under the applicable contract. For those representations and warranties that survive closing, they generally survive for periods up to five years or the expiration of the applicable statutes of limitations. Potential losses under the indemnifications are generally limited to a portion of the original transaction price, or to other lesser specific dollar amounts for select provisions. With respect to sale transactions, we also routinely enter into non-competition agreements for varying periods of time. Guarantees and indemnifications with respect to acquisition and divestiture activities, if triggered, could have a materially adverse impact on our financial condition and results of operations.

Retirement Plans

We sponsor retirement and postretirement plans covering select employees. Expense recognized in relation to these defined benefit retirement plans and the postretirement health care plan is based upon actuarial valuations and inherent in those valuations are key assumptions including discount rates, and where applicable, expected returns on assets, projected future salary rates and projected health care cost trends. The discount rates used in the valuation of our defined benefit pension and postretirement plans are evaluated annually based on current market conditions. In setting these rates we utilize long-term bond indices and yield curves as a preliminary indication of interest rate movements, and then make adjustments to the respective indices to reflect differences in the terms of the bonds covered under the indices in comparison to the projected outflow of our obligations. Our overall expected long-term rate of return on pension assets is based on historical and expected future returns, which are inflation adjusted and weighted for the expected return for each component of the investment portfolio. Our rate of assumed compensation increase is also based on our specific historical trends of wage adjustments.

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We account for our defined benefit pension and other postretirement plans by recognizing the funded status of a benefit plan in the statement of financial position. We also recognize in Accumulated Other Comprehensive Income (Loss) certain gains and losses that arose during the period. See Note 8 for key assumptions and further discussion related to our pension and postretirement plans.

Environmental Liabilities

Expenditures that relate to an existing condition caused by past operations, and which do not contribute to future revenue generation, are expensed. A reserve is established when it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. These reserves are determined without consideration of possible loss recoveries from third parties.

Specific costs included in environmental expense and reserves include site assessment, development of a remediation plan, clean-up costs, post-remediation expenditures, monitoring, fines, penalties and legal fees. Reserve amounts represent the expected undiscounted future cash outflows associated with such plans and actions.

Self Insurance

We are generally self-insured up to certain limits for product/general liability, workers’ compensation, auto liability and professional liability insurance programs. These policies have deductibles and self-insured retentions ranging from $150 thousand to $1.5 million per occurrence, depending upon the type of coverage and policy period. We are also generally self-insured up to certain stop-limits for certain employee health benefits, including medical, drug and dental. Our policy is to estimate reserves based upon a number of factors including known claims, estimated incurred but not reported claims and outside actuarial analysis, which are based on historical information along with certain assumptions about future events. Such estimated reserves are classified as Other Current Liabilities and Other Long-Term Liabilities within the Consolidated Balance Sheets.

Revenue Recognition — Sales and Rentals

Net revenues reflect gross revenues less sales discounts and allowances and customer returns for product sales and a provision for uncollectible receivables for rentals. Revenue is evaluated under the following criteria and recognized when each is met:

• Evidence of an arrangement: An agreement with the customer reflecting the terms and conditions to deliver products or services serves as evidence of an arrangement.

• Delivery: For products, delivery is considered to occur upon receipt by the customer and the transfer of title and risk of loss. For rental services, delivery is considered to occur when the services are rendered.

• Fixed or determinable price: The sales price is considered fixed or determinable if it is not subject to refund or adjustment.

• Collection is deemed probable: At or prior to the time of a transaction, credit reviews of each customer are performed to determine the creditworthiness of the customer. Collection is deemed probable if the customer is expected to be able to pay amounts under the arrangement as those amounts become due. If collection is not probable, revenue is recognized when collection becomes probable, generally upon cash collection.

As a general interpretation of the above guidelines, revenues for health care products in the patient care environment are generally recognized upon delivery of the products to the customer and their assumption of risk of loss and other risks and rewards of ownership. Local business customs and non-standard sales terms can sometimes result in deviations to this normal practice in certain instances; however, in no case is revenue recognized prior to the transfer of risk of loss and rewards of ownership.

For non-invasive therapy products and medical equipment management services, the majority of product offerings are rental products for which revenues are recognized consistent with the rendering of the service and use of products. For The Vest^® product, revenue is generally recognized at the time of receipt of authorization for billing from the applicable paying entity as this serves as evidence of the arrangement and sets a fixed or determinable price.

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For health care products and services aimed at improving operational efficiency and asset utilization, various revenue recognition techniques are used, depending on the offering. Arrangements to provide services, routinely under separately sold service and maintenance contracts, result in the deferral of revenues until specified services are performed. Service contract revenue is generally recognized ratably over the contract period, if applicable, or as services are rendered. Product-related goods are generally recognized upon delivery to the customer, similar to products in the patient care environment.

Revenues are presented in the Statements of Consolidated Income (Loss) net of certain discounts and sales adjustments. For product sales, we record reserves resulting in a reduction of revenue for contractual discounts, as well as price concessions and product returns. Likewise, rental revenue reserves, reflecting contractual and other routine billing adjustments, are recorded as a reduction of revenues. Reserves for revenue are estimated based upon historical rates for revenue adjustments.

Taxes Collected from Customers and Remitted to Governmental Units

Taxes assessed by a governmental authority that are directly imposed on a revenue producing transaction between us and our customers, including but not limited to sales taxes, use taxes, and value added taxes, are accounted for on a net (excluded from revenues and costs) basis.

Cost of Revenues

Cost of goods sold for capital sales consists primarily of purchased material costs, fixed manufacturing expense, variable direct labor, overhead costs and costs associated with the distribution and delivery of products to our customers. Rental expenses consist of costs associated directly with rental revenue, including depreciation, maintenance, logistics and service center facility and personnel costs.

Research and Development Costs

Research and development costs are expensed as incurred. Costs included within continuing operations in the Statements of Consolidated Income (Loss) were $58.3 million, $55.7 million and $57.3 million for fiscal years 2010, 2009 and 2008.

In addition, certain software development technology costs are capitalized as intangibles and are amortized over a period of three to five years once the software is ready for its intended use. The amount spent during fiscal years 2010, 2009 and 2008 was approximately $4.8 million, $5.8 million and $9.5 million.

Advertising Costs

Advertising costs are expensed as incurred. Costs included within continuing operations in the Statements of Consolidated Income (Loss) were $4.3 million, $4.0 million and $7.0 million for fiscal years 2010, 2009 and 2008.

Comprehensive Income

We include the net-of-tax effect of unrealized gains or losses on our available-for-sale securities, foreign currency translation adjustments and pension or other defined benefit postretirement plans’ actuarial gains or losses and prior service costs or credits in comprehensive income.

The composition of Accumulated Other Comprehensive Income (Loss) at September 30 is as follows:

	September 30,			September 30,			September 30,
	2010			2009			2008
Available-for-sale securities and currency hedges	$	(0.7	)	$	(0.9	)	$	(0.6	)
Foreign currency translation adjustment		(11.9	)		(12.6	)		2.4
Items not yet recognized as a component of net periodic pension and postretirement healthcare costs		(49.2	)		(46.4	)		(6.0	)
Total	$	(61.8	)	$	(59.9	)	$	(4.2	)

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Foreign Currency Translation

The functional currency of foreign operations is generally the local currency in the country of domicile. Assets and liabilities of foreign operations are primarily translated into U.S. dollars at year-end rates of exchange and the income statements are translated at the average rates of exchange prevailing during the year. Adjustments resulting from translation of the financial statements of foreign operations into U.S. dollars are excluded from the determination of net income, but included as a component of Accumulated Other Comprehensive Income (Loss). Foreign currency gains and losses resulting from foreign currency transactions are included in our results of operations and are not material.

Stock-Based Compensation

We account for stock-based compensation under fair value provisions. Stock-based compensation cost is measured at the grant date based on the value of the award and is recognized as expense over the vesting period. In order to determine the fair value of stock options on the date of grant, we utilize a Binomial model. Inherent in this model are assumptions related to a volatility factor, expected life, risk-free interest rate, dividend yield and expected forfeitures. The risk-free interest rate is based on factual data derived from public sources. The volatility factor, expected life, dividend yield and expected forfeiture assumptions require judgment utilizing historical information, peer data and future expectations. Deferred stock (also known as restricted stock units (“RSUs”)) are measured based on the fair market price of our common stock on the date of grant, as reported by the New York Stock Exchange, multiplied by the number of units granted. See Note 13 for further details.

Income Taxes

The Company and its eligible domestic subsidiaries file a consolidated U.S. income tax return. Foreign operations file income tax returns in a number of jurisdictions. Deferred income taxes are computed using an asset and liability approach to reflect the net tax effects of temporary differences between the financial reporting carrying amounts of assets and liabilities and the corresponding income tax amounts. We have a variety of deferred tax assets in numerous tax jurisdictions. These deferred tax assets are subject to periodic assessment as to recoverability and if it is determined that it is more likely than not that the benefits will not be realized, valuation allowances are recognized. In evaluating whether it is more likely than not that we would recover these deferred tax assets, future taxable income, the reversal of existing temporary differences and tax planning strategies are considered.

We account for uncertain income tax positions using a threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The difference between the tax benefit recognized in the financial statements for an uncertain income tax position and the tax benefit claimed in the tax return is referred to as an unrecognized tax benefit. See Note 11 for further details.

Derivative Instruments and Hedging Activity

We use derivative financial instruments to manage the economic impact of fluctuations in currency exchange rates. Derivative financial instruments related to currency exchange rates include forward purchase and sale agreements which generally have terms no greater than 15 months. Additionally, interest rate swaps have sometimes been used to convert a portion of our long-term debt from fixed to variable interest rates.

Derivative financial instruments are recognized on the Consolidated Balance Sheets as either assets or liabilities and are measured at fair value. Changes in the fair value of derivatives are recorded each period in the Statement of Consolidated Income (Loss) or Accumulated Other Comprehensive Income (Loss), depending on whether a derivative is designated and considered effective as part of a hedge transaction, and if it is, the type of hedge transaction. Gains and losses on derivative instruments reported in Accumulated Other Comprehensive Income (Loss) are subsequently included in the Statement of Consolidated Income (Loss) in the periods in which earnings are affected by the hedged item. These activities have not had a material effect on our financial position or results of operations for the periods presented herein.

Recently Issued Accounting Guidance

On October 1, 2009, we adopted the Financial Accounting Standard Board’s (“FASB”) authoritative guidance related to business combinations, noncontrolling interests in consolidated financial statements and assets acquired and liabilities assumed in a business combination that arise from contingencies. Our adoption of this guidance was prospective and applies to business combinations that occurred on or after October 1, 2009. See Note 2 for application of this guidance to the joint venture entered into during our first fiscal quarter of 2010.

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On October 1, 2009, we adopted the FASB’s authoritative guidance related to the determination of the useful life of intangible assets. Our adoption of this guidance was prospective and did not have a material impact on our consolidated financial statements or the joint venture discussed in Note 2.

On October 1, 2009, we early adopted the FASB’s authoritative guidance for arrangements with multiple deliverables and arrangements that include software elements. Our adoption of this guidance was prospective and did not have a material impact on our consolidated financial statements.

In December 2008, the FASB issued new authoritative guidance related to employers’ disclosures about postretirement benefit plan assets. This guidance requires detailed annual disclosures regarding the investment strategies, fair value measurements, and concentration of risk of plan assets of our defined benefit pension plans. Our adoption of this guidance is prospective and became effective beginning September 30, 2010. See Note 8 for further details.

In June 2009, the FASB revised the authoritative guidance to require entities to provide more information about sales of securitized financial assets and similar transactions, particularly if the seller retains some risk with respect to the assets. This revised guidance will become effective beginning October 1, 2010. We have evaluated the potential impact this guidance may have on our consolidated financial statements and have concluded that it is not material to our existing activity. When appropriate, we will consider and apply this guidance in connection with future business transactions.

In June 2009, the FASB revised the authoritative guidance to improve financial reporting by companies involved with variable interest entities and to provide more relevant and reliable information to users of financial statements. This revised guidance will become effective beginning October 1, 2010. We have evaluated the potential impact this guidance may have on our consolidated financial statements and have concluded that it is currently not applicable to us. When appropriate, we will consider and apply this guidance in connection with future business transactions.

NOTE 2. ACQUISITIONS

Encompass Joint Venture

On November 9, 2009, we entered into a joint venture with Encompass Group, LLC (“Encompass Group”), a leader in health care textiles and therapeutic and prevention surfaces, to form Encompass TSS, LLC (“Encompass JV”). This joint venture includes contributed former assets of Encompass Therapeutic Support Systems (“ETSS”), a division of Encompass Group and is 60 percent owned by us and 40 percent owned by Encompass Group. Encompass Group, through its ETSS business unit, traditionally focused on providing surface replacement systems. For our 60 percent ownership interest in the Encompass JV we paid $7.5 million to Encompass Group, contributed cash and entered into license and distribution agreements with Encompass JV.

The following summarizes the fair value of the assets acquired and liabilities assumed at the date of formation.

	Amount
Goodwill	$	8.0
Trade Name		1.5
Customer relationships		7.7
Technology		2.4
Net liabilities assumed		(0.7	)
Noncontrolling interest		(7.5	)
Additional paid-in-capital		(3.9	)
Total purchase price	$	7.5

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The Encompass JV agreements contain both a put option for Encompass Group and a call option for us, requiring or allowing us to purchase the remaining 40 percent interest, which are based on predetermined earnings multiples. Changes to the value of the put are accreted to noncontrolling interest in our Consolidated Balance Sheet with the offset being recorded as a component of retained earnings.

The goodwill of $8.0 million arising from the Encompass JV consists largely of the synergies created from combining ETSS’s focus on customer replacement surfaces with our platform brands. The goodwill is deductible for tax purposes and will be allocated entirely to our North America Acute Care segment.

The useful lives assigned to intangibles identified as part of the Encompass JV are as follows:

	Useful Life
Trade name		7
Customer relationships		7
Technology		5

If the Encompass JV had been consummated at the beginning of our 2009 fiscal year, the impact to revenues and net income on an unaudited pro forma basis would not have been significant to our financial results in any of the periods presented.

Liko Acquisition

On October 1, 2008, we acquired two affiliated companies: Liko Vårdlyft AB (“Liko Sweden”) and Liko North America Corporation (“Liko North America” and, together with Liko Sweden, “Liko”). Liko, headquartered in Lulea, Sweden, is a leading supplier and developer of patient lifts, slings and other patient transfer technology. The acquisition of Liko represents a direct connection to our mission of enhancing outcomes for patients and their caregivers and is in line with our strategy to add complementary technologies that leverage our global business and presence across the continuum of care. The purchase price for Liko was $190.4 million, including direct acquisition costs of $3.6 million and the payment of outstanding Liko debt of $9.8 million ($187.2 million net of cash acquired). The results of Liko are included in the Consolidated Financial Statements since the date of acquisition.

The following table summarizes the allocation of the purchase price of Liko based on estimated fair values as of the acquisition date:

	Amount
Goodwill	$	139.5
Trade name		15.8
Customer relationships		15.1
Developed technology		7.3
Non-compete agreements		1.7
Net assets acquired		18.9
Deferred tax liabilities		(7.9	)
Total purchase price	$	190.4

The purchase price remains subject to adjustment based on finalization of working capital and net debt adjustment provisions contained in the purchase agreements. Any such adjustment is expected to be favorable and not material and would be recorded in our Consolidated Statement of Income (Loss) as a reduction of the goodwill impairment charge that we recorded during fiscal 2009.

Goodwill is not deductible for tax purposes and has been allocated to reporting units included in all three of our reportable segments based on projected cash flows. The useful lives assigned to intangibles identified as part of the acquisition are as follows:

	Useful Life
Trade name	Indefinite
Developed technology		7
Customer relationships		7
Non-compete agreements		5

Total revenues for 2008 on an unaudited pro forma basis, as if the Liko acquisition had been consummated at the beginning of our 2008 fiscal year, would have been higher by approximately $74 million. The impact to net income on an unaudited pro forma basis would not have been significant to our financial results.

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NOTE 3. DISCONTINUED OPERATIONS

As discussed in Note 1, on March 31, 2008, we completed the spin-off of our funeral services business through a tax-free stock dividend to our shareholders. Pursuant to the Distribution Agreement (“Distribution Agreement”) between us and Hillenbrand, Inc., the holding company for the funeral services business, we contributed net assets in the amount of $270.1 million to Hillenbrand, Inc. The following table presents summary information related to the net assets contributed to Hillenbrand, Inc. at the close of business on March 31, 2008:

Assets
Current Assets
Cash	$	125.9
Investment securities		55.3
Trade accounts receivable, net of allowances		101.8
Inventories		49.7
Deferred income taxes		19.6
Other current assets		37.2
Total current assets		389.5
Property, plant and equipment, net		93.7
Intangible assets, net		21.3
Investments		27.9
Notes receivable		124.6
Deferred income taxes		19.5
Other assets		22.7
Total assets contributed	$	699.2
Liabilities
Current liabilities
Trade accounts payable	$	19.8
Accrued compensation		23.1
Short-term borrowings		250.0
Accrued customer rebates		18.8
Other current liabilities		40.5
Total current liabilities		352.2
Accrued pension and postretirement benefits		38.4
Other liabilities		38.5
Total liabilities contributed	$	429.1
Total net assets contributed	$	270.1

Included in the net assets contributed and discussed above were payables of $15.4 million related to the final cash distribution to Hillenbrand, Inc., which was paid in full in April 2008. Additionally, at March 31, 2008, Hillenbrand, Inc. owed the Company $20.0 million related primarily to income taxes payable on income generated by the funeral services business through the date of separation. As of the end of fiscal 2008, this amount had been fully settled.

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As a result of the spin-off transaction, the funeral services business and certain other costs have been classified within discontinued operations in the Company’s 2008 Consolidated Statement of Income. The following table and accompanying notes present certain summary income statement information related to the discontinued funeral services business and the spin-off transaction for the fiscal year ended September 30, 2008:

	Fiscal Year Ended
	September 30,
	2008
Funeral services sales	$	354.3
Total expenses (a) (b) (c) (d)		275.5
Income from discontinued operations before income taxes		78.8
Income tax expense (e)		30.1
Income from discontinued operations	$	48.7

(a)	Total expenses include all costs of discontinued operations, including costs of goods sold, operating expenses (research and development expenses and selling, general and administrative expenses) and other income and expense items.
(b)	We incurred certain non-recurring costs directly related to the spin-off transaction of $26.1 million for fiscal year 2008. Of these amounts, which were primarily for investment banking fees, legal, accounting, other professional and consulting fees, $24.5 million have been allocated to discontinued operations in the 2008 Consolidated Statement of Income. All remaining amounts are recorded within income from continuing operations.
(c)	Total one-time stock-based compensation charges of $10.3 million were recognized in the second quarter of fiscal 2008 due to the modification of stock options and accelerated vesting of certain restricted stock awards in connection with the spin-off. The portion of the stock-based compensation charge related to outstanding awards held by employees of the funeral services business, which was $4.5 million, were allocated to discontinued operations, while the remaining $5.8 million was recorded within income from continuing operations. See Note 13 for more details of stock-based compensation activity related to the spin-off transaction.
(d)	On July 1, 2004, we closed on the sale of Forethought Financial Services, Inc., a previously wholly-owned insurance business, to Forethought Financial Group, Inc. (“FFG”), for a combination of consideration, including cash, seller financing and warrants. During our second fiscal quarter of 2008, we renegotiated the terms of the seller financing provided to FFG, resulting in the recognition of a cumulative charge in our second quarter of fiscal 2008 of $6.4 million. The remaining outstanding portion of the seller note and warrants were contributed to a subsidiary of Hillenbrand, Inc. in conjunction with our spin-off of the funeral services business, and accordingly, the $6.4 million charge was classified as a component of income from discontinued operations in the 2008 Consolidated Statement of Income.
(e)	Includes the income tax effects of the adjustments described above.

The Company entered into the Distribution Agreement, a Judgment Sharing Agreement and a Tax Sharing Agreement as well as a number of other agreements with Hillenbrand, Inc. for the purpose of accomplishing the separation of the funeral services business from the Company and the distribution of Hillenbrand, Inc. common stock to the Company’s shareholders. These agreements govern the relationship between the Company and Hillenbrand, Inc. subsequent to the distribution and provide for the allocation of the assets, investments and property of the Company as well as of investments, property, tax and other liabilities and obligations attributable to periods prior to the distribution. They also limit our ability to incur indebtedness, pay dividends in excess of a pre-determined amount, and make acquisitions.

Distribution Agreement

The Distribution Agreement sets forth the agreements between the Company and Hillenbrand, Inc. with respect to the principal corporate transactions that were required to effect the separation of Hillenbrand, Inc. from the Company, the allocation of certain corporate assets and liabilities of the Company and Hillenbrand, Inc., and the framework of the other agreements governing the relationship between the two companies, including indemnifications between the parties.

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Additionally, in order to preserve the credit capacity of each of the Company and Hillenbrand, Inc. to perform its obligations under the Judgment Sharing Agreement described below, the Distribution Agreement imposes certain restrictive covenants on the Company and Hillenbrand, Inc. Specifically, the Distribution Agreement provides that the Company and its subsidiaries will not:

• incur indebtedness to finance the payment of any extraordinary cash dividend on its outstanding capital stock or the repurchase of any outstanding shares of its capital stock;

• declare and pay regular quarterly cash dividends on the shares of the Company’s common stock in excess of $0.1025 per share;

• make any acquisition outside its core area of business;

• incur indebtedness in excess of $100 million to finance any acquisition in its core area of business without the receipt of an opinion from a qualified investment banker that the transaction is fair to the Company’s shareholders from a financial point of view; or

• incur indebtedness to make an acquisition in its core area of business that either (1) causes the Company’s ratio, calculated as provided in the Distribution Agreement, of Pro Forma Consolidated Total Debt to Consolidated EBITDA (each as defined in the Distribution Agreement) to exceed 1.8x or (2) causes the Company’s credit rating by either Standard & Poor’s Ratings Services or Moody’s Investor Services to fall more than one category below its initial rating after giving effect to the spin-off.

These restrictive covenants will terminate in the event that either the Company’s or Hillenbrand, Inc.’s funding obligations under the Judgment Sharing Agreement terminate in accordance with the terms of that agreement. The Distribution Agreement imposes similar restrictions on Hillenbrand, Inc. and its subsidiaries.

Judgment Sharing Agreement

The Company and Hillenbrand, Inc.’s Batesville Casket Company subsidiary have been named in an antitrust lawsuit described in Note 16. The Company believes that it has committed no wrongdoing as alleged by the plaintiffs and that it has meritorious defenses to plaintiffs’ underlying allegations and damage theories.

The Judgment Sharing Agreement is intended to allocate any potential liability that may arise from certain anti-trust litigation and any other case that is consolidated with the litigation. We apply the same methodology in recording liabilities for loss contingencies related to lawsuits in evaluating and accounting for the Judgment Sharing Agreement.

The Judgment Sharing Agreement provides that Hillenbrand, Inc. is responsible for bearing all fees and costs incurred in the defense of the antitrust litigation matters on behalf of itself and the Company. The Distribution Agreement contains provisions governing the joint defense of the antitrust litigation and other claims. In the event that the Company or Hillenbrand, Inc. is dismissed as a defendant in the antitrust litigation matters (except where the dismissal results from a settlement agreement that does not include both the Company and Hillenbrand, Inc.) or is found upon conclusion of trial not to be liable for payment of any damages to the plaintiffs, any funding obligations under the Judgment Sharing Agreement of the party so dismissed or found not liable will terminate once such dismissal or finding of no liability is finally judicially determined. See Note 16 for additional information on the litigation in question.

Tax Sharing Agreement

The Company entered into a Tax Sharing Agreement with Hillenbrand, Inc. that generally governs each party’s respective rights, responsibilities and obligations after the spin-off with respect to taxes, including ordinary course of business taxes and taxes, if any, incurred as a result of any failure of the distribution to qualify as a tax-free distribution and the preparation and filing of tax returns and the handling of tax audits. Under the Tax Sharing Agreement, Hillenbrand, Inc. is responsible, with certain exceptions, for the payment of all income and non-income taxes attributable to its operations, and the operations of its direct and indirect subsidiaries, whether or not such tax liability is reflected on a consolidated or combined tax return filed by the Company. The Company is responsible for the payment of all income and non-income taxes that are not specifically the obligation of Hillenbrand, Inc.

The Tax Sharing Agreement also imposes restrictions on the Company’s and Hillenbrand, Inc.’s ability to engage in certain actions following the separation and sets forth the respective obligations among the Company and Hillenbrand, Inc. with respect to the filing of tax returns, the administration of tax contests, assistance and cooperation and other matters.

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Other

The Company entered into shared services and transition services agreements regarding certain services to be provided by each company and its subsidiaries to the other and its subsidiaries following the separation, as well as leases and subleases with Hillenbrand, Inc. for shared locations. Subleases for space in commercially leased locations have varying terms generally matching the terms of the underlying leases, which approximate fair market value. Also, the Company entered into agreements providing for the joint ownership by it and Hillenbrand, Inc. of certain assets, including certain aircraft and corporate conference facilities used by both companies. We also entered into a limited, mutual right of first offer or right of first refusal agreement with Hillenbrand, Inc. with respect to various real estate and improvements thereon owned by us or Hillenbrand, Inc. in the Batesville, Indiana area. As a result of these agreements and resulting services provided by and for Hillenbrand, Inc. since the spin-off, we had a payable and receivable with Hillenbrand, Inc. of $0.7 million and $5.0 million, as of September 30, 2008, a payable and receivable of $0.3 million and $2.3 million, as of September 30, 2009 and a payable and receivable of $0.2 million and $0.4 million as of September 30, 2010.

Additional details on all these agreements may be found in the Company’s Current Report on Form 8-K filed with the U.S. Securities and Exchange Commission (the “SEC”) on March 17, 2008.

NOTE 4. SALE OF NON-STRATEGIC ASSETS

In June 2009, we completed the sale of patents and intellectual property related to our Negative Pressure Wound Therapy technology for which there were no capitalized costs reflected on our consolidated balance sheet. In May 2009, we finalized a strategic development agreement with Teletracking Technologies, Inc. (“TeleTracking”) that resulted in the purchase by TeleTracking of certain assets and obligations related to the NaviCare^® Patient Flow product line. These combined transactions resulted in a gain of $10.2 million, net of related transaction costs.

NOTE 5. IMPAIRMENT OF GOODWILL AND OTHER INTANGIBLES

The Company tests goodwill and other intangible assets for impairment on an annual basis during its third fiscal quarter, or more often if events or circumstances indicate there may be impairment. The assessment during the third quarter of 2010 and 2008 indicated that there was no impairment with respect to goodwill or other recorded intangible assets. During the second quarter of fiscal 2009, as a result of the decline in our market capitalization related to the overall macro-economic climate and its resulting unfavorable impact on hospital capital spending and our operating results, the Company determined it was required to perform an interim impairment test with respect to goodwill and certain other intangibles outside of its normal third fiscal quarter test period.

Based on the results of goodwill and other intangible asset impairment testing as of March 31, 2009, the Company recorded an estimated impairment charge of $470 million in the second fiscal quarter of 2009. During the third quarter of 2009, the Company refined its impairment assessment for the second quarter and recorded an additional charge of $3.8 million. A further adjustment of $1.0 million was required in the fourth quarter as a result of purchase accounting adjustments in connection with the Liko acquisition. An additional adjustment is likely upon finalization of the working capital and net debt adjustments associated with the Liko acquisition, with any such adjustment expected to be favorable and not material.

As discussed in Note 14, the Company operates in three reportable business segments. Goodwill and other intangible impairment testing are performed at the reporting unit level, which is one level below a reportable business segment. The Company has determined that it has six reporting units. Goodwill is assigned to reporting units at the date the goodwill is initially recorded and has been reallocated as necessary based on the restructuring of reporting units over time. Once goodwill has been assigned to reporting units, it no longer retains its association with a particular acquisition, and all of the activities within a reporting unit, whether acquired or organically grown, are available to support the value of the goodwill.

The goodwill impairment test involves a two-step process. The first step, used to identify potential impairment, is a comparison of each reporting unit’s estimated fair value to its carrying value, including goodwill. If the fair value of a reporting unit exceeds its carrying value, applicable goodwill is considered not to be impaired. If the carrying value exceeds fair value, there is an indication of impairment and the second step is performed to measure the amount of the impairment. The second step requires the Company to calculate an implied fair value of goodwill. The implied fair value of goodwill is determined in the same manner as the amount of goodwill recognized in a business combination, which is the excess of the fair value of the reporting unit, as determined in the first step, over the aggregate fair values of the individual assets, liabilities and identifiable intangibles as if the reporting unit was being acquired in a business combination. If the goodwill assigned to a reporting unit exceeds the implied fair value of the goodwill, an impairment charge is recorded for the excess.

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For our second quarter of 2009 analysis, the Company estimated the fair value of each reporting unit in step one based on discounted cash flows as well as a market approach that compared each reporting unit’s earnings and revenue multiples to those of comparable public companies. The reporting unit’s discounted cash flows required significant management judgment with respect to forecasted sales, gross margin and selling, general and administrative expenses, capital expenditures and the selection and use of an appropriate discount rate. Utilizing the Company’s weighted average cost of capital as the discount rate for the discounted cash flows and median revenue and earnings multiples of comparable public companies under the market approach resulted in an implied fair value substantially in excess of the Company’s market capitalization. In order to reconcile the discounted cash flows and market approach fair values to the trading value of the Company’s common stock, the Company applied higher discount rates than its weighted average cost of capital to its discounted cash flows and utilized earnings and revenue multiples below the median of comparable public companies, reflecting the equity risk premiums expected by a market participant. The reconciled fair values under both the discounted cash flows and market approach were substantially the same and resulted in three of the Company’s reporting units having a carrying value in excess of their fair value.

The second step required the Company to allocate the fair value of each reporting unit that failed the first step test to the fair value of each reporting unit’s net assets. The Company calculated the fair values of each reporting unit’s net assets, with assistance from a third party valuation firm in the determination of fair values for significant tangible and intangible assets. All Company-specific data and analytics, including estimates and assumptions, used in the valuations prepared by the third party valuation firm were either prepared or validated by the Company. Management takes full responsibility for this data and the ultimate results of the valuation work including the final fair values assigned to each reporting unit. Due to the fact that the Company was required to allocate a significant portion of fair value to unrecorded intangible assets such as the Hill-Rom trade name, technology and know-how and customer lists, but were not permitted to record these assets on the Company’s balance sheet, the resulting fair value allocated to implied goodwill was significantly lower than recorded goodwill resulting in the impairment charge.

In fiscal 2009, the Company incurred the impairment charge for goodwill and other intangibles in each of its three reportable segments in the following amounts — North America Acute Care $289.5 million, North America Post-Acute Care $68.6 million and International and Surgical $114.7 million, which represented a full impairment of goodwill at that time in the applicable North America Acute Care and International reporting units.

The following is a summary of the activity in goodwill by segment.

	North America			North America			International and
	Acute Care			Post-Acute Care			Surgical			Total
Balances at October 1, 2008:
Goodwill	$	240.1		$	87.6		$	94.8		$	422.5
Accumulated impairment losses		—			—			—			—
Goodwill, net at October 1, 2008		240.1			87.6			94.8			422.5
Changes in Goodwill during the period:
Goodwill related to acquisitions		49.4			26.6			63.5			139.5
Impairment losses		(289.5	)		(68.6	)		(114.7	)		(472.8	)
Currency translation effect		—			—			(16.1	)		(16.1	)
Balances at September 30, 2009:
Goodwill		289.5			114.2			142.2			545.9
Accumulated impairment losses		(289.5	)		(68.6	)		(114.7	)		(472.8	)
Goodwill, net at September 30, 2009		—			45.6			27.5			73.1
Changes in Goodwill during the period:
Goodwill related to acquisitions		8.0			—			—			8.0
Balances at September 30, 2010:
Goodwill		297.5			114.2			142.2			553.9
Accumulated impairment losses		(289.5	)		(68.6	)		(114.7	)		(472.8	)
Goodwill, net at September 30, 2010	$	8.0		$	45.6		$	27.5		$	81.1

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NOTE 6. FINANCING AGREEMENTS

Total debt consists of the following:

	September 30,		September 30,
	2010		2009
Outstanding finance credit lines	$	8.1	$	12.2
Revolving credit facility		45.0		90.0
Unsecured 8.50% debentures due on December 1, 2011		48.4		49.3
Unsecured 7.00% debentures due on February 15, 2024		19.7		19.8
Unsecured 6.75% debentures due on December 15, 2027		29.8		29.8
Other		0.6		0.8
Total debt		151.6		201.9
Less current portion of debt		53.1		102.2
Total long-term debt	$	98.5	$	99.7

We have trade finance credit lines and uncommitted letter of credit facilities. These lines are associated with the normal course of business and are not currently, nor have they historically, been of material size to the overall business.

In 2004, we issued $250.0 million of 4.5 percent senior notes due in 2009. In conjunction with and in preparation for the spin-off of the funeral services business, the Company made a cash tender offer to purchase any and all of these notes. As a result of that tender offer, $224.3 million of long-term debt was retired effective March 31, 2008. Upon completion of the tender offer, the related interest rate swaps were also terminated resulting in a gain of $4.4 million. A portion of this gain was being amortized over the remaining life of the notes. A charge of $2.9 million was recognized by the Company during our second fiscal quarter of 2008 for early extinguishment of such debt. During our third fiscal quarter of 2009, we repaid the remaining $25.7 million of outstanding senior notes related to the 2004 issuance at the scheduled maturity date.

The retirement of debt discussed above was financed by $250.0 million of proceeds from borrowings under a Hillenbrand, Inc. revolving credit facility, which was put in place just prior to the spin-off of the funeral services business on March 31, 2008. Subsequent to its borrowing under its new credit facility, Hillenbrand, Inc. made a distribution of $250.0 million to the Company. The Company has no obligations under the Hillenbrand, Inc. credit facility.

Other unsecured debentures outstanding at September 30, 2010 have fixed rates of interest. We have deferred gains included in the amounts above from the termination of previous interest rate swap agreements, and those deferred gains amounted to $2.1 million at September 30, 2010 and $3.1 million at September 30, 2009. The deferred gains on the termination of the swaps are being amortized and recognized as a reduction of interest expense over the remaining term of the related debt through 2011 and 2024, and as a result, the effective interest rates on that debt have been and will continue to be lower than the stated interest rates on the debt.

The Company has a $500.0 million five-year senior revolving credit facility. The term of the five-year facility expires on March 28, 2013 (subject to extension upon satisfaction of certain conditions set forth in the credit facility). Borrowings under the credit facility bear interest at variable rates specified therein, and the availability of borrowings is subject to our ability at the time of borrowing to meet certain specified conditions, including compliance with covenants contained in the credit agreement governing the facility. The credit agreement contains covenants that, among other matters, require the Company to maintain a ratio of consolidated indebtedness to consolidated EBITDA (each as defined in the credit agreement) of not more than 3.5:1.0 and a ratio of consolidated EBITDA to interest expense of not less than 3.5:1.0. The proceeds of the five-year facility shall be used, as needed: (i) for working capital, capital expenditures, and other lawful corporate purposes; and (ii) to finance acquisitions.

As of September 30, 2010, we had outstanding borrowings of $45.0 million and undrawn letters of credit of $5.8 million under the five-year facility, leaving $449.2 million of borrowing capacity available under the facility. During the first quarter of fiscal 2010, we made a payment of $45.0 million on our credit facility to reduce a portion of the short-term debt originally borrowed in conjunction with the Liko acquisition.

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The fair value of our debt is estimated based on the quoted market prices for the same or similar issues or on the current rates offered to us for debt of the same remaining maturities. The book values of our short-term debt instruments approximate fair value. The estimated fair values of our long-term debt instruments were $95.7 million at September 30, 2010 which was unchanged from September 30, 2009.

NOTE 7. FAIR VALUE MEASUREMENTS

Fair value measurements are classified and disclosed in one of the following three categories:

• Level 1: Financial instruments with unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets and liabilities.

• Level 2: Financial instruments with observable inputs other than those included in Level 1 such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

• Level 3: Financial instruments with unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Unobservable inputs reflect the Company’s own assumptions that market participants would use in pricing the asset or liability (including assumptions about risk). Unobservable inputs shall be developed based on the best information available in the circumstances, which might include the Company’s own data.

The following table summarizes the Company’s financial assets and liabilities included in its Consolidated Balance Sheets, measured at fair value on a recurring basis:

			Quoted Prices in		Significant Other		Significant
			Active Markets for		Observable		Unobservable
	Balance at		Identical Assets		Inputs		Inputs
	September 30, 2010		(Level 1)		(Level 2)		(Level 3)
Cash and cash equivalents	$	184.5	$	184.5	$	—	$	—
Available-for-sale marketable securities		11.8		—		—		11.8
Other investments		0.3		—		—		0.3
Total assets at fair value	$	196.6	$	184.5	$	—	$	12.1
			Quoted Prices in		Significant Other		Significant
			Active Markets for		Observable		Unobservable
	Balance at		Identical Assets		Inputs		Inputs
	September 30, 2009		(Level 1)		(Level 2)		(Level 3)
Cash and cash equivalents	$	170.6	$	170.6	$	—	$	—
Trading securities		24.9		—		—		24.9
Available-for-sale marketable securities		16.7		—		—		16.7
Put rights		1.5		—		—		1.5
Other investments		0.5		—		—		0.5
Total assets at fair value	$	214.2	$	170.6	$	—	$	43.6

The following methods and assumptions were used to estimate the fair value of each class of financial instrument for which it is practicable to estimate that value.

At September 30, 2010, we had $11.8 million of AAA rated student loan auction rate securities. While we continue to earn interest on the ARS at the contractual rate, these investments are not currently being bought and sold in an active market and therefore do not have readily determinable market values. At September 30, 2010, the Company’s investment advisors provided a valuation based on unobservable inputs for the ARS. The investment advisors utilized a discounted cash flow approach (an “Income approach”) to arrive at this valuation, which was corroborated by separate and comparable discounted cash flow analysis prepared by us. The assumptions used in preparing the discounted cash flow model include estimates of interest rates, timing and amount of cash flows, credit spread related yield and illiquidity premiums, and expected holding periods of the ARS. These assumptions are volatile and subject to change as the underlying sources of these assumptions and market conditions change. See below for a reconciliation of the beginning to ending balances of these assets and the related change in the fair value of these assets during fiscal 2010.

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Currently, we intend, and believe we have the ability to hold these assets until market conditions are more favorable. If current market conditions do not improve or worsen, the result could be further realized or unrealized losses.

The following table presents the activity related to our ARS and the Put (see Note 1) during the year ended September 30, 2010.

	ARS
	Available-												(Gain)/
	For-Sale			Trading			Put			AOCL			Loss
Balance at October 1, 2009	$	16.7		$	24.9		$	1.5		$	1.2		$	—
Change in fair value		—			1.5			(0.3	)		—			(1.6	)
Sales or redemptions		(4.9	)		(26.4	)		(1.2	)		(0.1	)		1.8
Balance at September 30, 2010	$	11.8		$	—		$	—		$	1.1		$	0.2

The components of the change in our unrealized gains during fiscal years 2010, 2009 and 2008 were as follows:

	2010			2009			2008
Unrealized gains (losses) on available-for sale securities:
Unrealized holding gains (losses) arising during period, net-of-tax	$	0.2		$	(3.0	)	$	2.0
Less: Reclassification adjustment for losses (gains) realized in net income, net-of-tax		(0.1	)		2.7			(4.6	)
Net change in unrealized gains (losses), net-of-tax	$	0.1		$	(0.3	)	$	(2.6	)

For the fiscal years ended September 30, 2010, 2009 and 2008, we recognized income on our investments of $2.3 million, $2.9 million and $9.3 million, which did not include any impairments.

The carrying amounts of current assets and liabilities approximate fair value because of the short maturity of those instruments.

NOTE 8. RETIREMENT AND POSTRETIREMENT BENEFIT PLANS

The Company’s retirement plans consist of defined benefit plans, a post-retirement healthcare plan, and defined contribution savings plans. Plans cover certain employees both in and outside of the U.S.

Retirement Plans

The company sponsors four defined benefit plans. Those plans include a master defined benefit retirement plan, a nonqualified supplemental executive defined benefit retirement plan, and two defined benefit retirement plans covering employees in Germany and France. During 2010, the Company merged the defined benefit plan related to our fiscal 2004 acquisition of Mediq, Inc. (Mediq) into the master defined benefit plan. For comparable periods, the Mediq plan has been combined with the Master plan. Benefits for such plans are based primarily on years of service and the employee’s level of compensation during specific periods of employment. We contribute funds to trusts as necessary to provide for current service and for any unfunded projected future benefit obligation over a reasonable period of time. All of our plans have a September 30th measurement date.

As discussed in Note 10, the Company announced a restructuring plan during its second quarter of fiscal 2009. The restructuring resulted in a curtailment and remeasurement of both the master defined benefit retirement plan and the postretirement health care plan. The impact of the remeasurement in each plan is included within the following tables as curtailment and special termination benefits.

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Effect on Operations

The components of net pension expense for our defined benefit retirement plans for fiscal years 2010, 2009 and 2008 were as follows:

	2010			2009			2008
Service cost	$	5.1		$	4.0		$	4.7
Interest cost		13.2			13.3			12.3
Expected return on plan assets		(13.1	)		(12.9	)		(13.2	)
Amortization of unrecognized prior service cost, net		0.6			0.6			0.6
Amortization of net (gain) loss		2.6			(0.1	)		—
Net periodic benefit cost		8.4			4.9			4.4
Curtailment and special termination benefits		—			2.8			0.3
Net pension expense	$	8.4		$	7.7		$	4.7

Obligations and Funded Status

The change in benefit obligations, plan assets and funded status, along with amounts recognized in the Consolidated Balance Sheets for our defined benefit retirement plans at September 30 were as follows:

	September 30,			September 30,
	2010			2009
Change in benefit obligation:
Benefit obligation at beginning of year	$	246.2		$	180.5
Service cost		5.1			4.0
Interest cost		13.2			13.3
Curtailment		—			1.1
Special termination benefits		—			1.3
Actuarial loss		11.0			52.8
Benefits paid		(8.1	)		(7.2	)
Exchange rate (gain) loss		(0.9	)		0.4
Benefit obligation at end of year		266.5			246.2
Change in plan assets:
Fair value of plan assets at beginning of year		152.8			145.1
Actual return on plan assets		19.7			1.5
Employer contributions		51.3			13.4
Benefits paid		(8.1	)		(7.2	)
Fair value of plan assets at end of year		215.7			152.8
Funded status and net amounts recognized	$	(50.8	)	$	(93.4	)
Amounts recorded in the Consolidated Balance Sheets:
Accrued pension benefits, current portion	$	(1.0	)	$	(1.1	)
Accrued pension benefits, long-term		(49.8	)		(92.3	)
Net amount recognized	$	(50.8	)	$	(93.4	)

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In addition to the amounts above, net actuarial losses of $81.4 million and prior service costs of $3.5 million, less an applicable aggregate tax effect of $31.5 million are included as components of Accumulated Other Comprehensive Income (Loss) at September 30, 2010. At September 30, 2009, net actuarial losses of $79.9 million and prior service costs of $4.0 million, less an applicable aggregate tax effect of $32.4 million, were included as components of Accumulated Other Comprehensive Income (Loss).

The estimated net actuarial loss and prior service cost for our defined benefit retirement plans that will be amortized from Accumulated Other Comprehensive Income (Loss) into net periodic benefit cost over the next fiscal year are $3.8 million and $0.6 million.

Accumulated Benefit Obligation

The accumulated benefit obligation for all defined benefit pension plans was $243.6 million and $222.0 million at September 30, 2010 and 2009. Selected information for our plans, including plans with accumulated benefit obligations exceeding plan assets at September 30, 2010 and 2009, was as follows:

	September 30, 2010						September 30, 2009
	PBO		ABO		Plan Assets		PBO		ABO		Plan Assets
Supplemental executive plan	$	4.2	$	3.2	$	—	$	3.7	$	2.7	$	—
Master plan		248.3		227.2		215.3		229.1		206.5		152.4
German plan		11.5		11.5		—		11.5		11.5		—
French plan		2.5		1.7		0.4		1.9		1.3		0.4
	$	266.5	$	243.6	$	215.7	$	246.2	$	222.0	$	152.8

Actuarial Assumptions

The weighted average assumptions used in accounting for our domestic pension plans were as follows:

	2010			2009			2008
Weighted average assumptions to determined benefit obligations at the measurement date:
Discount rate for obligation		5.1	%		5.5	%		7.5	%
Rate of compensation increase		3.5	%		4.0	%		4.0	%

	2010			2009			2008
Weighted average assumptions to determined benefit cost for the year:
Discount rate for expense		5.5	%		7.5	%		6.5	%
Expected rate of return on plan assets		7.5	%		7.5	%		8.0	%
Rate of compensation increase		4.0	%		4.0	%		4.0	%

The discount rates used in the valuation of our defined benefit pension plans are evaluated annually based on current market conditions. In setting these rates we utilize long-term bond indices and yield curves as a preliminary indication of interest rate movements, and then make adjustments to the respective indices to reflect differences in the terms of the bonds covered under the indices in comparison to the projected outflow of our pension obligations. The overall expected long-term rate of return is based on historical and expected future returns, which are inflation adjusted and weighted for the expected return for each component of the investment portfolio, as well as taking into consideration economic and capital market conditions. The rate of assumed compensation increase is also based on our specific historical trends of past wage adjustments.

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Plan Assets

The weighted average asset allocations of our master defined benefit retirement plan at September 30, 2010 and 2009, by asset category, along with target allocations, are as follows:

	2010			2009			2010			2009
	Target			Target			Actual			Actual
	Allocation			Allocation			Allocation			Allocation
Equity securities		50	%		58	%		50	%		57	%
Fixed income securities		50	%		40	%		50	%		41	%
Real estate		0	%		2	%		0	%		2	%
Total								100	%		100	%

The Company has a Plan Committee that sets investment guidelines with the assistance of an external consultant. These guidelines are established based on market conditions, risk tolerance, funding requirements and expected benefit payments. The Plan Committee also oversees the investment allocation process, selects the investment managers and monitors asset performance. As pension liabilities are long-term in nature, the Company employs a long-term total return approach to maximize the long-term rate of return on plan assets for a prudent level of risk. Target allocations are guidelines, not limitations, and plan fiduciaries may occasionally approve allocations above or below a target range or elect to rebalance the portfolio within the targeted range.

The investment portfolio contains a diversified portfolio of primarily equities and fixed income securities. Securities are also diversified in terms of domestic and international securities, short- and long-term securities, growth and value styles, large cap and small cap stocks. The Plan Committee believes with prudent risk tolerance and asset diversification, the account should be able to meet its pension and other post-retirement obligations in the future.

Trust assets are invested subject to the following policy restrictions: short-term securities must be rated A2/P2 or higher; all fixed-income securities shall have a credit quality rating “BBB” or higher; investments in equities in any one company may not exceed 10 percent of the equity portfolio. Hill-Rom common stock represented 0 percent and 2 percent of master trust assets at September 30, 2010 and 2009 and is subject to a statutory limit when it reaches 10 percent of total trust assets. All Hill-Rom common stock previously held in the master defined benefit retirement plan was sold in fiscal 2010.

Fair Value Measurements of Plan Assets

The following table summarizes the valuation of the Company’s pension plan assets by pricing categories at September 30, 2010:

			Quoted Prices in		Significant
			Active Markets		Other		Significant
			For Identical		Observable		Unobservable
			Assets		Inputs		Inputs
	Total		(Level 1)		(Level 2)		(Level 3)
Cash	$	3.6	$	3.6	$	—	$	—
Equities
US companies		72.9		72.9		—		—
International companies		33.4		33.4		—		—
Fixed income securities		105.4		53.4		52.0		—
Other		0.4		0.4		—
Total plan assets at fair value	$	215.7	$	163.7	$	52.0	$	—

The Level 2 fixed income securities are commingled funds valued using the net asset value (“NAV”) unit price provided by the fund administrator. The NAV is based on the value of the underlying assets owned by the fund, all of which are publicly traded securities. For further descriptions of the asset Levels used in the above chart, refer to Note 7.

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Cash Flows

In August 2006, the Pension Protection Act was signed into law in the U.S. The Pension Protection Act replaces the funding requirements for defined benefit pension plans by subjecting defined benefit plans to 100 percent of the current liability funding target. Defined benefit plans with a funding status of less than 80 percent of the current liability are defined as being “at risk.” The Company’s U.S. qualified defined benefit plan is funded in excess of 80 percent, and therefore the Company expects that the plans will not be subject to the “at risk” funding requirements of the Pension Protection Act and that the law will not have a material impact on future contributions.

During 2010 and 2009, we contributed cash of $51.3 million and $13.4 million to our defined benefit retirement plans. We do not expect to contribute to our master defined benefit retirement plan in fiscal year 2011, due to the significant contribution made during 2010, however, minimal contributions will be required for our unfunded plans.

Estimated Future Benefit Payments

The benefit payments, which are expected to be funded through plan assets and company contributions and reflect expected future service, are expected to be paid as follows:

	Pension Benefits
2011	$	8.8
2012	$	9.4
2013	$	10.0
2014	$	10.6
2015	$	11.5
2016-2020	$	71.8

Defined Contribution Savings Plans

The Company has defined contribution savings plans that cover substantially all U.S. employees and certain non-U.S. employees. The general purpose of these plans is to provide additional financial security during retirement by providing employees with an incentive to make regular savings. Company contributions to the plans are based on eligibility and employee contributions. Expense under these plans was $12.6 million, $13.0 million and $13.2 million in fiscal years 2010, 2009 and 2008.

Postretirement Health Care Plan

In addition to defined benefit retirement plans, Hill-Rom also offers a domestic postretirement health care plan that provides health care benefits to qualified retirees and their dependents. The plan includes retiree cost sharing provisions and generally extends retiree coverage for medical, prescription and dental benefits beyond the COBRA continuation period to the date of Medicare eligibility. We use a measurement date of September 30 for this plan. In fiscal 2008, the plan was amended to change eligibility and future benefits, which resulted in a negative plan amendment and a curtailment. The postretirement health care plan was remeasured at March 31, 2009 in connection with the restructuring mentioned previously.

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The postretirement health care benefit included within continuing operations in the Statements of Consolidated Income (Loss) during fiscal 2010 was $0.1 million. The postretirement health care cost included within continuing operations in the Statements of Consolidated Income (Loss) during fiscal 2009 and 2008 was $1.0 million and $2.1 million. The change in the accumulated postretirement benefit obligation during 2010 and 2009 was as follows:

	2010			2009
Change in benefit obligation:
Benefit obligation at beginning of year	$	9.7		$	6.9
Service cost		0.4			0.3
Interest cost		0.5			0.5
Curtailment		—			(0.3	)
Special termination benefits		—			1.6
Actuarial loss		0.1			0.8
Benefits paid		(1.3	)		(0.4	)
Retiree contributions		0.3			0.3
Benefit obligation at end of year	$	9.7		$	9.7
Amounts recorded in the Consolidated Balance Sheets:
Accrued benefits obligation, current portion	$	0.5		$	1.3
Accrued benefits obligation, long-term		9.2			8.4
Net amount recognized	$	9.7		$	9.7

During fiscal 2010 and 2009, the Company contributed $1.0 million and $0.1 million to the plan.

In addition to the amounts above, net actuarial gains of $1.2 million and prior service credits of $5.7 million, less an applicable aggregate tax effect of $2.7 million are included as components of Accumulated Other Comprehensive Income (Loss) at September 30, 2010. At September 30, 2009, net actuarial gains of $1.8 million and prior service credits of $6.6 million, less an applicable aggregate tax effect of $3.3 million, were included as components of Accumulated Other Comprehensive Income (Loss).

The discount rate used to determine the net periodic benefit cost for the postretirement health care plan during the fiscal year ended September 30, 2010, 2009 and 2008 was 5.5 percent, 7.5 percent and 6.5 percent. The discount rate used to determine the benefit obligation as of September 30, 2010, 2009 and 2008 was 4.4 percent, 5.5 percent and 7.5 percent. As of September 30, 2010 the health care-cost trend rates were assumed to decrease as follows:

	2010			2009			2008
Year 1		7.75	%		8.25	%		8.25	%
Year 2		7.25	%		7.75	%		7.75	%
Year 3		6.75	%		7.25	%		7.25	%
Year 4		6.25	%		6.75	%		6.75	%
Year 5		5.75	%		6.25	%		6.25	%

A one-percentage-point increase/decrease in the assumed health care cost trend rates as of September 30, 2010 would cause an increase/decrease in service and interest costs of less than $0.1 million, along with an increase/decrease in the benefit obligation of $0.9 million and $0.8 million.

