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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant þ | |
Filed by a Party other than the Registrant o | |
Check the appropriate box: |
o Preliminary Proxy Statement | |
o Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) | |
þ Definitive Proxy Statement | |
o Definitive Additional Materials | |
o Soliciting Material Pursuant to §240.14a-12 |
Hillenbrand Industries, Inc.
Payment of Filing Fee (Check the appropriate box):
þ No fee required. | |
o Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. |
1) Title of each class of securities to which transaction applies: |
2) Aggregate number of securities to which transaction applies: |
3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): |
4) Proposed maximum aggregate value of transaction: |
5) Total fee paid: |
o Fee paid previously with preliminary materials. |
o Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. |
1) Amount Previously Paid: |
2) Form, Schedule or Registration Statement No.: |
3) Filing Party: |
4) Date Filed: |
SEC 1913 (02-02) | Persons who are to respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB control number. |
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(1) | To elect five members to the Board of Directors; | ||
(2) | To ratify the appointment of PricewaterhouseCoopers LLP as the independent registered public accounting firm of Hillenbrand Industries, Inc.; and | ||
(3) | To transact such other business as may properly come before the meeting and any adjournment of the meeting. |
By Order of the Board of Directors | ||
Patrick D. de Maynadier Secretary |
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• | The proxy statement and annual report to shareholders are available at www.hillenbrand.com. |
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• | Patrick T. Ryan, whose term expires at the upcoming annual meeting, be reelected as a Class I director for a one-year term expiring at the 2009 annual meeting of shareholders; | ||
• | Ronald A. Malone, whose term expires at the upcoming annual meeting, be reelected as a Class II director for a two-year term expiring at the 2010 annual meeting of shareholders; |
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• | Charles E. Golden and W August Hillenbrand, currently Class I directors serving terms expiring at the 2009 annual meeting of shareholders, be reelected as Class III directors for three-year terms expiring at the 2011 annual meeting of shareholders; and | ||
• | Joanne C. Smith, whose term expires at the upcoming annual meeting, be reelected as a Class III director for a three-year term expiring at the 2011 annual meeting of shareholders. |
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Shares(1) | ||||||||||||||||||||
Served As A | Beneficially Owned As Of | Percent of Total | ||||||||||||||||||
Name | Age | Principal Occupation | Director Since | December 17, 2007 | Shares Outstanding | |||||||||||||||
Patrick T. Ryan | 49 | Consultant | 2007 | 453 | (2) | (3) |
Shares(1) | ||||||||||||||||||||
Served As A | Beneficially Owned As Of | Percent of Total | ||||||||||||||||||
Name | Age | Principal Occupation | Director Since | December 17, 2007 | Shares Outstanding | |||||||||||||||
Ronald A. Malone | 53 | Chairman and Chief Executive Officer of | 2007 | 453 | (2) | (3) | ||||||||||||||
Gentiva Health Services, Inc. |
Shares(1) | ||||||||||||||||||||
Served As A | Beneficially Owned As Of | Percent of Total | ||||||||||||||||||
Name | Age | Principal Occupation | Director Since | December 17, 2007 | Shares Outstanding | |||||||||||||||
Charles E. Golden | 61 | Retired Executive Vice President and Chief Financial Officer of Eli Lilly and Company | 2002 | 17,966 | (4) | (3) | ||||||||||||||
W August Hillenbrand(5) | 67 | Retired Chief Executive Officer of the Company | 1972 | 2,369,351 | (6) | 3.8 | % | |||||||||||||
Joanne C. Smith | 47 | President and Chief Executive Officer of the Rehabilitation Institute of Chicago | 2003 | 7,109 | (2) | (3) |
Shares(1) | ||||||||||||||||||||
Served As A | Beneficially Owned As Of | Percent of Total | ||||||||||||||||||
Name | Age | Principal Occupation | Director Since | December 17, 2007 | Shares Outstanding | |||||||||||||||
Rolf A. Classon | 62 | Chairman of the Board of the Company | 2002 | 37,259 | (7) | (3) | ||||||||||||||
Eduardo R. Menascé | 62 | Retired President, Enterprise Solutions Group, Verizon Communications | 2004 | 5,598 | (2) | (3) |
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Shares(1) | ||||||||||||||||||||
Served As A | Beneficially Owned As Of | Percent of Total | ||||||||||||||||||
Name | Age | Principal Occupation | Director Since | December 17, 2007 | Shares Outstanding | |||||||||||||||
Ray J. Hillenbrand(5) | 73 | Personal Investments | 1970 | 480,144 | (8) | (3) | ||||||||||||||
Peter H. Soderberg | 61 | President and Chief Executive | ||||||||||||||||||
Officer of the Company | 2002 | 138,247 | (9) | (3) |
Shares(1) | Percent of Total | |||||||||||||
Beneficially Owned As Of | Shares | |||||||||||||
Name | Age | Principal Occupation | December 17, 2007 | Outstanding | ||||||||||
