8-K

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

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

Date of Report (Date of Earliest Event Reported): March 13, 2006

Hillenbrand Industries, Inc.
__________________________________________
(Exact name of registrant as specified in its charter)

Indiana	1-6651	35-1160484
_____________________ (State or other jurisdiction	_____________ (Commission	______________ (I.R.S. Employer
of incorporation)	File Number)	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) 934-7000

Not Applicable
______________________________________________
Former name or former address, if changed since last report

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[  ]  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[  ]  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[  ]  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[  ]  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01 Entry into a Material Definitive Agreement.

On March 13, 2006, the Compensation and Management Development Committee (the "Committee") of the Board of Directors of Hillenbrand Industries, Inc. approved the payment of a bonus to Rolf A. Classon in connection with the end of Mr. Classon's term as Interim President and Chief Executive Officer of Hillenbrand. As previously disclosed, the employment agreement between Mr. Classon and Hillenbrand provided that Mr. Classon would be entitled to receive a bonus at the end of the term of his employment as Interim President and Chief Executive Officer of (i) $382,500 (the "Guaranteed Bonus") plus (ii) up to $382,500 based upon the achievement by Hillenbrand during Mr. Classon's employment of certain objectives determined by the Committee (the "Incentive Bonus Opportunity"). The performance goals established by the Committee for evaluation of Mr. Classon in connection with the Incentive Bonus Opportunity included:
• Progress in line with plans with respect to the restructuring activities announced by H illenbrand in the fourth quarter of fiscal 2005;
• Timely completion of the search for a permanent President and Chief Executive Officer;
• Financial performance in line with Hillenbrand's business plans and guidance; and
• Other subjective goals relating to the business of Hillenbrand and its Hill-Rom subsidiary.

Based upon Hillenbrand's performance with respect to these performance goals during the term of Mr. Classon's employment as Interim President and Chief Executive Officer, the Committee approved the payment to Mr. Classon of a bonus of $765,000, representing the full amount of the Incentive Bonus Opportunity plus the Guaranteed Bonus.

In addition, on March 16, 2006, Hillenbrand agreed to provide supplemental benefits to Kenneth A. Camp, Senior Vice President of Hillenbrand and President and Chief Executive Officer of Hillenbrand's Batesville Casket Company subsidiary, under Hillenbrand's Supplemental Executive Retirement Plan ("SERP"). The agreement provi des that if Mr. Camp remains employed by Hillenbrand or Batesville for the entire four-year period beginning on March 16, 2006 and his employment is not thereafter terminated for "cause" (as defined in the employment agreement between Batesville and Mr. Camp), then for benefit calculation purposes under the SERP, Mr. Camp will be credited with an additional four years of service earned under the SERP (in addition to the years of service Mr. Camp otherwise would earn under the SERP during such period). Also under this agreement, if during the four-year period beginning March 16, 2006 (i) Mr. Camp's employment with Hillenbrand or Batesville is terminated after March 16, 2007 due to disability or death, (ii) Mr. Camp's employment with Hillenbrand or Batesville is terminated after March 16, 2007 without "cause" (as defined in Mr. Camp's employment agreement) or by Mr. Camp for "good reason" (as defined in Mr. Camp's employment agreement), (iii) a "change in control" (as defined in the SERP) of Hillenbrand occur s, or (iv) a sale, transfer or disposition of substantially all of the assets or capital stock of Batesville occurs, then Mr. Camp will be credited with one additional year of service under the SERP for each full year worked during the four-year period beginning March 16, 2006 (in addition to the years of service Mr. Camp otherwise would earn under the SERP during such period).

Additionally, on March 16, 2006, Hillenbrand awarded to Mr. Camp 18,671 restricted stock units (otherwise known as deferred stock awards) under Hillenbrand's Stock Incentive Plan. These restricted stock units will vest in 15% increments on the day after each of the first, second and third anniversaries of the date of the award, with the remaining 55% vesting on the day after the fourth anniversary of the date of the award. The restricted stock units will vest earlier upon (A) the occurrence of any one of the following events: (i) Mr. Camp's employment with Hillenbrand, one of its subsidiaries or one of their respective divis ions is terminated by the applicable entity without "cause" (as defined in Mr. Camp's employment agreement) or Mr. Camp's termination of employment is for "good reason" (as defined in Mr. Camp's employment agreement) or (ii) termination of Mr. Camp's employment with Hillenbrand, one of its subsidiaries or one of their respective divisions by reason of disability or death, or (B) the occurrence of (i) a Change in Control (as defined in the Stock Incentive Plan), or (ii) a sale, transfer or disposition of substantially all of the assets or capital stock of a subsidiary or division of Hillenbrand or one of its subsidiaries for whom Mr. Camp is employed at the time of such Change in Control, sale, transfer or disposition.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.
10.1 Letter to Kenneth A. Camp Regarding Supplemental Benefit Under Supplemental Executive Retirement Plan.
10.2 Stock Award between Hillenbrand Industries, Inc. and Kenneth A. Camp dated effective March 16, 2006.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	Hillenbrand Industries, Inc.
March 17, 2006	By:	Gregory N. Miller
		Name: Gregory N. Miller
		Title: Senior Vice President and Chief Financial Officer

	Hillenbrand Industries, Inc.
March 17, 2006	By:	Richard G. Keller
		Name: Richard G. Keller
		Title: Vice President - Controller and Chief Accounting Officer

Exhibit Index

Exhibit No.	Description
10.1	Letter to Kenneth A. Camp Regarding Supplemental Benefit Under Supplemental Executive Retirement Plan.
10.2	Stock Award between Hillenbrand Industries, Inc. and Kenneth A. Camp dated effective March 16, 2006.