We fund the postretirement health care plan as benefits are paid, and current plan benefits are expected to require net company contributions of approximately $0.5 million in fiscal 2011 and less than $1.0 million per year thereafter.

NOTE 9. SHAREHOLDERS’ EQUITY

In October 2006, our Board of Directors approved the repurchase of a total of 25.7 million shares of our common stock through the open market or private transactions. There were no repurchases under this approval during fiscal years 2008 and 2009 and through the third quarter of fiscal 2010. However, during August 2010, we repurchased 1.0 million shares of our common stock for $34.5 million. As of September 30, 2010, a cumulative total of 23.7 million shares had been repurchased by us at market trading prices, leaving 2.0 million shares still available for repurchase. The Board’s approval has no expiration date and currently there are no plans to terminate this program in the future.

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NOTE 10. SPECIAL CHARGES

Over the past several years, the Company has placed a focus on improving our cost structure and business processes through various means including consolidation of certain manufacturing and select back office operations, customer rationalizations and various other organizational changes. The charges associated with these actions are summarized below.

2010 Actions

• During the fourth quarter of fiscal 2010, we announced plans to eliminate approximately 100 employees which resulted in a special charge of $4.3 million primarily related to severance and other benefits provided to affected employees. The majority of the cash expenditures associated with the severance will be completed by the end of our 2011 fiscal year. We also recorded a charge of $3.9 million related to write-downs associated with the planned disposal of two aircraft from our corporate aviation assets, which are jointly owned with Hillenbrand, Inc. The loss was recognized net of management’s estimate of amounts to be recovered. The assets held for sale of $1.5 million are recorded in other current assets in the Consolidated Balance Sheet.

• During the second quarter of fiscal 2010, we announced organizational changes including the elimination of approximately 160 employees across the Company. The result was a special charge of $5.0 million primarily related to severance and other benefits provided to affected employees. The majority of the cash expenditures associated with the severance will be completed by the end of our 2011 fiscal year.

2009 Actions

• During the second quarter of fiscal 2009, we announced a plan which impacted approximately 450 salaried, hourly and temporary employees. In total, the plan resulted in a charge of $11.9 million related to severance and early retirement packages. Additionally, postretirement health care costs and the waiver of an early retirement pension penalty offered in conjunction with a voluntary early retirement incentive and the associated curtailment charges resulted in additional charges of $4.2 million. Asset impairment, discontinued use of a building under an operating lease and other charges of approximately $4.4 million were also recorded in conjunction with these actions. The charge related to severance and early retirement packages will result in cash expenditures that have been substantially completed as of September 30, 2010. Cash expenditures for the lease will be paid over the remaining lease period.

2008 Actions

• During the fourth quarter of fiscal 2008, we eliminated approximately 160 professional, salaried and non-exempt employee positions, including the elimination of management positions. Positions affected were distributed similarly to our employee locations. About one-third of the positions affected involved associates based at our global headquarters in Batesville, Indiana. The remaining affected positions were based in other North American locations and international sites throughout our global organization. Affected associates were offered severance and other enhanced benefits. The result was a one-time charge of approximately $6.0 million in the fourth quarter of fiscal 2008. The implementation of this restructuring plan was substantially completed as of September 30, 2008, and all cash expenditures associated with the severance have been completed.

• During the fourth quarter of fiscal 2008, management initiated a plan which resulted in a limited rationalization in the current service center footprint and the disposal of select assets and asset groups. As a result of the plan, the Company recorded a charge of $14.5 million during the fourth quarter of fiscal 2008. This charge mainly related to the impairment of equipment with a net book value of $16.0 million that was held for sale. The remainder of the charge related to lease termination and employee severance costs. This action is complete.

• During the first quarter of fiscal 2008, voluntary termination packages were offered to certain members of Hill-Rom’s Batesville manufacturing organization, which resulted in a special termination charge to cover benefits offered to those employees who accepted the termination offers. Additionally, approximately 15 other Hill-Rom manufacturing support positions were eliminated resulting in an aggregate special charge of $2.3 million in the first quarter of 2008, of which $0.3 million related to pension benefits. This action is now complete.

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Activity related to these actions during fiscal 2010 was as follows:

	Beginning									Ending
	Balance									Balance
	September 30,									September 30,
	2009		Expenses		Cash Payments			Reversals		2010
Fiscal Year 2010
Q2 Action — Restructuring	$	—	$	5.0	$	(3.5	)	$	—	$	1.5
Q4 Action — Restructuring		—		4.3		(0.6	)		—		3.7
Total Fiscal Year 2010	$	—	$	9.3	$	(4.1	)	$	—	$	5.2
Fiscal Year 2009
Q2 Action — Restructuring	$	4.5	$	—	$	(4.1	)	$	—	$	0.4
Fiscal Year 2008
Q1 Action — Line Relocation	$	—	$	—	$	—		$	—	$	—
Q4 Action — Worldwide Streamlining		0.1		—		(0.1	)		—		—
Q4 Action — MEMS Restructuring		—		—		—			—		—
Total Fiscal Year 2008	$	0.1	$	—	$	(0.1	)	$	—	$	—
Total	$	4.6	$	9.3	$	(8.3	)	$	—	$	5.6

NOTE 11. INCOME TAXES

The significant components of income from continuing operations before income taxes and the consolidated income tax provision from continuing operations for fiscal years 2010, 2009 and 2008 were as follows:

	2010			2009			2008
Income from continuing operations before income taxes:
Domestic	$	169.4		$	(221.4	)	$	90.0
Foreign		13.5			(157.4	)		2.3
Total	$	182.9		$	(378.8	)	$	92.3
Income tax expense from continuing operations:
Current provision
Federal	$	35.9		$	23.3		$	38.9
State		(5.3	)		(0.3	)		(1.1	)
Foreign		7.0			1.4			5.4
Total current provision		37.6			24.4			43.2
Deferred provision:
Federal		15.2			(3.2	)		(17.3	)
State		4.4			5.3			2.2
Foreign		(0.3	)		(0.3	)		(2.9	)
Total deferred provision		19.3			1.8			(18.0	)
Income tax expense from continuing operations	$	56.9		$	26.2		$	25.2

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Differences between income tax expense from continuing operations reported for financial reporting purposes and that computed based upon the application of the statutory U.S. Federal tax rate to the reported income from continuing operations before income taxes for fiscal years 2010, 2009 and 2008 were as follows:

	2010						2009						2008
				% of						% of						% of
				Pretax						Pretax						Pretax
	Amount			Income			Amount			Income			Amount			Income
Federal income tax (a)	$	64.0			35.0		$	(132.6	)		35.0		$	32.3			35.0
State income tax (b)		4.8			2.6			3.6			(0.9	)		2.6			2.8
Foreign income tax (c)		(0.6	)		(0.3	)		(2.1	)		0.5			1.7			1.8
Impairment of goodwill & other intangibles		—			—			163.3			(43.1	)		—			—
Application of federal tax credits		(0.6	)		(0.3	)		(3.6	)		0.9			(0.7	)		(0.8	)
Adjustment of estimated income tax accruals		(9.7	)		(5.4	)		0.2			—			(4.5	)		(4.8	)
Valuation of tax attributes		—			—			(1.9	)		0.5			(3.4	)		(3.7	)
Other, net		(1.0	)		(0.5	)		(0.7	)		0.2			(2.8	)		(3.0	)
Income tax expense from continuing operations	$	56.9			31.1		$	26.2			(6.9	)	$	25.2			27.3

(a)	At statutory rate.
(b)	Net of Federal benefit.
(c)	Federal tax rate differential.

The tax effect of temporary differences that gave rise to the deferred tax balance sheet accounts were as follows:

	September 30, 2010			September 30, 2009
Deferred tax assets:
Employee benefit accruals	$	45.4		$	54.8
Reserve for bad debts		10.4			10.1
Litigation and legal accruals		—			8.6
Net operating loss carryforwards — state		2.1			4.2
Tax credit carryforwards		2.4			2.4
Foreign (loss carryforwards and other tax attributes)		21.7			30.8
Other, net		34.3			39.6
		116.3			150.5
Less: valuation allowance		(28.5	)		(37.5	)
Total deferred tax assets		87.8			113.0
Deferred tax liabilities:
Depreciation		(41.2	)		(45.8	)
Amortization		(31.1	)		(31.6	)
Other, net		(6.4	)		(6.4	)
Total deferred tax liabilities		(78.7	)		(83.8	)
Deferred tax asset — net	$	9.1		$	29.2

At September 30, 2010, we had $21.7 million of deferred tax assets related to operating loss carryforwards and other tax attributes in foreign jurisdictions. These tax attributes are subject to various carryforward periods ranging from 1 year to an unlimited period. We also had $2.1 million of deferred tax assets related to state net operating loss carryforwards, which expire between 2011 and 2027. We also had $1.2 million of deferred tax assets related to foreign tax credit carryforwards, which expire between 2011 and 2019 and $1.2 million of deferred tax assets related to state credits, which expire between 2014 and 2026.

The gross deferred tax assets as of September 30, 2010 were reduced by valuation allowances of $28.5 million, relating primarily to foreign operating loss carryforwards and other tax attributes, as it is more likely than not that some portion or all of these tax attributes will not be realized. It is possible that improvements in foreign earnings could result in a reconsideration of the need for these valuation allowances. The valuation allowance was reduced by $9.0 million during fiscal 2010 due to releases of valuation allowances on deferred tax assets realized or expected to be utilized as well as adjustments in value of related deferred tax assets.

In evaluating whether it is more likely than not that we would recover our deferred tax assets, future taxable income, the reversal of existing temporary differences and tax planning strategies were considered. We believe that our estimates for the valuation allowances recorded against deferred tax assets are appropriate based on current facts and circumstances.

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The Company files a consolidated federal income tax return as well as multiple state, local and foreign jurisdiction tax returns. In the normal course of business, the Company is subject to examination by the taxing authorities in each of the jurisdictions where we file tax returns. During fiscal 2010, the Company reached a resolution with the Internal Revenue Service (“IRS”) on two tax matters previously disclosed. The first related to the character of certain payments received to terminate interest rate swap contracts. The resolution of this issue concluded the IRS audit for the fiscal years ended 2002 through 2006. The second related to the timing of deductions for insured losses. The resolution of this issue resolved all open tax matters for fiscal years ended 2007 and 2008. Also during fiscal 2010, the IRS initiated and is still conducting its post-filing examination of the fiscal 2009 consolidated federal return. The Company also continued to participate in the IRS Compliance Assurance Program (“CAP”) for fiscal year 2010 and has issued its application to remain in the CAP for fiscal 2011. The CAP provides the opportunity for the IRS to review certain tax matters prior to the Company filing its tax returns for the year, thereby reducing the time it takes to complete the post-filing examination. The Company is also subject to state and local or foreign income tax examinations by taxing authorities for years back to fiscal 2003.

The Company also has on-going audits in various stages of completion in several state and foreign jurisdictions, one or more of which may conclude within the next 12 months. Such settlements could involve some or all of the following: the payment of additional taxes, the adjustment of certain deferred taxes and/or the recognition of unrecognized tax benefits. The resolution of these matters, in combination with the expiration of certain statues of limitations in various jurisdictions, make it reasonably possible that our unrecognized tax benefits may decrease as a result of either payment or recognition by approximately $5 to $13 million in the next twelve months, excluding interest.

The total amount of gross unrecognized tax benefits as of September 30, 2010, 2009 and 2008 was $24.0 million, $35.5 million and $29.6 million which includes $8.0 million, $17.3 million and $15.4 million, that, if recognized, would impact the effective tax rate in future periods. The remaining amount relates to items which, if recognized, would not impact our effective tax rate.

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

	2010			2009			2008
Balance at October 1	$	35.5		$	29.6		$	44.6
Increases in tax position of prior years		3.9			2.6			6.3
Decreases in tax position of prior years		(6.8	)		(3.1	)		(18.4	)
Increases in tax positions related to the current year		1.4			8.0			1.5
Settlements with taxing authorities		(6.0	)		(1.0	)		(2.0	)
Lapse of applicable statute of limitations		(4.0	)		(1.2	)		(1.6	)
Change in positions due to acquisitions or dispositions		—			0.7			(0.8	)
Foreign currency adjustments		—			(0.1	)		—
Total change		(11.5	)		5.9			(15.0	)
Balance at September 30	$	24.0		$	35.5		$	29.6

We recognize accrued interest and penalties related to unrecognized tax benefits as a component of income tax expense. Accrued interest and penalties, which are not presented in the reconciliation table above, was $2.1 million, $6.8 million and $5.8 million at September 30, 2010, 2009 and 2008. During fiscal 2010 and 2008, we recognized $3.0 million and $1.2 million of income tax benefit for interest and penalties, while in fiscal 2009 we recognized $0.8 million of income tax expense for interest and penalties.

The amount of gross unrecognized tax benefits reflected in our financial statements includes amounts related to our former funeral services business for taxing jurisdictions where we filed consolidated tax returns. Pursuant to the Tax Sharing Agreement entered into as part of the spin-off (and described in Note 3), Hillenbrand, Inc. is responsible for the portion of the unrecognized tax benefits attributable to the funeral services business. As of September 30, 2010, such gross unrecognized tax benefits were $3.0 million, excluding interest.

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NOTE 12. EARNINGS PER COMMON SHARE

Basic earnings per share is calculated based upon the weighted average number of outstanding common shares for the period, plus the effect of deferred vested shares. Diluted earnings per share is calculated consistent with the basic earnings per share calculation plus the effect of dilutive unissued common shares related to stock-based employee compensation programs. For all years presented, anti-dilutive stock options were excluded from the calculation of dilutive earnings per share. Excluded shares were 3.4 million, 5.8 million and 2.2 million for fiscal years 2010, 2009 and 2008. Cumulative treasury stock acquired, less cumulative shares reissued, have been excluded in determining the average number of shares outstanding. For the year ended September 30, 2009, as a result of our net loss and to avoid dilution of the net loss, our basic and diluted earnings per share were identical.

Earnings per share is calculated as follows:

	2010		2009			2008
Net income (loss) attributable to common shareholders	$	125.3	$	(405.0	)	$	115.8
Average shares outstanding — Basic		62,934		62,581			62,426
Add potential effect of exercise of stock options and other unvested equity awards		805		—			196
Average shares outstanding — Diluted		63,739		62,581			62,622
Income (loss) attributable to common shareholders per common share from continuing operations — Basic	$	1.99	$	(6.47	)	$	1.07
Income attributable to common shareholders per common share from discontinued operations — Basic		—		—			0.78
Net Income (Loss) Attributable to Common Shareholders per Common Share — Basic	$	1.99	$	(6.47	)	$	1.86
Income (loss) attributable to common shareholders per common share from continuing operations — Diluted	$	1.97	$	(6.47	)	$	1.07
Income attributable to common shareholders per common share from discontinued operations — Diluted		—		—			0.78
Net Income (Loss) Attributable to Common Shareholders per Common Share — Diluted	$	1.97	$	(6.47	)	$	1.85

NOTE 13. STOCK-BASED COMPENSATION

We have stock-based compensation plans under which employees and non-employee directors may be granted options to purchase shares of Company common stock at the fair market value at the time of grant. In addition to stock options, the Company grants performance-based stock options, performance share units (“PSUs”) and deferred stock share awards otherwise known as restricted stock units (“RSUs”) to certain management level employees and vested deferred stock to non-employee directors. We also offer eligible employees the opportunity to buy shares of our common stock at a discount via an Employee Stock Purchase Plan (“ESPP”). The ESPP was approved by our shareholders in February 2009 and did not have a significant impact on our financial statements in fiscal years 2010 and 2009.

Our primary stock-based compensation program is the Stock Incentive Plan, which has been approved by our shareholders. In February 2009, our shareholders approved an amendment to the Stock Incentive Plan to reserve an additional 5.5 million shares for issuance increasing the total number of shares authorized to 15.3 million shares. At September 30, 2010, 6.7 million shares were available for future grants under our stock-based compensation plans. We generally settle our stock-based awards with treasury shares. As of September 30, 2010, we had 17.5 million treasury shares available for use to settle stock-based awards.

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The following table sets forth a summary of the annual stock-based compensation cost that was charged against income for all types of awards for fiscal years 2010, 2009 and 2008:

	2010			2009			2008
Total stock-based compensation cost (pre-tax)	$	12.0		$	12.1		$	23.2
Total income tax benefit		(4.4	)		(4.5	)		(8.6	)
Total stock-based compensation cost, net of tax		7.6			7.6			14.6
Allocated to discontinued operations		—			—			(3.7	)
Included in continuing operations	$	7.6		$	7.6		$	10.9

Modification Due to the Spin-off

As mentioned previously, on March 31, 2008, we completed the spin-off of Hillenbrand, Inc., our former funeral services business operating under the Batesville Casket name. In March 2008, in contemplation of the spin-off, the Board of Directors’ Compensation and Management Development Committee (“Compensation Committee”) modified the terms of our Stock Incentive Plan to require the equitable conversion and/or adjustment of outstanding stock-based awards in the event of the spin-off. With that modification, the fair values of all outstanding stock option awards were remeasured. As a result, the modification related to certain stock options resulted in incremental compensation cost of $9.8 million. Of this amount, $7.1 million was recorded in our second fiscal quarter of 2008 for vested stock options ($1.3 million in discontinued operations) and $2.7 million, reduced for forfeitures, have been subject to amortization over the remaining vesting periods of the affected stock options ending in 2010 (all in continuing operations). Additionally, the vesting of certain RSUs held by employees of the funeral services business was accelerated according to provisions triggered by the spin-off. As a result of the accelerated vesting of these RSUs, a $3.2 million charge was recorded in our second fiscal quarter of 2008, all of which was reflected within discontinued operations.

Pursuant to the modification described above, stock options and RSUs outstanding and held by current employees and current board members of either of the separated companies on the date of the spin-off were generally converted to stock options and RSUs in the post-spin company for whom they were employed or served. As such, stock options and RSUs held by Hill-Rom employees, as well as stock options and RSUs held by directors who serve on only the Hill-Rom Board, remained as Hill-Rom stock options and RSUs and were adjusted. The outstanding stock options and related exercise prices and RSUs were converted and/or adjusted using a ratio based on our closing stock price ($25.99) divided by the sum of our closing stock price and Hillenbrand, Inc.’s closing stock price ($22.10) on March 31, 2008, as reported by the New York Stock Exchange. Thus, immediately after the spin-off, the awards maintained the same intrinsic value that existed immediately before the spin-off.

Performance-based stock awards were generally converted or adjusted in a similar manner to outstanding stock options and RSUs. Vested deferred stock, which are stock awards which have been vested and elected by current or former employees or directors to be distributed in the future, as well as stock awards of retirees of either company, common directors of both companies, and former Hill-Rom directors, were converted to stock awards in both companies using the conversion ratio outlined above.

The following sets forth further details on our stock options, performance-based stock options, RSUs, PSUs and vested deferred stock.

Stock Options

Stock options granted by our Compensation Committee under the Stock Incentive Plan are non-qualified stock options. These awards are generally granted with exercise prices equal to the average of the high and low prices of our common stock on the date of grant. They vest in equal annual installments over a three or four year period and the maximum contractual term is ten years. We use a Binomial option-pricing model to estimate the fair value of stock options, and compensation cost is recognized on a straight-line basis over the requisite service period.

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The following table sets forth the weighted average fair value per share of stock options and the related valuation assumptions used in the determination of those fair values for fiscal years 2010, 2009 and 2008, excluding performance-based stock options:

							2008
	2010			2009			After March 31			Before March 31
Weighted average fair value per share	$	7.86		$	5.63		$	8.52		$	12.43
Valuation assumptions:
Risk-free interest rate		2.4	%		0.8 – 2.7	%		1.6 – 3.5	%		2.9 – 3.9	%
Expected dividend yield		1.7	%		1.5	%		1.6	%		1.8 – 2.1	%
Expected volatility		37.2	%		30.4	%		28.0	%		21.0	%
Weighted average expected life		5.6	years		6.2	years		7.2	years		8.2	years

The risk-free interest rate is based upon observed U.S. Treasury interest rates appropriate for the term of our employee stock options. Expected dividend yield is based on the history and our expectation of dividend payouts. Expected volatility for options granted after the spin-off and during fiscal years 2010 and 2009 was based on the median volatility of our Peer Group. For options granted prior to the spin-off, expected volatility was based on historical experience. Expected life represents the weighted average period the stock options are expected to remain outstanding and is a derived output of the Binomial model. The expected life of employee stock options is impacted by the above assumptions as well as the post-vesting forfeiture rate and the exercise factor used in the Binomial model. These two variables are based on the history of exercises and forfeitures for previous stock options granted by Hillenbrand Industries, Inc., predecessor to the Company.

The following table summarizes transactions under our stock option plans, excluding performance-based stock options, for fiscal year 2010:

	Weighted					Weighted
	Average			Weighted		Average			Aggregate
	Number of			Average		Remaining			Intrinsic
	Shares			Exercise		Contractual			Value (1)
	(in thousands)			Price		Term			(in millions)
Balance Outstanding at October 1, 2009		3,370		$	26.46
Granted		736			24.29
Exercised		(821	)		26.50
Cancelled/Forfeited		(365	)		25.48
Balance Outstanding at September 30, 2010		2,920		$	26.02		7.0	years	$	28.8
Exercisable at September 30, 2010		1,482		$	28.95		5.5	years	$	10.3
Options Expected to Vest		1,250		$	22.99		8.5	years	$	16.1

(1) The aggregate intrinsic value represents the total pre-tax intrinsic value, based on our closing stock price of $35.89, as reported by the New York Stock Exchange on September 30, 2010. This amount, which changes continuously based on the fair value of our common stock, would have been received by the option holders had all option holders exercised their options as of the balance sheet date.

The total intrinsic value of options exercised during fiscal years 2010, 2009 and 2008 was $3.9 million, $15 thousand and $1.6 million. Amounts related to periods prior to March 31, 2008, include options exercised by employees of our former funeral services business.

As of September 30, 2010, there was $6.3 million of unrecognized compensation expense related to stock options granted under the Plan. This unrecognized compensation expense does not reflect a reduction for our estimate of potential forfeitures, and is expected to be recognized over a weighted average period of 2.7 years.

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Performance-Based Stock Options

Our Compensation Committee sometimes grants performance-based stock options to a limited number of our executives. These awards are consistent with our compensation program’s guiding principles and are designed to align management’s interests with those of shareholders. Option prices and the term of such awards are similar to our stock options; however, vesting of the performance grants is contingent upon the achievement of performance targets and corresponding service requirements. Performance targets are set at the date of grant with a threshold, target and maximum level. The number of options that ultimately vests increases at each level of performance attained. Expense recognized to date related to performance-based stock options has not been significant.

The fair values of the performance options are estimated on the date of the grant using the Binomial option-pricing model and related valuation assumptions for stock options, as previously discussed. For certain performance awards with a market condition such as total shareholder return, as described below, a Monte-Carlo simulation method is used to determine fair value. The Monte-Carlo simulation is a generally accepted statistical technique used to generate a defined number of stock price paths in order to develop a reasonable estimate of the range of future expected stock prices of the Company and the Peer Group and minimizes standard error.

As of September 30, 2010, the total number of performance-based stock options granted and outstanding ranged from approximately 0.3 million shares at the threshold performance level of achievement to approximately 0.9 million shares at maximum achievement. There was $2.3 million of unrecognized compensation expense as of September 30, 2010 related to performance-based stock options. This unrecognized compensation expense does not reflect a reduction for our estimate of potential forfeitures, and will be recognized by the end of fiscal 2011 if performance targets are met. The amount of unrecognized compensation expense for performance-based stock options that we ultimately realize is subject to change based on the probable achievement of the established performance targets, which are assessed each quarter.

There were no performance-based stock options granted during fiscal year 2010. The following table sets forth the weighted average fair value per share for performance-based stock options and the related valuation assumptions used in the determination of those fair values for fiscal years 2009 and 2008.

	2009			2008
Weighted average fair value per share	$	4.88		$	7.20
Valuation assumptions:
Risk-free interest rate		0.8 – 2.7	%		1.6 – 3.5	%
Expected dividend yield		1.5	%		1.6	%
Expected volatility		30.4	%		28.0	%
Weighted average expected life		6.2	years		7.6	years

The basis for the assumptions listed above is similar to the valuation assumptions used for non-performance-based stock options, as discussed previously.

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The following table summarizes our stock option activity related to performance-based stock options for fiscal year 2010. None of the performance-based stock options were exercisable as of September 30, 2010.

	Weighted					Weighted
	Average			Weighted		Average			Aggregate
	Number of			Average		Remaining			Intrinsic
	Shares			Exercise		Contractual			Value (1)
	(in thousands)			Price		Term			(in millions)
Balance Outstanding at October 1, 2009		2,343		$	22.10
Granted		—			—
Exercised		—			—
Cancelled/Forfeited		(1,446	)		23.79
Balance Outstanding at September 30, 2010		897		$	19.39		8.2	years	$	14.8

(1) The aggregate intrinsic value represents the total pre-tax intrinsic value, based on our closing stock price of $35.89, as reported by the New York Stock Exchange on September 30, 2010. This amount, which changes continuously based on the fair value of our common stock, would have been received by the option holders had the maximum performance targets been achieved and all option holders met the maximum performance targets and exercised their options as of the balance sheet date.

Restricted Stock Units

RSUs are granted to certain employees with fair values equal to the average of the high and low prices of our common stock on the date of grant, multiplied by the number of units granted. RSU grants are contingent upon continued employment and vest over periods ranging from one to five years. Dividends, payable in common stock equivalents, accrue on the grants and are subject to the same specified terms as the original grants, including the risk of forfeiture.

The following table summarizes transactions for our nonvested RSUs for fiscal year 2010:

				Weighted
	Number of			Average
	Share Units			Grant Date
Restricted Stock Units	(in thousands)			Fair Value
Nonvested RSUs at October 1, 2009		799		$	25.15
Granted		415			25.15
Vested		(283	)		27.24
Forfeited		(138	)		24.07
Nonvested RSUs at September 30, 2010		793		$	24.66

As of September 30, 2010, there was $10.9 million of total unrecognized compensation expense related to nonvested RSUs granted under the Stock Incentive Plan. This unrecognized compensation expense does not reflect a reduction for our estimate of potential forfeitures, and is expected to be recognized over a weighted average period of 2.4 years. The total vest date fair value of shares that vested during fiscal years 2010, 2009 and 2008 was $7.3 million, $1.9 million and $8.7 million. Amounts related to periods prior to March 31, 2008, include vesting of RSUs held by employees of our former funeral services business.

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Performance Share Units

Our Compensation Committee grants PSUs to a limited number of our senior executives. These awards are subject to any stock dividends, stock splits, and other similar rights inuring to common stock, but unlike our RSUs are not entitled to cash dividend reinvestment or common stock equivalents. Vesting of the grants is contingent upon achievement of performance targets and corresponding service requirements. Expense recognized to date related to PSU grants has not been significant.

As of September 30, 2010, there was $0.9 million of unrecognized compensation expense related to PSUs granted under the Stock Incentive plan based on the expected achievement of certain performance targets. This unrecognized compensation expense does not reflect a reduction for our estimate of potential forfeitures, and is expected to be recognized by the end of fiscal 2012, if the performance targets are met. The amount of unrecognized compensation expense for the PSUs that we ultimately realize is subject to change based on the probable achievement of the established performance targets, which are assessed each quarter.

NOTE 14. SEGMENT REPORTING

We disclose segment information that is consistent with the way in which management operates and views the business. Our operating structure consists of the following three reporting segments:

• North America Acute Care- sells and rents our hospital patient support and near-patient technologies, as well as our health information technology solutions, to acute care facilities in North America.

• North America Post-Acute Care- sells and rents a variety of products outside of the hospital setting including long-term acute care, extended care and home care, offering patient support systems and respiratory care products.

• International and Surgical- sells and rents similar products as our North America businesses to Europe and the rest of the world, as well as sales of surgical accessories to facilities worldwide.

Our performance under each reportable segment is measured on a divisional income basis before special items. Inter-segment sales between the segments, while not significant, are generally accounted for at current market value or cost plus markup. Divisional income generally represents the division’s standard gross profit less its direct operating costs, excluding functional costs, along with an allocation of fixed manufacturing overhead, research and development, and distribution costs.

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Functional costs include common costs, such as administration, finance, information technology, legal, human resource costs, along with unallocated manufacturing variances and research and development costs. Eliminations represent the elimination of inter-segment sales. Functional costs and eliminations, while not considered segments, are presented separately to aid in the reconciliation of segment information to consolidated financial information.

	2010			2009			2008
Revenues:
North America Acute Care	$	840.3		$	791.6		$	934.7
North America Post-Acute Care		205.7			200.8			197.0
International and Surgical		432.2			398.8			381.4
Total eliminations		(8.6	)		(4.3	)		(5.4	)
Total revenues	$	1,469.6		$	1,386.9		$	1,507.7
Divisional income:
North America Acute Care	$	242.0		$	192.9		$	247.8
North America Post-Acute Care		61.2			58.0			55.7
International and Surgical		74.2			59.6			49.7
Functional costs		(193.7	)		(199.9	)		(227.6	)
Total divisional income		183.7			110.6			125.6
Impairment of goodwill and other intangibles		—			472.8			—
Litigation credit		(21.2	)		—			—
Special charges		13.2			20.5			22.8
Operating profit		191.7			(382.7	)		102.8
Gain on sale of non-strategic assets		—			10.2			—
Interest expense		(8.7	)		(10.4	)		(14.3	)
Investment income and other, net		(0.1	)		4.1			3.8
Income from continuing operations before income taxes	$	182.9		$	(378.8	)	$	92.3

Geographic Information

Geographic data for net revenues and long-lived assets (which consist mainly of property and equipment leased to others) for fiscal years 2010, 2009 and 2008 were as follows:

	2010		2009		2008
Net revenues to unaffiliated customers: (a)
United States	$	1,027.1	$	985.5	$	1,107.9
Foreign		442.5		401.4		399.8
Total revenues	$	1,469.6	$	1,386.9	$	1,507.7
Long-lived assets: (b)
United States	$	200.3	$	230.5	$	254.5
Foreign		43.4		41.9		42.3
Total long-lived assets	$	243.7	$	272.4	$	296.8

(a)	Net revenues are attributed to geographic areas based on the location of the customer.
(b)	Includes property and equipment leased to others.

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NOTE 15. QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

The following table presents selected consolidated financial data by quarter for each of the last two fiscal years.

2010 Quarter Ended

	December 31,		March 31,		June 30,		September 30,
	2009		2010		2010		2010
Net revenues	$	355.3	$	357.1	$	360.6	$	396.6
Gross profit	$	170.8	$	171.8	$	178.0	$	196.0
Net income attributable to common shareholders	$	19.8	$	24.2	$	30.6	$	50.7
Basic net income attributable to common shareholders per common share	$	0.32	$	0.38	$	0.48	$	0.80
Diluted net income attributable to common shareholders per common share	$	0.31	$	0.38	$	0.48	$	0.79

2009 Quarter Ended

	December 31,		March 31,			June 30,		September 30,
	2008		2009			2009		2009
Net revenues	$	351.6	$	337.3		$	334.7	$	363.3
Gross profit	$	152.5	$	153.4		$	150.7	$	171.3
Net income (loss) attributable to common shareholders	$	14.2	$	(465.8	)	$	20.2	$	26.4
Basic net income (loss) attributable to common shareholders per common share	$	0.23	$	(7.44	)	$	0.32	$	0.42
Diluted net income (loss) attributable to common shareholders per common share	$	0.23	$	(7.44	)	$	0.32	$	0.42

NOTE 16. COMMITMENTS AND CONTINGENCIES

Lease Commitments

Rental expense charged to continuing operations for fiscal years 2010, 2009 and 2008 was $19.5 million, $19.4 million and $19.9 million. The table below indicates the minimum annual rental commitments (excluding renewable periods) aggregating $59.0 million, for manufacturing facilities, warehouse distribution centers, service centers and sales offices, under noncancelable operating leases.

	Amount
2011	$	19.5
2012	$	12.7
2013	$	9.2
2014	$	6.1
2015	$	3.3
2016 and beyond	$	8.2

We have a long-term agreement with IBM to manage our global information structure environment that expires in September 2014. The expected aggregate cost from September 30, 2010 through the duration of the contract is $40.7 million.

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Self Insurance

We are involved in possible claims and are generally self-insured up to certain limits for product/general liability, workers’ compensation, auto liability and professional liability insurance programs. These policies have deductibles and self-insured retentions ranging from $150 thousand to $1.5 million per occurrence, depending upon the type of coverage and policy period. We are also generally self-insured up to certain stop-loss limits for certain employee health benefits, including medical, drug and dental. Our policy is to estimate reserves based upon a number of factors including known claims, estimated incurred but not reported claims and outside actuarial analysis, which are based on historical information along with certain assumptions about future events.

Legal Proceedings

Batesville Casket Antitrust Litigation

In 2005 the Funeral Consumers Alliance, Inc. and a number of individual consumer casket purchasers filed a purported class action antitrust lawsuit on behalf of certain consumer purchasers of Batesville^® caskets against the Company and its former Batesville Casket Company, Inc. subsidiary (now wholly owned by Hillenbrand, Inc.), and three national funeral home businesses.

The district court has dismissed the claims and denied class certification, but in October 2010, these decisions were appealed to the United States Court of Appeals for the Fifth Circuit. If the plaintiffs were to succeed in reversing the district court’s dismissal of the claims, but not the denial of class certification, then the plaintiffs would be able to pursue individual damages claims: the alleged overcharges on the plaintiffs’ individual casket purchases, which would be trebled as a matter of law, plus reasonable attorneys fees and costs.

If the plaintiffs were to (1) succeed in reversing the district court’s dismissal of the claims, (2) succeed in reversing the district court order denying class certification and certify a class, and (3) prevail at trial, then the damages awarded to the plaintiffs, which would be trebled as a matter of law, could have a significant material adverse effect on our results of operations, financial condition and/or liquidity. The plaintiffs in the FCA Action filed a report indicating that they are seeking damages ranging from approximately $947.0 million to approximately $1.46 billion before trebling on behalf of the purported class of consumers they seek to represent, based on claims of approximately one million casket purchases by the purported class members.

We and Hillenbrand, Inc. have entered into a Judgment Sharing Agreement that apportions the costs and any potential liabilities associated with this litigation between us and Hillenbrand, Inc. See Note 3 for more information regarding the Judgment Sharing Agreement.

We believe that we have committed no wrongdoing as alleged by the plaintiffs and that we have meritorious defenses to class certification and to plaintiffs’ underlying allegations and damage theories. In accordance with applicable authoritative guidance, we have not established a loss reserve in connection with this litigation.

Office of Inspector General Investigation

On February 8, 2008, we were served with an Administrative Investigative Demand subpoena by the United States Attorney’s Office for the Eastern District of Tennessee pursuant to a Health and Human Services’ Office of Inspector General investigation. On September 18, 2008, we were informed that the investigation was precipitated by the filing in 2005 of a qui tam (whistleblower) complaint under the False Claims Act in the United States District Court for the Eastern District of Tennessee. Once the complaint is filed with the court under seal, the Department of Justice investigates the allegations and has the right to intervene and in effect take over the prosecution of the lawsuit if it believes the allegations warrant. At this point, the government has not yet reached a final intervention decision and is continuing its investigation.

Although the complaint has been only partially unsealed at this point and we have not been formally served, we know that the plaintiffs seek recovery of significant damages and civil penalties relating to the alleged submission of false and fraudulent claims to Medicare and/or Medicaid for the provision of durable medical equipment. In the event that this matter were to proceed to litigation, if it were found that we had failed to comply with applicable laws and regulations, we could be subject to substantial fines or penalties and possible exclusion from participation in federal health care programs. At this time, we are continuing to cooperate with the government’s investigation. We cannot provide any assurances as to when the government will finish its investigation, or when, if ever, it will determine to formally intervene.

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Freedom Medical Antitrust Litigation

On October 19, 2009, Freedom Medical, Inc. filed a complaint against the Company, another manufacturer and two group purchasing organizations in the United States District Court for the Eastern District of Texas. The plaintiff alleges that the Company and the other defendants conspired to exclude it from the biomedical equipment rental market and to maintain the Company’s market share by engaging in a variety of conduct in violation of state and federal antitrust laws. The plaintiff also has asserted claims for business disparagement, common law conspiracy and tortuous interference with business relationships. The plaintiff seeks injunctive relief and money damages in an unspecified amount. We intend to defend this matter vigorously. Because the litigation is in a preliminary stage, we cannot assess the likelihood of an adverse outcome or determine an estimate, or a range of estimates, of potential damages, nor can we give any assurances that this matter will not have a material adverse impact on the Company’s financial condition, results of operations or cash flows.

Antitrust Settlement

In fiscal 2005, we entered into a definitive, court approved agreement with Spartanburg Regional Healthcare Systems and its attorneys to settle a purported antitrust class action lawsuit. A number of potential plaintiffs, including the United States government, opted out of the settlement, and we retained a reserve of $21.2 million against these potential claims. However, no individual claims were filed prior to the August 2010 statute of limitations deadline, and we therefore reversed this reserve into income as of September 30, 2010.

General

We are subject to various other claims and contingencies arising out of the normal course of business, including those relating to governmental investigations and proceedings, commercial transactions, product liability, employee related matters, antitrust, safety, health, taxes, environmental and other matters. Litigation is subject to many uncertainties and the outcome of individual litigated matters is not predictable with assurance. It is possible that some litigation matters for which reserves have not been established could be decided unfavorably to us, and that any such unfavorable decisions could have a material adverse effect on our financial condition, results of operations and cash flows.

NOTE 17. SUBSEQUENT EVENTS

We have performed an evaluation of subsequent events and concluded there were no subsequent events that required recognition or disclosure in these Consolidated Financial Statements.

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Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

Item 9A. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Our management, with the supervision and participation of our President and Chief Executive Officer and our Senior Vice President and Chief Financial Officer (the “Certifying Officers”), has evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of September 30, 2010. Our disclosure controls and procedures are designed to ensure that information required to be disclosed in the reports we file or submit under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms and such information is accumulated and communicated to management, including our Certifying Officers and our Board of Directors, as appropriate to allow timely decisions regarding required disclosure.

Based upon that evaluation, the Certifying Officers concluded that our disclosure controls and procedures were effective as of September 30, 2010.

Management’s Report on Internal Control Over Financial Reporting

The report of management’s assessment of the effectiveness of our internal control over financial reporting as of September 30, 2010 and the related attestation report of our independent registered public accounting firm, are included under Part II, Item 8 of this Form 10-K.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting during the quarter ended September 30, 2010 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Item 9B. OTHER INFORMATION

None.

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PART III

Item 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The information required by this Item is incorporated herein by reference to our Proxy Statement to be filed with the SEC in January 2011 relating to our 2011 Annual Meeting of Shareholders (the “2011 Proxy Statement”), under the headings “Election of Directors”, “Section 16(a) Beneficial Ownership Reporting Compliance”, and “Corporate Governance.” Information relating to our executive officers is included in this report in Part I, Item 1 under the caption “Executive Officers of the Registrant.”

Item 11. EXECUTIVE COMPENSATION

The information required by this Item is incorporated herein by reference to the 2011 Proxy Statement, under the heading “Executive Compensation.”

Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The information required by this Item is incorporated herein by reference to the 2011 Proxy Statement, under the headings “Security Ownership of Certain Beneficial Owners and Management” and “Equity Compensation Plan Information.”

Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE

The information required by this Item is incorporated herein by reference to the 2011 Proxy Statement, where such information is included under the heading “Corporate Governance.”

Item 14. PRINCIPAL ACCOUNTING FEES AND SERVICES

The information required by this Item is incorporated herein by reference to the 2011 Proxy Statement, where such information is included under the heading “Proposals Requiring Your Vote - Ratification of Appointment of Independent Registered Public Accounting Firm.”

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PART IV

Item 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a) The following documents have been filed as a part of this Form 10-K or, where noted, incorporated by reference:

(1)	Financial Statements
	The financial statements of the Company and its consolidated subsidiaries are listed under Part II, Item 8 on the Index to Consolidated Financial Statements on page 39.
(2)	Financial Statement Schedules
	The financial statement schedule filed in response to Part II, Item 8 and Part IV, Item 15(c) of Form 10-K is listed under Part II, Item 8 on the Index to Consolidated Financial Statements on page 39.
(3)	Exhibits (See changes to Exhibit Index below):
	“The Exhibit Index, which follows the signature page to this Form 10-K and is hereby incorporated herein by reference, sets forth a list of those exhibits filed herewith, and includes and identifies management contracts or compensatory plans or arrangements required to be filed as exhibits to this Form 10-K by Item 601 (b)(10)(iii) of Regulation S-K.”
	The agreements included as exhibits to this Form 10-K are intended to provide information regarding their terms and not to provide any other factual or disclosure information about us or the other parties to the agreements. The agreements may contain representations and warranties by the parties to the agreements, including us, solely for the benefit of the other parties to the applicable agreement. Such representation and warranties:

• should not in all instances be treated as categorical statements of fact, but rather as a way of allocating the risk to one of the parties if those statements prove to be inaccurate;

• may have been qualified by disclosures that were made to the other party in connection with the negotiation of the applicable agreement, which disclosures are not necessarily reflected in the agreement;

• may apply standards of materiality in a way that is different from what may be viewed as material to certain investors; and

• were made only as of the date of the applicable agreement or such other date or dates as may be specified in the agreement and are subject to more recent developments.

Accordingly, these representations and warranties may not describe the actual state of affairs as of the date they were made or at any other time.

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SCHEDULE II

HILL-ROM HOLDINGS, INC. AND SUBSIDIARIES

Valuation and Qualifying Accounts

For The Fiscal Years Ended September 30, 2010, 2009 and 2008

(Dollars in millions)

			ADDITIONS
	BALANCE AT		CHARGED TO			CHARGED TO			DEDUCTIONS			BALANCE
	BEGINNING		COSTS AND			OTHER			NET OF			AT END
DESCRIPTION	OF PERIOD		EXPENSES			ACCOUNTS			RECOVERIES			OF PERIOD
Reserves deducted from assets to which they apply:
Allowance for possible losses and sales returns — accounts receivable:
Period Ended:
September 30, 2010	$	27.5	$	0.8		$	7.2	(a)	$	(6.5	)(b)	$	29.0
September 30, 2009	$	25.9	$	4.1		$	8.0	(a)	$	(10.5	)(b)	$	27.5
September 30, 2008	$	51.5	$	3.0		$	6.6	(a)	$	(35.2	)(b) (f)	$	25.9
Allowance for inventory valuation:
Period Ended:
September 30, 2010	$	28.3	$	0.2		$	—		$	(3.8	)(c)		24.7
September 30, 2009	$	21.2	$	10.5		$	—		$	(3.4	)(c)		28.3
September 30, 2008	$	32.7	$	5.3		$	—		$	(16.8	)(c) (f)		21.2
Valuation allowance against deferred tax assets:
Period Ended:
September 30, 2010	$	37.5	$	(0.8	)	$	—		$	(8.2	)(d)		28.5
September 30, 2009	$	85.7	$	2.4		$	—		$	(50.6	)(d)		37.5
September 30, 2008	$	88.3	$	(8.8	)	$	—		$	6.2	(e)		85.7

(a)	Reduction of gross revenues for uncollectible health care rental reimbursements, cash discounts and other adjustments in determining net revenue. Also includes the effect of acquired businesses, if any.
(b)	Generally reflects the write-off of specific receivables against recorded reserves.
(c)	Generally reflects the write-off of specific inventory against recorded reserves.
(d)	Primarily reflects write-offs of deferred tax assets against the valuation allowance and other movement of the valuation allowance offset by an opposing change in deferred tax assets.
(e)	Primarily reflects the adoption of uncertain tax position provisions and the transfer of the valuation allowance to Hillenbrand, Inc. in conjunction with the spin-off of the funeral services business.
(f)	Includes reserve transfers to Hillenbrand, Inc. in conjunction with the spin-off of the funeral services business.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

HILL-ROM HOLDINGS, INC.
By:	/s/ John J. Greisch
	John J. Greisch
	President and Chief Executive Officer

Date: November 17, 2010

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the date indicated.

/s/ Rolf A. Classon	/s/ James R. Giertz
Rolf A. Classon	James R. Giertz
Chairman of the Board	Director
/s/ John J. Greisch	/s/ Charles E. Golden
John J. Greisch	Charles E. Golden
President and Chief Executive Officer and Director	Director
(Principal Executive Officer)
/s/ Joanne C. Smith, M.D.	/s/ W August Hillenbrand
Joanne C. Smith, M.D.	W August Hillenbrand
Director	Director
Vice Chairperson of the Board
/s/ Gregory N. Miller	/s/ Ronald A. Malone
Gregory N. Miller	Ronald A. Malone
Senior Vice President and Chief Financial Officer	Director
(Principal Financial Officer)
/s/ Richard G. Keller	/s/ Eduardo R. Menascé
Richard G. Keller	Eduardo R. Menascé
Vice President — Controller and	Director
Chief Accounting Officer
(Principal Accounting Officer)
	/s/ Katherine S. Napier
	Katherine S. Napier
	Director

Date: November 17, 2010

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HILL-ROM HOLDINGS, INC.

INDEX TO EXHIBITS

Management contracts and compensatory plans or arrangements are designated with”*”.