Gregory N. Miller | 44 | Senior Vice President and Chief Financial Officer | 66,550 | (10) | (3) | |||||||||
Kenneth A. Camp | 62 | Senior Vice President of Hillenbrand Industries, | ||||||||||||
Inc. and President and Chief Executive Officer, | ||||||||||||||
Batesville Casket Company, Inc. | 200,045 | (11) | (3) | |||||||||||
Patrick D. de Maynadier | 47 | Senior Vice President, General Counsel and Secretary | 100,536 | (12) | (3) | |||||||||
John H. Dickey | 53 | Senior Vice President, Human Resources | 58,931 | (13) | (3) | |||||||||
All directors and executive officers of the Company as a group, consisting of 15 persons. | 3,523,274 | (14) | 5.7 | % |
Shares | ||||||||||||
Beneficially Owned As Of | Percent of Total | |||||||||||
Name | Address | December 17, 2007 | Shares Outstanding | |||||||||
Franklin Mutual Advisers, LLC | 101 John F. Kennedy Parkway, Short Hills, NJ 07078 | 3,232,488 | (15) | 5.2 | % | |||||||
Franklin Resources, Inc. | One Franklin Parkway, San Mateo, CA 94493 | 3,224,314 | (16) | 5.2 | % |
(1) | The Company’s only class of equity securities outstanding is common stock without par value. Except as otherwise indicated in these footnotes, the persons named have sole voting and investment power with respect to all shares shown as beneficially owned by them. None of the shares beneficially owned by directors and executive officers are pledged as security except as noted below with respect to Ray J. Hillenbrand. | |
(2) | Represents deferred stock shares (otherwise known as restricted stock units) held on the books and records of the Company. | |
(3) | Ownership of less than one percent (1%) of the total shares outstanding. | |
(4) | Includes (i) 8,000 shares that may be purchased pursuant to stock options that are exercisable within 60 days of December 17, 2007, (ii) 2,857 shares of vested deferred stock and (iii) 7,109 |
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deferred stock shares (otherwise known as restricted stock units) held on the books and records of the Company. | ||
(5) | W August Hillenbrand and Ray J. Hillenbrand are cousins. | |
(6) | Includes (i) 132,000 shares that may be purchased pursuant to stock options that are exercisable within 60 days of December 17, 2007 and (ii) 7,109 deferred stock shares (otherwise known as restricted stock units) held on the books and records of the Company. Also includes 202,978 shares owned beneficially by W August Hillenbrand’s wife, Nancy K. Hillenbrand; 193,476 shares owned by grantor retained annuity trusts (GRATs); 1,433,927 shares owned of record, or which may be acquired within sixty days, by trusts of which W August Hillenbrand is trustee or co-trustee; and 71,771 shares held by a limited liability company. Mr. Hillenbrand disclaims beneficial ownership of these shares. | |
(7) | Includes (i) 8,000 shares that may be purchased pursuant to stock options that are exercisable within 60 days of December 17, 2007, (ii) 10,479 shares of vested deferred stock and (iii) 10,449 deferred stock shares (otherwise known as restricted stock units) held on the books and records of the Company. | |
(8) | Includes 11,322 deferred stock shares (otherwise known as restricted stock units) held on the books and records of the Company. Includes 128,975 shares held of record by a charitable foundation, of which Ray J. Hillenbrand is a trustee; and 222,854 shares held of record by family partnerships for the benefit of other members of his immediate family. Mr. Hillenbrand disclaims beneficial ownership of these shares. 44,916 of the shares beneficially owned by Mr. Hillenbrand are pledged as security. | |
(9) | Includes (i) 49,977 shares that may be purchased pursuant to stock options that are exercisable within 60 days of December 17, 2007, (ii) 67,404 deferred stock shares (otherwise known as restricted stock units) held on the books and records of the Company and (iii) 9,350 shares of performance based deferred stock shares (otherwise known as restricted stock units) held on the books and records of the Company. | |
(10) | Mr. Miller was elected Senior Vice President and Chief Financial Officer of the Company and Hill-Rom effective July 14, 2005. Includes (i) 41,568 shares that may be purchased pursuant to stock options that are exercisable within 60 days of December 17, 2007, (ii) 14,299 deferred stock shares (otherwise known as restricted stock units) held on the books and records of the Company and (iii) 7,700 shares of performance based deferred stock shares (otherwise known as restricted stock units) held on the books and records of the Company. | |
(11) | Mr. Camp was elected President and Chief Executive Officer of Batesville Casket Company, Inc., a subsidiary of the Company, on May 1, 2001. He was also elected as a Senior Vice President of the Company on August 4, 2005. Prior to his election to these positions, Mr. Camp has held various other positions within Hillenbrand Industries, Inc. and its subsidiary Batesville Casket Company, Inc. Includes (i) 148,501 shares that may be purchased pursuant to stock options that are exercisable within 60 days of December 17, 2007, (ii) 31,023 deferred stock shares (otherwise known as restricted stock units) held on the books and records of the Company and (iii) 7,700 shares of performance based deferred stock shares (otherwise known as restricted stock units) held on the books and records of the Company. | |