EX-10.1

Exhibit 10.1

Hillenbrand Industries, Inc.

Mr. Kenneth A. Camp

RE: Supplemental Benefit under the SERP

Dear Ken:

The purpose of this letter is to memorialize our commitment to you over the four year period commencing March 16, 2006 (“Four Year Period”) and to incentivize you to remain employed by Batesville Services, Inc. over such same Four Year Period.

If you remain employed by Hillenbrand Industries, Inc. (“Hillenbrand”) or Batesville Services, Inc. (“Batesville”) for the entire Four Year Period and your employment is not terminated for “cause” (as defined in your Employment Agreement with Batesville (“Employment Agreement”)) after the Four Year Period, then, for benefit calculation purposes under the Hillenbrand Industries, Inc. Supplemental Executive Retirement Plan (“SERP”), you will be credited with an additional four years of service, which will be added on to the amount of years of service earned under the SERP (which includes the service normally earned during such Four Year Period).

Notwithstanding the foregoing, you will be credited with one additional year of service, which will be added on to the amount of years of service earned under the SERP, for each full year (measured from March 16, 2006) worked during such Four Year Period, if and only if during the Four Year Period: (i) your employment with Hillenbrand or Batesville is terminated after the day after the first anniversary date of March 16, 2006 due to disability or death, (ii) your employment with Hillenbrand or Batesville is terminated after the day after the first anniversary date of March 16, 2006 without “cause” (as defined in the Employment Agreement) or by you for “Good Reason” (as defined in the Employment Agreement), (iii) a change of control of Hillenbrand as defined under the SERP, or (iv) a sale, transfer or disposition of substantially all of the assets or capital stock of Batesville.

Very truly yours,

Rolf A. Classon

Exhibit 10.2

HILLENBRAND INDUSTRIES, INC.
STOCK AWARD
(EFFECTIVE March 16, 2006)

1. Purpose. The purpose of the Hillenbrand Industries, Inc. Stock Award (hereinafter called the “Award”) is to promote profitability and growth of Hillenbrand Industries, Inc. (the “Company”) by offering an incentive payable in Company common stock to Kenneth A. Camp (“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 EIGHTEEN THOUSAND SIX HUNDRED AND SEVENTY ONE (18,671) 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 first, second, third and fourth anniversary dates as follows:

The day after the first anniversary date of the effective date of this Award	15% of the Deferred Stock Award
The day after the second anniversary date of the effective date of this Award	15% of the Deferred Stock Award
The day after the third anniversary date of the effective date of this Award	15% of the Deferred Stock Award
The day after the fourth anniversary date of the effective date of this Award	55% 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) the Employee’s employment with the Company, one of its Subsidiaries (as defined in the Plan) or one of their respective divisions is terminated by such applicable entity without “cause” (as defined in that certain outstanding Employment Agreement by and between such entity and Employee (“Employment Agreement”)) or Employee’s termination of employment is for “Good Reason” (as defined in the Employment Agreement) 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 occurrence 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 for whom the Employee is employed at the time of such Change in Control, sale, transfer or disposition. 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.

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 (i) as soon as administratively possible after the day after the corresponding anniversary date, (ii) as soon as administratively possible after the Employee’s termination of employment, or (iii) after the occurrence of the events described in clauses (B) (i) and (ii) in the immediate foregoing paragraph of this Section, 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. It is intended that no delivery of shares of Common Stock will cause Employee adverse tax consequences under Section 409A of the Internal Revenue Code of 1986, as amended (“Code”).

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 such other date as determined by the Committee that complies with the requirements of Code Section 409A or other applicable law to insure the validity of such deferral. 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. If there is a change in the outstanding shares of the Common Stock by reason of any stock dividend or split, re-capitalization, merger, consolidation, spin-off, reorganization, combination or exchange of shares or other similar corporate change occurring after the effective date of this Award, the Committee shall adjust the number of shares of Common Stock subject to the Award to reflect the change, 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 Hillenbrand Industries, Inc. Stock Incentive Plan (“Plan”). The terms and provisions of the Plan (including any subsequent amendments thereto) are hereby incorporated herein by reference. Except for the provisions of Section 2 above relating to termination of employment by the appropriate entity without “cause” or by the Employee for “Good Reason,” 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: March 16, 2006

HILLENBRAND INDUSTRIES, INC.

By:      
Rolf A. Classon
President and Chief Executive Officer