2.1	Distribution Agreement dated as of March 14, 2008 by and between Hill-Rom Holdings, Inc. (formerly Hillenbrand Industries, Inc.) and Hillenbrand, Inc. (formerly Batesville Holdings, Inc.) (Incorporated herein by reference to Exhibit 2.1 filed with Form 8-K dated April 1, 2008)
2.2	Letter Agreement dated as of March 31, 2008 between Hill-Rom Holdings, Inc. and Hillenbrand, Inc. regarding interpretation of Distribution Agreement (Incorporated herein by reference to Exhibit 2.2 filed with Form 10-Q for the quarter ended March 31, 2008.)
2.3	Share Sale and Purchase Agreement dated as of September 30, 2008 between Family Holding I Alvik AB and Hill-Rom AB regarding the sale of Liko Vårdlyft AB (Incorporated herein by reference to Exhibit 2.1 filed with Form 8-K dated September 30, 2008)
2.4	Share Sale and Purchase Agreement dated as of September 30, 2008 between AM Holding AB and Hill-Rom Company, Inc. regarding the sale of Liko North America Corporation (Incorporated herein by reference to Exhibit 2.2 filed with Form 8-K dated September 30, 2008)
3.1	Restated and Amended Articles of Incorporation of Hill-Rom Holdings, Inc., as currently in effect (Incorporated herein by reference to Exhibit 3.1 filed with Form 8-K dated March 10, 2010)
3.2	Amended and Restated Code of By-Laws of Hill-Rom Holdings, Inc., as currently in effect (Incorporated herein by reference to Exhibit 3.2 filed with Form 8-K dated March 10, 2010)
4.1	Indenture dated as of December 1, 1991, between Hill-Rom Holdings, Inc. and Union Bank, N.A. (as successor to LaSalle Bank National Association and Harris Trust and Savings Bank) as Trustee (Incorporated herein by reference to Exhibit (4) (a) to Registration Statement on Form S-3, Registration No. 33-44086)
*10.1	Hill-Rom Holdings, Inc. Amended and Restated Short Term Incentive Compensation Program (Incorporated herein by reference to Exhibit 10.1 filed with Form 10-K for the year ended September 30, 2009)
*10.3	Hill-Rom Holdings, Inc. 1996 Stock Option Plan (Incorporated herein by reference to Exhibit 10.2 filed with Form 10-Q for the quarter ended February 27, 1999)
*10.4	Form of Stock Award granted to certain executive officers (Incorporated herein by reference to Exhibit 10.4 filed with Form 10-K for the year ended November 27, 1999)
*10.5	Form of Stock Award granted to certain executive officers under the Stock Incentive Plan. (Incorporated herein by reference to Exhibit 10.4 filed with Form 10-K for the year ended September 30, 2003)
*10.7	Form of Director Indemnity Agreement (Incorporated herein by reference to Exhibit 10.6 filed with Form 10-K for the year ended September 30, 2003)
*10.8	Form of Indemnity Agreement between Hill-Rom Holdings, Inc. and certain executive officers (Incorporated herein by reference to Exhibit 10.9 filed with Form 10-K for the year ended September 30, 2003)
*10.9	Hill-Rom Holdings, Inc. Board of Directors’ Deferred Compensation Plan (Incorporated herein by reference to Exhibit 10.10 filed with Form 10-Q for the quarter ended June 2, 2001)

87

*10.10	Hill-Rom Holdings, Inc. Director Phantom Stock Plan and form of award (Incorporated herein by reference to Exhibit 10.11 filed with Form 10-Q for the quarter ended June 2, 2001)
*10.11	Hill-Rom Holdings, Inc. Supplemental Executive Retirement Plan (Incorporated herein by reference to Exhibit 10.14 filed with Form 10-K for the year ended September 30, 2003)
*10.12	Hill-Rom Holdings, Inc. Senior Executive Deferred Compensation Program (Incorporated herein by reference to Exhibit 10.15 filed with Form 10-K for the year ended September 30, 2003)
*10.13	Reserved
*10.15	Form of Director Stock Award (Incorporated herein by reference to Exhibit 10.1 filed with Form 10-Q for the quarter ended December 31, 2004)
*10.16	CEO Cash Award Policy (Incorporated herein by reference to Exhibit 10.28 filed with Form 10-K for the year ended September 30, 2005)
*10.18	Form of Performance Based Stock Award granted December 3, 2009 to certain executive officers, including the named executive officers, under the Stock Incentive Plan
10.19	Settlement Agreement relating to Spartanburg antitrust litigation (Incorporated herein by reference to Exhibit 10.1 filed with Form 8-K dated February 3, 2006)
10.20	Credit Agreement dated as of March 28, 2008 among Hill-Rom Holdings, Inc., the lenders named therein, and Citibank, N.A. as agent for the lenders (Incorporated herein by reference to Exhibit 10.1 to the Form 8-K dated April 1, 2008)
*10.21	Employment Agreement dated as of March 31, 2008 between Hill-Rom Holdings, Inc. and Peter H. Soderberg (Incorporated herein by reference to Exhibit 10.2 filed with Form 8-K dated April 1, 2008)
*10.22	Employment Agreement dated as of March 31, 2008 between Hill-Rom Holdings, Inc. and Gregory N. Miller (Incorporated herein by reference to Exhibit 10.3 filed with Form 8-K dated April 1, 2008)
*10.23	Employment Agreement dated as of March 31, 2008 between Hill-Rom Holdings, Inc. and Patrick D. de Maynadier (Incorporated herein by reference to Exhibit 10.4 filed with Form 8-K dated April 1, 2008)
*10.24	Employment Agreement dated as of March 31, 2008 between Hill-Rom Holdings, Inc. and John H. Dickey (Incorporated herein by reference to Exhibit 10.5 filed with Form 8-K dated April 1, 2008)
*10.25	Form of Change in Control Agreement between Hill-Rom Holdings, Inc. and Peter H. Soderberg (Incorporated herein by reference to Exhibit 10.6 filed with Form 8-K dated April 1, 2008)
*10.26	Form of Change in Control Agreement between Hill-Rom Holdings, Inc. and certain of its officers, including the Named Executive Officers (other than the CEO) (Incorporated herein by reference to Exhibit 10.7 filed with Form 8-K dated April 1, 2008)
10.27	Judgment Sharing Agreement dated as of March 14, 2008 among Hill-Rom Holdings, Inc., Hillenbrand, Inc. and Batesville Casket Company, Inc. (Incorporated herein by reference to Exhibit 10.8 filed with Form 8-K dated April 1, 2008)
10.28	Employee Matters Agreement dated as of March 14, 2008 between Hill-Rom Holdings, Inc. and Hillenbrand, Inc. (Incorporated herein by reference to Exhibit 10.9 filed with Form 8-K dated April 1, 2008)
10.29	Tax Sharing Agreement dated as of March 31, 2008 between Hill-Rom Holdings, Inc. and Hillenbrand, Inc. (Incorporated herein by reference to Exhibit 10.10 filed with Form 8-K dated April 1, 2008)
*10.30	Amended and Restated Hill-Rom Holdings, Inc. Stock Incentive Plan, as currently in effect (Incorporated herein by reference to Exhibit 10.30 filed with Form 10-K for the year ended September 30, 2009)

88

*10.31	Employment Agreement dated as of March 31, 2008 between Hill-Rom Company, Inc. and Richard G. Keller (Incorporated herein by reference to Exhibit 10.12 filed with Form 10-Q for the quarter ended March 31, 2008)
*10.32	Employment Agreement dated as of March 31, 2008 between Hill-Rom Holdings, Inc. and C. Jeffery Kao (Incorporated herein by reference to Exhibit 10.14 filed with Form 10-Q for the quarter ended March 31, 2008)
*10.33	Employment Agreement dated as of March 31, 2008 between Hill-Rom Holdings, Inc. and Mark D. Baron (Incorporated herein by reference to Exhibit 10.15 filed with Form 10-Q for the quarter ended March 31, 2008)
*10.34	Employment Agreement dated as of March 31, 2008 between Hill-Rom Holdings, Inc. and Kimberly K. Dennis (Incorporated herein by reference to Exhibit 10.16 filed with Form 10-Q for the quarter ended March 31, 2008)
*10.35	Employment Agreement dated as of July 31, 2008 between Hill-Rom Holdings, Inc. and Earl V. DeCarli (Incorporated herein by reference to Exhibit 10.18 filed with Form 10-Q for the quarter ended June 30, 2008)
*10.36	Letter Agreement dated September 27, 2009 between Hill-Rom Holdings, Inc. and Peter H. Soderberg (Incorporated herein by reference to Exhibit 10.1 filed with Form 8-K dated September 27, 2009)
*10.37	Hill-Rom Holdings, Inc. Employee Stock Purchase Plan (Incorporated by reference to Appendix I to the Company’s definitive Proxy Statement on Schedule 14A dated January 7, 2009)
*10.38	Letter Agreement effective October 1, 2009 between Hill-Rom Holdings, Inc. and Earl V. DeCarli (Incorporated herein by reference to Exhibit 10.40 filed with Form 10-K for the year ended September 30, 2009)
*10.39	Employment Agreement dated January 6, 2010 between Hill-Rom Holdings, Inc. and John J. Greisch (Incorporated herein by reference to Exhibit 10.1 filed with Form 8-K dated January 7, 2010)
*10.40	Change in Control Agreement between Hill-Rom Holdings, Inc. and John J. Greisch dated January 6, 2010 (Incorporated herein by reference to Exhibit 10.2 filed with Form 8-K dated January 7, 2010)
*10.41	Limited Recapture Agreement between Hill-Rom Holdings, Inc. and John J. Greisch dated January 6, 2010 (Incorporated herein by reference to Exhibit 10.4 filed with Form 8-K dated January 7, 2010)
*10.42	Separation and Release Agreement between Hill-Rom Holdings, Inc. and C. Jeffrey Kao dated March 1, 2010 (Incorporated herein by reference to Exhibit 10.1 filed with Form 8-K dated March 3, 2010)
*10.43	Separation and Release Agreement between Hill-Rom Holdings, Inc. and Gregory J. Tucholski dated April 23, 2010 (Incorporated herein by reference to Exhibit 10.1 filed with Form 10-Q for the quarter ended June 30, 2010)
*10.44	Employment Agreement between Hill-Rom Holdings, Inc. and Alejandro Infante-Saracho dated May 6, 2010 (Incorporated herein by reference to Exhibit 10.5 filed with Form 10-Q for the quarter ended March 31, 2010)
*10.45	Limited Recapture Agreement between Hill-Rom Holdings, Inc. and Alejandro Infante-Saracho dated May 6, 2010 (Incorporated herein by reference to Exhibit 10.6 filed with Form 10-Q for the quarter ended March 31, 2010)
*10.46	Employment Agreement between Hill-Rom Holdings, Inc. and Susan R. Lichtenstein dated May 10, 2010 (Incorporated herein by reference to Exhibit 10.7 filed with Form 10-Q for the quarter ended March 31, 2010)
*10.47	Limited Recapture Agreement between Hill-Rom Holdings, Inc. and Susan R. Lichtenstein dated May 10, 2010 (Incorporated herein by reference to Exhibit 10.8 filed with Form 10-Q for the quarter ended March 31, 2010)
*10.48	Employment Agreement between Hill-Rom Holdings, Inc. and Philip D. Settimi dated May 6, 2010 (Incorporated herein by reference to Exhibit 10.9 filed with Form 10-Q for the quarter ended March 31, 2010)

89

*10.49	Limited Recapture Agreement between Hill-Rom Holdings, Inc. and Philip D. Settimi dated May 6, 2010 (Incorporated herein by reference to Exhibit 10.10 filed with Form 10-Q for the quarter ended March 31, 2010)
*10.50	Employment Agreement between Hill-Rom Holdings, Inc. and Martha G. Aronson dated August 1, 2010
*10.51	Limited Recapture Agreement between Hill-Rom Holdings, Inc. and Martha G. Aronson dated August 1, 2010
*10.52	Employment Agreement between Hill-Rom Holdings, Inc. and Perry Stuckey III dated August 1, 2010
*10.53	Limited Recapture Agreement between Hill-Rom Holdings, Inc. and Perry Stuckey III dated August 1, 2010
*10.54	Employment Agreement between Hill-Rom Holdings, Inc. and Scott R. Jeffers dated September 13, 2010
*10.55	Limited Recapture Agreement between Hill-Rom Holdings, Inc. and Scott R. Jeffers dated September 13, 2010
*10.56	Amended Employment Agreement dated as of July 28, 2010 between Hill-Rom Holdings, Inc. and Patrick D. de Maynadier
*10.57	Amended Employment Agreement dated as of August 26, 2010 between Hill-Rom Holdings, Inc. and Mark D. Baron
*10.58	Form of Change in Control Agreement between Hill-Rom Holdings, Inc. and certain of its officers, including Named Executive Officers (other than the CEO)
*10.59	Amended Change in Control Agreement between Hill-Rom Holdings, Inc. and John J. Greisch dated September 30, 2010
*10.60	Change in Control Agreement between Hill-Rom Holdings, Inc. and Kimberly K. Dennis dated September 30, 2010
*10.61	2011 Non-Employee Director Compensation Policy
*10.62	Form of Non-Qualified Stock Option Agreement under Amended and Restated Hill-Rom Holdings, Inc. Stock Incentive Plan
*10.63	Form of Restricted Stock Unit Agreement under Amended and Restated Hill-Rom Holdings, Inc. Stock Incentive Plan
*10.64	Form of Non-Qualified Stock Option Agreement (CEO version) under Amended and Restated Hill-Rom Holdings, Inc. Stock Incentive Plan
*10.65	Form of Restricted Stock Unit Agreement (CEO version) under Amended and Restated Hill-Rom Holdings, Inc. Stock Incentive Plan
*10.66	Employment Agreement between Hill-Rom Holdings, Inc. and Mark Guinan, dated November 1, 2010 (Incorporated by reference to Exhibit 10.1 filed with the Company’s Form 8-K on November 1, 2010)
*10.67	Limited Recapture Agreement between Hill-Rom Holdings, Inc. and Mark Guinan, dated November 1, 2010 (Incorporated by reference to Exhibit 10.4 filed with the Company’s Form 8-K on November 1, 2010)
*10.68	Letter Agreement between Hill-Rom Holdings, Inc. and Greg Miller, dated November 1, 2010 (Incorporated by reference to Exhibit 10.4 filed with the Company’s Form 8-K on November 1, 2010)

90

	21	Subsidiaries of the Registrant
	23	Consent of Independent Registered Public Accounting Firm
	31.1	Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
	31.2	Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
	32.1	Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
	32.2	Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
	99.1	Corporate Governance Standards for the Board of Directors of Hill-Rom Holdings, Inc. (Incorporated by reference to Exhibit 99 filed with Form 10-Q for the quarter ended March 31, 2010)
	99.2	Charter of Audit Committee of Board of Directors of Hill-Rom Holdings, Inc. (Incorporated by reference to Exhibit 99.1 filed with Form 10-Q for the quarter ended December 31, 2008)
	99.4	Charter of Nominating/Corporate Governance Committee of Board of Directors of Hill-Rom Holdings, Inc. (Incorporated by reference to Exhibit 99.3 filed with Form 10-Q for the quarter ended March 31, 2007)
	99.5	Charter of Compensation and Management Development Committee of Board of Directors (Incorporated by reference to Exhibit 99.3 filed with Form 10-K for the year ended September 30, 2006)
	99.6	Position Specification for Chairperson of Board of Directors of Hill-Rom Holdings, Inc. (Incorporated herein by reference to Exhibit 99.5 filed with Form 10-K for the year ended September 30, 2004)
	99.7	Position Specification for Vice Chairperson of Board of Directors of Hill-Rom Holdings, Inc. (Incorporated herein by reference to Exhibit 99.7 filed with Form 10-K for the year ended September 30, 2003)
	99.8	Position Specification for Member of Board of Directors of Hill-Rom Holdings, Inc. (Incorporated by reference to Exhibit 99.8 filed with Form 10-K for the year ended September 30, 2008)
	99.9	Position Specification for President and Chief Executive Officer (Incorporated herein by reference to Exhibit 99.11 to the Form 10-K for the Transition Period ended September 30, 2002)
101.INS		XBRL Instance Document
101.SCH		XBRL Taxonomy Extension Schema Document
101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB		XBRL Extension Labels Linkbase Document
101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document

91

EX-10.18

EXHIBIT 10.18

HILL-ROM HOLDINGS, INC.
STOCK AWARD
(EFFECTIVE <date>)

1. Purpose. The purpose of the Hill-Rom Holdings, Inc. Stock Award (hereinafter called the “Award”), which is granted under the Hill-Rom Holdings, Inc. Stock Incentive Plan (the “Plan”), is to promote profitability and growth of Hill-Rom Holdings, Inc. (the “Company”) by offering an incentive payable in Company common stock to <Name> (the “Employee”) who contributes to such profitability and growth.

2. Amount of Award. The Company shall cause an account to be established in the name of the Employee (“Deferred Stock Account”), which shall be assumed to be invested in <Units> shares (“Initial Deferred Stock Award”) of common stock, no par value of the Company (“Common Stock”). The Initial Deferred Stock Award represents the number of shares of Common Stock that would be earned if all Performance Goals (defined below) were attained at the “Target” performance level, as described in Section 3. No actual shares of Common Stock shall be held in the Deferred Stock Account, and the number of shares of Common Stock maintained in the Deferred Stock Account (“Deferred Stock”) shall be a book entry which states the number of shares of Common Stock the Employee would have a right to receive in accordance with the terms of this Award. Any stock dividends, stock splits and other similar rights inuring to Common Stock shall be assumed to inure to the Deferred Stock, which may increase or decrease the number of shares of Deferred Stock in the Deferred Stock Account. The Initial Deferred Stock Award plus any increases or less any decreases due to stock dividends, stock splits and any other similar rights inuring to Common Stock as set forth in the two immediately preceding sentences shall herein after be referred to as the “Deferred Stock Award.”

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

First Performance Period:	October 1, 2009 through September 30, 2010
Second Performance Period:	October 1, 2010 through September 30, 2011
Third Performance Period:	October 1, 2011 through September 30, 2012

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

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

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

4. Vested Deferred Stock.

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

(b) Except as otherwise provided herein, any Deferred Stock maintained in the Deferred Stock Account which is not Vested Deferred Stock shall, upon the Employee’s termination of employment, be forfeited by the Employee without the payment of any consideration or further consideration by the Company, and neither the Employee nor any successors, heirs, assigns, or legal representatives of the Employee shall thereafter have any further rights or interest in such forfeited Deferred Stock.

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

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

(i) acted with gross neglect or willful misconduct in the discharge of the Employee’s duties and responsibilities or refused to follow or comply with the lawful direction of the Employer or the terms and conditions of any applicable employment agreement, providing such refusal is not based primarily on the Employee’s good faith compliance with applicable legal or ethical standards;

(ii) acquiesced or participated in any conduct that is dishonest, fraudulent, illegal (at the felony level), unethical, involves moral turpitude or is otherwise illegal and involves conduct that has the potential, in the Employer’s reasonable opinion, to cause the Company, a Subsidiary, its officers or its directors embarrassment or ridicule;

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

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

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

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

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(d) Earned Deferred Stock shall become Vested Deferred Stock upon the occurrence, after the day after the first anniversary date of the effective date of this Award, of (i) a Change in Control (as defined in Section 14.2 of the Plan), or (ii) a sale, transfer or disposition of substantially all of the assets or capital stock of a Subsidiary (as defined in the Plan) or division of the Company or one of its Subsidiaries individually or collectively for whom the Employee is employed at the time of such Change in Control, sale, transfer or disposition. Notwithstanding anything herein to the contrary, the distribution by the Company to Company shareholders of any or all of the shares of common stock of any of its Subsidiaries (“Distribution”) shall not constitute an event causing Deferred Stock to become Vested Deferred Stock as described in the preceding sentence. Temporary absences from employment because of illness, vacation or leave of absence and transfers among the Company and/or any of its Subsidiaries shall not be considered terminations of employment. For purposes of this Agreement and the Plan, the Committee shall have absolute discretion to determine the date and circumstances of termination of the Employee’s employment, and its determination shall be final, conclusive and binding upon the Employee. Notwithstanding anything herein to the contrary, the transfer of the Employee’s employment from the Company to any of its Subsidiaries or from one of the Company’s Subsidiaries to the Company or another of the Company’s Subsidiaries in connection with a Distribution or disposition shall not constitute a termination of employment for purposes of this Agreement, and the Employee’s employment will be deemed to continue for purposes of this Agreement until otherwise terminated as provided herein. In particular, if the Employee transfers employment from the Company to any of its Subsidiaries or from one of the Company’s Subsidiaries to the Company or another of the Company’s Subsidiaries in connection with or in anticipation of a Distribution, or disposition, such transfer of employment shall not constitute a termination of employment for purposes of this Agreement, and the Employee’s employment will be deemed to continue for purposes of this Agreement until otherwise terminated as provided herein.

In consideration of the grant of this Award, the Employee hereby agrees and acknowledges that any provisions in an Employment Agreement and/or a Change In Control Agreement between the Employee and the Company related to the vesting of awards granted under the Plan shall not apply and have no effect with respect to this Award, and that the vesting of this Award upon a Change in Control shall be governed solely by this Agreement.

5. Delivery of Shares. The Company shall deliver to the Employee shares of Common Stock equal in number to the number of shares of Vested Deferred Stock. The shares of Common Stock delivered to the Employee shall be from shares held by the Company as treasury stock or from shares of Common Stock acquired by the Company in the open market. Subject to the Employee’s election to defer, all shares of Common Stock to be delivered to the Employee shall be delivered as soon as administratively possible after the day on which such shares become Vested Deferred Stock, but no later than the 15^th day of the third month following the end of the calendar year in which such shares become Vested Deferred Stock. Notwithstanding anything herein to the contrary, with respect to any shares that become Earned Deferred Stock after the date the Employee becomes eligible for Retirement (as described in Section 4(c)) and on or before the earlier to occur of (A) the last day of the Third Performance Period or (B) the date of the Employee’s Retirement, such shares shall not be delivered until the earliest to occur of: (i) the last day of the Third Performance Period, (ii) the date of the Employee’s termination of employment (subject to the last sentence of this paragraph), or (iii) a Change in Control (but only if the event constituting a Change in Control satisfies the requirements for a distribution under Section 409A(a)(2)(A)(v) of the Internal Revenue Code of 1986, as amended (“Code”) (a “409A Change in Control”)). Shares that become deliverable in accordance with the immediately preceding sentence may be delivered at any time within ninety (90) days after the event that triggers delivery, provided that the Employee will have no right to designate the calendar year in which the shares will be delivered. With respect to any shares that become Earned Deferred Stock after the date the Employee becomes eligible for Retirement and after the earlier to occur of (A) the last day of the Third Performance Period or (B) the date of the Employee’s Retirement, such shares shall be delivered in accordance with the third sentence of this paragraph. Notwithstanding the foregoing, if shares become deliverable by reason of the Employee’s separation from service and at the time of the Employee’s separation from service the Employee is a “specified employee” as defined in Section 409A of the Code, then the shares of Common Stock to be delivered shall be delivered on the date which is six months after the date of the Employee’s separation from service.

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6. Administration of the Award. The Committee shall administer the Award. The Committee shall have complete and full discretion in the administration and interpretation of the terms of the Award.

7. Right to Defer Payment of Award.

(a) Election to Defer Award. The Employee may elect to defer payment of the Award otherwise due on the date shares become Vested Deferred Stock by completing a written election and delivering such election to the Company at least one year prior to such date; provided however, that the completion of such written election and the delivery of such election may be at an earlier date as determined by the Committee or required by law to insure the validity of such deferral. The Employee may not defer payment for a period that is shorter than five (5) years after the date the shares become Vested Deferred Stock. Notwithstanding the foregoing, with respect to any shares that become Vested Deferred Stock after the date the Employee has attained age fifty-five (55) and completed five (5) years of employment, the Employee may elect to defer payment of the Award to the later of a 409A Change in Control or a date which is at least five (5) years after the date of the Employee’s termination of employment, provided the Employee makes the election at least one year prior to the date of the Employee’s termination of employment, and the election will not take effect until the one-year anniversary of the date on which the election is made. At the end of the deferral period elected by the Employee (or within a certain period of time after the last day of the deferral period as determined by the Committee or required by law to insure the validity of the deferral), the Company, subject to Sections 9, 10 and 11, shall deliver to the Employee shares of Common Stock equal in number to the number of Vested Deferred Stock held in the Employee’s Deferred Stock Account.

(b) Financial Hardship. A withdrawal from the Employee’s Deferred Stock Account of Vested Deferred Stock shall be permitted prior to the termination of the deferral period in the event that the Employee experiences an “unforeseeable emergency” as such term in defined Section 409A(a)(2)(B)(ii) of the Code and the regulations issued thereunder. The Employee must apply to the Committee for an unforeseeable emergency withdrawal and demonstrate that the circumstances being experienced were not under the Employee’s control and constitute a real emergency, which is likely to cause a severe financial hardship. The Committee shall have the authority to require such medical or other evidence as it may need to determine the necessity for the Employee’s withdrawal request. If such application for withdrawal is permitted, the amount of such withdrawal shall be limited to an amount reasonably necessary to satisfy the emergency need, and the Committee must take into account any additional compensation available. If the Employee makes a withdrawal, the amount of the Employee’s Deferred Stock Account under this Award shall be proportionately reduced to reflect the withdrawal. Also, the withholding requirements described in Section 11 shall also be effected before the withdrawal. Notwithstanding anything in this Section 4(b) to the contrary, any withdrawal for any unforeseeable emergency must comply with Section 409A(a)(2)(B) of the Code.

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8. No Rights as Stockholder. The Employee shall have no rights as a stockholder with respect to any shares of Common Stock covered by this Award until shares of Common Stock are delivered to the Employee. Until such time, the Employee shall not be entitled to dividends (except where the Employee’s Deferred Stock Account is adjusted for stock dividends pursuant to Section 2) or to vote at meetings of the stockholders of the Company.

9. Compliance With Securities Laws. Prior to the receipt of any certificates for shares of Common Stock pursuant to this Award, the Employee (or the Employee’s beneficiary or legal representative upon the Employee’s death or disability) shall enter into such additional written representations, warranties and Awards as the Company may reasonably request in order to comply with applicable securities laws or with this Award.

10. Stock Ownership Guidelines. The Employee (or the Employee’s beneficiary or legal representative upon the Employee’s death or disability) shall be bound by the “Stock Ownership Guidelines” of the Company as may be in effect from time to time.

11. Withholding. Any payment of Common Stock under this Award shall be subject to applicable federal and state withholding requirements. Hence, unless the Employee delivers a check to the Company equal to the required withholding, the number of shares distributed shall be reduced to meet the Employee’s applicable withholding requirements.

12. Designation of Beneficiary. The Employee shall be permitted to provide to the Committee a beneficiary designation for receipt of his or her Award after death. If the Employee fails to designate a beneficiary, or if the designated beneficiary predeceases the Employee, the Award shall be paid to the deceased Employee’s spouse, if living, or if such spouse is not living, to the deceased Employee’s estate.

13. Adjustments. In the event of any merger, reorganization, consolidation, sale of substantially all assets, recapitalization, stock dividend, stock split, spin-off, split-up, split-off, distribution of assets or other change in corporate structure occurring after the effective date of this Award affecting the Common Stock subject to this award, the Board of Directors of the Company shall adjust the number and kind of shares of Common Stock subject to this Award so as to maintain the proportionate number of shares subject to this award, and such adjustment shall be conclusive and binding upon the Employee and the Company.

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14. Non-Transferability.

(a) The Deferred Stock, the Deferred Stock Account and the Vested Deferred Stock may not be sold, assigned, transferred, exchanged, pledged, hypothecated, or otherwise encumbered and no such sale, assignment, transfer, exchange, pledge, hypothecation, or encumbrance, whether made or created by a voluntary act of the Employee or any agent of the Employee or by operation of law, shall be recognized by, or be binding upon, or shall in any manner affect the rights of, the Company, its successors or any agent thereof.

(b) No amounts payable under the Award shall be transferable by the Employee other than by his designation of a beneficiary pursuant to Section 12. The amounts payable under the Award shall be exempt from the claims of creditors of the Employee and from all orders, decrees, levies and executions and any other legal process to the fullest extent that may be permitted by law.

15. Amendments to Award. The Award may only be modified upon the mutual agreement of the Company and the Employee.

16. Source of Benefit Payments. The payment of the Award to the Employee shall be paid solely from the general assets of the Company. Until the actual delivery of the shares of Common Stock, the Employee shall not have any interest in any specific assets of the Company, including shares of Common Stock, under the terms of the Award. The Award shall not be considered to create an escrow account, trust fund or other funding arrangement of any kind, or a fiduciary relationship between the Employee and the Company. Until such time of payment, no shares of the Common Stock shall be set aside by the Company for the Award.

17. Successors and Assigns.

(a) This Award is personal to the Employee and without the prior written consent of the Company shall not be assignable by the Employee except by will or the laws of descent and distribution. This Award shall inure to the benefit of and be enforceable by the Employee’s guardian and legal representatives.

(b) This Award shall inure to the benefit of and be binding upon the Company and its successors and assigns.

(c) The Company shall require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to assume expressly and agree to perform this Award in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place.

18. Award Subject to Plan. This Award is subject to the terms of the Plan. The terms and provisions of the Plan (including any subsequent amendments thereto) are hereby incorporated herein by reference. In the event of a conflict between any terms and provisions contained herein and the terms or provisions of the Plan, the applicable terms or provisions of the Plan will govern and prevail.

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19. Governing Law. This Award shall be governed by and construed in accordance with the internal laws of the State of Indiana without reference to principles of conflict of laws. The captions of this Award are not part of the provisions hereof and shall have no force or effect. This Award may not be amended or modified except by a written Award executed by the parties hereto or their respective successors and legal representatives.

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

21. No Waiver. The failure of the Employee or the Company to insist upon strict compliance with any provision of this Award or the failure to assert any right the Employee or the Company may have under this Award shall not be deemed to be a waiver of such provision or right or any other provision or right of this Award.

22. Entire Award. The Employee and the Company acknowledge that this Award supersedes any prior agreement between the parties with respect to the subject matter of this Award.

23. Counterparts. This Award may be executed in counterparts, which together shall constitute one and the same original.

Effective Date: <date>

	HILL-ROM HOLDINGS, INC.
	By:
		John H. Dickey
		Senior Vice President, Human Resources
Accepted:
	<Name>

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EX-10.50

EXHIBIT 10.50

EMPLOYMENT AGREEMENT

P R E A M B L E

This Employment Agreement defines the essential terms and conditions of our employment relationship with you. The subjects covered in this Agreement are vitally important to you and to the Company. Thus, you should read the document carefully and ask any questions before signing the Agreement. 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 1st day of August 2010 is entered into by and between Hill-Rom Holdings, Inc. (“Company”) and Martha Goldberg Aronson (“Employee”).

W I T N E S S E T H:

WHEREAS, the Company and its affiliated entities are engaged in the healthcare industry throughout the United States and abroad including, but not limited to, the design, manufacture, sale, service and rental of hospital beds and stretchers, hospital furniture, medical-related architectural products, specialty sleep surfaces (including therapeutic surfaces), air clearing devices, biomedical and asset management services, as well as other medical-related accessories, devices, products and services;

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

WHEREAS, in the course of the employment contemplated under this Agreement and as a continuation of Employee’s past employment with the Company, if applicable, 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 (collectively referred to as the “Parties”) acknowledge and agree that the execution of this Agreement is necessary to memorialize the terms and conditions of their employment relationship as well as safeguard against the unauthorized disclosure or use of the Company’s confidential information and to otherwise preserve the goodwill and ongoing business value of the Company;

NOW THEREFORE, in consideration of 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 as President, North America. 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 position. 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 this 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 Conducts, 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 Sixteen Thousand Three Hundred Forty Six Dollars and Fifteen Cents ($16,346.15), less usual and ordinary deductions;

(b) 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

(c) 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.

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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 any third party. Alternatively, should any such agreement exist, Employee warrants 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”). 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.

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 her duties and responsibilities or refused to follow or comply with the lawful direction of the Board of Directors 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;

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(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, its officers or its 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 its best interests or would hold the Company, its officers or directors up to probable civil or criminal liability, provided that, if Executive acts in good faith in compliance with applicable legal or ethical standards, such actions shall not be grounds for termination for cause; or

(f) Engaged in such other conduct recognized at law as constituting cause.

Upon the occurrence or discovery of any event specified above, the Company shall have the right to terminate 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.

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 acts by the Company, or failures by the Company to act (each a “Good Reason Condition”), provided (i) the Employee provides written notice to the Company of the occurrence of the Good Reason Condition within ten (10) business days after the Employee has knowledge of the Good Reason Condition; (ii) the Company fails to notify the Employee of the Company’s intended method of correction within thirty (30) business days after the Company receives Employee’s notice, or the Company fails to correct the Good Reason Condition within thirty (30) business days after such Employee notice; and (iii) the Employee resigns within ten (10) business days after the end of the 30-business-day period specified in (ii):

(a) A material diminution in Employee’s duties;

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(b) The failure to elect or reelect Employee as President, North America of the Company (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 her responsibilities to, and position within, the Company;

(d) A material reduction by the Company in the amount of Employee’s base salary or the discontinuation or material 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 at the Company’s St. Paul, Minnesota offices to a location requiring a change of more than fifty (50) miles in Employee’s daily commute; or

(f) Any other action or inaction by the Company that constitutes a material breach of this Employment Agreement.

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 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.

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.

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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 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 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. Each amount to be paid or benefit to be provided to Employee pursuant to this Agreement, which constitutes deferred compensation subject to Section 409A, shall be construed as a separate identified payment for purposes of Section 409A. To the extent required to avoid an accelerated or additional tax under Section 409A, amounts reimbursed to Employee under this Agreement shall be paid to Employee on or before the last day of the year following the year in which the expense was incurred, the amount of expenses eligible for reimbursement (and in-kind benefits provided to Employee) during any one year may not affect amounts reimbursed or provided in any subsequent tax year, and the right to reimbursement (and in-kind benefits provided to Employee) under this Agreement shall not be subject to liquidation or exchange for another benefit.

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15. Section 409A Acknowledgement. Employee acknowledges that, notwithstanding anything contained herein to the contrary, both Parties shall be independently responsible for accessing 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. 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 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 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 Payments. 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’ 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 the Employee’s salary commencing upon 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), begin upon the next regularly scheduled payroll 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 eighteen (18) 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;

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(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

(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 eighteen (18) 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 eighteen (18) 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) nine (9) 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 eighteen (18) 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, salesman, independent contractor, broker, agent, or consultant for any other individual, partnership, firm, corporation, company, or other entity engaged in such conduct.

26. Consent to Reasonableness. In light of the above-referenced concerns, including 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.

27. 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.

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28. 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’s 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.

29. 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 Employee 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 1069 State Road 46 E, 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.

30. Scope of Restrictions. If the scope of any restriction contained in any preceding paragraphs of this Agreement is deemed too broad to permit enforcement of such restriction to its fullest extent, then such restriction shall be enforced to the maximum extent permitted by law, and Employee hereby consents and agrees that such scope may be judicially modified accordingly in any proceeding brought to enforce such restriction.

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31. 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.

32. 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.

33. 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 (if any) 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.

34. 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.

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35. 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.

36. Choice of Law. This Agreement shall be deemed to have been made within the County of Ripley, State of Indiana and shall be interpreted and construed in accordance with the laws of the State of Indiana. Any and all matters of dispute of any nature whatsoever arising out of, or in any way connected with the interpretation of this Agreement, any disputes arising out of the Agreement or the employment relationship between the Parties hereto, shall be governed by, construed by and enforced in accordance with the laws of the State of Indiana without regard to any applicable state’s choice of law provisions.

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

38. Severability. The Parties agree that each and every paragraph, sentence, clause, term and provision of this Agreement is severable and that, in the event any portion of this Agreement is adjudged to be invalid or unenforceable, the remaining portions thereof shall remain in effect and be enforced to the fullest extent permitted by law. Further, should any particular clause, covenant, or provision of this Agreement be held unreasonable or contrary to public policy for any reason, the Parties acknowledge and agree that such covenant, provision or clause shall automatically be deemed modified such that the contested covenant, provision or clause will have the closest effect permitted by applicable law to the original form and shall be given effect and enforced as so modified to whatever extent would be reasonable and enforceable under applicable law.

39. Assignment-Notices. The rights and obligations of the Company under this Agreement shall inure to its benefit, as well as the benefit of its parent, subsidiary, successor and affiliated entities, and shall be binding upon the successors and assigns of the Company. This Agreement, being personal to 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.

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40. Amendments and Modifications. Except as specifically provided herein, no modification, amendment, extension or waiver of this Agreement or any provision hereof shall be binding upon the Company or 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.

41. 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.

42. 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.

43. 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”	HILL-ROM HOLDINGS, INC.
Signed: /s/ Martha Goldberg Aronson	By: /s/ John H. Dickey
Printed: Martha Goldberg Aronson	Title: Sr. Vice President
Dated: July 19, 2010	Dated: July 20, 2010

CAUTION: READ BEFORE SIGNING

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Exhibit A

SAMPLE SEPARATION AND RELEASE AGREEMENT

THIS SEPARATION and RELEASE AGREEMENT (“Agreement”) is entered into by and between Martha Goldberg Aronson (“Employee”) and [Insert 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, Employee’s Employment Agreement, any Change in Control Agreement and any Indemnity Agreement that may exist between the Company and Employee, Employee agrees that the Company shall have no other obligations or liabilities to her following her Effective Termination Date and that her receipt of the Severance Benefits provided herein shall constitute a complete settlement, satisfaction and waiver of any and all claims she may have against the Company.

2. Employee further submits, and the Company hereby accepts, her resignation as an employee, officer and director, as of her Effective Termination Date for any position she 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 her duties and responsibilities to others.

3. Employee acknowledges that she 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 her 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 she is a “specified employee” at the time of her 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. Each amount to be paid or benefit to be provided to Employee pursuant to this Agreement, which constitutes deferred compensation subject to Section 409A, shall be construed as a separate identified payment for purposes of Section 409A. To the extent required to avoid an accelerated or additional tax under Section 409A, amounts reimbursed to Employee under this Agreement shall be paid to Employee on or before the last day of the year following the year in which the expense was incurred, the amount of expenses eligible for reimbursement (and in-kind benefits provided to Employee) during any one year may not affect amounts reimbursed or provided in any subsequent tax year, and the right to reimbursement (and in-kind benefits provided to Employee) under this Agreement shall not be subject to liquidation or exchange for another benefit.

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 [Insert Amount] 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 (6^tth) 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 an 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 her bi-weekly base salary (i.e.                      Dollars and                      Cents ($                    ), less applicable deductions or other set-offs), for a period up to [insert 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) Group Life Insurance coverage until the above-referenced Severance Pay terminates.

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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 her execution of a release in compliance with the Older Workers Benefit Protection Act. The balance of the severance benefits and other obligations undertaken by the Company pursuant to this Agreement shall be allocated as consideration for all other promises and obligations undertaken by Employee, including execution of a general release of claims.

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 her 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 her 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 her 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), her intended duties as well as the anticipated start date. Such information is required to ensure Employee’s compliance with her non-compete obligations as well as all other applicable restrictive covenants. This notice will also serve to trigger the Company’s right to terminate the above-referenced severance pay benefits (specifically excluding any lump sum payment due as 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.

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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 her 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 her with any legal or financial advice concerning taxes or any other matter, and that she has not relied on any such advice in deciding whether to enter into this Agreement. To the extent applicable, Employee understands and agrees that she shall have the responsibility for, and she agrees to pay, any and all appropriate income tax or other tax obligations for which she is individually responsible and/or related to receipt of any benefits provided in this Agreement not subject to federal withholding obligations

10. In exchange for the foregoing Severance Benefits, MARTHA GOLDBERG ARONSON on behalf of herself, her heirs, representatives, agents and assigns hereby RELEASES, INDEMNIFIES, HOLDS HARMLESS, and FOREVER DISCHARGES (i) [Company Legal Name], 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, 1964 and 1991, as amended, 42 U.S.C. §§ 1981 and 2000(e) et seq.; the Age Discrimination in Employment Act, as amended, 29 U.S.C. §§ 621 et seq.; the Americans with Disabilities Act of 1990, as amended, 42 U.S.C §§ 12,101 et seq.; the Fair Labor Standards Act 29 U.S.C. §§ 201 et seq.; the Worker Adjustment and Retraining Notification Act, 29 U.S.C. §§ 2101, et seq.; the Sarbanes-Oxley Act of 2002, specifically including the Corporate and Criminal Fraud Accountability Act, 18 USC §1514A et seq.; the Employee Retirement Income Security Act of 1974, 29 U.S.C. §§ 1101 et seq.; the Family and Medical Leave Act of 1993, as amended, 29 U.S.C. §§ 2601 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.

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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 her 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 her right to file an administrative charge with the EEOC or any other federal, state, or local agency, Employee agrees that with her release of claims in this Agreement, she has waived any right she may have to recover monetary or other personal relief in any proceeding based in whole or in part on claims released by her 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 her release of claims in this Agreement, Employee specifically assigns to the Company her right to any recovery arising from any such proceeding.

14. [INCLUDE 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) She has carefully read and fully understands all of the provisions of this Agreement and that she 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 she 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 her choice concerning its terms and conditions; and

(d) She has been offered at least [twenty-one (21)/forty-five (45)] days within which to review and consider this Agreement.

15. [ADD THIS LANGUAGE IF THE 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 she 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 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.

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16. [ADD THIS LANGUAGE IF THE EMPLOYEE IS IN MINNESOTA — DO NOT USE THE PRECEDING PARAGRAPH IF THIS PARAGRAPH IS USED] The Parties agree that this Agreement shall not become effective and enforceable until the date this Agreement is signed by both parties or fifteen (15) 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 fifteen (15) days after Employee has signed this Agreement, thereby forfeiting Employee’s right to receive any Severance Benefits provided hereunder not otherwise required by law and rendering this Agreement null and void in its entirety. If the notice of revocation is mailed it must be postmarked within the fifteen (15) day period and sent certified mail, return receipt requested. This revocation must be sent to the Employee’s HR Representative and to the Company Office of General Counsel.

17. [ADD THIS LANGUAGE IF THE EMPLOYEE IS IN CALIFORNIA] Employee specifically acknowledges that, as a condition of this Agreement, she expressly releases all rights and claims that she knows about as well as those she 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 her favor at the time of executing the release which if known, must have materially affected her 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 her favor at the time of signing this Agreement and that this Agreement expressly contemplates the extinguishment of all such claims.

18. 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 she 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 her termination, such items to be governed exclusively by the terms of the applicable agreements or plan documents.

19. 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 she 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 she has with the Company prior to the date hereof, any rights she has as a shareholder, or any claim for breach of this Agreement, including, but not limited to the benefits promised by the terms of this Agreement.

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20. [Optional Provision for Equity Eligible Employees: Except as provided herein, Employee acknowledges that she will not be eligible to receive or vest in any additional stock options, stock awards or restricted stock units (“RSUs”) as of her Effective Termination Date. Failure to exercise any vested options within the applicable period as set for in the plan and/or grant will result in their forfeiture. 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.]

21. [Option A] Employee acknowledges that her termination and the Severance Benefits offered hereunder were based on an individual determination and were not offered in conjunction with any group termination or group severance program and waives any claim to the contrary.

[Option B] Employee represents and agrees that she 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).

22. Employee hereby affirms and acknowledges her continued obligations to comply with the post-termination covenants contained in her 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 her and, to the extent not inconsistent with the terms of this Agreement or applicable law, the terms thereof shall be incorporated herein by reference. 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 her Employment Agreement shall include but not be limited to those entities specifically identified in the updated Competitor List, attached hereto as Exhibit [B/C].

23. Employee acknowledges that the Company as well as its parent, subsidiary and affiliated companies (“Companies” herein) possess, and she has been granted access to, certain trade secrets as well as other confidential and proprietary information that they have acquired at great effort and expense. Such information includes, without limitation, confidential information regarding products and services, marketing strategies, business plans, operations, costs, current or, prospective customer information (including customer contacts, requirements, creditworthiness and like matters), product concepts, designs, prototypes or specifications, regulatory compliance issues, research and development efforts, technical data and know-how, sales information, including pricing and other 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”).

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24. 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.

25. 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 her possession or control relating to the Company or its business, including but not limited to any and all contracts, reports, memoranda, correspondence, manuals, forms, records, designs, budgets, contact information or lists (including customer, vendor or supplier lists), ledger sheets or other financial information, drawings, plans (including, but not limited to, business, marketing and strategic plans), personnel or other business files, computer hardware, software, or access codes, door and file keys, identification, credit cards, pager, phone, and any and all other physical, intellectual, or personal property of any nature that she received, prepared, helped prepare, or directed preparation of in connection with her 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.

26. 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).

27. 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 she 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 her 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.

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28. 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.

29. 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 she shall not communicate, display or otherwise reveal any of the contents of this Agreement to anyone other than her 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 her employment by stating that the Parties have terminated their relationship on an amicable basis and that the Parties have entered into a Confidential Separation and Release Agreement that prohibits her from further discussing the specifics of her 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 her Employment Agreement. Further, nothing contained herein shall be construed to limit or otherwise restrict the Company’s ability to disclose the terms and conditions of this Agreement as may be required by business necessity.

30. In the event that Employee breaches or threatens to breach any provision of this Agreement, she agrees that the Company shall be entitled to seek any and all equitable and legal relief provided by law, specifically including immediate and permanent injunctive relief. 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.

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31. 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 her in any wholly successful effort (i.e. entry of a judgment in her 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.

32. 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.

33. 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.

34. 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.

35. 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.

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

37. Employee represents and acknowledges that in signing this Agreement she 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.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

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38. 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, or any obligation contained in any other legally-binding document), and shall not be altered, amended, modified or otherwise changed except by a writing executed by both Parties.

PLEASE READ CAREFULLY. THIS SEPARATION AND RELEASE
AGREEMENT INCLUDES A COMPLETE RELEASE OF ALL
KNOWN AND UNKNOWN CLAIMS.

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

EMPLOYEE	[Company Legal Name]
Signed:	By:
Printed:	Title:
Dated:	Dated:

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Exhibit B

ILLUSTRATIVE COMPETITOR LIST

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

•     Amico Corporation	•     Anodyne Medical Device, Inc.
•     APEX Medical Corp.	•     Apria Healthcare Inc.
•     Aramark Corporation	•     Ascom (Ascom US, Inc.)
•     Barton Medical Corporation	•     B.G. Industries, Inc.
•     CareMed Supply, Inc.	•     Comfortex, Inc.
•     Corona Medical SAS	•     Custom Medical Solutions
•     Dukane Communication Systems, a division of Edwards Systems Technology, Inc.	•     Encompass Group, LLC
•     Fitzsimmons Home Medical Equipment, Inc.	•     Freedom Medical, Inc.
•     Gaymar Holding Company, LLC (Gaymar Industries, Inc.)	•     GF Health Products, Inc. (Graham Field)
•     Handicare AS (Romedic, Inc.)	•     Getinge Group (Arjo; Getinge; Maquet; Pegasus; Huntleigh Technology Plc (Huntleigh Healthcare, LLC))
•     Human Care HC AB	•     Horcher GmbH
•     Intego Systems, Inc. (formerly known as Wescom Products, Inc.)	•     Industrie Guido Malvestio S.P.A.
•     Joerns Healthcare, Inc.	•     Invacare Corporation
•     Kinetic Concepts, Inc. (KCI)	•     Joh. Stiegelmeyer & Co., GmbH (Stiegelmeyer)
•     Linet (Linet France, Linet Far East)	•     Linak Group
•     Medical Specialties Distributors, LLC	•     MedaSTAT, LLC
•     Merivaara Corporation	•     Medline Industries, Inc.
•     Modular Service Company	•     MIZUOSI
•     Nemschoff Chairs, Inc.	•     Molift
•     Paramount Bed Company, Ltd.	•     Nurture by Steelcase, Inc.
	•     Pardo

•     Pegasus Airwave, Inc.	•     Premise Corporation
•     Prism Medical Ltd (Waverly Glen)	•     Radianse, Inc.
•     Rauland-Borg Corporation	•     Recovercare, LLC (Stenbar, T.H.E. Medical)
•     Sentech Medical Systems, Inc.	•     SimplexGrinnell, LP
•     SIZEwise Rentals, LLC	•     Span America Medical Systems, Inc.
•     Statcom (Jackson Healthcare Solutions)	•     Stryker Corporation
•     Sunrise Medical (Ted Hoyer and Company)	•     Tele-Tracking Technologies, Inc.
•     Tempur-Pedic Medical, Inc.	•     Universal Hospital Services, Inc.
•     V. Guldmann A/S	•     Voelker AG
•     West-Com Nurse Call Systems, 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.

(Revised list April 2010)

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EX-10.51

EXHIBIT 10.51

Limited Recapture Agreement

This Limited Recapture Agreement (the “Agreement”) by and between Hill-Rom Holdings, Inc. (“Company”) and the undersigned Executive (“Executive”) is entered into effective as of August 1, 2010 (“Effective Date”), as a condition of the grant of a cash award by the Company to the Executive under the Company’s Short-Term Incentive Compensation Program or any similar future plan(s) or program(s) (“STIC Program”) and/or the grant of any performance-based (but not time based) stock options, deferred stock shares or other awards under the Company’s Stock Incentive Plan (as such plan may be amended) or any similar future plan(s) (“Stock Plan”). Any and all such cash or stock based awards under the STIC Program and/or Stock Plan are referred to herein as “Performance Based Compensation.”

1. Introduction. The Company’s Board of Directors has adopted and disclosed publicly an Executive Compensation Recoupment Policy (“Policy”). Under the Policy, all Performance-Based Compensation paid or awarded to, and trading profits on any Company securities trades (“Trading Profits”) by, executive officers (i.e., officers subject to Section 16 of the Securities Exchange Act of 1934, as amended) are subject to recoupment by the Company in the event there is a material restatement of the Company’s consolidated financial results (“Material Restatement”) due to misconduct of the individual executive officer(s) from whom recoupment is sought. The Policy, which applies prospectively from its December 3, 2009 effective date, gives the Compensation and Management Development Committee of the Board of Directors of the Company (“Committee”) discretion to determine whether and to what extent to seek recoupment under the Policy based on specific facts and circumstances. The Policy applies to all Performance Based Compensation and Trading Profits on any Company securities trades received by the Executive during the twenty four months prior to the disclosure of a Material Restatement.

2. Agreement.

Triggering Event

A “Triggering Event” shall be deemed to occur when and if, (i) there is a Material Restatement and (ii) the Material Restatement was due, in whole or in part, to the Executive’s misconduct (including, without limitation, fraud, and violation of law or Company policy).

Covered Compensation

In the event that a Triggering Event is determined by the Committee to have occurred, the Committee may seek recoupment from the Executive of the following Performance Based Compensation paid to and Trading Profits received by the Executive (“Covered Compensation”):

(a) Cash Awards Under STIC Program: All cash awards under the STIC Program paid to Executive after the Effective Date and within the 24-month period preceding the first public announcement by the Company of the Material Restatement to the extent that such cash awards paid to Executive exceeded, in the determination of the Committee, the amounts that would have been paid had the Company’s consolidated financial results that are the subject of the Material Restatement initially been reported correctly.

(b) Performance Based Stock Awards Under Stock Plan: All performance based stock options, performance based deferred stock shares or other performance based equity awards granted to Executive after the Effective Date and vested within the 24-month period preceding the first public announcement by the Company of the Material Restatement to the extent that such awards, in the determination of the Committee, would have not vested had the Company’s consolidated financial results that are the subject of the Material Restatement initially been reported correctly.

(c) Trading Profits: All Trading Profits received by Executive within the 24-month period preceding the first public announcement by the Company of the Material Restatement, regardless of whether such Trading Profits would have been received had the Company’s consolidated financial results that are the subject of the Material Restatement initially been reported correctly.

Repayment of Covered Compensation

In the event that a Triggering Event is determined by the Committee to have occurred and the Committee determines to recoup Covered Compensation from the Executive, the Executive agrees that he or she will promptly repay to the Company all Covered Compensation for which recoupment is sought in accordance with the following provisions:

(a) Cash Awards Under STIC Program: The Executive shall pay to the Company in cash the gross amount of cash awards under the STIC Program for which recoupment is sought.

(b) Performance-Based Stock Options: Vested and unexercised performance based stock options granted under the Stock Plan for which recoupment is sought shall automatically be forfeited and cancelled, and Executive thereafter shall not be entitled to exercise such stock options.

(c) Shares of Company Stock: Shares of stock of the Company received by Executive pursuant to performance based awards granted under the Stock Plan for which recoupment is sought, whether as an award of performance based deferred stock shares, upon the exercise of performance based stock options or otherwise, shall be transferred to the Company by the Executive; provided, however, that in the event the Executive no longer holds such shares, the Executive shall (i) transfer to the Company an equivalent number of other shares of Company stock held by Executive or (ii) if the Executive does not hold other shares of Company stock, pay to the Company an amount in cash equal to the greater of (A) the fair market value of the number of shares of Company stock for which recoupment is sought, as determined by the Committee, or (B) the proceeds received by the Executive upon the disposition of the shares for which recoupment is sought.

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(d) Trading Profits: The Executive shall pay to the Company in cash the amount of any Trading Profits for which recoupment is sought.

In addition to or in lieu of the Executive’s obligation to repay Covered Compensation in accordance with the foregoing, the Company may, in its discretion, temporarily or permanently cancel its obligation to make any further payments to the Executive under the STIC Program or to make any further awards to the Executive under the Stock Plan.

Inapplicability to Compensation Received Prior to Effective Date

The Company’s right to recoupment hereunder is not retroactive to any payment made under the STIC Program prior to the Effective Date, any award granted under the Stock Plan prior to the Effective Date or any Trading Profits received prior to the Effective Date.

Committee Discretion

The Committee has sole discretion to determine whether a Triggering Event has occurred and the amount of Covered Compensation to be recouped, if any, in connection with such Triggering Event.

IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its duly authorized officer, and the Executive has executed the Agreement as of the date first above written.

HILL-ROM HOLDINGS, INC.	EXECUTIVE
By: /s/ John H. Dickey	By: /s/ Martha Goldberg Aronson
Name: John Dickey	Name: Martha Goldberg Aronson
Title: Senior Vice President, Human Resources

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EX-10.52

EXHIBIT 10.52

EMPLOYMENT AGREEMENT

P R E A M B L E

This Employment Agreement defines the essential terms and conditions of our employment relationship with you. The subjects covered in this Agreement are vitally important to you and to the Company. Thus, you should read the document carefully and ask any questions before signing the Agreement. 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 1st day of August 2010 is entered into by and between Hill-Rom Holdings, Inc. (“Company”) and Perry Stuckey (“Employee”).

W I T N E S S E T H:

WHEREAS, the Company and its affiliated entities are engaged in the healthcare industry throughout the United States and abroad including, but not limited to, the design, manufacture, sale, service and rental of hospital beds and stretchers, hospital furniture, medical-related architectural products, specialty sleep surfaces (including therapeutic surfaces), air clearing devices, biomedical and asset management services, as well as other medical-related accessories, devices, products and services;

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

WHEREAS, in the course of the employment contemplated under this Agreement and as a continuation of Employee’s past employment with the Company, if applicable, 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 (collectively referred to as the “Parties”) acknowledge and agree that the execution of this Agreement is necessary to memorialize the terms and conditions of their employment relationship as well as safeguard against the unauthorized disclosure or use of the Company’s confidential information and to otherwise preserve the goodwill and ongoing business value of the Company;

NOW THEREFORE, in consideration of 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 as Senior Vice President, Chief Human Resources Officer. 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 position. 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 this 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 Conducts, 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 Thirteen Thousand Seventy Six Dollars and Ninety Two Cents ($13,076.92), less usual and ordinary deductions;

(b) A cash award of Two Hundred Thousand Dollars and Zero Cents ($200,000.00), payable on the next regularly scheduled payroll date following Employee’s commencement of employment, provided that if Employee voluntarily resigns from the Company (for reasons other than a “Good Reason Condition” as defined in Paragraph 11) prior to the twenty-four (24) month anniversary of the effective date of this Agreement, Employee shall be required to reimburse the Company for the full amount of this sign-on bonus no later than ninety (90) days following Employee’s resignation.

(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 any third party. Alternatively, should any such agreement exist, Employee warrants 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”). 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 his duties and responsibilities or refused to follow or comply with the lawful direction of the Board of Directors 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, its officers or its 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 its best interests or would hold the Company, its officers or directors up to probable civil or criminal liability, provided that, if Executive acts in good faith in compliance with applicable legal or ethical standards, such actions shall not be grounds for termination for cause; or

(f) Engaged in such other conduct recognized at law as constituting cause.

Upon the occurrence or discovery of any event specified above, the Company shall have the right to terminate 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.

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 acts by the Company, or failures by the Company to act (each a “Good Reason Condition”), provided (i) the Employee provides written notice to the Company of the occurrence of the Good Reason Condition within ten (10) business days after the Employee has knowledge of the Good Reason Condition; (ii) the Company fails to notify the Employee of the Company’s intended method of correction within thirty (30) business days after the Company receives Employee’s notice, or the Company fails to correct the Good Reason Condition within thirty (30) business days after such Employee notice; and (iii) the Employee resigns within ten (10) business days after the end of the 30-business-day period specified in (ii):

(a) A material diminution in Employee’s duties;

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(b) The failure to elect or reelect Employee as Vice President or other officer of the Company (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 material reduction by the Company in the amount of Employee’s base salary or the discontinuation or material 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) Any other action or inaction by the Company that constitutes a material breach of this Employment Agreement.

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 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 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 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. Each amount to be paid or benefit to be provided to Employee pursuant to this Agreement, which constitutes deferred compensation subject to Section 409A, shall be construed as a separate identified payment for purposes of Section 409A. To the extent required to avoid an accelerated or additional tax under Section 409A, amounts reimbursed to Employee under this Agreement shall be paid to Employee on or before the last day of the year following the year in which the expense was incurred, the amount of expenses eligible for reimbursement (and in-kind benefits provided to Employee) during any one year may not affect amounts reimbursed or provided in any subsequent tax year, and the right to reimbursement (and in-kind benefits provided to Employee) under this Agreement shall not be subject to liquidation or exchange for another benefit.

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15. Section 409A Acknowledgement. Employee acknowledges that, notwithstanding anything contained herein to the contrary, both Parties shall be independently responsible for accessing 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. 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 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 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 Payments. 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’ salary on the day following the date which is

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six (6) months following Employee’s Effective Termination Date with any remainder to be paid in bi-weekly installments equivalent to the Employee’s salary commencing upon 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), begin upon the next regularly scheduled payroll 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.

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;

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(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;

(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.

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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.