(12) | Mr. de Maynadier was elected Senior Vice President, General Counsel and Secretary of the Company effective October 1, 2007, having served as Vice President, General Counsel and Secretary of the Company since January 28, 2002. Includes (i) 74,680 shares that may be purchased pursuant to stock options that are exercisable within 60 days of December 17, 2007, (ii) 13,214 deferred stock shares (otherwise known as restricted stock units) held on the books |
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and records of the Company and (iii) 6,550 shares of performance based deferred stock shares (otherwise known as restricted stock units) held on the books and records of the Company. | ||
(13) | Mr. Dickey was elected Senior Vice President, Human Resources of the Company effective October 1, 2007, having served as Vice President of Human Resources of the Company since January 1, 2006. He had served as the Vice President of Human Resources and Administration for Batesville Casket Company since October 22, 2001. Includes (i) 38,667 shares that may be purchased pursuant to stock options that are exercisable within 60 days of December 17, 2007, (ii) 12,964 deferred stock shares (otherwise known as restricted stock units) held on the books and records of the Company and (iii) 4,650 shares of performance based deferred stock shares (otherwise known as restricted stock units) held on the books and records of the Company. | |
(14) | Includes (i) 529,360 shares that may be purchased pursuant to stock options that are exercisable within 60 days of December 17, 2007, (ii) 13,336 shares of vested deferred stock, (iii) 197,910 deferred stock shares (otherwise known as restricted stock units) held on the books and records of the Company and (iv) 38,300 shares of performance based deferred stock shares (otherwise known as restricted stock units) held on the books and records of the Company. | |
(15) | This information is based solely on an Amendment No. 1 to Schedule 13D filed by Franklin Mutual Advisers, LLC with the Securities and Exchange Commission (“SEC”) on November 21, 2006. | |
(16) | This information is based solely on an Amendment No. 1 to Schedule 13G filed by Franklin Resources, Inc. with the SEC on February 5, 2007. The Schedule 13G also was filed by Charles B. Johnson and Rupert H. Johnson, Jr., with the same address as Franklin Resources, Inc., with respect to all of such shares of the Company’s common stock, and by Franklin Advisory Services, LLC, One Parker Plaza, 9th Floor, Fort Lee, NJ 07024, with respect to 3,196,714 of such shares of the Company’s common stock. |
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(INCLUDING DIRECTOR COMPENSATION)
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• | Security holders of the Company and other interested persons may communicate with the Chairman of the Board, the chairs of the Company’s |
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Nominating/Corporate Governance Committee, Audit Committee or Compensation and Management Development Committee or the non-management directors of the Company as a group by sending an email to investors@hillenbrand.com. The email should specify which of the foregoing is the intended recipient. |
• | All communications received in accordance with these procedures will be reviewed initially by the Company’s Investor Relations Department and General Counsel. The Investor Relations Department will relay all such communications to the appropriate director or directors unless the Investor Relations Department and General Counsel determine that the communication: |
• | does not relate to the business or affairs of the Company or the functioning or constitution of the Board of Directors or any of its committees; | ||
• | relates to routine or insignificant matters that do not warrant the attention of the Board of Directors; | ||
• | is an advertisement or other commercial solicitation or communication; | ||
• | is frivolous or offensive; or | ||
• | is otherwise not appropriate for delivery to directors. |
• | The director or directors who receive any such communication will have discretion to determine whether the subject matter of the communication should be brought to the attention of the full Board of Directors or one or more of its committees and whether any response to the person sending the communication is appropriate. Any such response will be made through the Company’s Investor Relations Department and only in accordance with the Company’s policies and procedures and applicable law and regulations relating to the disclosure of information. | ||
• | The Company’s Investor Relations Department will retain copies of all communications received pursuant to these procedures for a period of at least one year. | ||
• | The Nominating/Corporate Governance Committee of the Board of Directors will review the effectiveness of these procedures from time to time and, if appropriate, recommend changes. |