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 eighteen (18) 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;

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(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

(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;

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(c) “Competitive Products” shall include any product or service that directly or indirectly competes with, is substantially similar to, or serves as a reasonable substitute for, any product or service in research, development or design, or manufactured, produced, sold or distributed by the Company;

(d) “Competitor” shall include any person or entity that offers or is actively planning to offer any Competitive Products and may include (but not be limited to) any entity identified on the Company’s Illustrative Competitor List, attached hereto as Exhibit B, which shall be amended from time to time to reflect changes in the Company’s business and competitive environment (updated competitor lists will be provided to 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 eighteen (18) 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 eighteen (18) 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) nine (9) 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 eighteen (18) 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, salesman, independent contractor, broker, agent, or consultant for any other individual, partnership, firm, corporation, company, or other entity engaged in such conduct.

26. Consent to Reasonableness. In light of the above-referenced concerns, including 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.

27. 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.

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28. 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’s 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.

29. 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 Employee 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 1069 State Road 46 E, 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.

30. Scope of Restrictions. If the scope of any restriction contained in any preceding paragraphs of this Agreement is deemed too broad to permit enforcement of such restriction to its fullest extent, then such restriction shall be enforced to the maximum extent permitted by law, and Employee hereby consents and agrees that such scope may be judicially modified accordingly in any proceeding brought to enforce such restriction.

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31. 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.

32. 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.

33. 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 (if any) 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.

34. 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.

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35. 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.

36. Choice of Law. This Agreement shall be deemed to have been made within the County of Ripley, State of Indiana and shall be interpreted and construed in accordance with the laws of the State of Indiana. Any and all matters of dispute of any nature whatsoever arising out of, or in any way connected with the interpretation of this Agreement, any disputes arising out of the Agreement or the employment relationship between the Parties hereto, shall be governed by, construed by and enforced in accordance with the laws of the State of Indiana without regard to any applicable state’s choice of law provisions.

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

38. Severability. The Parties agree that each and every paragraph, sentence, clause, term and provision of this Agreement is severable and that, in the event any portion of this Agreement is adjudged to be invalid or unenforceable, the remaining portions thereof shall remain in effect and be enforced to the fullest extent permitted by law. Further, should any particular clause, covenant, or provision of this Agreement be held unreasonable or contrary to public policy for any reason, the Parties acknowledge and agree that such covenant, provision or clause shall automatically be deemed modified such that the contested covenant, provision or clause will have the closest effect permitted by applicable law to the original form and shall be given effect and enforced as so modified to whatever extent would be reasonable and enforceable under applicable law.

39. Assignment-Notices. The rights and obligations of the Company under this Agreement shall inure to its benefit, as well as the benefit of its parent, subsidiary, successor and affiliated entities, and shall be binding upon the successors and assigns of the Company. This Agreement, being personal to 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.

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40. Amendments and Modifications. Except as specifically provided herein, no modification, amendment, extension or waiver of this Agreement or any provision hereof shall be binding upon the Company or 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.

41. 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.

42. 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.

43. 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”	HILL-ROM HOLDINGS, INC.
Signed: /s/ Perry Stuckey	By: /s/ John H. Dickey
Printed: Perry Stuckey	Title: Sr. Vice President
Dated: July 4, 2010	Dated: July 8, 2010

CAUTION: READ BEFORE SIGNING

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Exhibit A

SAMPLE SEPARATION AND RELEASE AGREEMENT

THIS SEPARATION and RELEASE AGREEMENT (“Agreement”) is entered into by and between Perry Stuckey (“Employee”) and [Insert 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, Employee’s Employment Agreement, any Change in Control Agreement and any Indemnity 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. Each amount to be paid or benefit to be provided to Employee pursuant to this Agreement, which constitutes deferred compensation subject to Section 409A, shall be construed as a separate identified payment for purposes of Section 409A. To the extent required to avoid an accelerated or additional tax under Section 409A, amounts reimbursed to Employee under this Agreement shall be paid to Employee on or before the last day of the year following the year in which the expense was incurred, the amount of expenses eligible for reimbursement (and in-kind benefits provided to Employee) during any one year may not affect amounts reimbursed or provided in any subsequent tax year, and the right to reimbursement (and in-kind benefits provided to Employee) under this Agreement shall not be subject to liquidation or exchange for another benefit.

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 [Insert Amount] 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 (6^tth) 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 an 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 [insert 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) Group Life Insurance coverage until the above-referenced Severance Pay terminates.

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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.

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.

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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.

10. In exchange for the foregoing Severance Benefits, PERRY STUCKEY on behalf of himself, his heirs, representatives, agents and assigns hereby RELEASES, INDEMNIFIES, HOLDS HARMLESS, and FOREVER DISCHARGES (i) [Company Legal Name], 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, 1964 and 1991, as amended, 42 U.S.C. §§ 1981 and 2000(e) et seq.; the Age Discrimination in Employment Act, as amended, 29 U.S.C. §§ 621 et seq.; the Americans with Disabilities Act of 1990, as amended, 42 U.S.C §§ 12,101 et seq.; the Fair Labor Standards Act 29 U.S.C. §§ 201 et seq.; the Worker Adjustment and Retraining Notification Act, 29 U.S.C. §§ 2101, et seq.; the Sarbanes-Oxley Act of 2002, specifically including the Corporate and Criminal Fraud Accountability Act, 18 USC §1514A et seq.; the Employee Retirement Income Security Act of 1974, 29 U.S.C. §§ 1101 et seq.; the Family and Medical Leave Act of 1993, as amended, 29 U.S.C. §§ 2601 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.

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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 his 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. [INCLUDE 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)] days within which to review and consider this Agreement.

15. [ADD THIS LANGUAGE IF THE 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 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.

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16. [ADD THIS LANGUAGE IF THE EMPLOYEE IS IN MINNESOTA — DO NOT USE THE PRECEDING PARAGRAPH IF THIS PARAGRAPH IS USED] The Parties agree that this Agreement shall not become effective and enforceable until the date this Agreement is signed by both parties or fifteen (15) 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 fifteen (15) days after Employee has signed this Agreement, thereby forfeiting Employee’s right to receive any Severance Benefits provided hereunder not otherwise required by law and rendering this Agreement null and void in its entirety. If the notice of revocation is mailed it must be postmarked within the fifteen (15) day period and sent certified mail, return receipt requested. This revocation must be sent to the Employee’s HR Representative and to the Company Office of General Counsel.

17. [ADD THIS LANGUAGE IF THE EMPLOYEE IS IN CALIFORNIA] Employee specifically acknowledges that, as a condition of this Agreement, he expressly releases all rights and claims that he knows about as well as those he 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 his favor at the time of executing the release which if known, must have materially affected his 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 his favor at the time of signing this Agreement and that this Agreement expressly contemplates the extinguishment of all such claims.

18. 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.

19. 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.

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20. [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.]

21. [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).

22. 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].

23. 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”).

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24. 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.

25. 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.

26. 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).

27. 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.

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28. 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.

29. 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.

30. 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.

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31. 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.

32. 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.

33. 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.

34. 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.

35. 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.

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

37. 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.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

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38. 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, or any obligation contained in any other legally-binding document), and shall not be altered, amended, modified or otherwise changed except by a writing executed by both Parties.

PLEASE READ CAREFULLY. THIS SEPARATION AND RELEASE
AGREEMENT INCLUDES A COMPLETE RELEASE OF ALL
KNOWN AND UNKNOWN CLAIMS.

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

EMPLOYEE	[Company Legal Name]
Signed:	By:
Printed:	Title:
Dated:	Dated:

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Exhibit B

ILLUSTRATIVE COMPETITOR LIST

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

•     Amico Corporation	•     Anodyne Medical Device, Inc.
•     APEX Medical Corp.	•     Apria Healthcare Inc.
•     Aramark Corporation	•     Ascom (Ascom US, Inc.)
•     Barton Medical Corporation	•     B.G. Industries, Inc.
•     CareMed Supply, Inc.	•     Comfortex, Inc.
•     Corona Medical SAS	•     Custom Medical Solutions
•     Dukane Communication Systems, a division of Edwards Systems Technology, Inc.	•     Encompass Group, LLC
•     Fitzsimmons Home Medical Equipment, Inc.	•     Freedom Medical, Inc.
•     Gaymar Holding Company, LLC (Gaymar Industries, Inc.)	•     GF Health Products, Inc. (Graham Field)
•     Handicare AS (Romedic, Inc.)	•     Getinge Group (Arjo; Getinge; Maquet; Pegasus; Huntleigh Technology Plc (Huntleigh Healthcare, LLC))
•     Human Care HC AB	•     Horcher GmbH
•     Intego Systems, Inc. (formerly known as Wescom Products, Inc.)	•     Industrie Guido Malvestio S.P.A.
•     Joerns Healthcare, Inc.	•     Invacare Corporation
•     Kinetic Concepts, Inc. (KCI)	•     Joh. Stiegelmeyer & Co., GmbH (Stiegelmeyer)
•     Linet (Linet France, Linet Far East)	•     Linak Group
•     Medical Specialties Distributors, LLC	•     MedaSTAT, LLC
•     Merivaara Corporation	•     Medline Industries, Inc.
•     Modular Service Company	•     MIZUOSI
•     Nemschoff Chairs, Inc.	•     Molift
•     Paramount Bed Company, Ltd.	•     Nurture by Steelcase, Inc.
	•     Pardo

•     Pegasus Airwave, Inc.	•     Premise Corporation
•     Prism Medical Ltd (Waverly Glen)	•     Radianse, Inc.
•     Rauland-Borg Corporation	•     Recovercare, LLC (Stenbar, T.H.E. Medical)
•     Sentech Medical Systems, Inc.	•     SimplexGrinnell, LP
•     SIZEwise Rentals, LLC	•     Span America Medical Systems, Inc.
•     Statcom (Jackson Healthcare Solutions)	•     Stryker Corporation
•     Sunrise Medical (Ted Hoyer and Company)	•     Tele-Tracking Technologies, Inc.
•     Tempur-Pedic Medical, Inc.	•     Universal Hospital Services, Inc.
•     V. Guldmann A/S	•     Voelker AG
•     West-Com Nurse Call Systems, 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.

(Revised list April 2010)

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EX-10.53

EXHIBIT 10.53

Limited Recapture Agreement

This Limited Recapture Agreement (the “Agreement”) by and between Hill-Rom Holdings, Inc. (“Company”) and the undersigned Executive (“Executive”) is entered into effective as of August 1, 2010 (“Effective Date”), as a condition of the grant of a cash award by the Company to the Executive under the Company’s Short-Term Incentive Compensation Program or any similar future plan(s) or program(s) (“STIC Program”) and/or the grant of any performance-based (but not time based) stock options, deferred stock shares or other awards under the Company’s Stock Incentive Plan (as such plan may be amended) or any similar future plan(s) (“Stock Plan”). Any and all such cash or stock based awards under the STIC Program and/or Stock Plan are referred to herein as “Performance Based Compensation.”

1. Introduction. The Company’s Board of Directors has adopted and disclosed publicly an Executive Compensation Recoupment Policy (“Policy”). Under the Policy, all Performance-Based Compensation paid or awarded to, and trading profits on any Company securities trades (“Trading Profits”) by, executive officers (i.e., officers subject to Section 16 of the Securities Exchange Act of 1934, as amended) are subject to recoupment by the Company in the event there is a material restatement of the Company’s consolidated financial results (“Material Restatement”) due to misconduct of the individual executive officer(s) from whom recoupment is sought. The Policy, which applies prospectively from its December 3, 2009 effective date, gives the Compensation and Management Development Committee of the Board of Directors of the Company (“Committee”) discretion to determine whether and to what extent to seek recoupment under the Policy based on specific facts and circumstances. The Policy applies to all Performance Based Compensation and Trading Profits on any Company securities trades received by the Executive during the twenty four months prior to the disclosure of a Material Restatement.

2. Agreement.

Triggering Event

A “Triggering Event” shall be deemed to occur when and if, (i) there is a Material Restatement and (ii) the Material Restatement was due, in whole or in part, to the Executive’s misconduct (including, without limitation, fraud, and violation of law or Company policy).

Covered Compensation

In the event that a Triggering Event is determined by the Committee to have occurred, the Committee may seek recoupment from the Executive of the following Performance Based Compensation paid to and Trading Profits received by the Executive (“Covered Compensation”):

(a) Cash Awards Under STIC Program: All cash awards under the STIC Program paid to Executive after the Effective Date and within the 24-month period preceding the first public announcement by the Company of the Material Restatement to the extent that such cash awards paid to Executive exceeded, in the determination of the Committee, the amounts that would have been paid had the Company’s consolidated financial results that are the subject of the Material Restatement initially been reported correctly.

(b) Performance Based Stock Awards Under Stock Plan: All performance based stock options, performance based deferred stock shares or other performance based equity awards granted to Executive after the Effective Date and vested within the 24-month period preceding the first public announcement by the Company of the Material Restatement to the extent that such awards, in the determination of the Committee, would have not vested had the Company’s consolidated financial results that are the subject of the Material Restatement initially been reported correctly.

(c) Trading Profits: All Trading Profits received by Executive within the 24-month period preceding the first public announcement by the Company of the Material Restatement, regardless of whether such Trading Profits would have been received had the Company’s consolidated financial results that are the subject of the Material Restatement initially been reported correctly.

Repayment of Covered Compensation

In the event that a Triggering Event is determined by the Committee to have occurred and the Committee determines to recoup Covered Compensation from the Executive, the Executive agrees that he or she will promptly repay to the Company all Covered Compensation for which recoupment is sought in accordance with the following provisions:

(a) Cash Awards Under STIC Program: The Executive shall pay to the Company in cash the gross amount of cash awards under the STIC Program for which recoupment is sought.

(b) Performance-Based Stock Options: Vested and unexercised performance based stock options granted under the Stock Plan for which recoupment is sought shall automatically be forfeited and cancelled, and Executive thereafter shall not be entitled to exercise such stock options.

(c) Shares of Company Stock: Shares of stock of the Company received by Executive pursuant to performance based awards granted under the Stock Plan for which recoupment is sought, whether as an award of performance based deferred stock shares, upon the exercise of performance based stock options or otherwise, shall be transferred to the Company by the Executive; provided, however, that in the event the Executive no longer holds such shares, the Executive shall (i) transfer to the Company an equivalent number of other shares of Company stock held by Executive or (ii) if the Executive does not hold other shares of Company stock, pay to the Company an amount in cash equal to the greater of (A) the fair market value of the number of shares of Company stock for which recoupment is sought, as determined by the Committee, or (B) the proceeds received by the Executive upon the disposition of the shares for which recoupment is sought.

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(d) Trading Profits: The Executive shall pay to the Company in cash the amount of any Trading Profits for which recoupment is sought.

In addition to or in lieu of the Executive’s obligation to repay Covered Compensation in accordance with the foregoing, the Company may, in its discretion, temporarily or permanently cancel its obligation to make any further payments to the Executive under the STIC Program or to make any further awards to the Executive under the Stock Plan.

Inapplicability to Compensation Received Prior to Effective Date

The Company’s right to recoupment hereunder is not retroactive to any payment made under the STIC Program prior to the Effective Date, any award granted under the Stock Plan prior to the Effective Date or any Trading Profits received prior to the Effective Date.

Committee Discretion

The Committee has sole discretion to determine whether a Triggering Event has occurred and the amount of Covered Compensation to be recouped, if any, in connection with such Triggering Event.

IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its duly authorized officer, and the Executive has executed the Agreement as of the date first above written.

HILL-ROM HOLDINGS, INC.	EXECUTIVE
By: /s/ John H. Dickey	By: /s/ Perry Stuckey
Name: John Dickey	Name: Perry Stuckey
Title: Senior Vice President, Human Resources

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EX-10.54

EXHIBIT 10.54

EMPLOYMENT AGREEMENT

P R E A M B L E

This Employment Agreement defines the essential terms and conditions of our employment relationship with you. The subjects covered in this Agreement are vitally important to you and to the Company. Thus, you should read the document carefully and ask any questions before signing the Agreement. 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 13th day of September 2010 is entered into by and between Hill-Rom Holdings, Inc. (“Company”) and Scott Jeffers

W I T N E S S E T H:

WHEREAS, the Company and its affiliated entities are engaged in the healthcare industry throughout the United States and abroad including, but not limited to, the design, manufacture, sale, service and rental of hospital beds and stretchers, hospital furniture, medical-related architectural products, specialty sleep surfaces (including therapeutic surfaces), air clearing devices, biomedical and asset management services, as well as other medical-related accessories, devices, products and services;

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

WHEREAS, in the course of the employment contemplated under this Agreement and as a continuation of Employee’s past employment with the Company, if applicable, 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 (collectively referred to as the “Parties”) acknowledge and agree that the execution of this Agreement is necessary to memorialize the terms and conditions of their employment relationship as well as safeguard against the unauthorized disclosure or use of the Company’s confidential information and to otherwise preserve the goodwill and ongoing business value of the Company;

NOW THEREFORE, in consideration of 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 as Senior Vice President, Operations and Global Supply Chain. 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 position. 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 this 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 Conducts, 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 Eleven Thousand Nine Hundred Twenty Three Dollars and Eight Cents ($11,923.08), less usual and ordinary deductions;

(b) A cash award of Fifty Thousand Dollars and Zero Cents ($50,000.00), payable on the next regularly scheduled payroll date following Employee’s commencement of employment, provided that if Employee voluntarily resigns from the Company (for reasons other than a “Good Reason Condition” as defined in Paragraph 11) prior to the twelve (12) month anniversary of the effective date of this Agreement, Employee shall be required to reimburse the Company for the full amount of this cash award no later than ninety (90) days following Employee’s resignation.

(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

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

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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 any third party. Alternatively, should any such agreement exist, Employee warrants 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”). 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.

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 his/her duties and responsibilities or refused to follow or comply with the lawful direction of the Board of Directors 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;

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(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, its officers or its 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 its best interests or would hold the Company, its officers or directors up to probable civil or criminal liability, provided that, if Executive acts in good faith in compliance with applicable legal or ethical standards, such actions shall not be grounds for termination for cause; or

(f) Engaged in such other conduct recognized at law as constituting cause.

Upon the occurrence or discovery of any event specified above, the Company shall have the right to terminate 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.

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 acts by the Company, or failures by the Company to act (each a “Good Reason Condition”), provided (i) the Employee provides written notice to the Company of the occurrence of the Good Reason Condition within ten (10) business days after the Employee has knowledge of the Good Reason Condition; (ii) the Company fails to notify the Employee of the Company’s intended method of correction within thirty (30) business days after the Company receives Employee’s notice, or the Company fails to correct the Good Reason Condition within thirty (30) business days after such Employee notice; and (iii) the Employee resigns within ten (10) business days after the end of the 30-business-day period specified in (ii):

(a) A material diminution in Employee’s duties;

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(b) The failure to elect or reelect Employee as Vice President or other officer of the Company (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 material reduction by the Company in the amount of Employee’s base salary or the discontinuation or material 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) Any other action or inaction by the Company that constitutes a material breach of this Employment Agreement.

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 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.

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.

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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 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 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. Each amount to be paid or benefit to be provided to Employee pursuant to this Agreement, which constitutes deferred compensation subject to Section 409A, shall be construed as a separate identified payment for purposes of Section 409A. To the extent required to avoid an accelerated or additional tax under Section 409A, amounts reimbursed to Employee under this Agreement shall be paid to Employee on or before the last day of the year following the year in which the expense was incurred, the amount of expenses eligible for reimbursement (and in-kind benefits provided to Employee) during any one year may not affect amounts reimbursed or provided in any subsequent tax year, and the right to reimbursement (and in-kind benefits provided to Employee) under this Agreement shall not be subject to liquidation or exchange for another benefit.

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15. Section 409A Acknowledgement. Employee acknowledges that, notwithstanding anything contained herein to the contrary, both Parties shall be independently responsible for accessing 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. 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 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 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 Payments. 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’ 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

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equivalent to the Employee’s salary commencing upon 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), begin upon the next regularly scheduled payroll 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.

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;

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(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;

(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.

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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.

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 eighteen (18) 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;

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(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

(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;

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(c) “Competitive Products” shall include any product or service that directly or indirectly competes with, is substantially similar to, or serves as a reasonable substitute for, any product or service in research, development or design, or manufactured, produced, sold or distributed by the Company;

(d) “Competitor” shall include any person or entity that offers or is actively planning to offer any Competitive Products and may include (but not be limited to) any entity identified on the Company’s Illustrative Competitor List, attached hereto as Exhibit B, which shall be amended from time to time to reflect changes in the Company’s business and competitive environment (updated competitor lists will be provided to 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 eighteen (18) 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 eighteen (18) 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) nine (9) 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 eighteen (18) 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, salesman, independent contractor, broker, agent, or consultant for any other individual, partnership, firm, corporation, company, or other entity engaged in such conduct.

26. Consent to Reasonableness. In light of the above-referenced concerns, including 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.

27. 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.

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28. 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’s 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.

29. 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 Employee 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 1069 State Road 46 E, 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.

30. Scope of Restrictions. If the scope of any restriction contained in any preceding paragraphs of this Agreement is deemed too broad to permit enforcement of such restriction to its fullest extent, then such restriction shall be enforced to the maximum extent permitted by law, and Employee hereby consents and agrees that such scope may be judicially modified accordingly in any proceeding brought to enforce such restriction.

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31. 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.

32. 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.

33. 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 (if any) 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.

34. 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.

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35. 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.

36. Choice of Law. This Agreement shall be deemed to have been made within the County of Ripley, State of Indiana and shall be interpreted and construed in accordance with the laws of the State of Indiana. Any and all matters of dispute of any nature whatsoever arising out of, or in any way connected with the interpretation of this Agreement, any disputes arising out of the Agreement or the employment relationship between the Parties hereto, shall be governed by, construed by and enforced in accordance with the laws of the State of Indiana without regard to any applicable state’s choice of law provisions.

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

38. Severability. The Parties agree that each and every paragraph, sentence, clause, term and provision of this Agreement is severable and that, in the event any portion of this Agreement is adjudged to be invalid or unenforceable, the remaining portions thereof shall remain in effect and be enforced to the fullest extent permitted by law. Further, should any particular clause, covenant, or provision of this Agreement be held unreasonable or contrary to public policy for any reason, the Parties acknowledge and agree that such covenant, provision or clause shall automatically be deemed modified such that the contested covenant, provision or clause will have the closest effect permitted by applicable law to the original form and shall be given effect and enforced as so modified to whatever extent would be reasonable and enforceable under applicable law.

39. Assignment-Notices. The rights and obligations of the Company under this Agreement shall inure to its benefit, as well as the benefit of its parent, subsidiary, successor and affiliated entities, and shall be binding upon the successors and assigns of the Company. This Agreement, being personal to 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.

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40. Amendments and Modifications. Except as specifically provided herein, no modification, amendment, extension or waiver of this Agreement or any provision hereof shall be binding upon the Company or 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.

41. 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.

42. 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.

43. 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”	HILL-ROM HOLDINGS, INC.
Signed: /s/ Scott R. Jeffers	By: /s/ Perry Stuckey
Printed: Scott R. Jeffers	Title: Senior Vice President and Chief Human Resource Officer
Dated: August 23, 2010	Dated: August 25, 2010

CAUTION: READ BEFORE SIGNING

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Exhibit A

SAMPLE SEPARATION AND RELEASE AGREEMENT

THIS SEPARATION and RELEASE AGREEMENT (“Agreement”) is entered into by and between Scott Jeffers (“Employee”) and Hill-Rom Holding, Inc. (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, Employee’s Employment Agreement, any Change in Control Agreement and any Indemnity 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. Each amount to be paid or benefit to be provided to Employee pursuant to this Agreement, which constitutes deferred compensation subject to Section 409A, shall be construed as a separate identified payment for purposes of Section 409A. To the extent required to avoid an accelerated or additional tax under Section 409A, amounts reimbursed to Employee under this Agreement shall be paid to Employee on or before the last day of the year following the year in which the expense was incurred, the amount of expenses eligible for reimbursement (and in-kind benefits provided to Employee) during any one year may not affect amounts reimbursed or provided in any subsequent tax year, and the right to reimbursement (and in-kind benefits provided to Employee) under this Agreement shall not be subject to liquidation or exchange for another benefit.

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 [Insert Amount] 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 (6^tth) 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 an 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 [insert 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) Group Life Insurance coverage until the above-referenced Severance Pay terminates.

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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.

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.

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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

10. In exchange for the foregoing Severance Benefits, SCOTT JEFFERS on behalf of himself, his heirs, representatives, agents and assigns hereby RELEASES, INDEMNIFIES, HOLDS HARMLESS, and FOREVER DISCHARGES (i) HILL-ROM HOLDINGS, INC., 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, 1964 and 1991, as amended, 42 U.S.C. §§ 1981 and 2000(e) et seq.; the Age Discrimination in Employment Act, as amended, 29 U.S.C. §§ 621 et seq.; the Americans with Disabilities Act of 1990, as amended, 42 U.S.C §§ 12,101 et seq.; the Fair Labor Standards Act 29 U.S.C. §§ 201 et seq.; the Worker Adjustment and Retraining Notification Act, 29 U.S.C. §§ 2101, et seq.; the Sarbanes-Oxley Act of 2002, specifically including the Corporate and Criminal Fraud Accountability Act, 18 USC §1514A et seq.; the Employee Retirement Income Security Act of 1974, 29 U.S.C. §§ 1101 et seq.; the Family and Medical Leave Act of 1993, as amended, 29 U.S.C. §§ 2601 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.

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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 his/her 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. [INCLUDE 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)] days within which to review and consider this Agreement.

15. [ADD THIS LANGUAGE IF THE 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 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.

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16. [ADD THIS LANGUAGE IF THE EMPLOYEE IS IN MINNESOTA — DO NOT USE THE PRECEDING PARAGRAPH IF THIS PARAGRAPH IS USED] The Parties agree that this Agreement shall not become effective and enforceable until the date this Agreement is signed by both parties or fifteen (15) 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 fifteen (15) days after Employee has signed this Agreement, thereby forfeiting Employee’s right to receive any Severance Benefits provided hereunder not otherwise required by law and rendering this Agreement null and void in its entirety. If the notice of revocation is mailed it must be postmarked within the fifteen (15) day period and sent certified mail, return receipt requested. This revocation must be sent to the Employee’s HR Representative and to the Company Office of General Counsel.

17. [ADD THIS LANGUAGE IF THE EMPLOYEE IS IN CALIFORNIA] Employee specifically acknowledges that, as a condition of this Agreement, he/she expressly releases all rights and claims that he/she knows about as well as those he/she 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 his/her favor at the time of executing the release which if known, must have materially affected his/her 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 his/her favor at the time of signing this Agreement and that this Agreement expressly contemplates the extinguishment of all such claims.

18. 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.

19. 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/she] 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/she] 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.

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20. [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.]

21. [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).

22. 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].

23. 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”).

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24. 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.

25. 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.

26. 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).

27. 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 h 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.

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28. 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.

29. 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.

30. 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.

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31. 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.

32. 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.

33. 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.

34. 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.

35. 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.

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

37. 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.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

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38. 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, or any obligation contained in any other legally-binding document), and shall not be altered, amended, modified or otherwise changed except by a writing executed by both Parties.

PLEASE READ CAREFULLY. THIS SEPARATION AND RELEASE
AGREEMENT INCLUDES A COMPLETE RELEASE OF ALL
KNOWN AND UNKNOWN CLAIMS.

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

EMPLOYEE	HILL-ROM HOLDINGS, INC.
Signed:	By:
Printed:	Title:
Dated:	Dated:

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Exhibit B

ILLUSTRATIVE COMPETITOR LIST

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

•     Amico Corporation	•     Anodyne Medical Device, Inc.
•     APEX Medical Corp.	•     Apria Healthcare Inc.
•     Aramark Corporation	•     Ascom (Ascom US, Inc.)
•     Barton Medical Corporation	•     B.G. Industries, Inc.
•     CareMed Supply, Inc.	•     Comfortex, Inc.
•     Corona Medical SAS	•     Custom Medical Solutions
•     Dukane Communication Systems, a division of Edwards Systems Technology, Inc.	•     Encompass Group, LLC
	•     Freedom Medical, Inc.
•     Fitzsimmons Home Medical Equipment, Inc.	•     GF Health Products, Inc. (Graham Field)
•     Gaymar Holding Company, LLC (Gaymar Industries, Inc.)	•     Getinge Group (Arjo; Getinge; Maquet; Pegasus; Huntleigh Technology Plc (Huntleigh Healthcare, LLC))
•     Handicare AS (Romedic, Inc.)	•     Horcher GmbH
•     Human Care HC AB	•     Industrie Guido Malvestio S.P.A.
•     Intego Systems, Inc. (formerly known as Wescom Products, Inc.)	•     Invacare Corporation
•     Joerns Healthcare, Inc.	•     Joh. Stiegelmeyer & Co., GmbH (Stiegelmeyer)
•     Kinetic Concepts, Inc. (KCI)	•     Linak Group
•     Linet (Linet France, Linet Far East)	•     MedaSTAT, LLC
•     Medical Specialties Distributors, LLC	•     Medline Industries, Inc.
•     Merivaara Corporation	•     MIZUOSI
•     Modular Service Company	•     Molift
•     Nemschoff Chairs, Inc.	•     Nurture by Steelcase, Inc.
•     Paramount Bed Company, Ltd.	•     Pardo

•     Pegasus Airwave, Inc.	•     Premise Corporation
•     Prism Medical Ltd (Waverly Glen)	•     Radianse, Inc.
•     Rauland-Borg Corporation	•     Recovercare, LLC (Stenbar, T.H.E. Medical)
•     Sentech Medical Systems, Inc.	•     SimplexGrinnell, LP
•     SIZEwise Rentals, LLC	•     Span America Medical Systems, Inc.
•     Statcom (Jackson Healthcare Solutions)	•     Stryker Corporation
•     Sunrise Medical (Ted Hoyer and Company)	•     Tele-Tracking Technologies, Inc.
•     Tempur-Pedic Medical, Inc.	•     Universal Hospital Services, Inc.
•     V. Guldmann A/S	•     Voelker AG
•     West-Com Nurse Call Systems, 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.

(Revised list April 2010)

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EX-10.55

EXHIBIT 10.55

Limited Recapture Agreement

This Limited Recapture Agreement (the “Agreement”) by and between Hill-Rom Holdings, Inc. (“Company”) and the undersigned Executive (“Executive”) is entered into effective as of September 13, 2010 (“Effective Date”), as a condition of the grant of a cash award by the Company to the Executive under the Company’s Short-Term Incentive Compensation Program or any similar future plan(s) or program(s) (“STIC Program”) and/or the grant of any performance-based (but not time based) stock options, deferred stock shares or other awards under the Company’s Stock Incentive Plan (as such plan may be amended) or any similar future plan(s) (“Stock Plan”). Any and all such cash or stock based awards under the STIC Program and/or Stock Plan are referred to herein as “Performance Based Compensation.”

1. Introduction. The Company’s Board of Directors has adopted and disclosed publicly an Executive Compensation Recoupment Policy (“Policy”). Under the Policy, all Performance-Based Compensation paid or awarded to, and trading profits on any Company securities trades (“Trading Profits”) by, executive officers (i.e., officers subject to Section 16 of the Securities Exchange Act of 1934, as amended) are subject to recoupment by the Company in the event there is a material restatement of the Company’s consolidated financial results (“Material Restatement”) due to misconduct of the individual executive officer(s) from whom recoupment is sought. The Policy, which applies prospectively from its December 3, 2009 effective date, gives the Compensation and Management Development Committee of the Board of Directors of the Company (“Committee”) discretion to determine whether and to what extent to seek recoupment under the Policy based on specific facts and circumstances. The Policy applies to all Performance Based Compensation and Trading Profits on any Company securities trades received by the Executive during the twenty four months prior to the disclosure of a Material Restatement.

2. Agreement.

Triggering Event

A “Triggering Event” shall be deemed to occur when and if, (i) there is a Material Restatement and (ii) the Material Restatement was due, in whole or in part, to the Executive’s misconduct (including, without limitation, fraud, and violation of law or Company policy).

Covered Compensation

In the event that a Triggering Event is determined by the Committee to have occurred, the Committee may seek recoupment from the Executive of the following Performance Based Compensation paid to and Trading Profits received by the Executive (“Covered Compensation”):

(a) Cash Awards Under STIC Program: All cash awards under the STIC Program paid to Executive after the Effective Date and within the 24-month period preceding the first public announcement by the Company of the Material Restatement to the extent that such cash awards paid to Executive exceeded, in the determination of the Committee, the amounts that would have been paid had the Company’s consolidated financial results that are the subject of the Material Restatement initially been reported correctly.

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(b) Performance Based Stock Awards Under Stock Plan: All performance based stock options, performance based deferred stock shares or other performance based equity awards granted to Executive after the Effective Date and vested within the 24-month period preceding the first public announcement by the Company of the Material Restatement to the extent that such awards, in the determination of the Committee, would have not vested had the Company’s consolidated financial results that are the subject of the Material Restatement initially been reported correctly.

(c) Trading Profits: All Trading Profits received by Executive within the 24-month period preceding the first public announcement by the Company of the Material Restatement, regardless of whether such Trading Profits would have been received had the Company’s consolidated financial results that are the subject of the Material Restatement initially been reported correctly.

Repayment of Covered Compensation

In the event that a Triggering Event is determined by the Committee to have occurred and the Committee determines to recoup Covered Compensation from the Executive, the Executive agrees that he or she will promptly repay to the Company all Covered Compensation for which recoupment is sought in accordance with the following provisions:

(a) Cash Awards Under STIC Program: The Executive shall pay to the Company in cash the gross amount of cash awards under the STIC Program for which recoupment is sought.

(b) Performance-Based Stock Options: Vested and unexercised performance based stock options granted under the Stock Plan for which recoupment is sought shall automatically be forfeited and cancelled, and Executive thereafter shall not be entitled to exercise such stock options.

(c) Shares of Company Stock: Shares of stock of the Company received by Executive pursuant to performance based awards granted under the Stock Plan for which recoupment is sought, whether as an award of performance based deferred stock shares, upon the exercise of performance based stock options or otherwise, shall be transferred to the Company by the Executive; provided, however, that in the event the Executive no longer holds such shares, the Executive shall (i) transfer to the Company an equivalent number of other shares of Company stock held by Executive or (ii) if the Executive does not hold other shares of Company stock, pay to the Company an amount in cash equal to the greater of (A) the fair market value of the number of shares of Company stock for which recoupment is sought, as determined by the Committee, or (B) the proceeds received by the Executive upon the disposition of the shares for which recoupment is sought.

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(d) Trading Profits: The Executive shall pay to the Company in cash the amount of any Trading Profits for which recoupment is sought.

In addition to or in lieu of the Executive’s obligation to repay Covered Compensation in accordance with the foregoing, the Company may, in its discretion, temporarily or permanently cancel its obligation to make any further payments to the Executive under the STIC Program or to make any further awards to the Executive under the Stock Plan.

Inapplicability to Compensation Received Prior to Effective Date

The Company’s right to recoupment hereunder is not retroactive to any payment made under the STIC Program prior to the Effective Date, any award granted under the Stock Plan prior to the Effective Date or any Trading Profits received prior to the Effective Date.

Committee Discretion

The Committee has sole discretion to determine whether a Triggering Event has occurred and the amount of Covered Compensation to be recouped, if any, in connection with such Triggering Event.

IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its duly authorized officer, and the Executive has executed the Agreement as of the date first above written.

HILL-ROM HOLDINGS, INC.		EXECUTIVE
By:	/s/ Perry Stuckey Name: Perry Stuckey	By:	/s/ Scott R. Jeffers Name: Scott Jeffers
	Title:   Senior Vice President, Chief Human Resources Officer

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EX-10.56

EXHIBIT 10.56

AMENDED EMPLOYMENT AGREEMENT

PREAMBLE

This Amended 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 AMENDED EMPLOYMENT AGREEMENT, dated and effective this 28th day of July 2010 is entered into by and between Hill-Rom Holdings, Inc. (the “Company”) and Patrick de Maynadier (“Employee”).

WITNESSETH:

WHEREAS, the Company and its various affiliated entities are engaged in the healthcare industry throughout the United States and abroad, including, but not limited to, the design, manufacture, sale, service and rental of hospital beds and stretchers, hospital furniture, medical-related architectural products, specialty sleep surfaces (including therapeutic surfaces), air clearing devices, biomedical and asset management services, as well as other medical-related accessories, devices, products and services;

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

WHEREAS, in the course of the employment contemplated under this Agreement and as a continuation of Employee’s past employment with the Company, if applicable, 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”);

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

WHEREAS, the Company and Employee have previously entered into an Amended Employment Agreement and now consider it desirable to update that prior agreement in consideration for the benefits provided herein and in consideration of the Release Agreement and the Release Affirmation Agreement attached as Appendices A and C, respectively;

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. Employee hereby submits, and the Company hereby accepts, his resignation as an employee, officer and director, effective as of the Transition Date, for any position he may hold as an employee, officer or director of any subsidiary of the Company. As of the effective date of this Agreement, the Company agrees to employ Employee as, and Employee agrees to serve as, Senior Vice President, Special Counsel. Employee agrees to perform any and all duties or responsibilities as may be assigned by the Company in its sole discretion subject to Paragraphs 2 and 3. The Parties acknowledge that both this title and the underlying duties may change.

2. Term. From the effective date of this Agreement through July 31, 2010 (the “Transition Date”), Employee shall perform his duties and responsibilities in a full-time capacity. Effective August 1, 2010 and continuing through December 31, 2010 (the “Interim Employment Period”), Employee shall work a minimum of 20% of his average hours worked while working in a full-time capacity, which for purposes of this Agreement is agreed to be 40 hours per month. Company shall make good faith efforts to select reasonable assignments for Employee (which may encompass transitional matters and/or new matters) and set reasonable expectations regarding the manner and time period in which employee must complete such assignments. Such good faith efforts shall include giving reasonable consideration to bona fide work assignments suggested by Employee to meet the minimum hour requirement set forth in this Paragraph. Time spent by Employee on matters related to, and in support of, the Company’s Hospital Beds for Humanity Program will count for purposes of calculating the minimum hours worked in any month during the Interim Employment Period. Unless terminated earlier pursuant to Paragraphs 8-11, Employee’s active employment by the Company shall terminate effective December 31, 2010 (the “Effective Termination Date”).

3. 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. Until the Transition Date, Employee agrees to devote his full working time, attention, talents, skills and best efforts to further the Company’s business. During the Interim Employment Period, Employee agrees to devote the working time (but no fewer than 40 working hours per month), attention, talents, skills and effort reasonably necessary to perform all assigned duties in a satisfactory manner. Through the Effective Termination Date, Employee 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 through the Transition Date; provided, however, that during the Interim Employment Period, Employee may engage in such activity but conditioned on Employee satisfying his obligations under this Agreement including without limitation the minimum service requirement set forth in Paragraph 2 above, the restrictions on the use of Confidential Information set forth in Paragraphs19-20, the restrictive covenants set forth in Paragraphs 21-27, and the notice obligation set forth in Paragraph 29. 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.

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4. Compensation. For all services rendered by Employee on behalf of, or at the request of, the Company, Employee shall be paid as follows in accordance with the Release Agreement attached as Exhibit A:

(a) A base salary (through the earlier of (i) the Enployee’s Effective Termination Date, or (ii) the date on which Employee’s employment is terminated by Employee without cause or for Good Reason, or by the Company for cause); at the bi-weekly rate of Thirteen Thousand Nine Hundred Sixty-one Dollars and Fifty-four Cents ($13,961.54), less usual and ordinary deductions;

(b) 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 subject to the terms of the Release Agreement attached as Exhibit A; and

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

5. 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.

6. Warranties and Indemnification. Employee warrants that he is not a party to any contract, restrictive covenant, or other agreement purporting to limit or otherwise adversely affecting his ability to secure employment with any third party. Alternatively, should any such agreement exist, Employee warrants 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.

7. 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 him not to disclose or use such confidential or proprietary information. Based on his 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.

8. Termination by Employee Without Cause. The parties agree that Employee may terminate this employment relationship at any time, without cause, upon sixty (60) days advance written notice. 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 his separation and as otherwise explicitly set forth in this Agreement and in the Release Agreement attached hereto as Exhibit A.

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9. 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 his duties and responsibilities or refused to follow or comply with the lawful direction of the Company or the terms and conditions of this Agreement provided 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, its officers or its 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 Ethical Business Conduct 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 its best interests or would hold the Company, its 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 him, 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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10. Termination by Employee for Good Reason. Employee may terminate this Agreement and declare the 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 his reporting relationship to the CEO or his successor;

(b) The failure to elect or reelect Employee as Vice President or other officer of the Company (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 compensation, additional compensation, benefits, policies or perquisites subject to Employee’s 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 an increase 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 (other than inadvertent failures that are cured by the Company promptly upon notice from the Employee).

Notwithstanding anything expressed or implied above to the contrary, if any of the above circumstances occur prior to the date of this Agreement, such occurrences shall not constitute Good Reason. If Employee terminates for Good Reason, the date on which Employee asserts his termination for Good reason shall be considered the Employee’s Effective Termination Date for purposes of all agreements with the Company, including this Agreement.

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11. 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 that Employee cannot perform the essential functions of his position as a result of a such 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 his duties or responsibilities hereunder on a full time basis, with or without reasonable accommodation, as a result of any mental or physical impairment.

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.

12. 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 his post-employment obligations as set forth in this Agreement.

13. Section 409A Notification. Employee acknowledges that he 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 his 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 if he is a “specified employee” at the time of his 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 termination of employment shall not be paid until a date at least six (6) months after Employee’s separation from service (as defined in Section 409A and applicable regulations). 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 allowed under Section 409A. If any provision of this Agreement (or of any award of compensation)

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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. Each amount to be paid or benefit to be provided to Employee pursuant to this Agreement shall be construed as a separate identified payment for purposes of Section 409A. To the extent required to avoid an accelerated or additional tax under Section 409A, amounts reimbursable to Employee under this Agreement shall be paid to Employee on or before the last day of the year following the year in which the expense was incurred, the amount of expenses eligible for reimbursement (and in-kind benefits provided to Employee) during any one year may not effect amounts reimbursable or provided in any subsequent year, and the right to reimbursement (and in-kind benefits provided to Employee) under this Agreement shall not be subject to liquidation or exchange for another benefit.

14. 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. 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. 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 claims obligation. Employee understands and acknowledges that neither the Company, nor any of its employees, attorneys, or other representatives has provided or will provide him with any legal or financial advice concerning taxes or any other matter, and that he has not relief on any such advice in deciding whether to enter into this Agreement.

15. Severance Payments. In the event Employee continues employment with the Company through the Effective Termination Date and is terminated by the Company without cause on the Effective Termination Date, then, subject to the normal terms and conditions imposed by the Company as set forth herein and in the attached Release Agreement and the attached Release Affirmation Agreement, Employee shall receive severance pay in an amount equal to eight (8) months of his base salary at the Effective Termination Date through August 31, 2011.

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16. Severance Payment Terms and Conditions. No severance pay shall be paid if Employee voluntarily leaves the Company’s employ 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, on or before August 1, 2010, both executing this Agreement and fully complying with the restrictive covenants contained herein, and executing the Release Agreement 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 Release Affirmation Agreement attached as Exhibit C on his Effective Termination Date and/or should Employee revoke such Release Affirmation Agreement within the seven-day revocation period. Conditioned upon the execution and delivery of the Release Agreement and the Release Affirmation Agreement, severance pay benefits shall be paid in accordance with the terms of the Release Agreement. Notwithstanding any other provision contained herein to the contrary, any severance pay benefits paid pursuant to this Agreement shall not be subject to termination upon reemployment (however, all other severance benefits, e.g., continued healthcare, shall cease).

17. Assignment of Rights.

(a) Copyrights. Employee agrees that all works of authorship fixed in any tangible medium of expression by him during the term of this Agreement relating to the Company’s business (“Works”), either solely or jointly with others, shall be and remain exclusively the property of the Company. Each such Work created by 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 his rights, title, and interests in and to such Inventions, any applications for United States and foreign Letters Patent, any United States and foreign Letters Patent, and any renewals thereof granted upon such Inventions;

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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 his inventorship, as may be necessary in the opinion of the Company, to obtain and maintain United States and foreign Letters Patent upon such Inventions and to vest the entire rights and title thereto in the Company and to confirm the complete ownership by the Company of such Inventions, patent applications, and patents.

18. 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, provided that Employee may pay the Company the depreciated value of, and own, his Blackberry cell phone (“Blackberry”) and request that the Company’s third party wireless service provider transfer the telephone number currently assigned to the Blackberry (i.e. 812-216-7565) to Employee’s personal account. The Company shall delete all data stored on such Blackberry and deactivate Company-provided wireless services to the device on or shortly after Employee’s Effective Termination Date. De minimis items such as pay stubs, 401(k) plan summaries, employee bulletins, and the like are excluded from this requirement. Further, sample legal forms and other related items developed by the Employee during the legal term of his employment, including any videos, photographs, and/or DVDs containing footage from the Hospital Beds for Humanity Program or any portion or copy thereof (the “HBH Materials”), may be retained and used by him thereafter provided they are not used to compete against the Company. Notwithstanding anything to the contrary above, with respect to Employee’s retention and use of the HBH Materials, Employee shall not (a) display the HBH Materials to greater than ten (10) persons in any twenty-four (24) hour period; (b) post the HBH Materials on any internet website; (c) distribute the HBH Materials to any third party; (d) edit or create a derivative work from the HBH Materials; (e) use the HBH materials to cast the Company in a negative light; or (f) engage in any activity that exceeds “fair use” of the Company’s trademark.

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19. 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 his 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.

20. 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.

21. 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 his 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.

22. Non-Solicitation. During Employee’s employment (including, for the avoidance of doubt, during the Interim Employment Period) and for a period of eighteen (18) 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;

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(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, unless in response to a Customer contacting Employee to inquire about Employee’s future employment status with the Company (and in such case only if such responsive communication does not defame, disparage or otherwise cast the Company it in a negative light so as to do harm to the personal or professional reputation of (i) the Company, (ii) its employee, officers, directors or trustees or (iii) the services and/or product provided by the Company and its subsidiaries or affiliate entities); or

(g) Otherwise attempt to directly or indirectly interfere with the Company’s business, the business of any of the Companies or their relationship with their employees, consultants, independent contractors or customers.

23. 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 while serving in any capacity other than as legal counsel for the Company or another client 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 date of separation;

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(c) Employee shall not market, sell, or otherwise offer or provide any Competitive Products within his Geographic Territory (if applicable) or Assigned Customer Base, specifically including any products or services relating to those for which 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.

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

(a) “Affiliate” includes any parent, subsidiary, joint venture, sister company, or other entity controlled, owned, managed or otherwise associated with the Company;

(b) “Assigned Customer Base” shall include all accounts or customers formally assigned to Employee within a given territory or geographical area or contacted by him 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;

(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 eighteen (18) month period preceding Employee’s date of separation;

(f) “Relevant Non-Compete Period” shall include the period of Employee’s employment with the Company (including, for the avoidance of doubt, during the Interim Employment Period) as well as a period of eighteen (18) 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) nine (9)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 eighteen (18) 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, salesman, independent contractor, broker, agent, or consultant for any other individual, partnership, firm, corporation, company, or other entity engaged in such conduct.

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25. 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 Section 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.

26. Ethical Obligations. Notwithstanding anything contained herein to the contrary, Employee acknowledges that he has certain independent ethical obligation concerning confidentiality and conflicts of interest imposed by the applicable provisions of the Indiana Rules of Professional Conduct (as well as possibly other model rules of professional conduct), which prevent or limit Employee in his capacity as an attorney from representing or otherwise working for any direct or indirect competitor of the Company whose interest may be materially adverse to the interest of the Company as well as prohibit Employee from disclosing, relying upon or otherwise using Company information for the benefit of such competitors. Employee acknowledges that such ethical obligations, specifically including Rules 1.6 through 1.9 of the Indiana Rule of Professional Conduct, shall be deemed part of this Agreement and shall run concurrent with all other restrictive covenant obligations contained herein.

27. 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.

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28. Effect of Transfer. 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, sister corporation 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, he 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 his 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 his 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 his transfer to, and subsequent employment by, the Affiliate shall serve as consideration for (as well as be deemed as evidence of his 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.

29. Interim Employment Period and Post-Termination Notification. During his Interim Employment Period and for the duration of his 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 his acceptance of any employment or consulting engagement. Such notice shall include sufficient information to ensure Employee compliance with his non-compete obligations and must include at a minimum the following information: (i) the name of the employer or entity for which he is providing any consulting services; (ii) a description of his intended duties as well as (iii) the anticipated start date. Such information is required to ensure Employee’s compliance with his non-compete obligations as well as all other applicable restrictive covenants. Such notice shall be provided in writing to the Office of Senior Vice President and Chief Legal Officer of the Company at 1069 State Road 46 E, 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.

30. Scope of Restrictions. If the scope of any restriction contained in any preceding paragraphs of this Agreement is deemed too broad to permit enforcement of such restriction to its fullest extent, then such restriction shall be enforced to the maximum extent permitted by law, and Employee hereby consents and agrees that such scope may be judicially modified accordingly in any proceeding brought to enforce such restriction. The Parties agree that the foregoing restrictions shall not be construed to prohibit Employee from the general practice of law provided, however, that any such practice of law must be consistent with Employee’s ethical obligations to maintain as confidential information protected by the attorney-client privilege, attorney work product doctrine or similar doctrines.

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31. 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 along 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 secretes, and including the recovery of compensatory or punitive damages. The parties agree that Employee may recover all reasonable costs and attorneys fees from the Company incurred that are directly related to Employee’s successful enforcement of the terms of this Agreement. Employee further agrees that the Company shall be entitled to an award of all costs and attorneys fees from Employee incurred by it in any attempt to enforce the terms of this Agreement, unless Employee is entitled to any costs and/or fees by operation of the preceding sentence.

32. Publicly Traded Stock. The Parties agree that nothing contained in this Agreement shall be construed to prohibit Employee from investing his personal assets in any stock or corporate security traded or quoted on a national securities exchange or national market system provided, however, such investments do not require any services on the part of Employee in the operation or the affairs of the business or otherwise violate the Company’s Code of Ethical Business Conduct.

33. 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, 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 Chief Legal Officer setting forth: (i) claimant’s name, address, and phone; (ii) the name of any attorney representative 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.

34. 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 employee discrimination litigation, wage litigation, defamation, or any other claim) lodged in any court will be tried, if at all, without a jury.

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35. 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.

36. Choice of Law. This Agreement shall be deemed to have been made within the County of Ripley, State of Indiana and shall be interpreted and construed in accordance with the laws of the State of Indiana. Any and all matters of dispute of any nature whatsoever arising out of, or in any way connected with the interpretation of this Agreement, any disputes arising out of the Agreement or the employment relationship between the Parties hereto, shall be governed by, construed by and enforced in accordance with the laws of the State of Indiana without regard to any applicable state’s choice of law provisions.

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

38. Severability. The Parties agree that each and ever 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.

39. Assignment-Notices. The rights and obligations of the Company under this Agreement shall inure to its benefit, as well as the benefit of its parent, subsidiary, successor and affiliated entities, and shall be binding upon the successors and assigns of the Company. This Agreement, being personal to Employee, cannot be assigned by Employee, but his personal representative shall be bound by all its terms and conditions. Any notice required hereunder shall be sufficient if in writing and mailed to the last known residence of Employee or to the Company at its principal office with a copy mailed to the Office of the Chief Legal Officer, in either case via certified mail, return receipt requested.

40. Amendments and Modifications. Except as specifically provided herein, no modification, amendment, extension or waiver of this Agreement or any provision hereof shall be binding upon the Company or 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 and applies to employees generally shall be deemed to be incorporated herein and made a part of this Agreement.

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41. Outside Representations. Employee represents and acknowledges that in signing this Agreement he does not rely, and has not relief, upon any representation or statement made by the Company or by any of the Company’s employees, officers, agents, stockholders, directors or attorneys with regard to the subject matter, basis or effect of this Agreement other than those specifically contained herein.

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

43. 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, SERP, Equity Awards, Pension and Indemnity Agreement, etc.).

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

PATRICK DE MAYNADIER		HILL-ROM HOLDINGS, INC.
Signed:	/s/ Patrick de Maynadier	By:	/s/ John H. Dickey
Printed:	Patrick de Maynadier	Title: Sr. Vice President
Dated:	July 28, 2010	Dated: July 28, 2010

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EXHIBIT A

RELEASE AGREEMENT

THIS RELEASE AGREEMENT (“Agreement”) dated and effective this 28^th day of July 2010 is entered into by and between Patrick de Maynadier (“Employee”) and Hill-Rom Holdings, Inc. (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 December 31, 2010 (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 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 transaction of this duties and responsibilities to others.

3. Employee further agrees to execute the Release Affirmation Agreement, attached as Exhibit C to his Amended Employment Agreement on his Effective Termination Date and acknowledges that his agreement to execute the Release Affirmation Agreement is a material inducement for the Company to enter into this Agreement. Employee agrees that if he does not execute the Release Affirmation Agreement on his Effective Termination Date, or if he revokes the Release Affirmation Agreement during the seven (7) day revocation period, he shall be entitled only to the consideration set forth in subparagraphs 5(a) and 5(b), below, to the extent those subparagraphs otherwise apply.

4. 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.

5. 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) Until July 31, 2010 (the “Transition Date”), full-time employment for Employee. The Company shall pay Employee any earned but unused vacation as of the Transition Date (which is agreed to be four (4) weeks as of the Effective Date of this Agreement), less applicable deductions permitted or required by law, in one lump sum within fifteen (15) days after the Transition Date;

(b) From August 1, 2010 through December 31, 2010 (the “Interim Employment Period”), employment for Employee at not less than 20% of his average hours worked while working at full-time capacity; upon execution of this Agreement, the Company shall inform Employee how the Company will measure hours worked during the Interim Employment Period. During the Interim Employment Period:

(i) Employee will not accrue additional vacation time;

(ii) Employee will not be eligible for additional equity awards;

(iii) Employee will not be eligible to participate in the Company’s health insurance program. Continuation of coverage requirements under COBRA (if any) will be triggered as of August 1, 2010. 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 July 31, 2010, subject to any approved changes in coverage based on a qualified election, through the Interim Employment Period, provided Employee (x) timely completes the applicable election of coverage forms and (y) continues to pay the employee portion of the applicable premium(s). The medical insurance provided herein does not include any disability coverage; and

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(iv) Employee will not be eligible for Group Life insurance coverage. However, Employee may convert his Group Life coverage to an individual policy (which policy is subject to a benefit amount of Five Hundred Thousand Dollars and Zero Cents ($500,000.00)); provided, if Employee converts such coverage within 30 days of the Transition Date, the Company shall pay the cost of one year of coverage directly to the insurer;

(c) As of Employee’s Effective Termination Date, the following benefits (“Severance Benefits”):

(i) 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 Two Hundred Forty Two Thousand Dollars and Zero Cents ($242,000.00), less applicable deductions or other set offs. Because such amounts are intended to be exempt from Section 409A pursuant to Treasury Regulations Sections 1.409A-1(b)(4) and (9), they shall be payable commencing on the next regularly scheduled payroll that occurs fifteen (15) days after the Company’s receipt of Employee’s Release Affirmation Agreement which has not been revoked. Specifically, Employee shall be paid severance equivalent to his bi-weekly base salary (i.e., Thirteen Thousand Nine Hundred Sixty-one Dollars and Fifty-four Cents ($13,961.54), less applicable deductions or other set-offs), until the amount set forth in the first sentence of this Paragraph has been paid in full.

(ii) Continued payment by the Company of the employer’s share of coverage as provided under the health care program, until the above-referenced Severance Pay terminates, Employee accepts other employment or Employee becomes eligible for alternative healthcare coverage, whichever comes first, provided Employee (x) timely completes the applicable election of coverage forms and (y) 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. The medical insurance provided herein does not include any disability coverage; and;

(iii) Payment of incentive compensation under the Company’s fiscal year 2010 Short Term Incentive Compensation Plan at an individual performance modifier of 100% at 60% of Employee’s base salary for fiscal year 2010 with the Company performance modifier as established by the Board of Directors for all Company employees. Such incentive compensation for fiscal year 2010, if any, shall be payable at the same time other active employees are paid such approved incentive compensation (the “STIC Payment Date”).

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6. 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.

7. The Company further agrees to provide Employee with limited out-placement counseling with a company of its choice for two years from the Effective Termination Date.

8. Should Employee become employed during the Interim Employment Period or 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 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.

9. During the Interim Employment Period, Employee covenants and agrees to continue to perform all assigned duties in a diligent and professional manner within the agreed upon hourly requirements described in subparagraph 5(b) above. Except as provided herein, Employee agrees to devote his attention, talents, skills and best efforts to further the Company’s business and agrees not to act in any manner that may conflict with the best interest of the Company or is otherwise detrimental to its business.

10. During the Interim Employment Period, Employee may be terminated for Cause as defined in his Amended Employment Agreement. If the Company determines that it has grounds to terminate Employee for Cause, to the extent the violation 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. If Employee is terminated for Cause during the Interim Employment Period, he will not be entitled to any benefits as described in Paragraph 5 above, except salary already earned to the date of termination and pay for earned vacation time as described in subparagraph 5(a).

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11. Should Employee resign without cause prior to the Effective Termination Date under Paragraph 8 of the Amended Employment Agreement, he will be entitled to no benefits under this Agreement except any salary already earned pursuant to the provisions of Paragraph 5 and payment for earned vacation time as provided in Paragraph 5(a).

12. Should Employee terminate his employment for Good Reason, as defined in his Amended Employment Agreement, his employment will terminate immediately, and he will not be entitled to any benefits as described in Paragraph 5 above, except salary already earned to the date of termination, pay earned for vacation time as described in subparagraph 5(a), and severance benefits as described in subparagraph 5(c)(i) - (iii).

13. 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 claim 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.

14. In exchange for the foregoing Severance Benefits, PATRICK de MAYNADIER on behalf of himself, his heirs, representatives, agents and assigns hereby RELEASES, INDEMNIFIES, HOLDS HARMLESS, and FOREVER DISCHARGES (i) Hill-Rom Holdings, Inc., (ii) its 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.

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15. 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. Sections 1981 and 2000(e) et. seq.; the Civil Rights Act of 1991; the Age Discrimination in Employment Act, as amended, 29 U.S.C. Sections 621 et seq.; the Americans with Disabilities Act of 1990, as amended, 42 U.S.C. Sections 12,101 et seq.; the Fair Labor Standards Act 29 U.S.C. Sections 201 et seq.; the Worker Adjustment and Retraining Notification Act, 29 U.S.C. Sections 2101, et seq.; the Sarbanes-Oxley Act of 2002, specifically including the Corporate and Criminal Fraud Accountability Act, 18 U.S.C. Section 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.

16. 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 his release of any age claims in this Agreement in court or before the Equal Employment Opportunity Commission.

17. 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.

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18. 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. Section 626) and any similar law governing release of claims. Accordingly, Employee hereby acknowledges that:

(a) He has carefully read and full understands all of the provision 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) days within which to review and consider this Agreement.

19. 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.

20. 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) currently provided by the Company, such items to be governed exclusively by the terms of the applicable agreements or plan documents.

21. 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 cannot 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, or under the Company’s Bylaws, any rights he has a s a shareholder, or any claim for breach of this Agreement, including, but not limited to the benefits promised by the terms of this Agreement.

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22. 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”) after 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 his Effective Termination Date. 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. 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.

24. Employee hereby affirms and acknowledges his continued obligations to comply with the post-termination covenants contained in his Amended Employment Agreement, including but not limited to, the non-complete, trade secret and confidentiality provisions. Employee acknowledges that a copy of the Amended Employment Agreement has 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 Amended Employment Agreement shall include but not be limited to those entities specifically identified in the update Competitor List, attached thereto as Exhibit B.

25. 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”).

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26. 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 disclosure, 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.

27. 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. including any legal forms developed by Employee during the term of his employment may be used by him thereafter provided such items are not used to compete against the Company. Notwithstanding anything to the contrary above, Employee may retain his Blackberry and the HBH Materials (as defined in his Amended Employment Agreement), subject to the terms of Paragraph 18 of the Amended Employment Agreement.

28. 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 JPMorgan Chase Corporate MasterCard bill).

29. 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 Chief Legal Officer, in the event he is contacted by any outside attorney (including paralegals or other affiliated parties) concerning or relating in any way to any matter falling within Employee’s knowledge or former area of responsibility 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 associate with such assistance and testimony.

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30. 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 employee, officers, directors or trustees or (c) the services and/or product provided by the Company and its subsidiaries or affiliate entities. Similarly, in response to any written inquiry from any prospective employer or in connection with a written inquiry in connection with any future business relationship involving Employee, the Company agrees not to provide any information that may defame, disparage or cast in a negative light so as to do harm to the personal or professional reputation of Employee. The Parties acknowledge, however, 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.

31. 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, subject to the terms of Paragraph 31 of Employee’s Amended Employment Agreement. 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.

32. 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, subject to the terms of Paragraph 31 of Employee’s Amended Employment Agreement. 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.

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33. 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.

34. 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.

35. 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.

36. 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.

37. 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.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

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38. 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 Employee’s Amended Employment Agreement, 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 RELEASE
AGREEMENT INCLUDES A COMPLETE RELEASE OF ALL
KNOWN AND UNKNOWN CLAIMS.

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

PATRICK DE MAYNADIER		HILL-ROM HOLDINGS, INC.
Signed:	/s/ Patrick de Maynadier	By:	/s/ John H. Dickey
Printed: Dated:	Patrick de Maynadier July 28, 2010	Title: Sr. Vice President Dated: July 28, 2010

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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.

•    Amico Corporation	•    Anodyne Medical Device, Inc.
•    APEX Medical Corp.	•    Apria Healthcare Inc.
•    Aramark Corporation	•    Ascom (Ascom US, Inc.)
•    Barton Medical Corporation	•    B.G. Industries, Inc.
•    CareMed Supply, Inc.	•    Comfortex, Inc.
•    Corona Medical SAS	•    Custom Medical Solutions
•    Dukane Communication Systems, a division of Edwards Systems Technology, Inc.	•    Encompass Group, LLC
•    Fitzsimmons Home Medical Equipment, Inc.	•    Freedom Medical, Inc.
•    Gaymar Holding Company, LLC (Gaymar Industries, Inc.)	•    GF Health Products, Inc. (Graham Field)
•    Getinge Group (Arjo; Getinge; Maquet; Pegasus; Huntleigh Technology Plc (Huntleigh Healthcare, LLC))	•    Handicare AS (Romedic, Inc.)
•    Human Care HC AB	•    Horcher GmbH
•    Industrie Guido Malvestio S.P.A.	•    Intego Systems, Inc. (formerly known as Wescom Products, Inc.)
•    Invacare Corporation	•    Joerns Healthcare, Inc.
•    Joh. Stiegelmeyer & Co., GmbH (Stiegelmeyer)	•    Kinetic Concepts, Inc. (KCI)
•    Linak Group	•    Linet (Linet France, Linet Far East)
•    MedaSTAT, LLC	•    Medical Specialties Distributors, LLC
•    Medline Industries, Inc.	•    Merivaara Corporation
•    MIZUOSI	•    Modular Service Company
•    Molift	•    Nemschoff Chairs, Inc.

•    Paramount Bed Company, Ltd.	•    Nurture by Steelcase, Inc.
•    Pardo	•    Pegasus Airwave, Inc.
•    Premise Corporation	•    Prism Medical Ltd (Waverly Glen)
•    Radianse, Inc.	•    Rauland-Borg Corporation
•    Recovercare, LLC (Stenbar, T.H.E. Medical)	•    Sentech Medical Systems, Inc.
•    SimplexGrinnell, LP	•    SIZEwise Rentals, LLC
•    Span America Medical Systems, Inc.	•    Statcom (Jackson Healthcare Solutions)
•    Stryker Corporation	•    Sunrise Medical (Ted Hoyer and Company)
•    Tempur-Pedic Medical, Inc.	•    Tele-Tracking Technologies, Inc.
•    Universal Hospital Services, Inc.	•    V. Guldmann A/S
•    Voelker AG	•    West-Com Nurse Call Systems, 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.

(Revised list April 2010)

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EXHIBIT C

RELEASE AFFIRMATION AGREEMENT

On  _____, 2010, Patrick de Maynadier (“Employee”) and Hill-Rom Holdings, Inc. (together with its subsidiaries and affiliates, the “Company”) entered into a Release Agreement.

In consideration for the separation pay and other good and valuable consideration provided by the Company in the Release Agreement, Employee agreed to reaffirm the Release Agreement on Employee’s Effective Termination Date by executing this Release Affirmation Agreement.

THEREFORE, in consideration of the mutual promises and payment set forth in the Release Agreement, the receipt and adequacy of which is acknowledged, the parties agree as follows:

1. In exchange for the Severance Benefits described in the Release Agreement, Patrick de Maynadier on behalf of himself, his heirs, representatives, agents and assigns hereby RELEASES, INDEMNIFIES, HOLDS HARMLESS, and FOREVER DISCHARGES, (i) Hill-Rom Holdings, Inc., (ii) its 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 Release Affirmation Agreement.

2. 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. Sections 1981 and 2000(e) et. seq.; the Civil Rights Act of 1991; the Age Discrimination in Employment Act, as amended, 29 U.S.C. Sections 621 et seq.; the Americans with Disabilities Act of 1990, as amended, 42 U.S.C. Sections 12,101 et seq.; the Fair Labor Standards Act 29 U.S.C. Sections 201 et seq.; the Worker Adjustment and Retraining Notification Act, 29 U.S.C. Sections 2101, et seq.; the Sarbanes Oxley Act of 2002, specifically including the Corporate and Criminal Fraud Accountability Act, 18 U.S.C. Section 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.

3. 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 released by this Release Affirmation Agreement provided, however, that nothing contained in this Release Affirmation 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 his release of any age claims in this Release Affirmation Agreement in court or before the Equal Employment Opportunity Commission.

4. 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 Release Affirmation 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 Release Affirmation 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 Release Affirmation Agreement, Employee specifically assigns to the Company his right to any recovery arising from any such proceeding.

5. 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 Release Affirmation Agreement and that he has entered into this Release Affirmation 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 the Release Agreement and this Release Affirmation Agreement;

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(c) prior to signing this Release Affirmation Agreement, Employee had been advised, and is being advised by this Release Affirmation 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) days within which to review and consider this Release Affirmation Agreement.

6. The Parties agree that this Release Affirmation Agreement shall not become effective and enforceable until the date this Release Affirmation Agreement is signed by both Parties or seven (7) calendar days after its execution by Employee, whichever is later. Employee may revoke this Release Affirmation Agreement for any reason by providing written notice of such intent to the Company within seven (7) days after he has signed this Release Affirmation Agreement, thereby forfeiting Employee’s right to receive any Severance Benefits provided in the Release Agreement, except as specifically provided in the Release Agreement and rendering this Release Affirmation Agreement null and void in its entirety. This revocation must be sent to the Employee’s HR representative with a copy sent to the Hill-Rom Office of Chief Legal Officer and must be received by the end of the seventh day after the Employee signs this Release Affirmation Agreement to be effective.

7. 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 Release Affirmation Agreement. It is further understood by the Parties that nothing in this Release Affirmation 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 Effective Termination Date, such items to be governed exclusively by the terms of the applicable agreements or plan documents.

8. Similarly, notwithstanding any provision contained herein to the contrary, this Release Affirmation 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 Release Affirmation Agreement, including, but not limited to the benefits promised by the terms of this Release Affirmation Agreement.

9. Employee hereby affirms and acknowledges his continued obligations to comply with the post-termination covenants contained in his Amended Employment Agreement, including but not limited to, the non-compete, trade secret and confidentiality provisions. Employee acknowledges that a copy of the Amended Employment Agreement has been has been provided to him and, to the extent not inconsistent with the terms of this Release Affirmation 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 Amended Employment Agreement shall include but not be limited to those entities specifically identified in the updated Competitor List, attached thereto as Exhibit B.

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10. Employee acknowledges that the Company as well as its 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”).

11. 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.

12. 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. Notwithstanding anything to the contrary above, Employee may retain his Blackberry and the HBH Materials (as defined in his Amended Employment Agreement), subject to the terms of Paragraph 18 of the Amended Employment Agreement.

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13. 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 Chief Legal Officer, 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.

14. 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. In response to any inquiry from any prospective employer or in connection with an inquiry in connection with any future business relationship involving Employee, the Company agrees not to provide any information that may defame, disparage or cast in a negative light so as to do harm to the personal or professional reputation of Employee. The Parties acknowledge, however, 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.

15. In the event that Employee breaches or threatens to breach any provision of this Release Affirmation 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, subject to the terms of Paragraph 31 of Employee’s Amended Employment Agreement. 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. 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 Release Affirmation Agreement to the fullest extent permitted by law.

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16. Similarly, in the event that the Company breaches or threatens to breach any provision of this Release Affirmation 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. The Company hereby waives any claim that Employee has an adequate remedy at law. The Company agrees that the foregoing relief shall not be construed to limit or otherwise restrict Employee’s ability to pursue any other remedy provided by law, including the recovery of any actual, compensatory or punitive damages.

17. Both Parties acknowledge that this Release Affirmation 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.

18. 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.

19. The Parties agree that each and every paragraph, sentence, clause, term and provision of this Release Affirmation Agreement is severable and that, if any portion of this Release Affirmation 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.

20. This Release Affirmation 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.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

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21. Employee represents and acknowledges that in signing this Release Affirmation 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 Release Affirmation Agreement other than those specifically contained herein.

PLEASE READ CAREFULLY. THIS RELEASE AFFIRMATION
AGREEMENT INCLUDES A COMPLETE RELEASE OF ALL
KNOWN AND UNKNOWN CLAIMS.

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

PATRICK DE MAYNADIER	HILL-ROM HOLDINGS, INC.
Signed:	By:
Printed:	Title:
Dated:	Dated:

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EX-10.57

EXHIBIT 10.57

AMENDED EMPLOYMENT AGREEMENT

P R E A M B L E

This Amended 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 AMENDED EMPLOYMENT AGREEMENT, dated and effective this 26th day of August 2010 is entered into by and between Hill-Rom Holdings, Inc. (the “Company”) and Mark Baron (“Employee”).

W I T N E S S E T H:

WHEREAS, the Company and its affiliated entities are engaged in the healthcare industry throughout the United States and abroad, including, but not limited to, the design, manufacture, sale, service and rental of hospital beds and stretchers, hospital furniture, medical-related architectural products, specialty sleep surfaces (including therapeutic surfaces), air clearing devices, biomedical and asset management services, as well as other medical-related accessories, devices, and products;

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

WHEREAS, in the course of the employment contemplated under this Agreement and as a continuation of Employee’s past employment with the Company, if applicable, 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”);

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

WHEREAS, the Company and Employee have previously entered into an Amended Employment Agreement and now consider it desirable to update that prior agreement in consideration for the benefits provided herein and in consideration of the Release Agreement and the Release Affirmation Agreement attached as Appendices A and C, respectively;

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 as, and Employee agrees to serve as Senior Vice President Operations. 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 position. 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 this title and the underlying duties may change.

2. Term. From the effective date of this Agreement through October 1, 2010 (the “Transition Date”), Employee shall perform his duties and responsibilities in a full-time capacity. Effective October 2, 2010 and continuing through February 28, 2011 (the “Interim Employment Period”), Employee shall work a minimum of 20% of his average hours worked while working in a full-time capacity, which for purposes of this Agreement is agreed to be 40 hours per month. Unless terminated earlier pursuant to Paragraphs 8-10, Employee’s active employment by the Company shall terminate effective February 28, 2011 (the “Effective Termination Date”).

3. 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. Until the Transition Date, Employee agrees to devote his full working time, attention, talents, skills and best efforts to further the Company’s business. During the Interim Employment Period, Employee agrees to devote the working time (but no fewer then 40working hours per month), attention, talents, skills and effort reasonably necessary to perform all assigned duties in a satisfactory manner. Through the Effective Termination Date, Employee 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 through the Transition Date; provided, however, that during the Interim Employment Period, Employee may engage in such outside business activity but conditioned on Employee satisfying his obligations under this Agreement including without limitation the minimum service requirement set forth in Paragraph 2 above, the restrictions on the use of Confidential Information set forth in Paragraphs 18-19, the restrictive covenants set forth in Paragraphs 20-25, and the notice obligation set forth in Paragraph 27. 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.

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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 Eleven Thousand Nine Hundred Twenty-three Dollars and Eight Cents ($11,923.08), less usual and ordinary deductions;

(b) 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 subject to the terms of the Release Agreement attached as Exhibit A; and

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

5. 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.

6. Warranties and Indemnification. Employee warrants that he is not a party to any contract, restrictive covenant, or other agreement purporting to limit or otherwise adversely affecting his ability to secure employment with any third party. Alternatively, should any such agreement exist, Employee warrants 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.

7. 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 him not to disclose or use such confidential or proprietary information. Based on his 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.

8. Termination by Employee. The Parties agree that Employee may terminate this employment relationship at any time, for any reason, upon sixty (60) days advance written notice. 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 his separation and as otherwise explicitly set forth in this Agreement and in the Release Agreement attached hereto as Exhibit A.

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9. 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 his duties and responsibilities or refused to follow or comply with the lawful direction of the Board of Directors of the Company or the terms and conditions of this Agreement provided 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, its officers or its 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 Ethical Business Conduct 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 its best interests or would hold the Company, its 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 him, 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.

10. 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 that Employee cannot perform the essential functions of his position as a result of a such 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;

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(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 his duties or responsibilities hereunder on a full time basis, with or without reasonable accommodation, as a result of any mental or physical impairment.

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.

11. 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 his post-employment obligations as set forth in this Agreement.

12. Section 409A Notification. Employee acknowledges that he 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 his 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 if he is a “specified employee” at the time of his 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 termination of employment shall not be paid until a date at least six (6) months after Employee’s separation from service (as defined in Section 409A and applicable regulations). 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 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

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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. Each amount to be paid or benefit to be provided to Employee pursuant to this Agreement shall be construed as a separate identified payment for purposes of Section 409A. To the extent required to avoid an accelerated or additional tax under Section 409A, amounts reimbursable to Employee under this Agreement shall be paid to Employee on or before the last day of the year following the year in which the expense was incurred, the amount of expenses eligible for reimbursement (and in-kind benefits provided to Employee) during any one year may not effect amounts reimbursable or provided in any subsequent year, and the right to reimbursement (and in-kind benefits provided to Employee) under this Agreement shall not be subject to liquidation or exchange for another benefit.

13. 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. 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. 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 claims obligation. Employee understands and acknowledges that neither the Company, nor any of its employees, attorneys, or other representatives has provided or will provide 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.

14. Severance Payments. In the event Employee continues employment with the Company through the Effective Termination Date and is terminated by the Company without cause on the Effective Termination Date, then, subject to the normal terms and conditions imposed by the Company as set forth herein and in the attached Release Agreement and the attached Release Affirmation Agreement, Employee shall be eligible to receive severance pay in an amount equal to thirty four (34) weeks of his base salary at the Effective Termination Date.

15. Severance Payment Terms and Conditions. No severance pay shall be paid if Employee voluntarily leaves the Company’s employ 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, on or before October 1, 2010, 2010, both executing this Agreement and fully complying with the restrictive covenants contained herein, and executing the Release Agreement 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 Release Affirmation Agreement attached as

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Exhibit C on his Effective Termination Date and/or should Employee revoke such Release Affirmation Agreement within the seven-day revocation period. Conditioned upon the execution and delivery of the Release Agreement and the Release Affirmation Agreement, severance pay benefits shall be paid in accordance with the terms of the Release Agreement. Notwithstanding any other provision contained herein to the contrary, any severance pay benefits paid pursuant to this Agreement shall not be subject to termination upon reemployment (however, all other severance benefits, e.g., continued healthcare, shall cease).

16. Assignment of Rights.

(a) Copyrights. Employee agrees that all works of authorship fixed in any tangible medium of expression by him during the term of this Agreement relating to the Company’s business (“Works”), either solely or jointly with others, shall be and remain exclusively the property of the Company. Each such Work created by 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 his rights, title, and interests in and to such Inventions, any applications for United States and foreign Letters Patent, any United States and foreign Letters Patent, and any renewals thereof granted upon such Inventions;

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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 his inventorship, as may be necessary in the opinion of the Company, to obtain and maintain United States and foreign Letters Patent upon such Inventions and to vest the entire rights and title thereto in the Company and to confirm the complete ownership by the Company of such Inventions, patent applications, and patents.

17. 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.

18. 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 his 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.

19. 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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20. 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 his 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.

21. Non-Solicitation. During Employee’s employment (including, for the avoidance of doubt, during the Interim Employment Period) and for a period of eighteen (18) 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.

22. 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 his 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.

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

(a) “Affiliate” includes any parent, subsidiary, joint venture, sister company, or other entity controlled, owned, managed or otherwise associated with the Company;

(b) “Assigned Customer Base” shall include all accounts or customers formally assigned to Employee within a given territory or geographical area or contacted by him 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 eighteen (18) month period preceding Employee’s date of separation;

(f) “Relevant Non-Compete Period” shall include the period of Employee’s employment with the Company (including, for the avoidance of doubt, during the Interim Employment Period) as well as a period of eighteen (18) 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) nine (9)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 eighteen (18) 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, salesman, independent contractor, broker, agent, or consultant for any other individual, partnership, firm, corporation, company, or other entity engaged in such conduct.

24. 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.

25. 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.

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26. Effect of Transfer. 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, sister corporation 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, he 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 his 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 his 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 his transfer to, and subsequent employment by, the Affiliate shall serve as consideration for (as well as be deemed as evidence of his 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.

27. Interim Employment Period and Post-Termination Notification. During his Interim Employment Period and for the duration of his 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 his acceptance of any employment or consulting engagement. Such notice shall include sufficient information to ensure Employee compliance with his non-compete obligations and must include at a minimum the following information: (i) the name of the employer or entity for which he is providing any consulting services; (ii) a description of his intended duties as well as (iii) the anticipated start date. Such information is required to ensure Employee’s compliance with his non-compete obligations as well as all other applicable restrictive covenants. Such notice shall be provided in writing to the Office of Senior Vice President and Chief Legal Officer of the Company at 1069 State Road 46 E, 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.

28. 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.

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29. 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.

30. Publicly Traded Stock. The Parties agree that nothing contained in this Agreement shall be construed to prohibit Employee from investing his personal assets in any stock or corporate security traded or quoted on a national securities exchange or national market system provided, however, such investments do not require any services on the part of Employee in the operation or the affairs of the business or otherwise violate the Company’s Code of Ethics.

31. 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 Chief Legal Officer 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.

32. 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.

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33. 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.

34. 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.

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

36. 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.

37. 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 his personal representative shall be bound by all its terms and conditions. Any notice required hereunder shall be sufficient if in writing and mailed to the last known residence of Employee or to the Company at its principal office with a copy mailed to the Office of the Chief Legal Officer.

38. 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.

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39. Outside Representations. 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.

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

41. 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.

MARK BARON		HILL-ROM HOLDINGS, INC.
Signed: Printed:	/s/ Mark D. Baron Mark D. Baron	By: /s/ Perry Stuckey Title:  Senior Vice President and Chief
Dated:	8/26/2010	Human Resources Officer
		Dated: 8/26/2010

CAUTION: READ BEFORE SIGNING

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EXHIBIT A

RELEASE AGREEMENT

THIS RELEASE AGREEMENT (“Agreement”) dated and effective this 26th day of August 2010 is entered into by and between Mark Baron (“Employee”) and Hill-Rom Holdings, Inc. (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 February 28, 2011 (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 further agrees to execute the Release Affirmation Agreement, attached as Exhibit C to his Amended Employment Agreement on his Effective Termination Date and acknowledges that his agreement to execute the Release Affirmation Agreement is a material inducement for the Company to enter into this Agreement. Employee agrees that if he does not execute the Release Affirmation Agreement on his Effective Termination Date, or if he revokes the Release Affirmation Agreement during the seven (7) day revocation period, he shall be entitled only to the consideration set forth in subparagraphs 5(a) and 5(b), below, to the extent those subparagraphs otherwise apply.

4. 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.

5. 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) Until October 1, 2010 (the “Transition Date”), full-time employment for Employee. The Company shall pay Employee any earned but unused vacation as of the Transition Date, less applicable deductions permitted or required by law, in one lump sum within fifteen (15) days after the Transition Date;

(b) From October 2, 2010 through February 28, 2011 (the “Interim Employment Period”), employment for Employee at not less than 20% of his average hours worked while working at full-time capacity (which for purposes of this Agreement is agreed to be 40 hours per month); upon execution of this Agreement, the Company shall inform Employee how the Company will measure hours worked during the Interim Employment Period. During the Interim Employment Period:

(i) Employee will not accrue additional vacation time; and

(ii) Employee will not be eligible for additional equity awards;

(c) As of Employee’s Effective Termination Date, the following benefits (“Severance Benefits”):

(i) 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 total amount of Two Hundred Two Thousand Six Hundred Ninety Two Dollars and Thirty Six cents ($202,692.36), less applicable deductions or other set offs. Because such amounts are intended to be exempt from Section 409A pursuant to Treasury Regulations Sections 1.409A-1(b)(4) and (9), they shall be payable commencing on the next regularly scheduled payroll that occurs fifteen (15) days after the Company’s receipt of Employee’s Release Affirmation Agreement which has not been revoked. Specifically, Employee shall be paid severance equivalent to his bi-weekly base salary (i.e., Eleven Thousand Nine Hundred Twenty-three Dollars and Eight Cents ($11,923.08), less applicable deductions or other set-offs), until the amount set forth in the first sentence of this Paragraph has been paid in full;

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(ii) Eligibility for incentive compensation under the Company’s fiscal year 2010 Short Term Incentive Compensation Plan at an individual performance modifier of 100%. Such incentive compensation for fiscal year 2010, if any, shall be payable at the same time other active employees are paid such approved incentive compensation (the “STIC Payment Date”); and

(iii) If the Employee selects COBRA coverage or retiree coverage under the applicable company plan, coverage at the active employee rates charged under the health care program selected by Employee as of the day immediately preceding the Effective Termination Date, with such reduced cost coverage continuing until the above-referenced Severance pay terminates or until Employee accepts other employment or Employee becomes eligible for alternative healthcare coverage, whichever comes first, provided Employee (x) timely completes the applicable election of coverage forms and (y) 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 or retiree medical premium) for any remaining months of the coverage. The medical insurance provided herein does not include any disability coverage; and;

6. 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.

7. The Company further agrees to provide Employee with limited out placement counseling with a company of its choice for two years from the Effective Termination Date.

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8. Should Employee become employed during the Interim Employment Period or 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 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.

9. During the Interim Employment Period, Employee covenants and agrees to continue to perform all assigned duties in a diligent and professional manner within the agreed upon hourly requirements described in subparagraph 5(b) above. Except as provided herein, Employee agrees to devote his attention, talents, skills and best efforts to further the Company’s business and agrees not to act in any manner that may conflict with the best interest of the Company or is otherwise detrimental to its business.

10. During the Interim Employment Period, Employee may be terminated for Cause as defined in his Amended Employment Agreement. If the Company determines that it has grounds to terminate Employee for Cause, to the extent the violation 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. If Employee is terminated for Cause during the Interim Employment Period, he will not be entitled to any benefits as described in Paragraph 5 above, except salary already earned to the date of termination and pay for earned vacation time as described in subparagraph 5(a).

11. Should Employee resign prior to the Effective Termination Date, he will be entitled to no benefits under this Agreement except any salary already earned pursuant to the provisions of Paragraph 5 and payment for earned vacation time as provided in Paragraph 5(a).

12. 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.

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13. In exchange for the foregoing Severance Benefits, Mark Baron on behalf of himself, his heirs, representatives, agents and assigns hereby RELEASES, INDEMNIFIES, HOLDS HARMLESS, and FOREVER DISCHARGES (i) Hill-Rom Holdings, Inc., (ii) its 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.

14. 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 Sarbanes-Oxley Act of 2002, specifically including the Corporate and Criminal Fraud Accountability Act, 18 U.S.C. §1514,A 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.

15. 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 his release of any age claims in this Agreement in court or before the Equal Employment Opportunity Commission.

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16. 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.

17. 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) days within which to review and consider this Agreement.

18. 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.

19. 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.

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20. 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 cannot 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.

21. 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 his Effective Termination Date. 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.

22. 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.

23. Employee hereby affirms and acknowledges his continued obligations to comply with the post-termination covenants contained in his Amended Employment Agreement, including but not limited to, the non-compete, trade secret and confidentiality provisions. Employee acknowledges that a copy of the Amended Employment Agreement has 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 Amended Employment Agreement shall include but not be limited to those entities specifically identified in the updated Competitor List, attached thereto as Exhibit B.

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24. 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”).

25. 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.

26. 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.

27. 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 JPMorgan Chase Corporate MasterCard bill).

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28. 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 Chief Legal Officer, in the event he is contacted by any outside attorney (including paralegals or other affiliated parties) concerning or relating in any way to any matter falling within Employee’s knowledge or former area of responsibility 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.

29. 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. Similarly, in response to any written inquiry from any prospective employer or in connection with a written inquiry in connection with any future business relationship involving Employee, the Company agrees not to provide any information that may defame, disparage or cast in a negative light so as to do harm to the personal or professional reputation of Employee. The Parties acknowledge, however, 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.

30. 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.

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31. 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.

32. 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.

33. 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.

34. 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.

35. 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.

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 Employee’s Amended Employment Agreement, or any obligations 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.

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PLEASE READ CAREFULLY. THIS RELEASE
AGREEMENT INCLUDES A COMPLETE RELEASE OF ALL
KNOWN AND UNKNOWN CLAIMS.

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

MARK BARON		HILL-ROM HOLDINGS, INC.
Signed: Printed:	/s/ Mark D. Baron Mark D. Baron	By: /s/ Perry Stuckey Title:  Senior Vice President and Chief
Dated:	8/26/10	Human Resources Officer
		Dated: 8/26/2010

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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.

•    Amico Corporation	•    Anodyne Medical Device, Inc.
•    APEX Medical Corp.	•    Apria Healthcare Inc.
•    Aramark Corporation	•    Ascom (Ascom US, Inc.)
•    Barton Medical Corporation	•    B.G. Industries, Inc.
•    CareMed Supply, Inc.	•    Comfortex, Inc.
•    Corona Medical SAS	•    Custom Medical Solutions
•    Dukane Communication Systems, a division of Edwards Systems Technology, Inc.	•    Encompass Group, LLC
•    Fitzsimmons Home Medical Equipment, Inc.	•    Freedom Medical, Inc.
•    Gaymar Holding Company, LLC (Gaymar Industries, Inc.)	•    GF Health Products, Inc. (Graham Field)
•    Getinge Group (Arjo; Getinge; Maquet; Pegasus; Huntleigh Technology Plc (Huntleigh Healthcare, LLC))	•    Handicare AS (Romedic, Inc.)
•    Human Care HC AB	•    Horcher GmbH
•    Industrie Guido Malvestio S.P.A.	•    Intego Systems, Inc. (formerly known as Wescom Products, Inc.)
•    Invacare Corporation	•    Joerns Healthcare, Inc.
•    Joh. Stiegelmeyer & Co., GmbH (Stiegelmeyer)	•    Kinetic Concepts, Inc. (KCI)
•    Linak Group	•    Linet (Linet France, Linet Far East)
•    MedaSTAT, LLC	•    Medical Specialties Distributors, LLC
•    Medline Industries, Inc.	•    Merivaara Corporation

•    MIZUOSI	•    Modular Service Company
•    Molift	•    Nemschoff Chairs, Inc.
•    Paramount Bed Company, Ltd.	•    Nurture by Steelcase, Inc.
•    Pardo	•    Pegasus Airwave, Inc.
•    Premise Corporation	•    Prism Medical Ltd (Waverly Glen)
•    Radianse, Inc.	•    Rauland-Borg Corporation
•    Recovercare, LLC (Stenbar, T.H.E. Medical)	•    Sentech Medical Systems, Inc.
•    SimplexGrinnell, LP	•    SIZEwise Rentals, LLC
•    Span America Medical Systems, Inc.	•    Statcom (Jackson Healthcare Solutions)
•    Stryker Corporation	•    Sunrise Medical (Ted Hoyer and Company)
•    Tempur-Pedic Medical, Inc.	•    Tele-Tracking Technologies, Inc.
•    Universal Hospital Services, Inc.	•    V. Guldmann A/S
•    Voelker AG	•    West-Com Nurse Call Systems, 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.

(Revised list April 2010)

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EXHIBIT C

RELEASE AFFIRMATION AGREEMENT

On  _____, 2010, Mark Baron (“Employee”) and Hill-Rom Holdings, Inc. (together with its subsidiaries and affiliates, the “Company”) entered into a Release Agreement.

In consideration for the separation pay and other good and valuable consideration provided by the Company in the Release Agreement, Employee agreed to reaffirm the Release Agreement on Employee’s Effective Termination Date by executing this Release Affirmation Agreement.

THEREFORE, in consideration of the mutual promises and payment set forth in the Release Agreement, the receipt and adequacy of which is acknowledged, the Employee agrees as follows:

1. In exchange for the Severance Benefits described in the Release Agreement, Mark Baron on behalf of himself, his heirs, representatives, agents and assigns hereby RELEASES, INDEMNIFIES, HOLDS HARMLESS, and FOREVER DISCHARGES, (i) Hill-Rom Holdings, Inc., (ii) its 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 Release Affirmation Agreement.

2. 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. Sections 1981 and 2000(e) et. seq.; the Civil Rights Act of 1991; the Age Discrimination in Employment Act, as amended, 29 U.S.C. Sections 621 et seq.; the Americans with Disabilities Act of 1990, as amended, 42 U.S.C. Sections 12,101 et seq.; the Fair Labor Standards Act 29 U.S.C. Sections 201 et seq.; the Worker Adjustment and Retraining Notification Act, 29 U.S.C. Sections 2101, et seq.; the Sarbanes Oxley Act of 2002, specifically including the Corporate and Criminal Fraud Accountability Act, 18 U.S.C. Section 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.

3. 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 released by this Release Affirmation Agreement provided, however, that nothing contained in this Release Affirmation 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 his release of any age claims in this Release Affirmation Agreement in court or before the Equal Employment Opportunity Commission.

4. 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 Release Affirmation 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 Release Affirmation 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 Release Affirmation Agreement, Employee specifically assigns to the Company his right to any recovery arising from any such proceeding.

5. 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 Release Affirmation Agreement and that he has entered into this Release Affirmation 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 the Release Agreement and this Release Affirmation Agreement;

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(c) prior to signing this Release Affirmation Agreement, Employee had been advised, and is being advised by this Release Affirmation 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) days within which to review and consider this Release Affirmation Agreement.

6. The Parties agree that this Release Affirmation Agreement shall not become effective and enforceable until the date this Release Affirmation Agreement is signed by both Parties or seven (7) calendar days after its execution by Employee, whichever is later. Employee may revoke this Release Affirmation Agreement for any reason by providing written notice of such intent to the Company within seven (7) days after he has signed this Release Affirmation Agreement, thereby forfeiting Employee’s right to receive any Severance Benefits provided in the Release Agreement, except as specifically provided in the Release Agreement and rendering this Release Affirmation Agreement null and void in its entirety. This revocation must be sent to the Employee’s HR representative with a copy sent to the Hill-Rom Office of Chief Legal Officer and must be received by the end of the seventh day after the Employee signs this Release Affirmation Agreement to be effective.

7. 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 Release Affirmation Agreement. It is further understood by the Parties that nothing in this Release Affirmation 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 Effective Termination Date, such items to be governed exclusively by the terms of the applicable agreements or plan documents.

8. Similarly, notwithstanding any provision contained herein to the contrary, this Release Affirmation 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 Release Affirmation Agreement, including, but not limited to the benefits promised by the terms of this Release Affirmation Agreement.

9. Employee hereby affirms and acknowledges his continued obligations to comply with the post-termination covenants contained in his Amended Employment Agreement, including but not limited to, the non-compete, trade secret and confidentiality provisions. Employee acknowledges that a copy of the Amended Employment Agreement has been has been provided to him and, to the extent not inconsistent with the terms of this Release Affirmation 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 Amended Employment Agreement shall include but not be limited to those entities specifically identified in the updated Competitor List, attached thereto as Exhibit B.

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10. Employee acknowledges that the Company as well as its 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”).

11. 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.

12. 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.

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13. 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 Chief Legal Officer, 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.

14. 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. In response to any inquiry from any prospective employer or in connection with an inquiry in connection with any future business relationship involving Employee, the Company agrees not to provide any information that may defame, disparage or cast in a negative light so as to do harm to the personal or professional reputation of Employee. The Parties acknowledge, however, 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.

15. In the event that Employee breaches or threatens to breach any provision of this Release Affirmation 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. 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 Release Affirmation Agreement to the fullest extent permitted by law.

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16. Similarly, in the event that the Company breaches or threatens to breach any provision of this Release Affirmation 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. The Company hereby waives any claim that Employee has an adequate remedy at law. The Company agrees that the foregoing relief shall not be construed to limit or otherwise restrict Employee’s ability to pursue any other remedy provided by law, including the recovery of any actual, compensatory or punitive damages.

17. Both Parties acknowledge that this Release Affirmation 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.

18. 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.

19. The Parties agree that each and every paragraph, sentence, clause, term and provision of this Release Affirmation Agreement is severable and that, if any portion of this Release Affirmation 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.

20. This Release Affirmation 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.

21. Employee represents and acknowledges that in signing this Release Affirmation 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 Release Affirmation Agreement other than those specifically contained herein.

PLEASE READ CAREFULLY. THIS RELEASE AFFIRMATION
AGREEMENT INCLUDES A COMPLETE RELEASE OF ALL
KNOWN AND UNKNOWN CLAIMS.

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

MARK BARON	HILL-ROM HOLDINGS, INC.
Signed:	By:
Printed:	Title:
Dated:	Dated:

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EX-10.58

EXHIIT 10.58

FORM OF CHANGE IN CONTROL AGREEMENT

(Tier 2 – Senior Executive)

This Change in Control Agreement (the “Agreement”) is made and entered into as of  _____  (date) by and between Hill-Rom Holdings, Inc., an Indiana corporation (the “Company”), and  _____  (the “Executive”).

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

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

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

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

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

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

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

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

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

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

2. Rights and Benefits Upon Termination.

In the event of the termination of Executive’s employment under any of the circumstances set forth in Section 1 hereof (“Termination”), the Company shall provide or cause to be provided to Executive the following rights and benefits, which, with the exception of Section 2(d) below, will only be provided if Executive executes and delivers to the Company within 45 days of the Termination a Release in the form attached hereto as Exhibit A (“Release”) and such Release has not been revoked:

(a) a lump sum payment in cash in the amount of two times Executive’s Annual Base Salary (as defined below), payable (i) on the date which is six (6) months following Termination, if the Executive is a “specified employee” as defined in Code Section 409A(a)(2)(B)(i) of the Internal Revenue Code of 1986, as amended (“Code”) (Section 409A of the Code is hereunder referred to as “Section 409A”), and the Treasury Regulations promulgated thereunder, and such payment is not otherwise exempt from Section 409A, or (ii) on the next regularly scheduled payroll following the earlier to occur of fifteen (15) days from the Company’s receipt of an executed Release or the expiration of sixty (60) days after Executive’s Termination, if Executive is not such a “specified employee” (or such payment is exempt from Section 409A); 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 Executive’s Termination;

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(b) for the 24 months following Termination, continued health and medical insurance coverage for Executive and Executive’s dependents substantially comparable (with regard to both benefits and employee contributions) to the coverage provided by the Company immediately prior to the Change in Control for active employees of equivalent rank. From the end of such 24-month period until Executive attains Social Security Retirement Age, Executive shall have the right to purchase (at COBRA rates applicable to such coverage) continued coverage for himself and Executive’s dependents under one or more plans maintained by the Company for its active employees, to the extent Executive would have been eligible to purchase continued coverage under the plan in effect immediately prior to the Change in Control had Executive’s employment terminated 24 months following Termination. The payment of any health or medical claims for the health and medical coverage provided in this subparagraph (b) shall be made to the Executive as soon as administratively practicable after the Executive has provided the appropriate claim documentation, but in no event shall the payment for any such health or medical claim be paid later than the last day of the calendar year following the calendar year in which the expense was incurred. Notwithstanding anything herein to the contrary, to the extent required by Section 409A: (1) the amount of medical claims eligible for reimbursement or to be provided as an in-kind benefit under this Agreement during a calendar year may not affect the medical claims eligible for reimbursement or to be provided as an in-kind benefit in any other calendar year, and (2) the right to reimbursement or in-kind benefits under this Agreement shall not be subject to liquidation or exchange for another benefit;

(c) continuation for Executive, for a period of two years following Termination, of the Executive Life Insurance Bonus Plan (if any) provided for Executive by the Company immediately prior to the Change in Control and the group term life insurance program provided for Executive immediately prior to the Change in Control. The payment of any claim for death benefits provided under this subparagraph (c) shall be paid in accordance with the appropriate program, provided, however that if the death benefit is subject to Section 409A, then the death benefit shall be paid, as determined by the Company in its complete and absolute discretion, no later than the later to occur of (i) the last day of calendar year in which the death of the Executive occurs or (ii) the 90^th day following the Executive’s death;

(d) a lump sum payment in cash, payable within 30 days after Termination, equal to all accrued and unpaid vacation, reimbursable business expenses, and similar miscellaneous benefits as of the Termination, provided, however, that to the extent that any such miscellaneous benefits are subject to Section 409A, such benefits shall be paid in one lump sum (i) on the date which is six (6) months following Termination, if the Executive is a “specified employee” as defined in Section 409A(a)(2)(B)(i) of Code and the Treasury Regulations promulgated thereunder, and such payment is not otherwise exempt from Section 409A, or (ii) on the next regularly scheduled payroll following the earlier to occur of fifteen (15) days from the Company’s receipt of an executed Release or the expiration of sixty (60) days after Executive’s Termination, if Executive is not such a “specified employee” (or such payment is exempt from Section 409A); 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 Executive’s Termination;

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(e) a lump sum payment in cash equal to the amount of Short-Term Incentive Compensation which would be payable to Executive if the Company performance targets (at 100%) with respect to such incentive compensation in effect for the entire year in which the Termination occurred had been achieved, payable (i) on the date which is six (6) months following Termination, if the Executive is a “specified employee” as defined in Section 409A(a)(2)(B)(i) of Code and the Treasury Regulations promulgated thereunder, and such payment is not otherwise exempt from Section 409A, or (ii) on the next regularly scheduled payroll following the earlier to occur of fifteen (15) days from the Company’s receipt of an executed Release or the expiration of sixty (60) days after Executive’s Termination, if Executive is not such a “specified employee” (or such payment is exempt from Section 409A); 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 Executive’s Termination; and

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

(i) immediate vesting of all Bonus Stock Awards (as defined in the Company’s Stock Incentive Plan) awarded to Executive after the date of this Agreement;

(ii) immediate vesting of all outstanding Stock Options awarded to Executive after the date of this Agreement under the Company’s Stock Incentive Plan;

(iii) immediate vesting of all awards of Restricted Stock awarded to Executive after the date of this Agreement under any Stock Award Agreements (as defined in the Company’s Stock Incentive Plan) with Executive and Hill-Rom Holdings, Inc.;

(iv) immediate vesting of all awards of Deferred Stock (as defined in the Company’s Stock Incentive Plan) (also known as Restricted Stock Units) awarded to Executive after the date of this Agreement under the Company’s Stock Incentive Plan; and

(v) the exercise of any Stock Appreciation Right (as defined in the Company’s Stock Incentive Plan) within 60 days of a Change in Control as provided by section 7.2 of the Stock Incentive Plan.

Any awards of the type described in Paragraphs (i)-(v) above which were issued prior to the date of this Agreement shall be governed by the terms of the applicable award agreements at the time such awards were issued, and shall not be affected by this Agreement. Shares or cash payments in lieu of shares shall be paid at the time specified in the Stock Incentive Plan and the applicable award, subject to Executive’s delivery of a Release to the extent required by this Agreement or the applicable awards within 45 days of Executive’s Termination which Release has not been revoked.

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3. Payment Adjustment Due to Excise Tax.

In the event that any payment or benefits received or to be received by Executive pursuant to Section 2 of this Agreement would, but for this Section, be subject to the excise tax imposed by Internal Revenue Code Section 4999, or any comparable successor provisions, then such payment shall be either: (i) provided to Executive in full, or (ii) provided to Executive as to such lesser extent which would result in no portion of such payment being subject to such excise tax, whichever of the foregoing amounts, when taking into account applicable federal, state, local and foreign income and employment taxes, such excise tax, and any other applicable taxes, results in the receipt by Executive, on an after-tax basis, of the greatest amount of the payment, notwithstanding that all or some portion of such payment may be taxable under such excise tax. To the extent such payment needs to be reduced pursuant to the preceding sentence, reductions shall come from taxable amounts before non-taxable amounts and beginning with the payments otherwise scheduled to occur soonest. Executive agrees to cooperate fully with the Company to determine the benefits applicable under this Section.

4. Confidentiality; Non-Competition.

(a) Executive shall not at any time without the prior approval of the Company disclose to any person, firm, corporation or other entity any trade secret, confidential customer information, or other proprietary information not known within the industry or by the public generally regarding the business then being conducted by the Company, including, without limitation, financial information, marketing and sales information and business and strategic plans.

(b) Executive shall not at any time during the term of this Agreement and within three years following the termination of Executive’s employment with the Company, (i) solicit any persons who are employed by the Company to terminate their employment with the Company, and (ii) directly or indirectly (either individually or as an agent, employee, director, officer, stockholder, partner or individual proprietor, consultant or as an investor who has made advances of loan capital or contributions to equity capital), engage in any activity which Executive knows (or reasonably should have known) to be competitive with the business of the Company as then being carried on. Nothing in this Agreement, however, shall prevent Executive from owning, as an investment, up to two percent (2%) of the outstanding equity capital of any competitor of the Company, shares of which are regularly traded on a national securities exchange or in over-the-counter markets. The restrictions set forth in this Section 4 shall not apply in the event of a termination of Executive’s employment pursuant to Section 1.

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5. Section 409A Acknowledgement.

Executive acknowledges that Executive has been advised of Section 409A, which has significantly changed the taxation of nonqualified deferred compensation plans and arrangements. Under proposed and final regulations as of the date of this Agreement, Executive has been advised that Executive’s severance pay and other Termination benefits may be treated by the Internal Revenue Service as “nonqualified deferred compensation,” subject to Section 409A. In that event, several provisions in Section 409A may affect Executive’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” (as defined in Section 409A) on account of separation from service may not be made earlier than six (6) months after the effective date of 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% excise tax. As a result of the requirements imposed by the American Jobs Creation Act of 2004, Executive agrees that if Executive is a “specified employee” at the time of Executive’s termination and if severance payments are covered as “nonqualified deferred compensation” or otherwise not exempt, such severance pay (and other benefits to the extent applicable) due Executive at time of termination shall not be paid until a date at least six (6) months after Executive’s separation from service (as defined in Section 409A and applicable regulations). Executive acknowledges that, notwithstanding anything contained herein to the contrary, both Executive and the Company shall each be independently responsible for accessing their own risks and liabilities under Section 409A that may be associated with any payment made under the terms of this Agreement which may be deemed to trigger Section 409A. To the extent applicable, Executive understands and agrees that Executive shall have the responsibility for, and Executive agrees to pay, any and all appropriate income tax or other tax obligations for which Executive is individually responsible and/or related to receipt of any benefits provided in this Agreement. Executive 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 Executive or based on any alleged failure to withhold taxes or satisfy any claimed obligation. Executive understands and acknowledges that neither the Company, nor any of its employees, attorneys, or other representatives has provided or will provide Executive with any legal or financial advice concerning taxes or any other matter, and that Executive has not relied on any such advice in deciding whether to enter into this Agreement. 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 allowed under Section 409A. If any provision of this Agreement (or of any award of compensation) would cause Executive 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 Executive regarding such amendments or modifications prior to the effective date of any such change. Each amount to be paid or benefit to be provided to Executive pursuant to this Agreement shall be construed as a separate identified payment for purposes of Section 409A. To the extent required to avoid an accelerated or additional tax under Section 409A, amounts reimbursable to Executive under this Agreement shall be paid to Executive on or before the last day of the year following the year in which the expense was incurred, the amount of expenses eligible for reimbursement (and in-kind benefits provided to Executive) during any one year may not effect amounts reimbursable or provided in any subsequent year, and the right to reimbursement (and in-kind benefits provided to Executive) under this Agreement shall not be subject to liquidation or exchange for another benefit.

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

(a) “Annual Base Salary” means the annualized amount of Executive’s rate of base salary in effect immediately before the Change in Control or immediately before the date of Termination, whichever is greater.