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• | The Board approved Corporate Governance Standards for the Board of Directors in September 2002 and has revised these Standards on several occasions as warranted by changes in New York Stock Exchange governance standards and other developments. Among other matters, these Standards: |
• | confirm that the Board of Directors has established standing committees, each with a charter approved by the Board, to address certain key areas. These committees are the Audit Committee, Finance Committee, Compensation and Management Development Committee and Nominating/Corporate Governance Committee; | ||
• | provide that at least a majority of the directors of the Company shall be independent; | ||
• | provide for an annual determination by the Board of Directors regarding the independence of each director; | ||
• | provide that the Audit Committee, Nominating/Corporate Governance Committee and Compensation and Management Development Committee will consist entirely of independent directors; | ||
• | provide for an annual assessment by the Nominating/Corporate Governance Committee of the Board’s effectiveness as a whole as well as the effectiveness of the individual directors and the Board’s various committees, including a review of the mix of skills, core competencies and qualifications of members of the Board; | ||
• | provide that the non-management directors shall conduct executive sessions without participation by any employees of the Company at each regularly scheduled meeting of the Board; |
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• | limit the number of public company boards on which a director may sit to four without Board approval; | ||
• | provide that no more than half of the members of the Board may be over seventy years of age; and | ||
• | provide all proposed related party transactions between the Company or any of its subsidiaries and any director or executive officer of the Company must be reviewed and approved by the Nominating/Corporate Governance Committee in advance. |
• | The Board determined the independence of each of the Company’s directors based on the standards set forth in the Corporate Governance Standards described above and elected only independent directors as members of the Audit Committee, Nominating/Corporate Governance Committee and Compensation and Management Development Committee. See “Determinations with Respect to Independence of Directors” below. | ||
• | On December 5, 2007, the Nominating/Corporate Governance Committee of the Board completed a formal evaluation of the effectiveness of the incumbent directors who are being nominated for election at the Company’s 2008 annual meeting of shareholders, the Board as a whole and the Board’s various committees, in light of Board and Board committee goals established for 2007. The evaluation included a review of the mix of skills, core competencies and qualifications of members of the Board. On that date, the Nominating/Corporate Governance Committee also reviewed a summary of its findings with the Board. | ||
• | In September 2002, the Board overhauled its committee structure and adopted revised charters for each of its committees, which have been further amended as warranted by changes in NYSE listing standards, SEC rules and other developments. | ||
• | The Board adopted a revised Code of Ethical Business Conduct covering, among other matters, conflicts of interest, corporate opportunities, confidentiality, protection and proper use of the Company’s assets, fair dealing, compliance with laws, including insider trading laws, accuracy and reliability of the Company’s books and records and reporting of illegal or unethical behavior. This Code applies to all directors, officers and other employees of the Company, including the Company’s Chief Executive Officer, Chief Financial Officer and Chief Accounting Officer. The Board periodically reviews and makes changes to the Code based on recommendations made by the Audit Committee of the Board. The Company’s Code of Ethical Business Conduct constitutes a “code of ethics” within the meaning of Item 406 of the SEC’s Regulation S-K. | ||
• | All employees, including the Company’s Chief Executive Officer, Chief Financial Officer and Chief Accounting Officer, are required to participate in ethics training and abide by the Code of Ethical Business Conduct to ensure that the Company’s business is conducted in a consistently legal and ethical manner. All members of the Board of Directors and all officers of the Company and its subsidiaries have read and certified their compliance with the Code without exception. |
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• | Employees are required to report any conduct that they believe in good faith to be an actual or apparent violation of the Code of Ethical Business Conduct. The Sarbanes-Oxley Act of 2002 requires companies to have procedures to receive, retain and treat complaints received regarding accounting, internal accounting controls or auditing matters and to allow for the confidential and anonymous submission by employees of concerns regarding questionable accounting or auditing matters. The Company currently has such procedures in place and has effectively and independently addressed concerns raised by employees and others. | ||