(b) “Cause” shall have the same meaning set forth in any current employment agreement that the Executive has with the Company or any of its subsidiaries.

(c) A “Change in Control” shall be deemed to occur on:

(i) the date that any person, corporation, partnership, syndicate, trust, estate or other group acting with a view to the acquisition, holding or disposition of securities of the Company, becomes, directly or indirectly, the beneficial owner, as defined in Rule 13d-3 under the Securities Exchange Act of 1934 (“Beneficial Owner”), of securities of the Company representing 35% or more of the voting power of all securities of the Company having the right under ordinary circumstances to vote at an election of the Board (“Voting Securities”), other than by reason of (x) the acquisition of securities of the Company by the Company or any of its Subsidiaries or any employee benefit plan of the Company or any of its Subsidiaries, (y) the acquisition of Company securities directly from the Company, or (z) the acquisition of Company securities by one or more members of the Hillenbrand Family (which term shall mean descendants of John A. Hillenbrand and their spouses, trusts primarily for their benefit or entities controlled by them);

(ii) the consummation of a merger or consolidation of the Company with another corporation unless:

(A) the shareholders of the Company, immediately prior to the merger or consolidation, beneficially own, immediately after the merger or consolidation, shares entitling such shareholders to 50% or more of the voting power of all securities of the corporation surviving the merger or consolidation having the right under ordinary circumstances to vote at an election of directors in substantially the same proportions as their ownership, immediately prior to such merger or consolidation, of Voting Securities of the Company;

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(B) no person, corporation, partnership, syndicate, trust, estate or other group beneficially owns, directly or indirectly, 35% or more of the voting power of the outstanding voting securities of the corporation resulting from such merger or consolidation except to the extent that such ownership existed prior to such merger or consolidation; and

(C) the members of the Company’s Board, immediately prior to the merger or consolidation, constitute, immediately after the merger or consolidation, a majority of the board of directors of the corporation issuing cash or securities in the merger;

(iii) the date on which a majority of the members of the Board consist of persons other than Current Directors (which term shall mean any member of the Board on the date hereof and any member whose nomination or election has been approved by a majority of Current Directors then on the Board);

(iv) the consummation of a sale or other disposition of all or substantially all of the assets of the Company; or

(v) the date of approval by the shareholders of the Company of a plan of complete liquidation of the Company.

Notwithstanding the foregoing, for benefits payable upon or in relation to a Change in Control which are not otherwise exempt from Section 409A, any of the events listed above must be a change in the ownership or effective control of the Company or in the ownership of a substantial portion of the assets of the Company as described in Section 409A and any regulations or other applicable guidance promulgated thereunder.

(d) “Executive Life Insurance Bonus Plan” shall mean a program under which the Company pays the annual premium for a whole life insurance policy on the life of Executive.

(e) “Good Reason” means the occurrence, without Executive’s consent, of any of the following acts by the Company, or failures by the Company to act (each a “Good Reason Condition”), provided Executive provides written notice to the Company of the occurrence of the Good Reason Condition within ten (10) business days after the Executive has knowledge of it; the Company fails to notify Executive of the Company’s intended method of correction within thirty (30) business days after the Company receives Executive’s notice, or the Company fails to correct the Good Reason Condition within thirty (30) business days after such Executive notice; and the Executive resigns within ten (10) business days after the end of the 30-business-day period after Executive’s notice:

(i) a material diminution in Executive’s duties;

(ii) the failure to elect or reelect Executive as Vice President or other officer of the Company (unless such failure is related in any way to the Company’s decision to terminate Executive for cause);

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(iii) the failure of the Company to continue to provide Executive with office space, related facilities and support personnel (including, but not limited to, administrative and secretarial assistance) within the Company’s principal executive offices commensurate with Executive’s responsibilities to, and position within, the Company;

(iv) a material reduction by the Company in the amount of Executive’s base salary or the discontinuation or material reduction by the Company of Executive’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 Executive understanding that such reduction(s) shall be permissible if the change applies in a similar way to other peer level employees;

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

(vi) any other action or inaction by the Company that constitutes a material breach of this Agreement.

(f) “Section 409A” means Section 409A of the Internal Revenue Code.

(g) “Short-Term Incentive Compensation” means the Incentive Compensation payable under the Short-Term Incentive Compensation Program, or any successor or other short-term incentive plan or program.

(h) “Stock Incentive Plan” shall mean the Hill-Rom Holdings, Inc. Stock Incentive Plan maintained by the Company, as amended from time to time.

7. Notice.

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

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

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

9. Assignment.

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

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

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

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

12. Amendment. This Agreement may not be amended or modified otherwise than by a written agreement executed by the parties hereto or their respective successors and legal representatives.

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

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

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

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

17. Term of Agreement. The term of this Agreement shall be one (1) year commencing on the date hereof; provided however, that this Agreement shall be automatically renewed for successive one-year terms commencing on each anniversary of the date of this Agreement unless the Company shall have given notice of non-renewal to Executive at least 30 days prior to the scheduled termination date; and further provided that notwithstanding the foregoing, this Agreement shall not terminate (i) within three years after a Change in Control or (ii) during any period of time when a transaction which would result in a Change in Control is pending or under consideration by the Board. The termination of this Agreement shall not adversely affect any rights to which Executive has become entitled prior to such termination. In addition, Section 4(a) shall survive the termination of this Agreement.

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

HILL-ROM HOLDINGS, INC.
By:
	Title:  President and Chief Executive Officer
Executive

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CAUTION: READ BEFORE SIGNING

Exhibit A

SAMPLE SEPARATION AND RELEASE AGREEMENT

THIS SEPARATION and RELEASE AGREEMENT (“Agreement”) is entered into by and between [INSERT EXECUTIVE’S NAME] (“Executive”) and Hill-Rom Holdings, Inc. (together with its subsidiaries and affiliates, the “Company”). To wit, the Parties agree as follows:

1. Executive and the Company have entered into an [Amended] Change in Control Agreement, attached hereto as Exhibit [A], effective as of [INSERT DATE] (the “Change in Control Agreement”).

2. Executive’s employment by the Company has been terminated following a Change in Control as described in the Change in Control Agreement. Executive shall terminate employment effective [INSERT DATE OF TERMINATION] (Executive’s “Effective Termination Date”). Except as specifically provided by this Agreement, the Change in Control Agreement, or any other non-employment agreement that may exist between the Company and Executive, Executive agrees that the Company shall have no other obligations or liabilities to Executive following Executive’s Effective Termination Date and that Executive’s receipt of the benefits as outlined in the Change in Control Agreement shall constitute a complete settlement, satisfaction and waiver of any and all claims Executive may have against the Company.

3. Executive acknowledges that Executive 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, Executive has been advised that if Executive is a “key Executive” covered by Section 409A or any similar law, Executive’s 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 Executive’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, Executive agrees if Executive is a “specified employee” at the time of Executive’s 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 Executive’s Effective Termination Date from Company, as more fully explained in the Change in Control Agreement.

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4. In consideration of the promises contained in this Agreement and contingent upon Executive’s compliance with such promises, the Company agrees to provide Executive the benefits outlined in the Change in Control Agreement (the “Severance Benefits”).

5. The Company further agrees to provide Executive with limited out-placement counseling with a company of its choice provided that Executive participates in such counseling immediately following termination of employment. Notwithstanding anything in this Section 5 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.

6. In exchange for the foregoing Severance Benefits, [INSERT EMPLOYEE FULL NAME] on behalf of himself/herself, Executive’s heirs, representatives, agents and assigns hereby RELEASES, INDEMNIFIES, HOLDS HARMLESS, and FOREVER DISCHARGES (i) Hill-Rom Holdings, Inc., (ii) its subsidiary or affiliated entities, (iii) all of their present or former directors, officers, Executives, shareholders, and agents, as well as, (iv) all predecessors, successors and assigns thereof from any and all actions, charges, claims, demands, damages or liabilities of any kind or character whatsoever, known or unknown, which Executive now has or may have had through the effective date of this Agreement.

7. 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 Executive may have under the Civil Rights Acts of 1866 and 1964, as amended, 42 U.S.C. §§ 1981 and 2000(e) et seq.; the Civil Rights Act of 1991; the Age Discrimination in Employment Act, as amended, 29 U.S.C. §§ 621 et seq.; the Americans with Disabilities Act of 1990, as amended, 42 U.S.C §§ 12,101 et seq.; the Fair Labor Standards Act 29 U.S.C. §§ 201 et seq.; the Worker Adjustment and Retraining Notification Act, 29 U.S.C. §§ 2101, et seq.; the Sarbanes-Oxley Act of 2002, specifically including the Corporate and Criminal Fraud Accountability Act, 18 U.S.C. §1514,A et seq.; and any other federal, state or local law governing the Parties’ employment relationship; (ii) any claims on account of, arising out of or in any way connected with Executive’s employment with the Company or leaving of that employment; (iii) any claims alleged or which could have been alleged in any charge or complaint against the Company; (iv) any claims relating to the conduct of any Executive, officer, director, agent or other representative of the Company; (v) any claims of discrimination, harassment or retaliation on any basis; (vi) any claims arising from any legal restrictions on an employer’s right to separate its Executives; (vii) any claims for personal injury, compensatory or punitive damages or other forms of relief; and (viii) all other causes of action sounding in contract, tort or other common law basis, including (a) the breach of any alleged oral or written contract, (b) negligent or intentional misrepresentations, (c) wrongful discharge, (d) just cause dismissal, (e) defamation, (f) interference with contract or business relationship or (g) negligent or intentional infliction of emotional distress.

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8. Executive further agrees and covenants not to sue the Company or any entity or individual subject to the foregoing General Release with respect to any claims, demands, liabilities or obligations release by this Agreement provided, however, that nothing contained in this Agreement shall:

(a) prevent Executive 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 Executive’s 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]

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

10. [INCLUDE 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, Executive hereby acknowledges that:

(a) Executive has carefully read and fully understands all of the provisions of this Agreement and that Executive has entered into this Agreement knowingly and voluntarily;

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

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

(d) Executive has been offered at least [twenty-one (21)/forty-five (45)] days within which to review and consider this Agreement.

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11. [ADD THIS LANGUAGE IF THE 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 Executive, whichever is later. Executive may revoke this Agreement for any reason by providing written notice of such intent to the Company within seven (7) days after Executive has signed this Agreement, thereby forfeiting Executive’s right to receive any Severance Benefits provided hereunder and rendering this Agreement null and void in its entirety. This revocation must be sent to the Executive’s HR representative with a copy sent to the Hill-Rom Office of Chief Legal Officer and must be received by the end of the seventh day after the Executive signs this Agreement to be effective.

12. [ADD THIS LANGUAGE IF THE EMPLOYEE IS IN CALIFORNIA] Executive specifically acknowledges that, as a condition of this Agreement, Executive expressly releases all rights and claims that Executive knows about as well as those Executive may not know about. Executive 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 Executive’s favor at the time of executing the release which if known, must have materially affected Executive’s 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, Executive expressly acknowledges that this Agreement is intended to include and does in its effect, without limitation, include all claims which Executive does not know or suspect to exist in Executive’s favor at the time of signing this Agreement and that this Agreement expressly contemplates the extinguishment of all such claims.

13. The Parties agree that nothing contained herein shall purport to waive or otherwise affect any of Executive’s rights or claims that may arise after Executive signs this Agreement. It is further understood by the Parties that nothing in this Agreement shall affect any rights Executive may have under any Company sponsored Deferred Compensation Program, Executive Life Insurance Bonus Plan, Stock 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 Executive’s termination, such items to be governed exclusively by the terms of the applicable agreements or plan documents.

14. Similarly, notwithstanding any provision contained herein to the contrary, this Agreement shall not constitute a waiver or release or otherwise affect Executive’s rights with respect to any vested benefits, any rights Executive has to benefits which can not be waived by law, any coverage provided under any Directors and Officers (“D&O”) policy, any rights Executive may have under any indemnification agreement Executive has with the Company prior to the date hereof, any rights Executive 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.

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15. Except as provided in the Change in Control Agreement, Executive acknowledges that Executive will not be eligible to receive or vest in any additional stock options, stock awards or restricted stock units (“RSUs”) as of Executive’s Effective Termination Date. Failure to exercise any vested options within the applicable period as set for in the plan and/or grant will result in their forfeiture. Executive acknowledges that any stock options, stock awards or RSUs held for less than the required period shall be deemed forfeited as of the effective date of this Agreement. All terms and conditions of such stock options, stock awards or RSUs shall not be affected by this Agreement, shall remain in full force and effect, and shall govern the Parties’ rights with respect to such equity based awards.

16. [Option A] Executive acknowledges that Executive’s termination and the Severance Benefits offered hereunder were based on an individual determination and were not offered in conjunction with any group termination or group severance program and waives any claim to the contrary.

[Option B] Executive represents and agrees that Executive has been provided relevant cohort information based on the information available to the Company as of the date this Agreement was tendered to Executive. This information is attached hereto as Exhibit [B]. 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).

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

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18. Executive acknowledges that the Company as well as its subsidiary and affiliated companies (“Companies” herein) possess, and Executive 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”).

19. Executive agrees that all such Confidential Information is and shall remain the sole and exclusive property of the Company. Except as may be expressly authorized by the Company in writing, or as may be required by law after providing due notice thereof to the Company, Executive agrees not to disclose, or cause any other person or entity to disclose, any Confidential Information to any third party for as long thereafter as such information remains confidential (or as limited by applicable law) and agrees not to make use of any such Confidential Information for Executive’s own purposes or for the benefit of any other entity or person. The Parties acknowledge that Confidential Information shall not include any information that is otherwise made public through no fault of Executive or other wrong doing.

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

21. Executive hereby consents and authorizes the Company to deduct as an offset from the above-referenced severance payments the value of any Company property not returned or returned in a damaged condition as well as any monies paid by the Company on Executive’s behalf (e.g., payment of any outstanding JPMorgan Chase Corporate MasterCard bill) to the extent permitted by Section 409A.

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22. Executive agrees to cooperate with the Company in connection with any pending or future litigation, proceeding or other matter which has been or may be brought against or by the Company before any agency, court, or other tribunal and concerning or relating in any way to any matter falling within Executive’s knowledge or former area of responsibility. Executive agrees to immediately notify the Company, through the Office of the Chief Legal Officer, in the event Executive is contacted by any outside attorney (including paralegals or other affiliated parties) unless (i) the Company is represented by the attorney, (ii) Executive is represented by the attorney for the purpose of protecting Executive’s personal interests or (iii) the Company has been advised of and has approved such contact. Executive agrees to provide reasonable assistance and completely truthful testimony in such matters including, without limitation, facilitating and assisting in the preparation of any underlying defense, responding to discovery requests, preparing for and attending deposition(s) as well as appearing in court to provide truthful testimony. The Company agrees to reimburse Executive for all reasonable out of pocket expenses incurred at the request of the Company associated with such assistance and testimony.

23. Executive agrees not to make any written or oral statement that may defame, disparage or cast in a negative light so as to do harm to the personal or professional reputation of (a) the Company, (b) its Executives, officers, directors or trustees or (c) the services and/or products provided by the Company and its subsidiaries or affiliate entities. Similarly, in response to any written inquiry from any prospective employer or in connection with a written inquiry in connection with any future business relationship involving Executive, the Company agrees not to provide any information that may defame, disparage or cast in a negative light so as to do harm to the personal or professional reputation of Executive. The Parties acknowledge, however, that nothing contained herein shall be construed to prevent or prohibit the Company or the Executive from providing truthful information in response to any court order, discovery request, subpoena or other lawful request.

24. EXECUTIVE SPECIFICALLY AGREES AND UNDERSTANDS THAT THE EXISTENCE AND TERMS OF THIS AGREEMENT ARE STRICTLY CONFIDENTIAL AND THAT SUCH CONFIDENTIALITY IS A MATERIAL TERM OF THIS AGREEMENT. Accordingly, except as required by law or unless authorized to do so by the Company in writing, Executive agrees that Executive shall not communicate, display or otherwise reveal any of the contents of this Agreement to anyone other than Executive’s spouse, legal counsel or financial advisor provided, however, that they are first advised of the confidential nature of this Agreement and Executive obtains their agreement to be bound by the same. The Company agrees that Executive may respond to legitimate inquiries regarding the termination of Executive’s 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 Executive’s from further discussing the specifics of Executive’s separation. Nothing contained herein shall be construed to prevent Executive from discussing or otherwise advising subsequent employers of the existence of any obligations as set forth in Executive’s 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.

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25. In the event that Executive breaches or threatens to breach any provision of this Agreement, Executive agrees that the Company shall be entitled to seek any and all equitable and legal relief provided by law, specifically including immediate and permanent injunctive relief. Executive hereby waives any claim that the Company has an adequate remedy at law. In addition, and to the extent not prohibited by law, Executive agrees that the Company shall be entitled to discontinue providing any additional Severance Benefits upon such breach or threatened breach as well as an award of all costs and attorneys’ fees incurred by the Company in any successful effort to enforce the terms of this Agreement. Executive agrees that the foregoing relief shall not be construed to limit or otherwise restrict the Company’s ability to pursue any other remedy provided by law, including the recovery of any actual, compensatory or punitive damages. Moreover, if Executive pursues any claims against the Company subject to the foregoing General Release, or breaches the above confidentiality provision, Executive agrees to immediately reimburse the Company for the value of all benefits received under this Agreement to the fullest extent permitted by law.

26. Similarly, in the event that the Company breaches or threatens to breach any provision of this Agreement, Executive shall be entitled to seek any and all equitable or other available relief provided by law, specifically including immediate and permanent injunctive relief. In the event Executive is required to file suit to enforce the terms of this Agreement, the Company agrees that Executive shall be entitled to an award of all costs and attorneys’ fees incurred by Executive’s in any wholly successful effort (i.e. entry of a judgment in Executive’s favor) to enforce the terms of this Agreement. In the event Executive is wholly unsuccessful, the Company shall be entitled to an award of its costs and attorneys’ fees.

27. Both Parties acknowledge that this Agreement is entered into solely for the purpose of terminating Executive’s employment relationship with the Company on an amicable basis and shall not be construed as an admission of liability or wrongdoing by the Company or Executive, both Parties having expressly denied any such liability or wrongdoing.

28. 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.

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29. 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.

30. 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.

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

32. Executive represents and acknowledges that in signing this Agreement Executive does not rely, and has not relied, upon any representation or statement made by the Company or by any of the Company’s Executives, officers, agents, stockholders, directors or attorneys with regard to the subject matter, basis or effect of this Agreement other than those specifically contained herein.

33. This Agreement represents the entire agreement between the Parties concerning the subject matter hereof, shall supersede any and all prior agreements which may otherwise exist between them concerning the subject matter hereof (specifically excluding, however, the post-termination obligations contained in an Executive’s Employment Agreement, any obligations contained in an existing and valid Indemnity Agreement of Change in Control, or any obligation contained in any other legally-binding document), and shall not be altered, amended, modified or otherwise changed except by a writing executed by both Parties.

PLEASE READ CAREFULLY. THIS SEPARATION AND RELEASE
AGREEMENT INCLUDES A COMPLETE RELEASE OF ALL
KNOWN AND UNKNOWN CLAIMS.

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

[EXECUTIVE]	HILL-ROM HOLDINGS, INC.
Signed:	By:
Printed:	Title:
Dated:	Dated:

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Exhibit B
ILLUSTRATIVE COMPETITOR LIST

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

•    Amico Corporation	•    Anodyne Medical Device, Inc.
•    APEX Medical Corp.	•    Apria Healthcare Inc.
•    Aramark Corporation	•    Ascom (Ascom US, Inc.)
•    Barton Medical Corporation	•    B.G. Industries, Inc.
•    CareMed Supply, Inc.	•    Comfortex, Inc.
•    Corona Medical SAS	•    Custom Medical Solutions
•    Dukane Communication Systems, a division of Edwards Systems Technology, Inc.	•    Encompass Group, LLC
•    Fitzsimmons Home Medical Equipment, Inc.	•    Freedom Medical, Inc.
•    Gaymar Holding Company, LLC (Gaymar Industries, Inc.)	•    GF Health Products, Inc. (Graham Field)
•    Getinge Group (Arjo; Getinge; Maquet; Pegasus; Huntleigh Technology Plc (Huntleigh Healthcare, LLC))	•    Handicare AS (Romedic, Inc.)
•    Human Care HC AB	•    Horcher GmbH
•    Industrie Guido Malvestio S.P.A.	•    Intego Systems, Inc. (formerly known as Wescom Products, Inc.)
•    Invacare Corporation	•    Joerns Healthcare, Inc.
•    Joh. Stiegelmeyer & Co., GmbH (Stiegelmeyer)	•    Kinetic Concepts, Inc. (KCI)
•    Linak Group	•    Linet (Linet France, Linet Far East)
•    MedaSTAT, LLC	•    Medical Specialties Distributors, LLC
•    Medline Industries, Inc.	•    Merivaara Corporation
•    MIZUOSI	•    Modular Service Company

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•    Molift	•    Nemschoff Chairs, Inc.
•    Paramount Bed Company, Ltd.	•    Nurture by Steelcase, Inc.
•    Pardo	•    Pegasus Airwave, Inc.
•    Premise Corporation	•    Prism Medical Ltd (Waverly Glen)
•    Radianse, Inc.	•    Rauland-Borg Corporation
•    Recovercare, LLC (Stenbar, T.H.E. Medical)	•    Sentech Medical Systems, Inc.
•    SimplexGrinnell, LP	•    SIZEwise Rentals, LLC
•    Span America Medical Systems, Inc.	•    Statcom (Jackson Healthcare Solutions)
•    Stryker Corporation	•    Sunrise Medical (Ted Hoyer and Company)
•    Tempur-Pedic Medical, Inc.	•    Tele-Tracking Technologies, Inc.
•    Universal Hospital Services, Inc.	•    V. Guldmann A/S
•    Voelker AG	•    West-Com Nurse Call Systems, 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.

(Revised list April 2010)

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EX-10.59

EXHIBIT 10.59

AMENDED CHANGE IN CONTROL AGREEMENT

This Change in Control Agreement (the “Agreement”) is made and entered into on September, 30, 2010, by and between Hill-Rom Holdings, Inc., an Indiana corporation (the “Company”), and John J. Greisch (the “Executive”).

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

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

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

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

WHEREAS, the Company and Executive have previously entered into a Change in Control Agreement and now consider it desirable to update the prior agreement in consideration for the benefits provided herein;

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

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

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

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

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

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

2. Rights and Benefits Upon Termination.

In the event of the termination of Executive’s employment under any of the circumstances set forth in Section 1 hereof (“Termination”), the Company shall provide or cause to be provided to Executive the following rights and benefits, which, with the exception of Section 2(d) below, will only be provided if Executive executes and delivers to the Company within 45 days of the Termination a Release in the form attached hereto as Exhibit A (“Release”) and such Release has not been revoked:

(a) an amount equal to three times Executive’s Annual Base Salary (as defined below) payable as follows:

(i) if the Termination occurs within two years following the Change in Control, in a lump sum payment (1) on the date which is six (6) months following Termination, if the Executive is a “specified employee” as defined in Code Section 409A(a)(2)(B)(i) of the Internal Revenue Code of 1986, as amended (“Code”) (Section 409A of the Code is hereunder referred to as “Section 409A”) and the Treasury Regulations promulgated thereunder and such payment is not otherwise exempt from Section 409A, or (2) on the next regularly scheduled payroll following the earlier to occur of fifteen (15) days from the Company’s receipt of an executed Release or the expiration of sixty (60) days after Executive’s Termination, if Executive is not such a “specified employee” (or such payment is exempt from Section 409A); 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 (1) shall only begin on the next regularly scheduled payroll following the expiration of sixty (60) days after the Executive’s Termination; or

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(ii) if the Termination occurs more than two years following the Change in Control, the amount determined under this Section 2(a) shall be paid over a 24-month period pursuant to applicable provisions of Executive’s Employment Agreement.

(b) for the 36 months following Termination, continued health and medical insurance coverage for Executive and his dependents substantially comparable (with regard to both benefits and employee contributions) to the coverage provided by the Company immediately prior to the Change in Control for active employees of equivalent rank. From the end of such 36-month period until Executive attains Social Security Retirement Age, Executive shall have the right to purchase (at COBRA rates applicable to such coverage) continued coverage for himself and his dependents under one or more plans maintained by the Company for its active employees, to the extent Executive would have been eligible to purchase continued coverage under the plan in effect immediately prior to the Change in Control had his employment terminated 36 months following Termination. The payment of any health or medical claims for the health and medical coverage provided in this subparagraph (b) shall be made to the Executive as soon as administratively practicable after the Executive has provided the appropriate claim documentation, but in no event shall the payment for any such health or medical claim be paid later than the last day of the calendar year following the calendar year in which the expense was incurred. Notwithstanding anything herein to the contrary, to the extent required by Section 409A: (1) the amount of medical claims eligible for reimbursement or to be provided as an in-kind benefit under this Agreement during a calendar year may not affect the medical claims eligible for reimbursement or to be provided as an in-kind benefit in any other calendar year, and (2) the right to reimbursement or in-kind benefits under this Agreement shall not be subject to liquidation or exchange for another benefit;

(c) continuation for Executive, for a period of three years following Termination, of the Executive Life Insurance Bonus Plan (if any) provided for Executive by the Company immediately prior to the Change in Control and the group term life insurance program provided for executive immediately prior to the Change in Control. The payment of any claim for death benefits provided under this subparagraph (c) shall be paid in accordance with the appropriate program, provided, however that if the death benefit is subject to Section 409A, then the death benefit shall be paid, as determined by the Company in its complete and absolute discretion, no later than the later to occur of (i) the last day of calendar year in which the death of the Executive occurs or (ii) the 90^th day following the Executive’s death;

(d) a lump sum payment in cash, payable within 30 days after Termination, equal to all accrued and unpaid vacation, reimbursable business expenses, and similar miscellaneous benefits as of the Termination, provided, however, that to the extent that any such miscellaneous benefits are subject to Section 409A, such benefits shall be paid in one lump sum (i) on the date which is six months following Termination, if the Executive is a “specified employee” as defined in Code Section 409A(a)(2)(B)(i) and such payment is not otherwise exempt from Section 409A or (ii) on the next regularly scheduled payroll following the earlier to occur of fifteen (15) days from the Company’s receipt of an executed Release or the expiration of sixty (60) days after Executive’s Termination, if Executive is not such a “specified employee;” 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 Executive’s Termination; and

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(e) a lump sum payment in cash for amounts accrued as of Termination under the Supplemental Executive Retirement Plan for the payment of benefits under such plan and an additional amount equal to three (3) times the amounts accrued for the last 12 months immediately prior to Termination in any of the Defined Contribution, Matching Account and/or Supplemental Contribution Account under the Supplemental Executive Retirement Plan, payable (i) on the date which is six (6) months following Termination, if the Executive is a “specified employee“ as defined in Code Section 409A(a)(2)(B)(i) or (ii) on the next regularly scheduled payroll following the earlier to occur of fifteen (15) days from the Company’s receipt of an executed Release or the expiration of sixty (60) days after Executive’s Termination, if Executive is not such a “specified employee” (or such payment is exempt from Section 409A); 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 Executive’s Termination.

(f) a lump sum payment in cash equal to the amount of Short-Term Incentive Compensation which would be payable to Executive if the Company performance targets (at 100%) with respect to such incentive compensation in effect for the entire year in which the Termination occurred had been achieved, payable with 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 Executive’s Termination and shall be paid on the Company’s regularly scheduled payroll dates thereafter, 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 benefits shall only begin on the next regularly scheduled payroll following the expiration of sixty (60) days after Executive’s Termination; and

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

(i) immediate vesting of all Bonus Stock Awards (as defined in the Company’s Stock Incentive Plan) awarded to Executive after the date of this Agreement;

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(ii) immediate vesting of all outstanding Stock Options awarded to Executive after the date of this Agreement under the Company’s Stock Incentive Plan;

(iii) immediate vesting of all awards of Restricted Stock awarded to Executive after the date of this Agreement under any Stock Award Agreements (as defined in the Company’s Stock Incentive Plan) with Executive and Hill-Rom Holdings, Inc.;

(iv) immediate vesting of all awards of Deferred Stock (as defined in the Company’s Stock Incentive Plan) (also known as Restricted Stock Units) awarded to Executive after the date of this Agreement under the Company’s Stock Incentive Plan; and

(v) the exercise of any Stock Appreciation Right (as defined in the Company’s Stock Incentive Plan) within 60 days of a Change in Control as provided by section 7.2 of the Stock Incentive Plan.

Any awards of the type described in Paragraphs (i)-(v) above which were issued prior to the date of this Agreement shall be governed by the terms of the applicable award agreements at the time such awards were issued, and shall not be affected by this Agreement. Shares or cash payments in lieu of shares shall be paid at the time specified in the Stock Incentive Plan and the applicable award, subject to Executive’s delivery of a Release to the extent required by this Agreement or the applicable awards within 45 days of Executive’s Termination which Release has not been revoked.

3. Payment Adjustment Due to Excise Tax.

In the event that any payment or benefits received or to be received by Executive pursuant to Section 2 of this Agreement would, but for this paragraph, be subject to the excise tax imposed by Internal Revenue Code Section 4999, or any comparable successor provisions, then such payment shall be either: (i) provided to Executive in full, or (ii) provided to Executive as to such lesser extent which would result in no portion of such payment being subject to such excise tax, whichever of the foregoing amounts, when taking into account applicable federal, state, local and foreign income and employment taxes, such excise tax, and any other applicable taxes, results in the receipt by Executive, on an after-tax basis, of the greatest amount of the payment, notwithstanding that all or some portion of such payment may be taxable under such excise tax. To the extent such payment needs to be reduced pursuant to the preceding sentence, reductions shall come from taxable amounts before non-taxable amounts and beginning with the payments otherwise scheduled to occur soonest. Executive agrees to cooperate fully with the Company to determine the benefits applicable under this paragraph.

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4. Confidentiality; Non-Competition.

(a) Executive shall not at any time without the prior approval of the Company disclose to any person, firm, corporation or other entity any trade secret, confidential customer information, or other proprietary information not known within the industry or by the public generally regarding the business then being conducted by the Company, including, without limitation, financial information, marketing and sales information and business and strategic plans.

(b) Executive shall not at any time during the term of this Agreement and within three years following the termination of his employment with the Company, (i) solicit any persons who are employed by the Company to terminate their employment with the Company, and (ii) directly or indirectly (either individually or as an agent, employee, director, officer, stockholder, partner or individual proprietor, consultant or as an investor who has made advances of loan capital or contributions to equity capital), engage in any activity which he knows (or reasonably should have known) to be competitive with the business of the Company as then being carried on. Nothing in this Agreement, however, shall prevent Executive from owning, as an investment, up to two percent (2%) of the outstanding equity capital of any competitor of the Company, shares of which are regularly traded on a national securities exchange or in over-the-counter markets. The restrictions set forth in this Section 4 shall not apply in the event of a termination of Executive’s employment pursuant to Section 1.

5. Section 409A Acknowledgement.

Executive acknowledges that he has been advised of Section 409A, which has significantly changed the taxation of nonqualified deferred compensation plans and arrangements. Under proposed and final regulations as of the date of this Agreement, Executive has been advised that Executive’s severance pay and other Termination benefits may be treated by the Internal Revenue Service as “nonqualified deferred compensation,” subject to Section 409A. In that event, several provisions in Section 409A may affect Executive’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” (as defined in Section 409A) on account of separation from service may not be made earlier than six (6) months after 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% excise tax. As a result of the requirements imposed by the American Jobs Creation Act of 2004, Executive agrees that if Executive is a “specified employee” at the time of Executive’s termination and if severance payments are covered as “nonqualified deferred compensation” or otherwise not exempt, such severance pay (and other benefits to the extent applicable) due Executive at time of termination shall not be paid until a date at least six (6) months after Executive’s separation from service (as defined in Section 409A and applicable regulations issued thereunder). Executive acknowledges that, notwithstanding anything contained herein to the contrary, both Executive and the Company shall each be independently responsible for accessing their own risks and liabilities under Section 409A that may be associated with any payment made under the terms of this Agreement which may be deemed to trigger Section 409A. To the extent applicable, Executive understands and agrees that Executive shall have the responsibility for, and Executive agrees to pay, any and all appropriate income tax or other tax obligations for which Executive is individually responsible and/or related to receipt of any benefits provided in this Agreement. Executive agrees to fully indemnify and hold the Company harmless for any taxes, penalties, interest, cost or attorneys’

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fee assessed against or incurred by the Company on account of such benefits having been provided to Executive or based on any alleged failure to withhold taxes or satisfy any claimed obligation. Executive understands and acknowledges that neither the Company, nor any of its employees, attorneys, or other representatives has provided or will provide Executive with any legal or financial advice concerning taxes or any other matter, and that Executive has not relied on any such advice in deciding whether to enter into this Agreement. 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 allowed under Section 409A. If any provision of this Agreement (or of any award of compensation) would cause Executive 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 Executive regarding such amendments or modifications prior to the effective date of any such change. Each amount to be paid or benefit to be provided to Executive pursuant to this Agreement shall be construed as a separate identified payment for purposes of Section 409A. To the extent required to avoid an accelerated or additional tax under Section 409A, amounts reimbursable to Employee under this Agreement shall be paid to Employee on or before the last day of the year following the year in which the expense was incurred, the amount of expenses eligible for reimbursement (and in-kind benefits provided to Employee) during any one year may not effect amounts reimbursable or provided in any subsequent year, and the right to reimbursement (and in-kind benefits provided to Employee) under this Agreement shall not be subject to liquidation or exchange for another benefit.

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

(a) “Annual Base Salary” means the annualized amount of Executive’s rate of base salary in effect immediately before the Change in Control or immediately before the date of Termination, whichever is greater.

(b) “Cause” shall have the same meaning set forth in any current employment agreement that the Executive has with the Company or any of its subsidiaries.

(c) A “Change in Control” shall be deemed to occur on:

(i) the date that any person, corporation, partnership, syndicate, trust, estate or other group acting with a view to the acquisition, holding or disposition of securities of the Company, becomes, directly or indirectly, the beneficial owner, as defined in Rule 13d-3 under the Securities Exchange Act of 1934 (“Beneficial Owner”), of securities of the Company representing 35% or more of the voting power of all securities of the Company having the right under ordinary circumstances to vote at an election of the Board (“Voting Securities”), other than by reason of (x) the acquisition of securities of the Company by the Company or any of its Subsidiaries or any employee benefit plan of the Company or any of its Subsidiaries, (y) the acquisition of securities of the Company directly from the Company, or (z) the acquisition of Company securities by one or more members of the Hillenbrand Family (which term shall mean descendants of John A. Hillenbrand and their spouses, trusts primarily for their benefit or entities controlled by them);

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(ii) the consummation of a merger or consolidation of the Company with another corporation unless

(A) the shareholders of the Company, immediately prior to the merger or consolidation, beneficially own, immediately after the merger or consolidation, shares entitling such shareholders to 50% or more of the voting power of all securities of the corporation surviving the merger or consolidation having the right under ordinary circumstances to vote at an election of directors in substantially the same proportions as their ownership, immediately prior to such merger or consolidation, of Voting Securities of the Company;

(B) no person, corporation, partnership, syndicate, trust, estate or other group beneficially owns, directly or indirectly, 35% or more of the voting power of the outstanding voting securities of the corporation resulting from such merger or consolidation except to the extent that such ownership existed prior to such merger or consolidation; and

(C) the members of the Company’s Board, immediately prior to the merger or consolidation, constitute, immediately after the merger or consolidation, a majority of the board of directors of the corporation issuing cash or securities in the merger;

(iii) the date on which a majority of the members of the Board consist of persons other than Current Directors (which term shall mean any member of the Board on the date hereof and any member whose nomination or election has been approved by a majority of Current Directors then on the Board);

(iv) the consummation of a sale or other disposition of all or substantially all of the assets of the Company; or

(v) the date of approval by the shareholders of the Company of a plan of complete liquidation of the Company.

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Notwithstanding the foregoing, for benefits payable upon or in relation to a Change in Control which are not otherwise exempt from Section 409A, any of the events listed above must be a change in the ownership or effective control of the Company or in the ownership of a substantial portion of the assets of the Company as described in Section 409A and any regulations or other applicable guidance promulgated thereunder.

(d) “Good Reason” shall have the same meaning set forth in any current employment agreement that the Executive has with the Company or any of its subsidiaries.

(e) “Normal Retirement Benefit” shall have the meaning set forth in the Pension Plan.

(f) “Pension Plan” means the Hill-Rom Holdings, Inc. Pension Plan as amended from time to time.

(g) “Section 409A” means Section 409A of the Internal Revenue Code.

(h) “Short-Term Incentive Compensation” means the Incentive Compensation payable under the Short-Term Incentive Compensation Program, or any successor or other short-term incentive plan or program.

(i) “Early Retirement Benefits” early retirement benefits shall have the meaning set forth in the Pension Plan which defines the age at which full, unreduced benefits are available without any early retirement reduction being applied.

(j) “Executive Life Insurance Bonus Program” shall mean a program under which the Company pays the annual premium for a whole life insurance policy on the life of Executive.

(k) “Supplemental Executive Retirement Plan” shall mean the Hill-Rom Holdings, Inc. Supplemental Executive Retirement Plan, as amended from time to time.

(l) “Defined Contribution Accounts”, “Matching Accounts”, and “Supplemental Contribution Accounts” shall have the meanings set forth in the Company’s Supplemental Executive Retirement Program (“SERP”).

(m) “Stock Incentive Plan” shall mean the Hill-Rom Holdings, Inc. Stock Incentive Plan maintained by the Company, as amended from time to time.

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7. Notice.

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

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

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

9. Assignment.

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

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

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

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

12. Amendment. This Agreement may not be amended or modified otherwise than by a written agreement executed by the parties hereto or their respective successors and legal representatives.

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

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

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

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

17. Term of Agreement. The term of this Agreement shall be one (1) year commencing on the date hereof; provided however, that this Agreement shall be automatically renewed for successive one-year terms commencing on each anniversary of the date of this Agreement unless the Company shall have given notice of non-renewal to Executive at least 30 days prior to the scheduled termination date; and further provided that notwithstanding the foregoing, this Agreement shall not terminate (i) within three years after a Change in Control or (ii) during any period of time when a transaction which would result in a Change in Control is pending or under consideration by the Board. The termination of this Agreement shall not adversely affect any rights to which Executive has become entitled prior to such termination. In addition, Section 5(a) shall survive the termination of this Agreement.

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

HILL-ROM HOLDINGS, INC.
By:	/s/ Susan Lichtenstein
	Title:	Susan Lichtenstein
		Senior Vice President, Corporate Affairs and Chief Legal Officer
/s/ John J. Greisch
Executive

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CAUTION: READ BEFORE SIGNING

Exhibit A

SAMPLE SEPARATION AND RELEASE AGREEMENT

THIS SEPARATION and RELEASE AGREEMENT (“Agreement”) is entered into by and between John J. Greisch (“Executive”) and Hill-Rom Holdings, Inc. (together with its subsidiaries and affiliates, the “Company”). To wit, the Parties agree as follows:

1. Executive and the Company have entered into an Amended Change in Control Agreement, attached hereto, effective as of September 30, 2010 (the “Change in Control Agreement”).

2. Executive’s employment by the Company has been terminated following a Change in Control as described in the Change in Control Agreement. Executive shall terminate employment effective [INSERT DATE OF TERMINATION] (Executive’s “Effective Termination Date”). Except as specifically provided by this Agreement, the Change in Control Agreement, or any other non-employment agreement that may exist between the Company and Executive, Executive agrees that the Company shall have no other obligations or liabilities to Executive following Executive’s Effective Termination Date and that Executive’s receipt of the benefits as outlined in the Change in Control Agreement shall constitute a complete settlement, satisfaction and waiver of any and all claims Executive may have against the Company.

3. Executive acknowledges that Executive 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, Executive has been advised that if Executive is a “key Executive” covered by Section 409A or any similar law, Executive’s 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 Executive’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, Executive agrees if Executive is a “specified employee” at the time of Executive’s 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 Executive’s Effective Termination Date from Company, as more fully explained in the Change in Control Agreement.

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4. In consideration of the promises contained in this Agreement and contingent upon Executive’s compliance with such promises, the Company agrees to provide Executive the benefits outlined in the Change in Control Agreement (the “Severance Benefits”).

5. The Company further agrees to provide Executive with limited out-placement counseling with a company of its choice provided that Executive participates in such counseling immediately following termination of employment. Notwithstanding anything in this Section 5 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.

6. In exchange for the foregoing Severance Benefits, John J. Greisch on behalf of himself, Executive’s heirs, representatives, agents and assigns hereby RELEASES, INDEMNIFIES, HOLDS HARMLESS, and FOREVER DISCHARGES (i) Hill-Rom Holdings, Inc., (ii) its subsidiary or affiliated entities, (iii) all of their present or former directors, officers, Executives, shareholders, and agents, as well as, (iv) all predecessors, successors and assigns thereof from any and all actions, charges, claims, demands, damages or liabilities of any kind or character whatsoever, known or unknown, which Executive now has or may have had through the effective date of this Agreement.

7. 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 Executive may have under the Civil Rights Acts of 1866 and 1964, as amended, 42 U.S.C. §§ 1981 and 2000(e) et seq.; the Civil Rights Act of 1991; the Age Discrimination in Employment Act, as amended, 29 U.S.C. §§ 621 et seq.; the Americans with Disabilities Act of 1990, as amended, 42 U.S.C §§ 12,101 et seq.; the Fair Labor Standards Act 29 U.S.C. §§ 201 et seq.; the Worker Adjustment and Retraining Notification Act, 29 U.S.C. §§ 2101, et seq.; the Sarbanes-Oxley Act of 2002, specifically including the Corporate and Criminal Fraud Accountability Act, 18 U.S.C. §1514,A et seq.; and any other federal, state or local law governing the Parties’ employment relationship; (ii) any claims on account of, arising out of or in any way connected with Executive’s employment with the Company or leaving of that employment; (iii) any claims alleged or which could have been alleged in any charge or complaint against the Company; (iv) any claims relating to the conduct of any Executive, officer, director, agent or other representative of the Company; (v) any claims of discrimination, harassment or retaliation on any basis; (vi) any claims arising from any legal restrictions on an employer’s right to separate its Executives; (vii) any claims for personal injury, compensatory or punitive damages or other forms of relief; and (viii) all other causes of action sounding in contract, tort or other common law basis, including (a) the breach of any alleged oral or written contract, (b) negligent or intentional misrepresentations, (c) wrongful discharge, (d) just cause dismissal, (e) defamation, (f) interference with contract or business relationship or (g) negligent or intentional infliction of emotional distress.

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8. Executive further agrees and covenants not to sue the Company or any entity or individual subject to the foregoing General Release with respect to any claims, demands, liabilities or obligations release by this Agreement provided, however, that nothing contained in this Agreement shall:

(a) prevent Executive 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 Executive’s release of any age claims in this Agreement in court or before the Equal Employment Opportunity Commission.

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

10. The Parties acknowledge that it is their mutual and specific intent that the above waiver fully complies with the requirements of the Older Workers Benefit Protection Act (29 U.S.C. § 626) and any similar law governing release of claims. Accordingly, Executive hereby acknowledges that:

(a) Executive has carefully read and fully understands all of the provisions of this Agreement and that Executive has entered into this Agreement knowingly and voluntarily;

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

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

(d) Executive has been offered at least [twenty-one (21)/forty-five (45)] days within which to review and consider this Agreement.

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11. The Parties agree that this Agreement shall not become effective and enforceable until the date this Agreement is signed by both Parties or seven (7) calendar days after its execution by Executive, whichever is later. Executive may revoke this Agreement for any reason by providing written notice of such intent to the Company within seven (7) days after Executive has signed this Agreement, thereby forfeiting Executive’s right to receive any Severance Benefits provided hereunder and rendering this Agreement null and void in its entirety. This revocation must be sent to the Executive’s HR representative with a copy sent to the Hill-Rom Office of Chief Legal Officer and must be received by the end of the seventh day after the Executive signs this Agreement to be effective.

12. The Parties agree that nothing contained herein shall purport to waive or otherwise affect any of Executive’s rights or claims that may arise after Executive signs this Agreement. It is further understood by the Parties that nothing in this Agreement shall affect any rights Executive may have under any Company sponsored Deferred Compensation Program, Executive Life Insurance Bonus Plan, Stock 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 Executive’s termination, such items to be governed exclusively by the terms of the applicable agreements or plan documents.

13. Similarly, notwithstanding any provision contained herein to the contrary, this Agreement shall not constitute a waiver or release or otherwise affect Executive’s rights with respect to any vested benefits, any rights Executive has to benefits which can not be waived by law, any coverage provided under any Directors and Officers (“D&O”) policy, any rights Executive may have under any indemnification agreement Executive has with the Company prior to the date hereof, any rights Executive 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.

14. Except as provided in the Change in Control Agreement, Executive acknowledges that Executive will not be eligible to receive or vest in any additional stock options, stock awards or restricted stock units (“RSUs”) as of Executive’s Effective Termination Date. Failure to exercise any vested options within the applicable period as set for in the plan and/or grant will result in their forfeiture. Executive acknowledges that any stock options, stock awards or RSUs held for less than the required period shall be deemed forfeited as of the effective date of this Agreement. All terms and conditions of such stock options, stock awards or RSUs shall not be affected by this Agreement, shall remain in full force and effect, and shall govern the Parties’ rights with respect to such equity based awards.

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15. Executive acknowledges that Executive’s 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.

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

17. Executive acknowledges that the Company as well as its subsidiary and affiliated companies (“Companies” herein) possess, and Executive 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”).

18. Executive agrees that all such Confidential Information is and shall remain the sole and exclusive property of the Company. Except as may be expressly authorized by the Company in writing, or as may be required by law after providing due notice thereof to the Company, Executive agrees not to disclose, or cause any other person or entity to disclose, any Confidential Information to any third party for as long thereafter as such information remains confidential (or as limited by applicable law) and agrees not to make use of any such Confidential Information for Executive’s own purposes or for the benefit of any other entity or person. The Parties acknowledge that Confidential Information shall not include any information that is otherwise made public through no fault of Executive or other wrong doing.

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

20. Executive hereby consents and authorizes the Company to deduct as an offset from the above-referenced severance payments the value of any Company property not returned or returned in a damaged condition as well as any monies paid by the Company on Executive’s behalf (e.g., payment of any outstanding JPMorgan Chase Corporate MasterCard bill) to the extent permitted by Section 409A.

21. Executive agrees to cooperate with the Company in connection with any pending or future litigation, proceeding or other matter which has been or may be brought against or by the Company before any agency, court, or other tribunal and concerning or relating in any way to any matter falling within Executive’s knowledge or former area of responsibility. Executive agrees to immediately notify the Company, through the Office of the Chief Legal Officer, in the event Executive is contacted by any outside attorney (including paralegals or other affiliated parties) unless (i) the Company is represented by the attorney, (ii) Executive is represented by the attorney for the purpose of protecting Executive’s personal interests or (iii) the Company has been advised of and has approved such contact. Executive agrees to provide reasonable assistance and completely truthful testimony in such matters including, without limitation, facilitating and assisting in the preparation of any underlying defense, responding to discovery requests, preparing for and attending deposition(s) as well as appearing in court to provide truthful testimony. The Company agrees to reimburse Executive for all reasonable out of pocket expenses incurred at the request of the Company associated with such assistance and testimony.

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22. Executive agrees not to make any written or oral statement that may defame, disparage or cast in a negative light so as to do harm to the personal or professional reputation of (a) the Company, (b) its Executives, officers, directors or trustees or (c) the services and/or products provided by the Company and its subsidiaries or affiliate entities. Similarly, in response to any written inquiry from any prospective employer or in connection with a written inquiry in connection with any future business relationship involving Executive, the Company agrees not to provide any information that may defame, disparage or cast in a negative light so as to do harm to the personal or professional reputation of Executive. The Parties acknowledge, however, that nothing contained herein shall be construed to prevent or prohibit the Company or the Executive from providing truthful information in response to any court order, discovery request, subpoena or other lawful request.

23. EXECUTIVE SPECIFICALLY AGREES AND UNDERSTANDS THAT THE EXISTENCE AND TERMS OF THIS AGREEMENT ARE STRICTLY CONFIDENTIAL AND THAT SUCH CONFIDENTIALITY IS A MATERIAL TERM OF THIS AGREEMENT. Accordingly, except as required by law or unless authorized to do so by the Company in writing, Executive agrees that Executive shall not communicate, display or otherwise reveal any of the contents of this Agreement to anyone other than Executive’s spouse, legal counsel or financial advisor provided, however, that they are first advised of the confidential nature of this Agreement and Executive obtains their agreement to be bound by the same. The Company agrees that Executive may respond to legitimate inquiries regarding the termination of Executive’s 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 Executive’s from further discussing the specifics of Executive’s separation. Nothing contained herein shall be construed to prevent Executive from discussing or otherwise advising subsequent employers of the existence of any obligations as set forth in Executive’s 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.

24. In the event that Executive breaches or threatens to breach any provision of this Agreement, Executive agrees that the Company shall be entitled to seek any and all equitable and legal relief provided by law, specifically including immediate and permanent injunctive relief. Executive hereby waives any claim that the Company has an adequate remedy at law. In addition, and to the extent not prohibited by law, Executive agrees that the Company shall be entitled to discontinue providing any additional Severance Benefits upon such breach or threatened breach as well as an award of all costs and attorneys’ fees incurred by the Company in any successful effort to enforce the terms of this Agreement. Executive agrees that the foregoing relief shall not be construed to limit or otherwise restrict the Company’s ability to pursue any other remedy provided by law, including the recovery of any actual, compensatory or punitive damages. Moreover, if Executive pursues any claims against the Company subject to the foregoing General Release, or breaches the above confidentiality provision, Executive agrees to immediately reimburse the Company for the value of all benefits received under this Agreement to the fullest extent permitted by law.

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25. Similarly, in the event that the Company breaches or threatens to breach any provision of this Agreement, Executive shall be entitled to seek any and all equitable or other available relief provided by law, specifically including immediate and permanent injunctive relief. In the event Executive is required to file suit to enforce the terms of this Agreement, the Company agrees that Executive shall be entitled to an award of all costs and attorneys’ fees incurred by Executive’s in any wholly successful effort (i.e. entry of a judgment in Executive’s favor) to enforce the terms of this Agreement. In the event Executive is wholly unsuccessful, the Company shall be entitled to an award of its costs and attorneys’ fees.

26. Both Parties acknowledge that this Agreement is entered into solely for the purpose of terminating Executive’s employment relationship with the Company on an amicable basis and shall not be construed as an admission of liability or wrongdoing by the Company or Executive, both Parties having expressly denied any such liability or wrongdoing.

27. 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.

28. 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.

29. 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.

30. Executive represents and acknowledges that in signing this Agreement Executive does not rely, and has not relied, upon any representation or statement made by the Company or by any of the Company’s Executives, officers, agents, stockholders, directors or attorneys with regard to the subject matter, basis or effect of this Agreement other than those specifically contained herein.

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31. This Agreement represents the entire agreement between the Parties concerning the subject matter hereof, shall supersede any and all prior agreements which may otherwise exist between them concerning the subject matter hereof (specifically excluding, however, the post-termination obligations contained in an Executive’s Employment Agreement, any obligations contained in an existing and valid Indemnity Agreement of Change in Control, or any obligation contained in any other legally-binding document), and shall not be altered, amended, modified or otherwise changed except by a writing executed by both Parties.

PLEASE READ CAREFULLY. THIS SEPARATION AND RELEASE
AGREEMENT INCLUDES A COMPLETE RELEASE OF ALL
KNOWN AND UNKNOWN CLAIMS.

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

JOHN J. GREISCH	HILL-ROM HOLDINGS, INC.
Signed:	By:
Printed:	Title:
Dated:	Dated:

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Exhibit B
ILLUSTRATIVE COMPETITOR LIST

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

•    Amico Corporation	•    Anodyne Medical Device, Inc.
•    APEX Medical Corp.	•    Apria Healthcare Inc.
•    Aramark Corporation	•    Ascom (Ascom US, Inc.)
•    Barton Medical Corporation	•    B.G. Industries, Inc.
•    CareMed Supply, Inc.	•    Comfortex, Inc.
•    Corona Medical SAS	•    Custom Medical Solutions
•    Dukane Communication Systems, a division of Edwards Systems Technology, Inc.	•    Encompass Group, LLC
•    Fitzsimmons Home Medical Equipment, Inc.	•    Freedom Medical, Inc.
•    Gaymar Holding Company, LLC (Gaymar Industries, Inc.)	•    GF Health Products, Inc. (Graham Field)
•    Getinge Group (Arjo; Getinge; Maquet; Pegasus; Huntleigh Technology Plc (Huntleigh Healthcare, LLC))	•    Handicare AS (Romedic, Inc.)
•    Human Care HC AB	•    Horcher GmbH
•    Industrie Guido Malvestio S.P.A.	•    Intego Systems, Inc. (formerly known as Wescom Products, Inc.)
•    Invacare Corporation	•    Joerns Healthcare, Inc.
•    Joh. Stiegelmeyer & Co., GmbH (Stiegelmeyer)	•    Kinetic Concepts, Inc. (KCI)
•    Linak Group	•    Linet (Linet France, Linet Far East)
•    MedaSTAT, LLC	•    Medical Specialties Distributors, LLC
•    Medline Industries, Inc.	•    Merivaara Corporation
•    MIZUOSI	•    Modular Service Company
•    Molift	•    Nemschoff Chairs, Inc.
•    Paramount Bed Company, Ltd.	•    Nurture by Steelcase, Inc.

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•    Pardo	•    Pegasus Airwave, Inc.
•    Premise Corporation	•    Prism Medical Ltd (Waverly Glen)
•    Radianse, Inc.	•    Rauland-Borg Corporation
•    Recovercare, LLC (Stenbar, T.H.E. Medical)	•    Sentech Medical Systems, Inc.
•    SimplexGrinnell, LP	•    SIZEwise Rentals, LLC
•    Span America Medical Systems, Inc.	•    Statcom (Jackson Healthcare Solutions)
•    Stryker Corporation	•    Sunrise Medical (Ted Hoyer and Company)
•    Tempur-Pedic Medical, Inc.	•    Tele-Tracking Technologies, Inc.
•    Universal Hospital Services, Inc.	•    V. Guldmann A/S
•    Voelker AG	•    West-Com Nurse Call Systems, 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.

(Revised list April 2010)

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EX-10.60

EXHIBIT 10.60

CHANGE IN CONTROL AGREEMENT

This Change in Control Agreement (the “Agreement”) is made and entered into as of September 30, 2010 by and between Hill-Rom Holdings, Inc., an Indiana corporation (the “Company”), and Kim Dennis (the “Executive”).

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

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

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

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

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

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

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

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

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

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

2. Rights and Benefits Upon Termination.

In the event of the termination of Executive’s employment under any of the circumstances set forth in Section 1 hereof (“Termination”), the Company shall provide or cause to be provided to Executive the following rights and benefits, which, with the exception of Section 2(d) below, will only be provided if Executive executes and delivers to the Company within 45 days of the Termination a Release in the form attached hereto as Exhibit A (“Release”) and such Release has not been revoked:

(a) a lump sum payment in cash in the amount of two times Executive’s Annual Base Salary (as defined below), payable (i) on the date which is six (6) months following Termination, if the Executive is a “specified employee” as defined in Code Section 409A(a)(2)(B)(i) of the Internal Revenue Code of 1986, as amended (“Code”) (Section 409A of the Code is hereunder referred to as “Section 409A”), and the Treasury Regulations promulgated thereunder, and such payment is not otherwise exempt from Section 409A, or (ii) on the next regularly scheduled payroll following the earlier to occur of fifteen (15) days from the Company’s receipt of an executed Release or the expiration of sixty (60) days after Executive’s Termination, if Executive is not such a “specified employee” (or such payment is exempt from Section 409A); 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 Executive’s Termination;

(b) for the 24 months following Termination, continued health and medical insurance coverage for Executive and Executive’s dependents substantially comparable (with regard to both benefits and employee contributions) to the coverage provided by the Company immediately prior to the Change in Control for active employees of equivalent rank. From the end of such 24-month period until Executive attains Social Security Retirement Age, Executive shall have the right to purchase (at COBRA rates applicable to such coverage) continued coverage for himself and Executive’s dependents under one or more plans maintained by the Company for its active employees, to the extent Executive would have been eligible to purchase continued coverage under the plan in effect

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immediately prior to the Change in Control had Executive’s employment terminated 24 months following Termination. The payment of any health or medical claims for the health and medical coverage provided in this subparagraph (b) shall be made to the Executive as soon as administratively practicable after the Executive has provided the appropriate claim documentation, but in no event shall the payment for any such health or medical claim be paid later than the last day of the calendar year following the calendar year in which the expense was incurred. Notwithstanding anything herein to the contrary, to the extent required by Section 409A: (1) the amount of medical claims eligible for reimbursement or to be provided as an in-kind benefit under this Agreement during a calendar year may not affect the medical claims eligible for reimbursement or to be provided as an in-kind benefit in any other calendar year, and (2) the right to reimbursement or in-kind benefits under this Agreement shall not be subject to liquidation or exchange for another benefit;

(c) continuation for Executive, for a period of two years following Termination, of the Executive Life Insurance Bonus Plan (if any) provided for Executive by the Company immediately prior to the Change in Control and the group term life insurance program provided for Executive immediately prior to the Change in Control. The payment of any claim for death benefits provided under this subparagraph (c) shall be paid in accordance with the appropriate program, provided, however that if the death benefit is subject to Section 409A, then the death benefit shall be paid, as determined by the Company in its complete and absolute discretion, no later than the later to occur of (i) the last day of calendar year in which the death of the Executive occurs or (ii) the 90^th day following the Executive’s death;

(d) a lump sum payment in cash, payable within 30 days after Termination, equal to all accrued and unpaid vacation, reimbursable business expenses, and similar miscellaneous benefits as of the Termination, provided, however, that to the extent that any such miscellaneous benefits are subject to Section 409A, such benefits shall be paid in one lump sum (i) on the date which is six (6) months following Termination, if the Executive is a “specified employee” as defined in Section 409A(a)(2)(B)(i) of Code and the Treasury Regulations promulgated thereunder, and such payment is not otherwise exempt from Section 409A, or (ii) on the next regularly scheduled payroll following the earlier to occur of fifteen (15) days from the Company’s receipt of an executed Release or the expiration of sixty (60) days after Executive’s Termination, if Executive is not such a “specified employee” (or such payment is exempt from Section 409A); 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 Executive’s Termination;

(e) a monthly pension annuity benefit commencing as of the first day of the calendar month following the later to occur of (i) the Executive attaining age 62 or (ii) the six month anniversary date of the Executive’s Termination (the “Pension Benefit Starting Date”) and paid on the first day of each succeeding month (if unmarried, in the form of a life annuity with guaranteed payments for 24 months, or if married (in the form of a joint and 50% survivor annuity) equal to the actuarially equivalent difference between (i) the monthly Pension Plan annuity benefit, the monthly Supplemental Pension Plan annuity benefit if Executive is a participant in the Supplemental Pension Plan, and any additional pension benefit provided in an offer letter (or other written document signed by an authorized officer of the Company other than Executive) if Executive is subject to any such letter or document, which Executive will

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receive starting at the Pension Benefit Starting Date (if unmarried, in the form of a life annuity with guaranteed payments for 24 months, or if married in the form of a joint and 50% survivor annuity), and (ii) the monthly pension annuity benefit he would have received starting at the Pension Benefit Starting Date under such plan(s) and/or offer letter, as in effect on or after the date hereof (if unmarried, in the form of a life annuity with guaranteed payments for 24 months, or if married in the form of a joint and 50% survivor annuity) calculated as if Executive had earned two additional years of service and pay at his Annual Base Salary (and for purposes of calculating Average Monthly Earnings as defined in the Pension Plan, Executive Annual Base Salary shall be annualized for any portion of the imputed service period which is less than a full calendar year and such portion of the year shall be eligible to be counted). Unless the Executive (who also must be a participant in the Supplemental Pension Plan) elects a form of annuity set forth on Annex A attached to the Supplemental Pension Plan prior to his or her Pension Benefit Starting Date, Executive, if unmarried, shall receive a life annuity with guaranteed payment for 24 months, or, if married, a 50% joint and survivor annuity. The benefit provided for in this paragraph shall be funded in a rabbi trust prior to the Change in Control. For purposes of this subparagraph (e), the benefit under clause (ii) will be calculated as though the Pension Plan and any applicable Supplemental Pension Plan as in effect on or after date hereof, remained the same.

(f) a lump sum payment in cash for amounts accrued as of the Termination and an additional amount equal to the amounts accrued for the last 12 months times two (2) immediately prior to the Termination Date in any of the Defined Contribution, Matching Account and/or Supplemental Contribution Account, payable (i) on the date which is six (6) months following Termination, if the Executive is a “specified employee” as defined in Code Section 409A(a)(2)(B)(i) or (ii) on the next regularly scheduled payroll following the earlier to occur of fifteen (15) days from the Company’s receipt of an executed Release or the expiration of sixty (60) days after Executive’s Termination, if Executive is not such a “specified employee” (or such payment is exempt from Section 409A); 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 Executive’s Termination.

(g) a lump sum payment in cash equal to the amount of Short-Term Incentive Compensation which would be payable to Executive if the Company performance targets (at 100%) with respect to such incentive compensation in effect for the entire year in which the Termination occurred had been achieved, payable (i) on the date which is six (6) months following Termination, if the Executive is a “specified employee” as defined in Section 409A(a)(2)(B)(i) of Code and the Treasury Regulations promulgated thereunder, and such payment is not otherwise exempt from Section 409A, or (ii) on the next regularly scheduled payroll following the earlier to occur of fifteen (15) days from the Company’s receipt of an executed Release or the expiration of sixty (60) days after Executive’s Termination, if Executive is not such a “specified employee” (or such payment is exempt from Section 409A); 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 Executive’s Termination; and

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

(i) immediate vesting of all Bonus Stock Awards (as defined in the Company’s Stock Incentive Plan) awarded to Executive after the date of this Agreement;

(ii) immediate vesting of all outstanding Stock Options awarded to Executive after the date of this Agreement under the Company’s Stock Incentive Plan;

(iii) immediate vesting of all awards of Restricted Stock awarded to Executive after the date of this Agreement under any Stock Award Agreements (as defined in the Company’s Stock Incentive Plan) with Executive and Hill-Rom Holdings, Inc.;

(iv) immediate vesting of all awards of Deferred Stock (as defined in the Company’s Stock Incentive Plan) (also known as Restricted Stock Units) awarded to Executive after the date of this Agreement under the Company’s Stock Incentive Plan; and

(v) the exercise of any Stock Appreciation Right (as defined in the Company’s Stock Incentive Plan) within 60 days of a Change in Control as provided by section 7.2 of the Stock Incentive Plan.

Any awards of the type described in Paragraphs (i)-(v) above which were issued prior to the date of this Agreement shall be governed by the terms of the applicable award agreements at the time such awards were issued, and shall not be affected by this Agreement. Shares or cash payments in lieu of shares shall be paid at the time specified in the Stock Incentive Plan and the applicable award, subject to Executive’s delivery of a Release to the extent required by this Agreement or the applicable awards within 45 days of Executive’s Termination which Release has not been revoked.

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3. Payment Adjustment Due to Excise Tax.

In the event that any payment or benefits received or to be received by Executive pursuant to Section 2 of this Agreement would, but for this Section, be subject to the excise tax imposed by Internal Revenue Code Section 4999, or any comparable successor provisions, then such payment shall be either: (i) provided to Executive in full, or (ii) provided to Executive as to such lesser extent which would result in no portion of such payment being subject to such excise tax, whichever of the foregoing amounts, when taking into account applicable federal, state, local and foreign income and employment taxes, such excise tax, and any other applicable taxes, results in the receipt by Executive, on an after-tax basis, of the greatest amount of the payment, notwithstanding that all or some portion of such payment may be taxable under such excise tax. To the extent such payment needs to be reduced pursuant to the preceding sentence, reductions shall come from taxable amounts before non-taxable amounts and beginning with the payments otherwise scheduled to occur soonest. Executive agrees to cooperate fully with the Company to determine the benefits applicable under this Section.

4. Confidentiality; Non-Competition.

(a) Executive shall not at any time without the prior approval of the Company disclose to any person, firm, corporation or other entity any trade secret, confidential customer information, or other proprietary information not known within the industry or by the public generally regarding the business then being conducted by the Company, including, without limitation, financial information, marketing and sales information and business and strategic plans.

(b) Executive shall not at any time during the term of this Agreement and within three years following the termination of Executive’s employment with the Company, (i) solicit any persons who are employed by the Company to terminate their employment with the Company, and (ii) directly or indirectly (either individually or as an agent, employee, director, officer, stockholder, partner or individual proprietor, consultant or as an investor who has made advances of loan capital or contributions to equity capital), engage in any activity which Executive knows (or reasonably should have known) to be competitive with the business of the Company as then being carried on. Nothing in this Agreement, however, shall prevent Executive from owning, as an investment, up to two percent (2%) of the outstanding equity capital of any competitor of the Company, shares of which are regularly traded on a national securities exchange or in over-the-counter markets. The restrictions set forth in this Section 4 shall not apply in the event of a termination of Executive’s employment pursuant to Section 1.

5. Section 409A Acknowledgement.

Executive acknowledges that Executive has been advised of Section 409A, which has significantly changed the taxation of nonqualified deferred compensation plans and arrangements. Under proposed and final regulations as of the date of this Agreement, Executive has been advised that Executive’s severance pay and other Termination benefits may be treated by the Internal Revenue Service as “nonqualified deferred compensation,” subject to Section 409A. In that event, several provisions in Section 409A may affect Executive’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” (as defined in Section 409A) on account of separation from service may not be made earlier than six (6) months after the effective date of 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% excise tax. As a result of the requirements imposed by the American Jobs Creation Act of 2004, Executive agrees that if Executive is a “specified employee” at the time of

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Executive’s termination and if severance payments are covered as “nonqualified deferred compensation” or otherwise not exempt, such severance pay (and other benefits to the extent applicable) due Executive at time of termination shall not be paid until a date at least six (6) months after Executive’s separation from service (as defined in Section 409A and applicable regulations). Executive acknowledges that, notwithstanding anything contained herein to the contrary, both Executive and the Company shall each be independently responsible for accessing their own risks and liabilities under Section 409A that may be associated with any payment made under the terms of this Agreement which may be deemed to trigger Section 409A. To the extent applicable, Executive understands and agrees that Executive shall have the responsibility for, and Executive agrees to pay, any and all appropriate income tax or other tax obligations for which Executive is individually responsible and/or related to receipt of any benefits provided in this Agreement. Executive 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 Executive or based on any alleged failure to withhold taxes or satisfy any claimed obligation. Executive understands and acknowledges that neither the Company, nor any of its employees, attorneys, or other representatives has provided or will provide Executive with any legal or financial advice concerning taxes or any other matter, and that Executive has not relied on any such advice in deciding whether to enter into this Agreement. 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 allowed under Section 409A. If any provision of this Agreement (or of any award of compensation) would cause Executive 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 Executive regarding such amendments or modifications prior to the effective date of any such change. Each amount to be paid or benefit to be provided to Executive pursuant to this Agreement shall be construed as a separate identified payment for purposes of Section 409A. To the extent required to avoid an accelerated or additional tax under Section 409A, amounts reimbursable to Executive under this Agreement shall be paid to Executive on or before the last day of the year following the year in which the expense was incurred, the amount of expenses eligible for reimbursement (and in-kind benefits provided to Executive) during any one year may not effect amounts reimbursable or provided in any subsequent year, and the right to reimbursement (and in-kind benefits provided to Executive) under this Agreement shall not be subject to liquidation or exchange for another benefit.

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

(a) “Annual Base Salary” means the annualized amount of Executive’s rate of base salary in effect immediately before the Change in Control or immediately before the date of Termination, whichever is greater.

(b) “Cause” shall have the same meaning set forth in any current employment agreement that the Executive has with the Company or any of its subsidiaries.

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(c) A “Change in Control” shall be deemed to occur on:

(i) the date that any person, corporation, partnership, syndicate, trust, estate or other group acting with a view to the acquisition, holding or disposition of securities of the Company, becomes, directly or indirectly, the beneficial owner, as defined in Rule 13d-3 under the Securities Exchange Act of 1934 (“Beneficial Owner”), of securities of the Company representing 35% or more of the voting power of all securities of the Company having the right under ordinary circumstances to vote at an election of the Board (“Voting Securities”), other than by reason of (x) the acquisition of securities of the Company by the Company or any of its Subsidiaries or any employee benefit plan of the Company or any of its Subsidiaries, (y) the acquisition of Company securities directly from the Company, or (z) the acquisition of Company securities by one or more members of the Hillenbrand Family (which term shall mean descendants of John A. Hillenbrand and their spouses, trusts primarily for their benefit or entities controlled by them);

(ii) the consummation of a merger or consolidation of the Company with another corporation unless:

(A) the shareholders of the Company, immediately prior to the merger or consolidation, beneficially own, immediately after the merger or consolidation, shares entitling such shareholders to 50% or more of the voting power of all securities of the corporation surviving the merger or consolidation having the right under ordinary circumstances to vote at an election of directors in substantially the same proportions as their ownership, immediately prior to such merger or consolidation, of Voting Securities of the Company;

(B) no person, corporation, partnership, syndicate, trust, estate or other group beneficially owns, directly or indirectly, 35% or more of the voting power of the outstanding voting securities of the corporation resulting from such merger or consolidation except to the extent that such ownership existed prior to such merger or consolidation; and

(C) the members of the Company’s Board, immediately prior to the merger or consolidation, constitute, immediately after the merger or consolidation, a majority of the board of directors of the corporation issuing cash or securities in the merger;

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(iii) the date on which a majority of the members of the Board consist of persons other than Current Directors (which term shall mean any member of the Board on the date hereof and any member whose nomination or election has been approved by a majority of Current Directors then on the Board);

(iv) the consummation of a sale or other disposition of all or substantially all of the assets of the Company; or

(v) the date of approval by the shareholders of the Company of a plan of complete liquidation of the Company.

Notwithstanding the foregoing, for benefits payable upon or in relation to a Change in Control which are not otherwise exempt from Section 409A, any of the events listed above must be a change in the ownership or effective control of the Company or in the ownership of a substantial portion of the assets of the Company as described in Section 409A and any regulations or other applicable guidance promulgated thereunder.

(d) “Executive Life Insurance Bonus Plan” shall mean a program under which the Company pays the annual premium for a whole life insurance policy on the life of Executive.

(e) “Good Reason” means the occurrence, without Executive’s consent, of any of the following acts by the Company, or failures by the Company to act (each a “Good Reason Condition”), provided Executive provides written notice to the Company of the occurrence of the Good Reason Condition within ten (10) business days after the Executive has knowledge of it; the Company fails to notify Executive of the Company’s intended method of correction within thirty (30) business days after the Company receives Executive’s notice, or the Company fails to correct the Good Reason Condition within thirty (30) business days after such Executive notice; and the Executive resigns within ten (10) business days after the end of the 30-business-day period after Executive’s notice:

(i) a material diminution in Executive’s duties;

(ii) the failure to elect or reelect Executive as Vice President or other officer of the Company (unless such failure is related in any way to the Company’s decision to terminate Executive for cause);

(iii) the failure of the Company to continue to provide Executive with office space, related facilities and support personnel (including, but not limited to, administrative and secretarial assistance) within the Company’s principal executive offices commensurate with Executive’s responsibilities to, and position within, the Company;

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(iv) a material reduction by the Company in the amount of Executive’s base salary or the discontinuation or material reduction by the Company of Executive’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 Executive understanding that such reduction(s) shall be permissible if the change applies in a similar way to other peer level employees;

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

(vi) any other action or inaction by the Company that constitutes a material breach of this Agreement.

(f)	“Section 409A” means Section 409A of the Internal Revenue Code.
(g)	“Short-Term Incentive Compensation” means the Incentive Compensation payable under the Short-Term Incentive Compensation Program, or any successor or other short-term incentive plan or program.
(h)	“Early Retirement Benefits” early retirement benefits shall have the meaning set forth in the pension plan which defines the age at which full, unreduced benefits are available without any early retirement reduction being applied.
(i)	“Executive Life Insurance Bonus Program” shall mean a program under which the Company pays the annual premium for a whole life insurance policy on the life of Executive.
(j)	“Supplemental Pension Plan” means the SERP or any successor long-term supplemental pension plan or program or any other commitment made by the company to provide retirement benefits in addition to those provided by the pension plan trust.
(k)	“Defined Contribution Accounts”, “Matching Accounts”, and “Supplemental Contribution Accounts” shall have the meanings set forth in the Company’s Supplemental Executive Retirement Program (“SERP”).
(l)	“Stock Incentive Plan” shall mean the Hill-Rom Holdings, Inc. Stock Incentive Plan maintained by the Company, as amended from time to time.

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7. Notice.

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

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

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

9. Assignment.

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

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

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

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

12. Amendment. This Agreement may not be amended or modified otherwise than by a written agreement executed by the parties hereto or their respective successors and legal representatives.

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

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

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

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

17. Term of Agreement. The term of this Agreement shall be one (1) year commencing on the date hereof; provided however, that this Agreement shall be automatically renewed for successive one-year terms commencing on each anniversary of the date of this Agreement unless the Company shall have given notice of non-renewal to Executive at least 30 days prior to the scheduled termination date; and further provided that notwithstanding the foregoing, this Agreement shall not terminate (i) within three years after a Change in Control or (ii) during any period of time when a transaction which would result in a Change in Control is pending or under consideration by the Board. The termination of this Agreement shall not adversely affect any rights to which Executive has become entitled prior to such termination. In addition, Section 4(a) shall survive the termination of this Agreement.

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

HILL-ROM HOLDINGS, INC.
By:	/s/ John J. Greisch
	Title: President and Chief Executive Officer
Kimberly Dennis 9/30/2010
Executive

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CAUTION: READ BEFORE SIGNING

Exhibit A

SAMPLE SEPARATION AND RELEASE AGREEMENT

THIS SEPARATION and RELEASE AGREEMENT (“Agreement”) is entered into by and between [INSERT EXECUTIVE’S NAME] (“Executive”) and Hill-Rom Holdings, Inc. (together with its subsidiaries and affiliates, the “Company”). To wit, the Parties agree as follows:

1. Executive and the Company have entered into an [Amended] Change in Control Agreement, attached hereto as Exhibit [A], effective as of [INSERT DATE] (the “Change in Control Agreement”).

2. Executive’s employment by the Company has been terminated following a Change in Control as described in the Change in Control Agreement. Executive shall terminate employment effective [INSERT DATE OF TERMINATION] (Executive’s “Effective Termination Date”). Except as specifically provided by this Agreement, the Change in Control Agreement, or any other non-employment agreement that may exist between the Company and Executive, Executive agrees that the Company shall have no other obligations or liabilities to Executive following Executive’s Effective Termination Date and that Executive’s receipt of the benefits as outlined in the Change in Control Agreement shall constitute a complete settlement, satisfaction and waiver of any and all claims Executive may have against the Company.

3. Executive acknowledges that Executive 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, Executive has been advised that if Executive is a “key Executive” covered by Section 409A or any similar law, Executive’s 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 Executive’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, Executive agrees if Executive is a “specified employee” at the time of Executive’s 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 Executive’s Effective Termination Date from Company, as more fully explained in the Change in Control Agreement.

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4. In consideration of the promises contained in this Agreement and contingent upon Executive’s compliance with such promises, the Company agrees to provide Executive the benefits outlined in the Change in Control Agreement (the “Severance Benefits”).

5. The Company further agrees to provide Executive with limited out-placement counseling with a company of its choice provided that Executive participates in such counseling immediately following termination of employment. Notwithstanding anything in this Section 5 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.

6. In exchange for the foregoing Severance Benefits, [INSERT EMPLOYEE FULL NAME] on behalf of himself/herself, Executive’s heirs, representatives, agents and assigns hereby RELEASES, INDEMNIFIES, HOLDS HARMLESS, and FOREVER DISCHARGES (i) Hill-Rom Holdings, Inc., (ii) its subsidiary or affiliated entities, (iii) all of their present or former directors, officers, Executives, shareholders, and agents, as well as, (iv) all predecessors, successors and assigns thereof from any and all actions, charges, claims, demands, damages or liabilities of any kind or character whatsoever, known or unknown, which Executive now has or may have had through the effective date of this Agreement.

7. 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 Executive may have under the Civil Rights Acts of 1866 and 1964, as amended, 42 U.S.C. §§ 1981 and 2000(e) et seq.; the Civil Rights Act of 1991; the Age Discrimination in Employment Act, as amended, 29 U.S.C. §§ 621 et seq.; the Americans with Disabilities Act of 1990, as amended, 42 U.S.C §§ 12,101 et seq.; the Fair Labor Standards Act 29 U.S.C. §§ 201 et seq.; the Worker Adjustment and Retraining Notification Act, 29 U.S.C. §§ 2101, et seq.; the Sarbanes-Oxley Act of 2002, specifically including the Corporate and Criminal Fraud Accountability Act, 18 U.S.C. §1514,A et seq.; and any other federal, state or local law governing the Parties’ employment relationship; (ii) any claims on account of, arising out of or in any way connected with Executive’s employment with the Company or leaving of that employment; (iii) any claims alleged or which could have been alleged in any charge or complaint against the Company; (iv) any claims relating to the conduct of any Executive, officer, director, agent or other representative of the Company; (v) any claims of discrimination, harassment or retaliation on any basis; (vi) any claims arising from any legal restrictions on an employer’s right to separate its Executives; (vii) any claims for personal injury, compensatory or punitive damages or other forms of relief; and (viii) all other causes of action sounding in contract, tort or other common law basis, including (a) the breach of any alleged oral or written contract, (b) negligent or intentional misrepresentations, (c) wrongful discharge, (d) just cause dismissal, (e) defamation, (f) interference with contract or business relationship or (g) negligent or intentional infliction of emotional distress.

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8. Executive further agrees and covenants not to sue the Company or any entity or individual subject to the foregoing General Release with respect to any claims, demands, liabilities or obligations release by this Agreement provided, however, that nothing contained in this Agreement shall:

(a) prevent Executive 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 Executive’s 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]

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

10. [INCLUDE 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, Executive hereby acknowledges that:

(a) Executive has carefully read and fully understands all of the provisions of this Agreement and that Executive has entered into this Agreement knowingly and voluntarily;

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

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

(d) Executive has been offered at least [twenty-one (21)/forty-five (45)] days within which to review and consider this Agreement.

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11. [ADD THIS LANGUAGE IF THE 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 Executive, whichever is later. Executive may revoke this Agreement for any reason by providing written notice of such intent to the Company within seven (7) days after Executive has signed this Agreement, thereby forfeiting Executive’s right to receive any Severance Benefits provided hereunder and rendering this Agreement null and void in its entirety. This revocation must be sent to the Executive’s HR representative with a copy sent to the Hill-Rom Office of Chief Legal Officer and must be received by the end of the seventh day after the Executive signs this Agreement to be effective.

12. [ADD THIS LANGUAGE IF THE EMPLOYEE IS IN CALIFORNIA] Executive specifically acknowledges that, as a condition of this Agreement, Executive expressly releases all rights and claims that Executive knows about as well as those Executive may not know about. Executive 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 Executive’s favor at the time of executing the release which if known, must have materially affected Executive’s 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, Executive expressly acknowledges that this Agreement is intended to include and does in its effect, without limitation, include all claims which Executive does not know or suspect to exist in Executive’s favor at the time of signing this Agreement and that this Agreement expressly contemplates the extinguishment of all such claims.

13. The Parties agree that nothing contained herein shall purport to waive or otherwise affect any of Executive’s rights or claims that may arise after Executive signs this Agreement. It is further understood by the Parties that nothing in this Agreement shall affect any rights Executive may have under any Company sponsored Deferred Compensation Program, Executive Life Insurance Bonus Plan, Stock 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 Executive’s termination, such items to be governed exclusively by the terms of the applicable agreements or plan documents.

14. Similarly, notwithstanding any provision contained herein to the contrary, this Agreement shall not constitute a waiver or release or otherwise affect Executive’s rights with respect to any vested benefits, any rights Executive has to benefits which can not be waived by law, any coverage provided under any Directors and Officers (“D&O”) policy, any rights Executive may have under any indemnification agreement Executive has with the Company prior to the date hereof, any rights Executive 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.

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15. Except as provided in the Change in Control Agreement, Executive acknowledges that Executive will not be eligible to receive or vest in any additional stock options, stock awards or restricted stock units (“RSUs”) as of Executive’s Effective Termination Date. Failure to exercise any vested options within the applicable period as set for in the plan and/or grant will result in their forfeiture. Executive acknowledges that any stock options, stock awards or RSUs held for less than the required period shall be deemed forfeited as of the effective date of this Agreement. All terms and conditions of such stock options, stock awards or RSUs shall not be affected by this Agreement, shall remain in full force and effect, and shall govern the Parties’ rights with respect to such equity based awards.

16. [Option A] Executive acknowledges that Executive’s termination and the Severance Benefits offered hereunder were based on an individual determination and were not offered in conjunction with any group termination or group severance program and waives any claim to the contrary.

[Option B] Executive represents and agrees that Executive has been provided relevant cohort information based on the information available to the Company as of the date this Agreement was tendered to Executive. This information is attached hereto as Exhibit [B]. 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).

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

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18. Executive acknowledges that the Company as well as its subsidiary and affiliated companies (“Companies” herein) possess, and Executive 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”).

19. Executive agrees that all such Confidential Information is and shall remain the sole and exclusive property of the Company. Except as may be expressly authorized by the Company in writing, or as may be required by law after providing due notice thereof to the Company, Executive agrees not to disclose, or cause any other person or entity to disclose, any Confidential Information to any third party for as long thereafter as such information remains confidential (or as limited by applicable law) and agrees not to make use of any such Confidential Information for Executive’s own purposes or for the benefit of any other entity or person. The Parties acknowledge that Confidential Information shall not include any information that is otherwise made public through no fault of Executive or other wrong doing.

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

21. Executive hereby consents and authorizes the Company to deduct as an offset from the above-referenced severance payments the value of any Company property not returned or returned in a damaged condition as well as any monies paid by the Company on Executive’s behalf (e.g., payment of any outstanding JPMorgan Chase Corporate MasterCard bill) to the extent permitted by Section 409A.

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22. Executive agrees to cooperate with the Company in connection with any pending or future litigation, proceeding or other matter which has been or may be brought against or by the Company before any agency, court, or other tribunal and concerning or relating in any way to any matter falling within Executive’s knowledge or former area of responsibility. Executive agrees to immediately notify the Company, through the Office of the Chief Legal Officer, in the event Executive is contacted by any outside attorney (including paralegals or other affiliated parties) unless (i) the Company is represented by the attorney, (ii) Executive is represented by the attorney for the purpose of protecting Executive’s personal interests or (iii) the Company has been advised of and has approved such contact. Executive agrees to provide reasonable assistance and completely truthful testimony in such matters including, without limitation, facilitating and assisting in the preparation of any underlying defense, responding to discovery requests, preparing for and attending deposition(s) as well as appearing in court to provide truthful testimony. The Company agrees to reimburse Executive for all reasonable out of pocket expenses incurred at the request of the Company associated with such assistance and testimony.

23. Executive agrees not to make any written or oral statement that may defame, disparage or cast in a negative light so as to do harm to the personal or professional reputation of (a) the Company, (b) its Executives, officers, directors or trustees or (c) the services and/or products provided by the Company and its subsidiaries or affiliate entities. Similarly, in response to any written inquiry from any prospective employer or in connection with a written inquiry in connection with any future business relationship involving Executive, the Company agrees not to provide any information that may defame, disparage or cast in a negative light so as to do harm to the personal or professional reputation of Executive. The Parties acknowledge, however, that nothing contained herein shall be construed to prevent or prohibit the Company or the Executive from providing truthful information in response to any court order, discovery request, subpoena or other lawful request.

24. EXECUTIVE SPECIFICALLY AGREES AND UNDERSTANDS THAT THE EXISTENCE AND TERMS OF THIS AGREEMENT ARE STRICTLY CONFIDENTIAL AND THAT SUCH CONFIDENTIALITY IS A MATERIAL TERM OF THIS AGREEMENT. Accordingly, except as required by law or unless authorized to do so by the Company in writing, Executive agrees that Executive shall not communicate, display or otherwise reveal any of the contents of this Agreement to anyone other than Executive’s spouse, legal counsel or financial advisor provided, however, that they are first advised of the confidential nature of this Agreement and Executive obtains their agreement to be bound by the same. The Company agrees that Executive may respond to legitimate inquiries regarding the termination of Executive’s 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 Executive’s from further discussing the specifics of Executive’s separation. Nothing contained herein shall be construed to prevent Executive from discussing or otherwise advising subsequent employers of the existence of any obligations as set forth in Executive’s 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.

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25. In the event that Executive breaches or threatens to breach any provision of this Agreement, Executive agrees that the Company shall be entitled to seek any and all equitable and legal relief provided by law, specifically including immediate and permanent injunctive relief. Executive hereby waives any claim that the Company has an adequate remedy at law. In addition, and to the extent not prohibited by law, Executive agrees that the Company shall be entitled to discontinue providing any additional Severance Benefits upon such breach or threatened breach as well as an award of all costs and attorneys’ fees incurred by the Company in any successful effort to enforce the terms of this Agreement. Executive agrees that the foregoing relief shall not be construed to limit or otherwise restrict the Company’s ability to pursue any other remedy provided by law, including the recovery of any actual, compensatory or punitive damages. Moreover, if Executive pursues any claims against the Company subject to the foregoing General Release, or breaches the above confidentiality provision, Executive agrees to immediately reimburse the Company for the value of all benefits received under this Agreement to the fullest extent permitted by law.

26. Similarly, in the event that the Company breaches or threatens to breach any provision of this Agreement, Executive shall be entitled to seek any and all equitable or other available relief provided by law, specifically including immediate and permanent injunctive relief. In the event Executive is required to file suit to enforce the terms of this Agreement, the Company agrees that Executive shall be entitled to an award of all costs and attorneys’ fees incurred by Executive’s in any wholly successful effort (i.e. entry of a judgment in Executive’s favor) to enforce the terms of this Agreement. In the event Executive is wholly unsuccessful, the Company shall be entitled to an award of its costs and attorneys’ fees.

27. Both Parties acknowledge that this Agreement is entered into solely for the purpose of terminating Executive’s employment relationship with the Company on an amicable basis and shall not be construed as an admission of liability or wrongdoing by the Company or Executive, both Parties having expressly denied any such liability or wrongdoing.

28. 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.

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29. 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.

30. 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.

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

32. Executive represents and acknowledges that in signing this Agreement Executive does not rely, and has not relied, upon any representation or statement made by the Company or by any of the Company’s Executives, officers, agents, stockholders, directors or attorneys with regard to the subject matter, basis or effect of this Agreement other than those specifically contained herein.

33. This Agreement represents the entire agreement between the Parties concerning the subject matter hereof, shall supersede any and all prior agreements which may otherwise exist between them concerning the subject matter hereof (specifically excluding, however, the post-termination obligations contained in an Executive’s Employment Agreement, any obligations contained in an existing and valid Indemnity Agreement of Change in Control, or any obligation contained in any other legally-binding document), and shall not be altered, amended, modified or otherwise changed except by a writing executed by both Parties.

PLEASE READ CAREFULLY. THIS SEPARATION AND RELEASE
AGREEMENT INCLUDES A COMPLETE RELEASE OF ALL
KNOWN AND UNKNOWN CLAIMS.

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

[EXECUTIVE]	HILL-ROM HOLDINGS, INC.
Signed:	By:
Printed:	Title:
Dated:	Dated:

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Exhibit B
ILLUSTRATIVE COMPETITOR LIST

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

•	Amico Corporation	•	Anodyne Medical Device, Inc.
•	APEX Medical Corp.	•	Apria Healthcare Inc.
•	Aramark Corporation	•	Ascom (Ascom US, Inc.)
•	Barton Medical Corporation	•	B.G. Industries, Inc.
•	CareMed Supply, Inc.	•	Comfortex, Inc.
•	Corona Medical SAS	•	Custom Medical Solutions
•	Dukane Communication Systems, a division of Edwards Systems Technology, Inc.	• •	Encompass Group, LLC Freedom Medical, Inc.
• •	Fitzsimmons Home Medical Equipment, Inc. Gaymar Holding Company, LLC (Gaymar Industries, Inc.)	•	GF Health Products, Inc. (Graham Field)
•	Getinge Group (Arjo; Getinge; Maquet; Pegasus; Huntleigh Technology Plc (Huntleigh Healthcare, LLC))	• •	Handicare AS (Romedic, Inc.) Horcher GmbH
•	Human Care HC AB	•	Intego Systems, Inc. (formerly known as Wescom Products, Inc.)
•	Industrie Guido Malvestio S.P.A.
•	Invacare Corporation	•	Joerns Healthcare, Inc.
•	Joh. Stiegelmeyer & Co., GmbH (Stiegelmeyer)	•	Kinetic Concepts, Inc. (KCI)
•	Linak Group	•	Linet (Linet France, Linet Far East)
•	MedaSTAT, LLC	•	Medical Specialties Distributors, LLC
•	Medline Industries, Inc.	•	Merivaara Corporation
•	MIZUOSI	•	Modular Service Company

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•	Molift	•	Nemschoff Chairs, Inc.
•	Paramount Bed Company, Ltd.	•	Nurture by Steelcase, Inc.
•	Pardo	•	Pegasus Airwave, Inc.
•	Premise Corporation	•	Prism Medical Ltd (Waverly Glen)
•	Radianse, Inc.	•	Rauland-Borg Corporation
•	Recovercare, LLC (Stenbar, T.H.E. Medical)	•	Sentech Medical Systems, Inc.
•	SimplexGrinnell, LP	•	SIZEwise Rentals, LLC
•	Span America Medical Systems, Inc.	•	Statcom (Jackson Healthcare Solutions)
•	Stryker Corporation	•	Sunrise Medical (Ted Hoyer and Company)
•	Tempur-Pedic Medical, Inc.	•	Tele-Tracking Technologies, Inc.
•	Universal Hospital Services, Inc.	•	V. Guldmann A/S
•	Voelker AG	•	West-Com Nurse Call Systems, 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.

(Revised list April 2010)

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EX-10.61

EXHIBIT 10.61

Hill-Rom Holdings, Inc. FY 2011 Non-Employee Director Compensation Policy

• Non-employee directors, other than the Chairman of the Board, shall each receive an annual cash retainer of $50,000 (increased from $25,000) for their service as directors and shall not receive meeting fees for attendance at Board meetings; the Chairman of the Board shall receive an annual cash retainer of $125,000 (reduced from $150,000) for service as Chairman of the Board.

• Each non-employee director, other than the Chairman of the Board, who is a member of the Nominating/Corporate Governance, Audit or Compensation and Management Development Committee, shall receive a fee of $1,500 for each Committee meeting attended, in person or by telephone. Notwithstanding the foregoing, for any meeting of an ad hoc Committee of the Board that requires attendance in person or by telephone, the non-employee directors who attend, other than the Chairman of the Board, shall each receive a meeting fee of $1,500, except when such meetings occur before, during or after a meeting of the Board or a standing Committee of the Board that also is attended by such directors.

• The Chairpersons of each of the Audit, Compensation and Management Development and Nominating/Corporate Governance Committees shall receive an additional $12,500, $8,000 and $7,000 annual retainer, respectively.

• Non-employee directors who attend meetings of Committees of which they are not members shall receive no fees for their attendance.

• Board and Committee retainers shall be paid in quarterly installments and the meeting fees shall be paid following the applicable meetings.

• Each non-employee director shall be reimbursed for expenses incurred as a result of attendance at Board or Committee meetings.

• Each non-employee director shall be awarded, on the first trading day following the close of each annual meeting of the Company’s shareholders, restricted stock units (otherwise known as deferred stock awards) valued at $120,000 on the date of grant under the Corporation’s Stock Incentive Plan; provided that the Chairman of the Board’s annual grant of deferred stock awards shall be valued at $200,000. Each deferred stock award granted to any non-employee director shall be for a number of shares of Common Stock determined by dividing (i) the indicated dollar amount by (ii) the average high and low prices of the Common Stock on the date of grant. Vesting for all such restricted stock units will occur on the later to occur of one year and one day from the date of the grant or the six month anniversary of the date that the applicable director ceases to be a member of the Board.

EX-10.62

EXHIBIT 10.62

HILL-ROM HOLDINGS, INC.

NON-QUALIFIED STOCK OPTION AGREEMENT

Name of Grantee: <NAME>	No. of Shares: <UNITS>
Date of Grant: <GRANT DATE>	Price per Share: <GRANT PRICE>

This Non-Qualified Stock Option Agreement (this “Agreement”) by and between HILL-ROM HOLDINGS, INC. (the “Company”) and the Grantee named above (referred to below as “you”) evidences the grant by the Company of a Non-Qualified Stock Option to you on the date stated above (the “Grant Date”) and your acceptance of such Option in accordance with the provisions of the Hill-Rom Holdings, Inc. Stock Incentive Plan (the “Plan”).

Your Option is subject to the terms and conditions set forth in the Plan (which is incorporated herein by reference), any rules and regulations adopted by the Board of Directors of the Company or the committee of the Board which administers the Plan (collectively, the “Committee”), and this Agreement. In the event of any conflict between the provisions of the Plan and the provisions of this Agreement, the terms, conditions and provisions of the Plan shall control, and this Agreement shall be deemed to be modified accordingly. This grant becomes effective only if you sign and return to the Company a copy of this Agreement evidencing your understanding of the terms and conditions of your Option. Any terms used in this Agreement and not defined have the meanings set forth in the Plan.

1. Option Grant

You have been granted an option (the “Option”) to purchase the number of shares of the Company’s Common Stock, without par value (“Common Stock”), set forth above. The Option is a “non-qualified stock option” and is not an incentive stock option within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”).

2. Option Price

The price at which you may purchase the shares of Common Stock covered by the Option is the price per share set forth above.

3. Term of Option

Your Option expires in all events on the tenth anniversary of the Grant Date (“Expiration Date”). Your Option, however, may terminate prior to the Expiration Date as provided in paragraphs 7 and 11 of this Agreement upon the occurrence of one of the events described in those paragraphs. Regardless of the provisions of paragraphs 7 and 11 and notwithstanding anything else to the contrary contained in this Agreement, in no event can your Option be exercised after the Expiration Date.

4. Vesting of Option

(a) Unless it becomes exercisable on an earlier date as provided in paragraph 7 or 11 below and subject to those paragraphs, your Option will become exercisable with respect to the first 25 percent of the shares of Common Stock covered by the Option on the first anniversary of the Grant Date and your Option will become exercisable with respect to the second, third and fourth 25 percent of the shares covered by Option on the second, third and fourth anniversaries of the Grant Date, respectively, provided that you are an employee of the Company or one of its Subsidiaries on each such date.

(b) To the extent your Option has become exercisable, you may exercise the Option to purchase all or any part of such shares at any time on or before the date the Option expires or terminates, but in no case may fewer than 100 shares be purchased at any one time, except to purchase a residue of fewer than 100 shares.

5. Manner of Exercise

You may exercise your Option by giving notice to the Company or its designated administrator on a form acceptable to the Company (which may be written or electronic) specifying the number of shares of Common Stock desired to be purchased. The notice must be accompanied by payment of the aggregate option price for such shares, which payment may be made in the following ways: in cash; by delivery of shares of Common Stock; by broker-assisted cashless exercise; or by a combination of the above, in each case subject to the terms and conditions set forth in paragraphs 6(a), 6(b), and 6(c) below. Your Option will be deemed exercised on the date your notice of exercise (with required accompaniments as described in paragraph 6) is received by the Company or its designated administrator.

6. Satisfaction of Option Price

(a) Payment of Cash. Your Option may be exercised by payment of the option price in cash (including cash equivalents, such as check, bank draft, money order, or wire transfer to the order of the Company).

(b) Payment in Common Stock. Your Option may be exercised by the delivery of unencumbered shares of Common Stock already owned by you for at least six months (either by actual delivery of the shares or by providing an affidavit affirming ownership of the shares in form and manner approved by the Committee). The shares will be valued at their fair market value on the date of exercise as provided in the Plan. The stock certificates for the shares you deliver in payment of the exercise price must be duly endorsed or accompanied by appropriate stock powers. Only stock certificates issued solely in your name or jointly in your and your spouse’s name may be delivered. Only whole shares may be delivered. Any portion of the exercise price in excess of the fair market value of a whole number of shares must be paid in cash. If a certificate delivered in exercise of your Option evidences more shares than are needed to pay the exercise price, an appropriate replacement certificate will be issued to you for the excess shares.

(c) Broker-Assisted Cashless Exercise. You may exercise your Option by executing and delivering the documents necessary to irrevocably authorize a broker acceptable to the Company to sell shares of Common Stock (or a sufficient portion of such shares) acquired upon exercise of the Option and remit to the Company a sufficient portion of the sale proceeds to pay the entire option price and any withholding tax obligation resulting from such exercise.

7. Termination of Employment

(a) General. The following rules apply to your Option in the event of your death, disability, retirement, or other termination of your employment with the Company or one of its Subsidiaries. Authorized leaves of absence from the Company or a Subsidiary shall not constitute a termination of employment for purposes of this Agreement. Except as set forth in Paragraph 7(d), if you are employed by a Subsidiary of the Company and the Company ceases to own, directly or indirectly, more than 50% of the ownership interests of the Subsidiary, your employment shall be deemed terminated for purposes of this Agreement at such time. Paragraph 11 provides special rules which apply after a Change in Control (as defined in that paragraph).

(i) Termination of Employment. If your employment terminates because of your voluntary resignation (other than Retirement as that term is used below), your Option will terminate thirty (30) days after such termination of employment. Following the termination of your employment, no additional portions of your Option will become exercisable, and your Option will be exercisable during such thirty (30) day period only for the number of shares with respect to which it is exercisable on the date of the termination of your employment. If your employment is terminated involuntarily by the Company or a Subsidiary (as applicable, the “Employer”) other than for “Cause” (as defined below), your Option will terminate ninety (90) days after such termination of employment. Following the termination of your employment, no additional portions of your Option will become exercisable, and your Option will be exercisable during such ninety (90) day period only for the number of shares with respect to which it is exercisable on the date of the termination of your employment. Notwithstanding anything herein to the contrary, your Option may not be exercised after the Expiration Date. If your employment is terminated involuntarily by the Employer for “Cause,” your Option (including any portion that has previously become exercisable) will immediately expire and may not be exercised.

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

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

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

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

(E) engaged in any act that, in the reasonable opinion of the Employer, is contrary to its best interests or would hold the Company, a Subsidiary, its officers or directors up to probable civil or criminal liability, provided that, if you act 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.

(ii) Retirement. If, on or after the first anniversary of the Grant Date, your employment terminates by reason of retirement after attaining age fifty-five (55) and completion of five (5) years of employment (“Retirement”), your Option will become fully exercisable upon such retirement and may be exercised during the period commencing on the date of your Retirement and ending on the earlier of (A) the third anniversary of the date of your Retirement, or (B) the Expiration Date, and at the conclusion of such period, your Option will terminate.

(iii) Disability. If your employment terminates by reason of disability (as determined by the Committee), your Option will become fully exercisable upon such termination of employment and may be exercised during the period commencing on the date of your termination of employment and ending on the earlier of (A) the third anniversary of the date of your termination of employment, or (B) the Expiration Date, and at the conclusion of such period, your Option will terminate.

(iv) Death. If your employment terminates by reason of death, your Option will become fully exercisable upon such termination of employment and may be exercised during the period commencing on the date of your death and ending on the earlier of (A) the third anniversary of the date of your death, or (B) the Expiration Date, and at the conclusion of such period, your Option will terminate.

(b) Adjustments by the Committee. The Committee may, in its discretion, exercised before or after your termination of employment, declare all or any portion of your Option immediately exercisable and/or permit all or any part of your Option to remain exercisable for such period designated by it after the time when the Option would have otherwise terminated as provided in the applicable portion of paragraph 7(a), but not beyond the Expiration Date.

(c) Committee Determinations. For purposes of this Agreement and the Plan, the Committee shall have absolute discretion to determine the date and circumstances of termination of your employment, and its determination shall be final, conclusive and binding upon you.

(d) Distribution of Subsidiary. Notwithstanding anything herein to the contrary, the distribution by the Company of any or all or a part of the shares of common stock of any of its Subsidiaries to Company shareholders (“Distribution”) shall not constitute a termination of employment for purposes of this Agreement, and if you are employed by a Subsidiary of the Company whose shares of common stock are included in a Distribution, your employment will be deemed to continue for purposes of this Agreement until otherwise terminated as provided herein. In addition, if you transfer employment from the Company to one of its Subsidiaries or from one of the Company’s Subsidiaries to the Company or another of the Company’s Subsidiaries in connection with or in anticipation of the Distribution, such transfer shall not constitute a termination of employment for purposes of this Agreement, and your employment will be deemed to continue for purposes of this Agreement until otherwise terminated as provided herein.

8. Restrictions on Option Exercise

(a) Even though your Option is otherwise exercisable, your right to exercise the Option will be suspended if the Committee determines that your exercise of the Option would violate applicable laws or regulations. The suspension will last until the exercise would be lawful. Any such suspension will not extend the term of your Option. The Company has no obligation to register the Common Stock covered by your Option under federal or state securities laws or to compensate you for any loss caused by the implementation of this paragraph 8.

(b) Even though your Option is otherwise exercisable, the Committee may refuse to permit such exercise if it determines, in its discretion, that any of the following circumstances is present:

(i) the shares to be acquired upon such exercise are required to be registered or qualified under any federal or state securities law, or to be listed on any securities exchange or quotation system, and such registration, qualification, or listing has not occurred;

(ii) the consent or approval of any government regulatory body is required or desirable and has not been obtained;

(iii) an agreement by you with respect to the disposition of shares to be acquired upon exercise of your Option is determined by the Committee to be necessary or desirable in order to comply with any legal requirements and you have not executed such agreement; or

(iv) the issuance, sale or delivery of any shares of Common Stock is or may in the circumstances be unlawful under the laws or regulations of any applicable jurisdiction.

9. Income Tax Withholding

In connection with the exercise of your Option, you will be required to pay, or make other arrangements satisfactory to the Committee, to satisfy any applicable tax withholding liability. You may elect to have the tax withholding obligation satisfied by having the Company retain shares of Common Stock, otherwise deliverable to you upon exercise of your Option, having a value equal to the amount of your withholding obligation. If you fail to satisfy your tax withholding obligation in a time and manner satisfactory to the Committee, the Company shall have the right to withhold the required amount from your salary or other amounts payable to you.

Any election to have shares withheld must be made (in the manner acceptable to the Company) on or before the date you exercise your Option.

The amount of withholding tax paid by you to the Company will be paid to the appropriate federal, state and local tax authorities in satisfaction of the withholding obligations under the tax laws. The total amount of income you recognize by reason of exercise of the Option will be reported to the appropriate taxing authorities in the year in which you recognize income with respect to the exercise. Whether you owe additional tax will depend on your overall taxable income for the applicable year and the total tax remitted for that year through withholding or by estimated payments.

10. Non-transferability of Option

The Option granted to you by this Agreement may be exercised only by you, and may not be assigned, pledged, or otherwise transferred by you, with the exception that in the event of your death the Option may be exercised (at any time prior to its expiration or termination as provided in paragraphs 3 and 7) by the executor or administrator of your estate or by a person who acquired the right to exercise your Option by bequest or inheritance or by the laws of descent and distribution.

11. Change in Control

Notwithstanding the provisions of paragraph 7, in the event your employment is terminated at any time after a Change in Control (as defined in the Plan) but prior to the second anniversary thereof (a) by the Company for any reason other than on account of your death, disability, retirement or for Cause (as defined above) or (b) by you for Good reason (as defined in your employment agreement), your Option will become immediately exercisable in full and will remain exercisable for a period of ninety (90) days after your termination of employment or such longer period as may be specified in paragraph 7, but not beyond the Expiration Date.

12. Adjustment in Certain Events

In the event of any merger, reorganization, consolidation, sale of substantially all assets, recapitalization, stock dividend, stock split, spin-off, split-up, split-off, distribution of assets or other change in corporate structure occurring after the effective date of this award affecting the Common Stock underlying your award, the Board shall adjust the number and kind of shares of Common Stock covered by your Option and the exercise price so as to maintain without change the aggregate exercise price and such adjustment shall be conclusive and binding upon you and the Company.