• | Hill-Rom has adopted a Code of Conduct that is consistent with the Advanced Medical Technology Association’s (AdvaMed) Code of Ethics on Interactions with Health Care Professionals. AdvaMed is a medical technology association, representing members that produce nearly 90 percent of the health care technology purchased annually in the United States and more than 50 percent purchased annually around the world. The AdvaMed Code is a voluntary code of ethics to facilitate members’ ethical interactions with those individuals or entities that purchase, lease, recommend, use, arrange for the purchase or lease of, or prescribe members’ medical technology products in the United States. The Company and Hill-Rom are members. The AdvaMed Code can be accessed at www.advamed.org/MemberPortal/About/code/codeofethics.htm. | ||
• | Directors may not be given personal loans or extensions of credit by the Company, and all directors are required to deal at arm’s length with the Company and its subsidiaries, and to disclose any circumstance that might be perceived as a conflict of interest. | ||
• | The Board approved a policy mandating that the Company’s outside independent registered public accounting firm not perform any prohibited non-audit services under the Sarbanes-Oxley Act of 2002 and the related SEC rules. In addition, the Audit Committee approved a policy requiring that all services from the outside independent registered public accounting firm must be pre-approved by the Audit Committee or its delegate (i.e., the Audit Committee Chairman). | ||
• | The Board adopted stock ownership guidelines for the Company’s directors and executive officers. In general, these standards require non-employee directors to hold deferred stock shares (otherwise known as restricted stock units) granted to them until six months after they cease to be directors and that executive officers of the Company must achieve and maintain a minimum level of stock ownership as discussed further under “Executive Compensation—Compensation Discussion and Analysis.” The stock ownership guidelines are included in the Corporate Governance Standards. | ||
• | As part of directors’ education, which includes, among other things, regular dedicated sessions regarding the Company’s businesses and operations, Audit Committee sponsored financial literacy and legal and regulatory compliance training, and participation in Company and industry trade events, the Board requires each director to attend an outside governance or director related seminar at least once every three years. |
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• | Pursuant to the Foreign Corrupt Practices Act and the Sarbanes-Oxley Act of 2002, the Company monitors and enforces policies, and implements a system of internal controls, designed to detect and prevent money laundering, corruption and bribery. Supporting processes include ethics training and certification regarding, among other things, compliance with the Foreign Corrupt Practices Act, documentation, training and testing, new hire criminal background checks and internal audit procedures. |
• | The director is, or has been within the last three years, an employee of the Company or any of its subsidiaries, or an immediate family member of the director is, or has been within the last three years, an executive officer of the Company (but employment as an interim executive officer will not disqualify a director from being considered independent following that employment). |
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• | The director has received, or has an immediate family member who has received, during any twelve-month period within the last three years, more than $100,000 per year in direct compensation from the Company or its subsidiaries, other than director and committee fees and pension or other forms of deferred compensation for prior service (provided such compensation is not contingent in any way on continued service). | ||
• | (A) The director or an immediate family member of the director is a current partner of a firm that is the internal or external auditor of the Company or any of its subsidiaries; (B) the director is a current employee of such a firm; (C) the director has an immediate family member who is a current employee of such a firm and who participates in the firm’s audit, assurance or tax compliance (but not tax planning) practice; or (D) the director or an immediate family member was within the last three years (but is no longer) a partner or employee of such a firm and personally worked on the audit of the Company or any of its subsidiaries within that time. | ||
• | The director or an immediate family member of the director is, or has been within the last three years, employed as an executive officer of another company where any of the Company’s present executives at the same time serves or served on that company’s compensation committee. | ||