13. Forfeiture

Your Option and any Common Stock acquired under the Plan and any gain from the sale of any Common Stock acquired under the Plan are required to be forfeited by you, including after exercise or vesting, if, during your employment or within one (1) year following your termination of employment (or any longer period specified in any applicable employment or severance agreement with the Company), you engage in Disqualifying Conduct, which shall mean: (i) your performance of service (including service as an employee, director, or consultant) for a competitor of the Company or its Subsidiaries or the establishing by you of a business which competes with the Company or its Subsidiaries, (ii) your solicitation of employees or customers of the Company or its Subsidiaries, (iii) your improper use or disclosure of confidential information of the Company or its Subsidiaries, or (iv) your material misconduct in the performance of your duties for the Company or its Subsidiaries, as determined by the Committee.

14. No Guarantee of Employment

The grant of this Option does not constitute an assurance of continued employment for any period or in any way interfere with the Company’s right to terminate your employment or to change the terms and conditions of your employment.

15. Other Plans

You acknowledge that any income derived from your Option (or the sale of Common Stock underlying your Option) will not affect your participation in, or benefits under, any other benefit plan maintained by the Company.

16. Administration

The Committee has the sole power to interpret the Plan and this Agreement and to act upon all matters relating to Options granted under the Plan. Any decision, determination, interpretation, or other action taken pursuant to the provisions of the Plan by the Committee shall be final, binding, and conclusive.

17. Amendment

The Committee may from time to time amend the terms of this grant in accordance with the terms of the Plan in effect at the time of such amendment, but no amendment which is unfavorable to you can be made without your written consent.

This Agreement contains the formal terms and conditions of your award and accordingly should be retained in your files for future reference. Please sign below to evidence your acceptance of this Option on the terms and conditions set forth in this Agreement, and return a signed copy of this Agreement in the enclosed, self-addressed envelope.

BY:
	Perry Stuckey Senior Vice President,
	Chief Human Resources Officer

ACCEPTED:                                         

EX-10.63

EXHIBIT 10.63

FORM OF HILL-ROM HOLDINGS, INC.
STOCK AWARD (4 YR)
(EFFECTIVE <date>)

1. Purpose. The purpose of the Hill-Rom Holdings, Inc. Stock Award (hereinafter called the “Award”), which is granted under the Hill-Rom Holdings, Inc. Stock Incentive Plan (the “Plan”), is to promote profitability and growth of Hill-Rom Holdings, Inc. (the “Company”) by offering an incentive payable in Company common stock to <Name> (“Employee”) who contributes to such profitability and growth.

2. Amount of Award. The Company shall cause an account to be established in the name of the Employee (“Deferred Stock Account”), which shall be assumed to be invested in <Units> shares (“Initial Deferred Stock Award”) of common stock, no par value of the Company (“Common Stock”). No actual shares of Common Stock shall be held in the Deferred Stock Account, and the number of shares of Common Stock maintained in the Deferred Stock Account (“Deferred Stock”) shall be a book entry which states the number of shares of Common Stock the Employee would have a right to receive in accordance with the terms of this Award. Any cash dividend paid on Common Stock by the Company while the Deferred Stock Account exists will be assumed to be paid on the Deferred Stock in the Deferred Stock Account and shall be assumed to be reinvested in Common Stock on the date of such dividend payment, thereby increasing the number of shares of Deferred Stock maintained in the Deferred Stock Account. Any stock dividends, stock splits and other similar rights inuring to Common Stock shall also be assumed to inure to the Deferred Stock, which may increase or decrease the number of shares of Deferred Stock in the Deferred Stock Account. The Initial Deferred Stock Award plus any increases or less any decreases due to cash dividends, stock dividends, stock splits and any other similar rights inuring to Common Stock as set forth in the two immediately preceding sentences shall herein after be referred to as the “Deferred Stock Award.”

If Employee’s employment with the Company or any of its Subsidiaries (as defined in the Plan) continues uninterrupted from the effective date of this Award through the day after the first, second, third and fourth anniversaries of such effective date, respectively, an amount of Deferred Stock which equals a percentage as set forth below of the Deferred Stock Award, shall be non-forfeitable (“Vested Deferred Stock”), and the Company shall, subject to his election to defer receipt, deliver to him shares of Common Stock equal in number to the number of shares of Deferred Stock which became Vested Deferred Stock on the day after such second, third, and fourth anniversary dates as follows:

The day after the first anniversary date of the effective date of this Award	25% of the Deferred Stock Award
The day after the second anniversary date of the effective date of this Award	25% of the Deferred Stock Award
The day after the third anniversary date of the effective date of this Award	25% of the Deferred Stock Award
The day after the fourth anniversary date of the effective date of this Award	25% of the Deferred Stock Award

Any Deferred Stock maintained in the Deferred Stock Account which is not Vested Deferred Stock shall, upon the Employee’s termination of employment, be forfeited by Employee without the payment of any consideration or further consideration by the Company, and neither Employee nor any successors, heirs, assigns, or legal representatives of Employee shall thereafter have any further rights or interest in such forfeited Deferred Stock. Any fractional shares of Vested Deferred Stock shall be rounded up to the next whole share of Vested Deferred Stock.

Notwithstanding the schedule set forth above, Deferred Stock maintained in the Deferred Stock Account shall become Vested Deferred Stock upon (A) the occurrence of any one of the following events: (i) termination of Employee’s employment with the Company, one of its Subsidiaries (as defined in the Plan) or one of their respective divisions by reason of retirement after (a) the day after the first anniversary date of the effective date of this Award, and (b) attaining age fifty-five (55) and completion of five (5) years of employment, or (ii) termination of Employee’s employment with the Company, one of its Subsidiaries or one of their respective divisions by reason of disability, as determined by the Compensation and Management Development Committee of the Company’s Board of Directors (the “Committee”), or death, or (B) the termination of Employee’s employment by the Company for any reason other than on account of his death, disability, retirement or for Cause (as defined in Employee’s employment agreement) or by Employee for Good Reason (as defined in Employee’s employment agreement) (i)after the day after the first anniversary date of the effective date of this Award and (ii) after the occurrence, but before the third anniversary, of (a)a Change in Control (as defined in Section 14.2 of the Plan), or (b) a sale, transfer or disposition of substantially all of the assets or capital stock of a Subsidiary (as defined in the Plan) or division of the Company or one of its Subsidiaries for whom the Employee is employed at the time of such Change in Control, sale, transfer or disposition. Notwithstanding anything herein to the contrary, the distribution by the Company to Company shareholders of any or all of the shares of common stock of any of its Subsidiaries (“Distribution”) shall not constitute an event causing Deferred Stock to become Vested Deferred Stock as described in the preceding sentence. Temporary absences from employment because of illness, vacation or leave of absence and transfers among the Company and/or any of its Subsidiaries shall not be considered terminations of employment. For purposes of this Agreement and the Plan, the Committee shall have absolute discretion to determine the date and circumstances of termination of Employee’s employment, and its determination shall be final, conclusive and binding upon Employee. Except as provided in this paragraph, upon termination of employment with the Company, one of its Subsidiaries (as defined in the Plan) or one of their respective divisions, the Employee shall be entitled to receive only the number of shares of Vested Deferred Stock as set forth in the vesting schedule set forth in the second paragraph of this Section 2. Notwithstanding anything herein to the contrary, the transfer of Employee’s employment from the Company to any of its Subsidiaries or from one of the Company’s Subsidiaries to the Company or another of the Company’s Subsidiaries in connection with a Distribution shall not constitute a termination of employment for purposes of this Agreement, and Employee’s employment will be deemed to continue for purposes of this Agreement until otherwise terminated as provided herein. In particular, if Employee transfers employment from the Company to any of its Subsidiaries or from one of the Company’s Subsidiaries to the Company or another of the Company’s Subsidiaries in connection with or in anticipation of the Distribution, such transfer shall not constitute a termination of employment for purposes of this Agreement, and Employee’s employment will be deemed to continue for purposes of this Agreement until otherwise terminated as provided herein.

The shares of Common Stock delivered to the Employee shall be from shares held by the Company as treasury stock or from shares of Common Stock acquired by the Company in the open market. Subject to the Employee’s election to defer, all shares of Common Stock to be delivered to the Employee shall be delivered as soon as administratively possible after the day after the corresponding anniversary date or the Employee’s termination of employment under clause (A)(ii) in the immediate foregoing paragraph, provided that the shares of Common Stock to be delivered as set forth herein (not deferred shares) shall be delivered no later than the 15^th day of the third month following the end of the Company’s first taxable year in which such shares become Vested Deferred Stock. However, all shares of Common Stock shall be delivered as soon as administratively possible after the occurrence of the events described in clauses B(i) and B(ii) in the immediate foregoing paragraph, but no later than ninety (90) days following the occurrence of such event (subject to the last sentence of this paragraph), provided that the Employee shall have no right to designate the calendar year in which the shares will be delivered. To the extent shares of Common Stock have not been delivered hereunder prior to the date the Employee has attained age fifty-five (55) and completed five (5) years of employment, then thereafter any shares to be delivered hereunder shall be delivered upon the earlier to occur of: (i) the corresponding anniversary date set forth in the second paragraph of this Section 2, provided such Common Stock shall be delivered no later than the 15th day of the third month following the end of the Company’s first taxable year in which such anniversary date occurs, or (ii) the date of the Employee’s termination of employment, provided such Common Stock shall be delivered no later than ninety (90) days following the Employee’s termination of employment and further provided that the Employee shall have no right to designate the calendar year in which the shares will be delivered. Notwithstanding the foregoing, if shares become deliverable by reason of the Employee’s termination of employment following retirement or a Change in Control and at the time of the Employee’s termination of employment the Employee is a “specified employee” as defined in Section 409A of the Code (as defined below), then the shares of Common Stock to be delivered shall be delivered on the date which is six months after the date of the Employee’s termination of employment.

3. Administration of the Award. The Committee shall administer the Award. The Committee shall have complete and full discretion in the administration and interpretation of the terms of the Award.

4. Right to Defer Payment of Award.

(a) Election to Defer Award. The Employee may elect to defer payment of the Award otherwise due on the anniversary date set forth in Section 2 by completing a written election and delivering such election to the Company at least one year prior to the applicable anniversary date; provided however, that the completion of such written election and the delivery of such election may be at an earlier date as determined by the Committee or required by law to insure the validity of such deferral. The deferral period elected cannot end prior to five (5) years after an Award is otherwise due on an anniversary date set forth in Section 2. At the end of the deferral period elected by the Employee (or within a certain period of time after the last day of the deferral period as determined by the Committee or required by law to insure the validity of the deferral), the Company, consistent with Section 2 and subject to Section 6, 7 and 8 shall deliver to the Employee shares of Common Stock equal in number to the number of Vested Deferred Stock held in the Employee’s Deferred Stock Account.

(b) Financial Hardship. A withdrawal from the Employee’s Deferred Stock Account of Vested Deferred Stock shall be permitted prior to the termination of the deferral period in the event that the Employee experiences an “unforeseeable emergency” as such term in defined Section 409A(a)(2)(B)(ii) of the Internal Revenue Code of 1986, as amended (“Code”) and the regulations issued therewith. The Employee must apply to the Committee for an unforeseeable emergency withdrawal and demonstrate that the circumstances being experienced were not under the Employee’s control and constitute a real emergency, which is likely to cause a severe financial hardship. The Committee shall have the authority to require such medical or other evidence as it may need to determine the necessity for the Employee’s withdrawal request. If such application for withdrawal is permitted, the amount of such withdrawal shall be limited to an amount reasonably necessary to satisfy the emergency need, and the Committee must take into account any additional compensation available. If the Employee makes a withdrawal, the amount of the Employee’s Deferred Stock Account under this Award shall be proportionately reduced to reflect the withdrawal. Also, the withholding requirements described in Section 7 shall also be effected before the withdrawal. Notwithstanding anything in this Section 4(b) to the contrary, any withdrawal for any unforeseeable emergency must comply with Section 409A(a)(2)(B) of the Code.

5. No Rights as Stockholder. Employee shall have no rights as a stockholder with respect to any shares of Common Stock covered by this Award until shares of Common Stock are delivered to the Employee pursuant to the last paragraph in Section 2 and Section 4. Until such time, Employee shall not be entitled to dividends (except where the Employee’s Deferred Stock Account is adjusted pursuant to the first paragraph of Section 2) or to vote at meetings of the stockholders of the Company.

6. Compliance With Securities Laws. Prior to the receipt of any certificates for shares of Common Stock pursuant to this Award, Employee (or Employee’s beneficiary or legal representative upon Employee’s death or disability) shall enter into such additional written representations, warranties and Awards as the Company may reasonably request in order to comply with applicable securities laws or with this Award.

7. Stock Ownership Guidelines. Employee (or Employee’s beneficiary or legal representative upon the Employee’s death or disability) shall be bound by the “Stock Ownership Guidelines” of the Company as may be in effect from time to time.

8. Withholding. Any payment of Common Stock under this Award shall be subject to applicable federal and state withholding requirements. Hence, unless the Employee delivers a check to the Company equal to the required withholding, the number of shares distributed shall be reduced to meet the Employee’s applicable withholding requirements.

9. Designation of Beneficiary. The Employee shall be permitted to provide to the Committee a beneficiary designation for receipt of his or her Award after death. If the Employee fails to designate a beneficiary, or if the designated beneficiary predeceases the Employee, the Award shall be paid to the deceased Employee’s spouse, if living, or if such spouse is not living, to the deceased Employee’s estate.

10. Adjustments. In the event of any merger, reorganization, consolidation, sale of substantially all assets, recapitalization, stock dividend, stock split, spin-off, split-up, split-off, distribution of assets or other change in corporate structure occurring after the effective date of this Award affecting the Common Stock subject to this award, the Board shall adjust the number and kind of shares of Common Stock subject to this Award so as to maintain the proportionate number of shares subject to this award, and such adjustment shall be conclusive and binding upon the Employee and the Company.

11. Non-Transferability.

(a) The Deferred Stock, the Deferred Stock Account and the Vested Deferred Stock may not be sold, assigned, transferred, exchanged, pledged, hypothecated, or otherwise encumbered and no such sale, assignment, transfer, exchange, pledge, hypothecation, or encumbrance, whether made or created by a voluntary act of the Employee or any agent of the Employee or by operation of law, shall be recognized by, or be binding upon, or shall in any manner affect the rights of, the Company, its successors or any agent thereof.

(b) No amounts payable under the Award shall be transferable by the Employee other than by his designation of a beneficiary pursuant to Section 9. The amounts payable under the Award shall be exempt from the claims of creditors of the Employee and from all orders, decrees, levies and executions and any other legal process to the fullest extent that may be permitted by law.

12. Amendments to Award. The Award may only be modified upon the mutual agreement of the Company and the Employee.

13. Source of Benefit Payments. The payment of the Award to the Employee shall be paid solely from the general assets of the Company. Until the actual delivery of the shares of Common Stock, the Employee shall not have any interest in any specific assets of the Company, including shares of Common Stock, under the terms of the Award. The Award shall not be considered to create an escrow account, trust fund or other funding arrangement of any kind, or a fiduciary relationship between the Employee and the Company. Until such time of payment, no shares of the Common Stock shall be set aside by the Company for the Award.

14. Successors and Assigns.

(a) This Award is personal to the Employee and without the prior written consent of the Company shall not be assignable by the Employee except by will or the laws of descent and distribution. This Award shall inure to the benefit of and be enforceable by the Employee’s guardian and legal representatives.

(b) This Award shall inure to the benefit of and be binding upon the Company and its successors and assigns.

(c) The Company shall require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to assume expressly and agree to perform this Award in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place.

15. Award Subject to Plan. This Award is subject to the terms of the Plan. The terms and provisions of the Plan (including any subsequent amendments thereto) are hereby incorporated herein by reference. In the event of a conflict between any terms and provisions contained herein and the terms or provisions of the Plan, the applicable terms or provisions of the Plan will govern and prevail.

16. Governing Law. This Award shall be governed by and construed in accordance with the internal laws of the State of Indiana without reference to principles of conflict of laws. The captions of this Award are not part of the provisions hereof and shall have no force or effect. This Award may not be amended or modified except by a written Award executed by the parties hereto or their respective successors and legal representatives.

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

18. No Waiver. The failure of the Employee or the Company to insist upon strict compliance with any provision of this Award or the failure to assert any right the Employee or the Company may have under this Award shall not be deemed to be a waiver of such provision or right or any other provision or right of this Award.

19. Entire Award. The Employee and the Company acknowledge that this Award supersedes any prior agreement between the parties with respect to the subject matter of this Award.

20. Counterparts. This Award may be executed in counterparts, which together shall constitute one and the same original.

Effective Date: <date>

	HILL-ROM HOLDINGS, INC.
	By:
		Perry Stuckey
		Senior Vice President, Chief Human Resources Officer
Accepted:
	<Name>

EX-10.64

EXHIBIT 10.64

FORM OF HILL-ROM HOLDINGS, INC.

NON-QUALIFIED STOCK OPTION AGREEMENT (CEO Version)

Name of Grantee: <NAME>	No. of Shares: <UNITS>
Date of Grant: <GRANT DATE>	Price per Share: <GRANT PRICE>

This Non-Qualified Stock Option Agreement (this “Agreement”) by and between HILL-ROM HOLDINGS, INC. (the “Company”) and the Grantee named above (referred to below as “you”) evidences the grant by the Company of a Non-Qualified Stock Option to you on the date stated above (the “Grant Date”) and your acceptance of such Option in accordance with the provisions of the Hill-Rom Holdings, Inc. Stock Incentive Plan (the “Plan”).

Your Option is subject to the terms and conditions set forth in the Plan (which is incorporated herein by reference), any rules and regulations adopted by the Board of Directors of the Company or the committee of the Board which administers the Plan (collectively, the “Committee”), and this Agreement. In the event of any conflict between the provisions of the Plan and the provisions of this Agreement, the terms, conditions and provisions of the Plan shall control, and this Agreement shall be deemed to be modified accordingly. This grant becomes effective only if you sign and return to the Company a copy of this Agreement evidencing your understanding of the terms and conditions of your Option. Any terms used in this Agreement and not defined have the meanings set forth in the Plan.

1. Option Grant

You have been granted an option (the “Option”) to purchase the number of shares of the Company’s Common Stock, without par value (“Common Stock”), set forth above. The Option is a “non-qualified stock option” and is not an incentive stock option within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”).

2. Option Price

The price at which you may purchase the shares of Common Stock covered by the Option is the price per share set forth above.

3. Term of Option

Your Option expires in all events on the tenth anniversary of the Grant Date (“Expiration Date”). Your Option, however, may terminate prior to the Expiration Date as provided in paragraphs 7 and 11 of this Agreement upon the occurrence of one of the events described in those paragraphs. Regardless of the provisions of paragraphs 7 and 11 and notwithstanding anything else to the contrary contained in this Agreement, in no event can your Option be exercised after the Expiration Date.

4. Vesting of Option

(a) Unless it becomes exercisable on an earlier date as provided in paragraph 7 or 11 below and subject to those paragraphs, your Option will become exercisable with respect to the first 25 percent of the shares of Common Stock covered by the Option on the first anniversary of the Grant Date and your Option will become exercisable with respect to the second, third and fourth 25 percent of the shares covered by Option on the second, third and fourth anniversaries of the Grant Date, respectively, provided that you are an employee of the Company or one of its Subsidiaries on each such date.

(b) To the extent your Option has become exercisable, you may exercise the Option to purchase all or any part of such shares at any time on or before the date the Option expires or terminates, but in no case may fewer than 100 shares be purchased at any one time, except to purchase a residue of fewer than 100 shares.

5. Manner of Exercise

You may exercise your Option by giving notice to the Company or its designated administrator on a form acceptable to the Company (which may be written or electronic) specifying the number of shares of Common Stock desired to be purchased. The notice must be accompanied by payment of the aggregate option price for such shares, which payment may be made in the following ways: in cash; by delivery of shares of Common Stock; by broker-assisted cashless exercise; or by a combination of the above, in each case subject to the terms and conditions set forth in paragraphs 6(a), 6(b), and 6(c) below. Your Option will be deemed exercised on the date your notice of exercise (with required accompaniments as described in paragraph 6) is received by the Company or its designated administrator.

6. Satisfaction of Option Price

(a) Payment of Cash. Your Option may be exercised by payment of the option price in cash (including cash equivalents, such as check, bank draft, money order, or wire transfer to the order of the Company).

(b) Payment in Common Stock. Your Option may be exercised by the delivery of unencumbered shares of Common Stock already owned by you for at least six months (either by actual delivery of the shares or by providing an affidavit affirming ownership of the shares in form and manner approved by the Committee). The shares will be valued at their fair market value on the date of exercise as provided in the Plan. The stock certificates for the shares you deliver in payment of the exercise price must be duly endorsed or accompanied by appropriate stock powers. Only stock certificates issued solely in your name or jointly in your and your spouse’s name may be delivered. Only whole shares may be delivered. Any portion of the exercise price in excess of the fair market value of a whole number of shares must be paid in cash. If a certificate delivered in exercise of your Option evidences more shares than are needed to pay the exercise price, an appropriate replacement certificate will be issued to you for the excess shares.

(c) Broker-Assisted Cashless Exercise. You may exercise your Option by executing and delivering the documents necessary to irrevocably authorize a broker acceptable to the Company to sell shares of Common Stock (or a sufficient portion of such shares) acquired upon exercise of the Option and remit to the Company a sufficient portion of the sale proceeds to pay the entire option price and any withholding tax obligation resulting from such exercise.

7. Termination of Employment

(a) General. The following rules apply to your Option in the event of your death, disability, retirement, or other termination of your employment with the Company or one of its Subsidiaries. Authorized leaves of absence from the Company or a Subsidiary shall not constitute a termination of employment for purposes of this Agreement. Except as set forth in Paragraph 7(d), if you are employed by a Subsidiary of the Company and the Company ceases to own, directly or indirectly, more than 50% of the ownership interests of the Subsidiary, your employment shall be deemed terminated for purposes of this Agreement at such time. Paragraph 11 provides special rules which apply after a Change in Control (as defined in that paragraph).

(i) Termination of Employment. If your employment terminates because of your voluntary resignation (other than Retirement as that term is used below), your Option will terminate thirty (30) days after such termination of employment. Following the termination of your employment, no additional portions of your Option will become exercisable, and your Option will be exercisable during such thirty (30) day period only for the number of shares with respect to which it is exercisable on the date of the termination of your employment. If your employment is terminated involuntarily by the Company or a Subsidiary (as applicable, the “Employer”) other than for “Cause” (as defined below), your Option will terminate ninety (90) days after such termination of employment. Following the termination of your employment, no additional portions of your Option will become exercisable, and your Option will be exercisable during such ninety (90) day period only for the number of shares with respect to which it is exercisable on the date of the termination of your employment. Notwithstanding anything herein to the contrary, your Option may not be exercised after the Expiration Date. If your employment is terminated involuntarily by the Employer for “Cause,” your Option (including any portion that has previously become exercisable) will immediately expire and may not be exercised.

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

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

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

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

(E) engaged in any act that, in the reasonable opinion of the Employer, is contrary to its best interests or would hold the Company, a Subsidiary, its officers or directors up to probable civil or criminal liability, provided that, if you act 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.

(ii) Retirement. If, on or after the first anniversary of the Grant Date, your employment terminates by reason of retirement after attaining age fifty-five (55) and completion of five (5) years of employment (“Retirement”), your Option will become fully exercisable upon such retirement and may be exercised during the period commencing on the date of your Retirement and ending on the earlier of (A) the third anniversary of the date of your Retirement, or (B) the Expiration Date, and at the conclusion of such period, your Option will terminate.

(iii) Disability. If your employment terminates by reason of disability (as determined by the Committee), your Option will become fully exercisable upon such termination of employment and may be exercised during the period commencing on the date of your termination of employment and ending on the earlier of (A) the third anniversary of the date of your termination of employment, or (B) the Expiration Date, and at the conclusion of such period, your Option will terminate.

(iv) Death. If your employment terminates by reason of death, your Option will become fully exercisable upon such termination of employment and may be exercised during the period commencing on the date of your death and ending on the earlier of (A) the third anniversary of the date of your death, or (B) the Expiration Date, and at the conclusion of such period, your Option will terminate.

(b) Adjustments by the Committee. The Committee may, in its discretion, exercised before or after your termination of employment, declare all or any portion of your Option immediately exercisable and/or permit all or any part of your Option to remain exercisable for such period designated by it after the time when the Option would have otherwise terminated as provided in the applicable portion of paragraph 7(a), but not beyond the Expiration Date.

(c) Committee Determinations. For purposes of this Agreement and the Plan, the Committee shall have absolute discretion to determine the date and circumstances of termination of your employment, and its determination shall be final, conclusive and binding upon you.

(d) Distribution of Subsidiary. Notwithstanding anything herein to the contrary, the distribution by the Company of any or all or a part of the shares of common stock of any of its Subsidiaries to Company shareholders (“Distribution”) shall not constitute a termination of employment for purposes of this Agreement, and if you are employed by a Subsidiary of the Company whose shares of common stock are included in a Distribution, your employment will be deemed to continue for purposes of this Agreement until otherwise terminated as provided herein. In addition, if you transfer employment from the Company to one of its Subsidiaries or from one of the Company’s Subsidiaries to the Company or another of the Company’s Subsidiaries in connection with or in anticipation of the Distribution, such transfer shall not constitute a termination of employment for purposes of this Agreement, and your employment will be deemed to continue for purposes of this Agreement until otherwise terminated as provided herein.

8. Restrictions on Option Exercise

(a) Even though your Option is otherwise exercisable, your right to exercise the Option will be suspended if the Committee determines that your exercise of the Option would violate applicable laws or regulations. The suspension will last until the exercise would be lawful. Any such suspension will not extend the term of your Option. The Company has no obligation to register the Common Stock covered by your Option under federal or state securities laws or to compensate you for any loss caused by the implementation of this paragraph 8.

(b) Even though your Option is otherwise exercisable, the Committee may refuse to permit such exercise if it determines, in its discretion, that any of the following circumstances is present:

(i) the shares to be acquired upon such exercise are required to be registered or qualified under any federal or state securities law, or to be listed on any securities exchange or quotation system, and such registration, qualification, or listing has not occurred;

(ii) the consent or approval of any government regulatory body is required or desirable and has not been obtained;

(iii) an agreement by you with respect to the disposition of shares to be acquired upon exercise of your Option is determined by the Committee to be necessary or desirable in order to comply with any legal requirements and you have not executed such agreement; or

(iv) the issuance, sale or delivery of any shares of Common Stock is or may in the circumstances be unlawful under the laws or regulations of any applicable jurisdiction.

9. Income Tax Withholding

In connection with the exercise of your Option, you will be required to pay, or make other arrangements satisfactory to the Committee, to satisfy any applicable tax withholding liability. You may elect to have the tax withholding obligation satisfied by having the Company retain shares of Common Stock, otherwise deliverable to you upon exercise of your Option, having a value equal to the amount of your withholding obligation. If you fail to satisfy your tax withholding obligation in a time and manner satisfactory to the Committee, the Company shall have the right to withhold the required amount from your salary or other amounts payable to you.

Any election to have shares withheld must be made (in the manner acceptable to the Company) on or before the date you exercise your Option.

The amount of withholding tax paid by you to the Company will be paid to the appropriate federal, state and local tax authorities in satisfaction of the withholding obligations under the tax laws. The total amount of income you recognize by reason of exercise of the Option will be reported to the appropriate taxing authorities in the year in which you recognize income with respect to the exercise. Whether you owe additional tax will depend on your overall taxable income for the applicable year and the total tax remitted for that year through withholding or by estimated payments.

10. Non-transferability of Option

The Option granted to you by this Agreement may be exercised only by you, and may not be assigned, pledged, or otherwise transferred by you, with the exception that in the event of your death the Option may be exercised (at any time prior to its expiration or termination as provided in paragraphs 3 and 7) by the executor or administrator of your estate or by a person who acquired the right to exercise your Option by bequest or inheritance or by the laws of descent and distribution.

11. Change in Control

Notwithstanding the provisions of paragraph 7, in the event your employment is terminated at any time after a Change in Control (as defined in the Plan) but prior to the third anniversary thereof (a) by the Company for any reason other than on account of your death, disability, retirement or for Cause (as defined above) or (b) by you for Good reason (as defined in your employment agreement), your Option will become immediately exercisable in full and will remain exercisable for a period of ninety (90) days after your termination of employment or such longer period as may be specified in paragraph 7, but not beyond the Expiration Date.

12. Adjustment in Certain Events

In the event of any merger, reorganization, consolidation, sale of substantially all assets, recapitalization, stock dividend, stock split, spin-off, split-up, split-off, distribution of assets or other change in corporate structure occurring after the effective date of this award affecting the Common Stock underlying your award, the Board shall adjust the number and kind of shares of Common Stock covered by your Option and the exercise price so as to maintain without change the aggregate exercise price and such adjustment shall be conclusive and binding upon you and the Company.

13. Forfeiture

Your Option and any Common Stock acquired under the Plan and any gain from the sale of any Common Stock acquired under the Plan are required to be forfeited by you, including after exercise or vesting, if, during your employment or within one (1) year following your termination of employment (or any longer period specified in any applicable employment or severance agreement with the Company), you engage in Disqualifying Conduct, which shall mean: (i) your performance of service (including service as an employee, director, or consultant) for a competitor of the Company or its Subsidiaries or the establishing by you of a business which competes with the Company or its Subsidiaries, (ii) your solicitation of employees or customers of the Company or its Subsidiaries, (iii) your improper use or disclosure of confidential information of the Company or its Subsidiaries, or (iv) your material misconduct in the performance of your duties for the Company or its Subsidiaries, as determined by the Committee.

14. No Guarantee of Employment

The grant of this Option does not constitute an assurance of continued employment for any period or in any way interfere with the Company’s right to terminate your employment or to change the terms and conditions of your employment.

15. Other Plans

You acknowledge that any income derived from your Option (or the sale of Common Stock underlying your Option) will not affect your participation in, or benefits under, any other benefit plan maintained by the Company.

16. Administration

The Committee has the sole power to interpret the Plan and this Agreement and to act upon all matters relating to Options granted under the Plan. Any decision, determination, interpretation, or other action taken pursuant to the provisions of the Plan by the Committee shall be final, binding, and conclusive.

17. Amendment

The Committee may from time to time amend the terms of this grant in accordance with the terms of the Plan in effect at the time of such amendment, but no amendment which is unfavorable to you can be made without your written consent.

This Agreement contains the formal terms and conditions of your award and accordingly should be retained in your files for future reference. Please sign below to evidence your acceptance of this Option on the terms and conditions set forth in this Agreement, and return a signed copy of this Agreement in the enclosed, self-addressed envelope.

BY:
	Perry Stuckey Senior Vice President,
	Chief Human Resources Officer

ACCEPTED:                                         

EX-10.65

EXHIBIT 10.65

FORM OF HILL-ROM HOLDINGS, INC.
STOCK AWARD (CEO Version)
(EFFECTIVE <date>)

1. Purpose. The purpose of the Hill-Rom Holdings, Inc. Stock Award (hereinafter called the “Award”), which is granted under the Hill-Rom Holdings, Inc. Stock Incentive Plan (the “Plan”), is to promote profitability and growth of Hill-Rom Holdings, Inc. (the “Company”) by offering an incentive payable in Company common stock to <Name> (“Employee”) who contributes to such profitability and growth.

2. Amount of Award. The Company shall cause an account to be established in the name of the Employee (“Deferred Stock Account”), which shall be assumed to be invested in <Units> shares (“Initial Deferred Stock Award”) of common stock, no par value of the Company (“Common Stock”). No actual shares of Common Stock shall be held in the Deferred Stock Account, and the number of shares of Common Stock maintained in the Deferred Stock Account (“Deferred Stock”) shall be a book entry which states the number of shares of Common Stock the Employee would have a right to receive in accordance with the terms of this Award. Any cash dividend paid on Common Stock by the Company while the Deferred Stock Account exists will be assumed to be paid on the Deferred Stock in the Deferred Stock Account and shall be assumed to be reinvested in Common Stock on the date of such dividend payment, thereby increasing the number of shares of Deferred Stock maintained in the Deferred Stock Account. Any stock dividends, stock splits and other similar rights inuring to Common Stock shall also be assumed to inure to the Deferred Stock, which may increase or decrease the number of shares of Deferred Stock in the Deferred Stock Account. The Initial Deferred Stock Award plus any increases or less any decreases due to cash dividends, stock dividends, stock splits and any other similar rights inuring to Common Stock as set forth in the two immediately preceding sentences shall herein after be referred to as the “Deferred Stock Award.”

If Employee’s employment with the Company or any of its Subsidiaries (as defined in the Plan) continues uninterrupted from the effective date of this Award through the day after the first, second, third and fourth anniversaries of such effective date, respectively, an amount of Deferred Stock which equals a percentage as set forth below of the Deferred Stock Award, shall be non-forfeitable (“Vested Deferred Stock”), and the Company shall, subject to his election to defer receipt, deliver to him shares of Common Stock equal in number to the number of shares of Deferred Stock which became Vested Deferred Stock on the day after such second, third, and fourth anniversary dates as follows:

The day after the first anniversary date of the effective date of this Award	25% of the Deferred Stock Award
The day after the second anniversary date of the effective date of this Award	25% of the Deferred Stock Award
The day after the third anniversary date of the effective date of this Award	25% of the Deferred Stock Award
The day after the fourth anniversary date of the effective date of this Award	25% of the Deferred Stock Award

Any Deferred Stock maintained in the Deferred Stock Account which is not Vested Deferred Stock shall, upon the Employee’s termination of employment, be forfeited by Employee without the payment of any consideration or further consideration by the Company, and neither Employee nor any successors, heirs, assigns, or legal representatives of Employee shall thereafter have any further rights or interest in such forfeited Deferred Stock. Any fractional shares of Vested Deferred Stock shall be rounded up to the next whole share of Vested Deferred Stock.

Notwithstanding the schedule set forth above, Deferred Stock maintained in the Deferred Stock Account shall become Vested Deferred Stock upon (A) the occurrence of any one of the following events: (i) termination of Employee’s employment with the Company, one of its Subsidiaries (as defined in the Plan) or one of their respective divisions by reason of retirement after (a) the day after the first anniversary date of the effective date of this Award, and (b) attaining age fifty-five (55) and completion of five (5) years of employment, or (ii) termination of Employee’s employment with the Company, one of its Subsidiaries or one of their respective divisions by reason of disability, as determined by the Compensation and Management Development Committee of the Company’s Board of Directors (the “Committee”), or death, or (B) the termination of Employee’s employment by the Company for any reason other than on account of his death, disability, retirement or for Cause (as defined in Employee’s employment agreement) or by Employee for Good Reason (as defined in Employee’s employment agreement) (i)after the day after the first anniversary date of the effective date of this Award and (ii) after the occurrence, but before the third anniversary, of (a)a Change in Control (as defined in Section 14.2 of the Plan), or (b) a sale, transfer or disposition of substantially all of the assets or capital stock of a Subsidiary (as defined in the Plan) or division of the Company or one of its Subsidiaries for whom the Employee is employed at the time of such Change in Control, sale, transfer or disposition. Notwithstanding anything herein to the contrary, the distribution by the Company to Company shareholders of any or all of the shares of common stock of any of its Subsidiaries (“Distribution”) shall not constitute an event causing Deferred Stock to become Vested Deferred Stock as described in the preceding sentence. Temporary absences from employment because of illness, vacation or leave of absence and transfers among the Company and/or any of its Subsidiaries shall not be considered terminations of employment. For purposes of this Agreement and the Plan, the Committee shall have absolute discretion to determine the date and circumstances of termination of Employee’s employment, and its determination shall be final, conclusive and binding upon Employee. Except as provided in this paragraph, upon termination of employment with the Company, one of its Subsidiaries (as defined in the Plan) or one of their respective divisions, the Employee shall be entitled to receive only the number of shares of Vested Deferred Stock as set forth in the vesting schedule set forth in the second paragraph of this Section 2. Notwithstanding anything herein to the contrary, the transfer of Employee’s employment from the Company to any of its Subsidiaries or from one of the Company’s Subsidiaries to the Company or another of the Company’s Subsidiaries in connection with a Distribution shall not constitute a termination of employment for purposes of this Agreement, and Employee’s employment will be deemed to continue for purposes of this Agreement until otherwise terminated as provided herein. In particular, if Employee transfers employment from the Company to any of its Subsidiaries or from one of the Company’s Subsidiaries to the Company or another of the Company’s Subsidiaries in connection with or in anticipation of the Distribution, such transfer shall not constitute a termination of employment for purposes of this Agreement, and Employee’s employment will be deemed to continue for purposes of this Agreement until otherwise terminated as provided herein.

The shares of Common Stock delivered to the Employee shall be from shares held by the Company as treasury stock or from shares of Common Stock acquired by the Company in the open market. Subject to the Employee’s election to defer, all shares of Common Stock to be delivered to the Employee shall be delivered as soon as administratively possible after the day after the corresponding anniversary date or the Employee’s termination of employment under clause (A)(ii) in the immediate foregoing paragraph, provided that the shares of Common Stock to be delivered as set forth herein (not deferred shares) shall be delivered no later than the 15^th day of the third month following the end of the Company’s first taxable year in which such shares become Vested Deferred Stock. However, all shares of Common Stock shall be delivered as soon as administratively possible after the occurrence of the events described in clauses B(i) and B(ii) in the immediate foregoing paragraph, but no later than ninety (90) days following the occurrence of such event (subject to the last sentence of this paragraph), provided that the Employee shall have no right to designate the calendar year in which the shares will be delivered. Tothe extent shares of Common Stock have not been delivered hereunder prior to the date the Employee has attained age fifty-five (55) and completed five (5) years of employment, then thereafter any shares to be delivered hereunder shall be delivered upon the earlier to occur of: (i) the corresponding anniversary date set forth in the second paragraph of this Section 2, provided such Common Stock shall be delivered no later than the 15th day of the third month following the end of the Company’s first taxable year in which such anniversary date occurs, or (ii) the date of the Employee’s termination of employment, provided such Common Stock shall be delivered no later than ninety (90) days following the Employee’s termination of employment and further provided that the Employee shall have no right to designate the calendar year in which the shares will be delivered. Notwithstanding the foregoing, if shares become deliverable by reason of the Employee’s termination of employment following retirement or a Change in Control and at the time of the Employee’s termination of employment the Employee is a “specified employee” as defined in Section 409A of the Code (as defined below), then the shares of Common Stock to be delivered shall be delivered on the date which is six months after the date of the Employee’s termination of employment.

3. Administration of the Award. The Committee shall administer the Award. The Committee shall have complete and full discretion in the administration and interpretation of the terms of the Award.

4. Right to Defer Payment of Award.

(a) Election to Defer Award. The Employee may elect to defer payment of the Award otherwise due on the anniversary date set forth in Section 2 by completing a written election and delivering such election to the Company at least one year prior to the applicable anniversary date; provided however, that the completion of such written election and the delivery of such election may be at an earlier date as determined by the Committee or required by law to insure the validity of such deferral. The deferral period elected cannot end prior to five (5) years after an Award is otherwise due on an anniversary date set forth in Section 2. At the end of the deferral period elected by the Employee (or within a certain period of time after the last day of the deferral period as determined by the Committee or required by law to insure the validity of the deferral), the Company, consistent with Section 2 and subject to Section 6, 7 and 8 shall deliver to the Employee shares of Common Stock equal in number to the number of Vested Deferred Stock held in the Employee’s Deferred Stock Account.

(b) Financial Hardship. A withdrawal from the Employee’s Deferred Stock Account of Vested Deferred Stock shall be permitted prior to the termination of the deferral period in the event that the Employee experiences an “unforeseeable emergency” as such term in defined Section 409A(a)(2)(B)(ii) of the Internal Revenue Code of 1986, as amended (“Code”) and the regulations issued therewith. The Employee must apply to the Committee for an unforeseeable emergency withdrawal and demonstrate that the circumstances being experienced were not under the Employee’s control and constitute a real emergency, which is likely to cause a severe financial hardship. The Committee shall have the authority to require such medical or other evidence as it may need to determine the necessity for the Employee’s withdrawal request. If such application for withdrawal is permitted, the amount of such withdrawal shall be limited to an amount reasonably necessary to satisfy the emergency need, and the Committee must take into account any additional compensation available. If the Employee makes a withdrawal, the amount of the Employee’s Deferred Stock Account under this Award shall be proportionately reduced to reflect the withdrawal. Also, the withholding requirements described in Section 7 shall also be effected before the withdrawal. Notwithstanding anything in this Section 4(b) to the contrary, any withdrawal for any unforeseeable emergency must comply with Section 409A(a)(2)(B) of the Code.

5. No Rights as Stockholder. Employee shall have no rights as a stockholder with respect to any shares of Common Stock covered by this Award until shares of Common Stock are delivered to the Employee pursuant to the last paragraph in Section 2 and Section 4. Until such time, Employee shall not be entitled to dividends (except where the Employee’s Deferred Stock Account is adjusted pursuant to the first paragraph of Section 2) or to vote at meetings of the stockholders of the Company.

6. Compliance With Securities Laws. Prior to the receipt of any certificates for shares of Common Stock pursuant to this Award, Employee (or Employee’s beneficiary or legal representative upon Employee’s death or disability) shall enter into such additional written representations, warranties and Awards as the Company may reasonably request in order to comply with applicable securities laws or with this Award.

7. Stock Ownership Guidelines. Employee (or Employee’s beneficiary or legal representative upon the Employee’s death or disability) shall be bound by the “Stock Ownership Guidelines” of the Company as may be in effect from time to time.

8. Withholding. Any payment of Common Stock under this Award shall be subject to applicable federal and state withholding requirements. Hence, unless the Employee delivers a check to the Company equal to the required withholding, the number of shares distributed shall be reduced to meet the Employee’s applicable withholding requirements.

9. Designation of Beneficiary. The Employee shall be permitted to provide to the Committee a beneficiary designation for receipt of his or her Award after death. If the Employee fails to designate a beneficiary, or if the designated beneficiary predeceases the Employee, the Award shall be paid to the deceased Employee’s spouse, if living, or if such spouse is not living, to the deceased Employee’s estate.

10. Adjustments. In the event of any merger, reorganization, consolidation, sale of substantially all assets, recapitalization, stock dividend, stock split, spin-off, split-up, split-off, distribution of assets or other change in corporate structure occurring after the effective date of this Award affecting the Common Stock subject to this award, the Board shall adjust the number and kind of shares of Common Stock subject to this Award so as to maintain the proportionate number of shares subject to this award, and such adjustment shall be conclusive and binding upon the Employee and the Company.

11. Non-Transferability.

(a) The Deferred Stock, the Deferred Stock Account and the Vested Deferred Stock may not be sold, assigned, transferred, exchanged, pledged, hypothecated, or otherwise encumbered and no such sale, assignment, transfer, exchange, pledge, hypothecation, or encumbrance, whether made or created by a voluntary act of the Employee or any agent of the Employee or by operation of law, shall be recognized by, or be binding upon, or shall in any manner affect the rights of, the Company, its successors or any agent thereof.

(b) No amounts payable under the Award shall be transferable by the Employee other than by his designation of a beneficiary pursuant to Section 9. The amounts payable under the Award shall be exempt from the claims of creditors of the Employee and from all orders, decrees, levies and executions and any other legal process to the fullest extent that may be permitted by law.

12. Amendments to Award. The Award may only be modified upon the mutual agreement of the Company and the Employee.

13. Source of Benefit Payments. The payment of the Award to the Employee shall be paid solely from the general assets of the Company. Until the actual delivery of the shares of Common Stock, the Employee shall not have any interest in any specific assets of the Company, including shares of Common Stock, under the terms of the Award. The Award shall not be considered to create an escrow account, trust fund or other funding arrangement of any kind, or a fiduciary relationship between the Employee and the Company. Until such time of payment, no shares of the Common Stock shall be set aside by the Company for the Award.

14. Successors and Assigns.

(a) This Award is personal to the Employee and without the prior written consent of the Company shall not be assignable by the Employee except by will or the laws of descent and distribution. This Award shall inure to the benefit of and be enforceable by the Employee’s guardian and legal representatives.

(b) This Award shall inure to the benefit of and be binding upon the Company and its successors and assigns.

(c) The Company shall require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to assume expressly and agree to perform this Award in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place.

15. Award Subject to Plan. This Award is subject to the terms of the Plan. The terms and provisions of the Plan (including any subsequent amendments thereto) are hereby incorporated herein by reference. In the event of a conflict between any terms and provisions contained herein and the terms or provisions of the Plan, the applicable terms or provisions of the Plan will govern and prevail.

16. Governing Law. This Award shall be governed by and construed in accordance with the internal laws of the State of Indiana without reference to principles of conflict of laws. The captions of this Award are not part of the provisions hereof and shall have no force or effect. This Award may not be amended or modified except by a written Award executed by the parties hereto or their respective successors and legal representatives.

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

18. No Waiver. The failure of the Employee or the Company to insist upon strict compliance with any provision of this Award or the failure to assert any right the Employee or the Company may have under this Award shall not be deemed to be a waiver of such provision or right or any other provision or right of this Award.

19. Entire Award. The Employee and the Company acknowledge that this Award supersedes any prior agreement between the parties with respect to the subject matter of this Award.

20. Counterparts. This Award may be executed in counterparts, which together shall constitute one and the same original.

Effective Date: <date>

	HILL-ROM HOLDINGS, INC.
	By:
		Perry Stuckey
		Senior Vice President, Chief Human Resources Officer
Accepted:
	<Name>

EX-21

EXHIBIT 21

HILL-ROM HOLDINGS, INC.
SUBSIDIARIES OF THE REGISTRANT

All subsidiaries of the Company as of November 9, 2010 are wholly-owned Indiana corporations, unless otherwise noted.

Hill-Rom, Inc.

Subsidiaries of Hill-Rom, Inc.
Advanced Respiratory, Inc., a Minnesota corporation
Allen Medical Systems, Inc.
Hill-Rom Manufacturing, Inc., a Delaware corporation
Hill-Rom Services, Inc., a Delaware corporation

Jointly owned subsidiaries of Hill-Rom, Inc. and Advanced Respiratory, Inc.
Hill-Rom Company, Inc.

Subsidiaries of Hill-Rom Company, Inc.
NaviCare Systems, LLC
Hill-Rom International, Inc.
MEDIQ/PRN Life Support Services, LLC, a Delaware limited liability company
Liko North America, LLC
Hill-Rom Logistics, LLC

Subsidiary of Hill-Rom Manufacturing, Inc.
Hill-Rom Canada, Ltd., an (Ontario) Canadian Corporation

Subsidiaries of Hill-Rom International Inc.
Hill-Rom Pty, Ltd, an Australian corporation
Hill-Rom Asia Limited, a Hong-Kong corporation
Hill-Rom Japan KK, a Japanese corporation

Subsidiaries of Hill-Rom Pty, Ltd.
Medicraft Manufacturing Pty. Ltd, an Australian corporation
Medicraft Australia Pty. Ltd, an Australian corporation

Jointly owned subsidiary of Medicraft Manufacturing Pty, Ltd. and Medicraft Australia Pty. Ltd.
Medicraft Australia Unit Trust, an Australian entity

Subsidiary of Hill-Rom Asia Limited
Hill-Rom Business Services Co., LTD, a Hong-Kong corporation

Subsidiaries of Hill-Rom Services, Inc.
Hill-Rom SARL, a French corporation
Hill-Rom Services Pte, Ltd., a Singapore corporation
Hill-Rom TSS, Inc.

Subsidiary of Allen Medical Systems, Inc.
AMATECH Corporation

Jointly owned subsidiaries of Hill-Rom Services, Inc. and Hill-Rom, Inc.
Hill-Rom International B.V., a Netherlands corporation
Hill-Rom HB, a Swedish partnership

Subsidiaries of Hill-Rom International B.V.
Hill-Rom B.V., a Netherlands corporation
Hill-Rom Ltd., a United Kingdom corporation
Hillrom S.A., a Switzerland corporation
Hill-Rom Austria GmbH, an Austrian corporation
Hill-Rom Sociedade Unipessoal, LDA (Portugal)
Hill-Rom Global Holdings, B.V., a Netherlands corporation

Jointly owned subsidiaries of Hill-Rom International B.V. and Hill-Rom Services, Inc.
Hill-Rom de Mexico S de RL de CV, a Mexican corporation
Hill-Rom Servicios S de RL de CV, a Mexican corporation
Hill-Rom GmbH, a German corporation

Subsidiary of Hill-Rom B.V.
Hill-Rom Finland, a Finland corporation

Subsidiary of Hill-Rom GmbH
Liko GmbH, a German corporation

Subsidiaries of Hill-Rom, Ltd. (UK)
Hill-Rom (UK), Ltd., a United Kingdom corporation
Liko UK Ltd, a United Kingdom corporation

Subsidiaries of Hill-Rom SARL
Hill-Rom Industries SA, a French corporation
Hill-Rom, S.p.A, an Italian corporation
Hill-Rom SAS, a French corporation
SCI Le Couviour Immoblier, a French corporation
Hill-Rom Iberia S.L., a Spanish corporation
Hill-Rom AB, a Swedish corporation

Jointly owned subsidiary of Hill-Rom SARL and Hill-Rom SAS
Hill-Rom sro, a Czech Republic corporation

Subsidiary of Hill-Rom AB
Liko Vårdlyft AB, a Swedish corporation

Subsidiaries of Liko Vårdlyft AB
Liko R&D AB, a Swedish corporation
Liko Competence AB, a Swedish corporation
Liko AB, a Swedish corporation
Liko Production AB, a Swedish corporation
Liko Textil AB, a Swedish corporation
Liko Norge AS, a Norway corporation
Nordic Rehab AB, a Swedish corporation
Liko Invest AB, a Swedish corporation

Subsidiary of Hill-Rom TSS, Inc.
60 percent ownership interest in Encompass TSS, LLC, a Delaware limited liability company

EX-23

EXHIBIT 23

Consent of Independent Registered Public Accounting Firm

We hereby consent to the incorporation by reference in the Registration Statement on Form S-3 (Nos. 333-157337, 333-107016) and Form S-8 (Nos. 333-157341, 333-157338, 333-88354, 333-49669, and 333-88328) of Hill-Rom Holdings, Inc. of our report dated November 17, 2010, relating to the financial statements, financial statement schedule and the effectiveness of internal control over financial reporting, which appears in this Form 10-K.

PricewaterhouseCoopers LLP
Indianapolis, Indiana
November 17, 2010

EX-31.1

EXHIBIT 31.1

CERTIFICATIONS

Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, John J. Greisch, certify that:

1.	I have reviewed this Annual Report on Form 10-K of Hill-Rom Holdings, Inc.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the periods covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)	designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)	designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)	evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)	disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s fourth fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s Board of Directors (or persons performing the equivalent functions):

a)	all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b)	any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 17, 2010

/s/ John J. Greisch John J. Greisch

President and Chief Executive Officer

EX-31.2

EXHIBIT 31.2

CERTIFICATIONS

Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Gregory N. Miller, certify that:

1.	I have reviewed this Annual Report on Form 10-K of Hill-Rom Holdings, Inc.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the periods covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)	designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)	designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)	evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)	disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s fourth fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s Board of Directors (or persons performing the equivalent functions):

a)	all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b)	any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 17, 2010

/s/ Gregory N. Miller Gregory N. Miller

Senior Vice President and Chief Financial Officer

EX-32.1

EXHIBIT 32.1

Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Annual Report on Form 10-K of Hill-Rom Holdings, Inc. (the “Company”) for the year ended September 30, 2010, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, John J. Greisch, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ John J. Greisch John J. Greisch

President and Chief Executive Officer

November 17, 2010

A signed original of this written statement required by Section 906 has been provided to Hill-Rom Holdings, Inc. and will be retained by Hill-Rom Holdings, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

EXHIBIT 32.2

Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Annual Report on Form 10-K of Hill-Rom Holdings, Inc. (the “Company”) for the year ended September 30, 2010, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Gregory N. Miller, Senior Vice President and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Gregory N. Miller Gregory N. Miller

Senior Vice President and Chief Financial Officer

November 17, 2010

A signed original of this written statement required by Section 906 has been provided to Hill-Rom Holdings, Inc. and will be retained by Hill-Rom Holdings, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.