• | The director is a current employee, or an immediate family member of the director is a current executive officer, of a company that has made payments to, or received payments from, the Company for property or services in an amount which, in any of the last three fiscal years, exceeded the greater of $1 million, or 2% of such other company’s consolidated gross revenues. | ||
• | The director owns, or is affiliated with the owner of, a controlling amount of voting stock of the Company. |
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• | Review from time to time and, if appropriate, recommend to the Board changes to the corporate governance standards for the Board of Directors of the Company and its committees, including committee charters; | ||
• | Review from time to time, and, if appropriate, make changes to the statement setting forth the responsibilities of directors and the qualifications for new nominees for election to the Board; |
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• | Review from time to time, and, if appropriate, make changes to the statement setting forth the responsibilities of and the qualifications for the Chairman of the Board and the Vice Chairperson of the Board; | ||
• | Annually assess the Board’s effectiveness as a whole as well as the effectiveness of the individual directors and the Board’s various committees, including a review of the mix of skills, core competencies and qualifications of members of the Board; | ||
• | Assess, at least annually, the compensation package for the members of the Board of Directors and, if appropriate, recommend changes to the Board of Directors; | ||
• | Make recommendations with respect to the composition of Board committees; | ||
• | If deemed necessary, select and retain an executive search firm to identify qualified candidates to serve as members of the Board, considering effectiveness, responsiveness and other relevant factors, and approve the fees and other compensation to be paid to the executive search firm; | ||
• | Review the performance of the executive search firm and approve any proposed discharge of the executive search firm when circumstances warrant; | ||
• | Select and recommend to the Board director nominees for election at each annual meeting of shareholders, as well as director nominees to fill vacancies arising between annual meetings of shareholders; | ||
• | When deemed necessary or appropriate, make recommendations to the Board regarding the appointment or replacement of the Chairman of the Board and the Vice Chairperson of the Board; | ||
• | Recommend to the Board annually, based on a consideration of all relevant facts and circumstances, whether each director is independent (as that term is defined in the Corporate Governance Standards for the Board of Directors). | ||
• | Assess the adequacy of and make recommendations to the Board regarding directors’ and officers’ insurance coverage; | ||
• | Review and make recommendations to the Board regarding any shareholder proposals; | ||
• | Pre-approve any related party transactions between the Company or any of its subsidiaries and any director or executive officer; | ||
• | Determine requirements for, and means of, director orientation and training; and | ||
• | Review the charter for the Committee and assess the performance of the members of the Committee at least annually and recommend updates and changes to the Board as conditions warrant. | ||
• | With respect to ethical, legal and regulatory compliance: |
• | Review and assess periodically the Company’s Code of Ethical Business Conduct, recommend changes in the Code of Ethical Business Conduct as conditions warrant and confirm that management has established a system to monitor compliance with the Code of Ethical Business Conduct by officers and relevant employees of the Company; | ||
• | Promote an organizational culture that encourages commitment to compliance with the law and use good faith efforts to assure that corporate information and reporting systems exists that are adequate to assure that appropriate information as to compliance matters comes to its attention in a timely manner as a matter of ordinary operations; and | ||
• | Together with the Audit Committee assist the Board in its oversight of legal and regulatory compliance, other than matters of financial |
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compliance (accounting, auditing, financial reporting, and investor disclosures), as to which the Audit Committee has sole oversight. |
• | Have a reputation for industry, integrity, honesty, candor, fairness and discretion; | ||
• | Be an acknowledged expert in his or her chosen field of endeavor, which area of expertise should have some relevance to the Company’s businesses or operations; | ||
• | Be knowledgeable, or willing and able to become so quickly, in the critical aspects of the Company’s businesses and operations; and | ||
• | Be experienced and skillful in serving as a competent overseer of, and trusted advisor to, senior management of a substantial publicly held corporation. |
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(a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | |||||||||||||||||||||
Change in Pension | ||||||||||||||||||||||||||||
Value and Nonqualified | ||||||||||||||||||||||||||||
Non-Equity | Deferred | |||||||||||||||||||||||||||
Fees Earned or | Incentive Plan | Compensation | All Other | |||||||||||||||||||||||||
Paid in Cash | Stock Awards | Option Awards | Compensation | Earnings | Compensation | Total | ||||||||||||||||||||||
Name | $(1) | $(2) | $ | $ | $(3) | $(4) | $ | |||||||||||||||||||||
Rolf A. Classon — Chairman | $ | 208,250 | $ | 208,058 | $ | 792 | $ | 417,100 | ||||||||||||||||||||
Charles E. Golden | $ | 90,750 | $ | 107,001 | $ | 0 | $ | 197,751 | ||||||||||||||||||||
John A. Hillenbrand II | $ | 66,750 | $ | 107,001 | $ | 247 | $ | 173,998 | ||||||||||||||||||||
Ray J. Hillenbrand | $ | 74,575 | $ | 107,001 | $ | 0 | $ | 181,576 | ||||||||||||||||||||
W August Hillenbrand (5) | $ | 72,250 | $ | 107,001 | $ | 9,795 | $ | 931,047 | $ | 1,120,093 | ||||||||||||||||||
Ronald A. Malone | $ | 25,250 | $ | 30,092 | $ | 276 | $ | 55,618 | ||||||||||||||||||||
Jose A. Mejia | $ | 26,750 | $ | 30,092 | $ | 180 | $ | 57,022 | ||||||||||||||||||||
Eduardo R. Menascé | $ | 74,500 | $ | 107,001 | $ | 792 | $ | 182,293 | ||||||||||||||||||||
Patrick T. Ryan | $ | 22,000 | $ | 30,092 | $ | 180 | $ | 52,272 | ||||||||||||||||||||
Joanne C. Smith | $ | 72,750 | $ | 107,001 | $ | 180 | $ | 179,931 |
(1) | Directors receive an annual retainer of $25,000 for their service as directors, together with a $3,500 fee for each Board meeting attended. The Chairman of the Board of Directors’ annual retainer is $150,000. For any Board meeting lasting longer than one day, each director who attends receives $1,000 for each additional day. Directors who attend a Board meeting or standing committee meeting by telephone receive fifty percent (50%) of the usual meeting fee. Each director who is a member of the Nominating/Corporate Governance, Finance, Audit or Compensation and Management Development Committee receives a fee of $1,500 for each committee meeting attended. The Chairs of the Audit, Compensation and Management Development, Nominating/Corporate Governance and Finance Committees receive an additional $10,000, $8,000, $7,000 and $5,000 annual retainer, respectively. Directors who attend meetings of committees of which they are not members receive no fees for their attendance. | |
(2) | Each director is awarded on the first trading day following the close of each annual meeting of the Company’s shareholders 1,800 deferred stock shares (otherwise known as restricted stock units) under the Company’s Stock Incentive Plan. A new director receives a pro-rata portion of the annual award representing the time served during the fiscal year of joining the Board of Directors. Delivery of shares underlying such deferred stock shares occurs 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 of Directors of the Company. In the case of the Chairman of the Board of Directors, the annual grant of deferred stock shares is 3,500. Dividends paid on the Company common stock will be deemed to have been paid with regard to the deferred stock shares awarded and deemed to be reinvested in Company common stock at the market value on the date of such dividend, and will be paid in additional shares on the distribution date of the underlying award. | |
The amounts indicated represent the aggregate dollar amount of compensation expense related to deferred stock shares (otherwise known as restricted stock units) granted that was recognized in our financial statements during the fiscal year 2007. The determination of this expense is based on the methodology set forth in Notes 1 and 11 to our financial statements included in our Annual Report on Form 10-K, which was filed with the SEC on November 29, 2007. The aggregate number of deferred stock shares (otherwise known as restricted stock units) held by each director at September 30, 2007 was as follows: Rolf A. Classon — 10,449; Charles E. Golden — 7,109; John A. Hillenbrand II — 7,109; Ray J. Hillenbrand — 11,322; W August Hillenbrand – 7,109; Ronald A. |
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Malone — 453; Jose A. Mejia — 453; Eduardo R. Menascé — 5,598; Patrick T. Ryan — 453; and Joanne C. Smith — 7,109. | ||
(3) | Consists of above market nonqualified deferred compensation earnings. Members of the Board of Directors, who are not employees, may participate in the Hillenbrand Industries, Inc. Board of Directors Deferred Compensation Plan in which members may elect to defer receipt of fees earned. Upon election, the participant may invest fees earned in either a cash investment which bears interest at a prime rate in effect from time to time or at other rates determined by the Company, or common stock to be paid at the end of the deferral period. As of September 30, 2007 the following members are participating and have balances in the Board of Directors Deferred Compensation Program: |
Deferred | ||||||||||||
Cash | Vested Deferred Stock | |||||||||||
$ | # | $ | ||||||||||
W August Hillenbrand | $ | 455,805 | ||||||||||
Charles E. Golden | 2,857 | $ | 157,192 |
(4) | Consists of pension benefits, incremental cost of aircraft usage, security expenses, Company paid life insurance and other personal benefits provided by the Company. All Other Compensation earned or allocated during the fiscal year ended September 30, 2007 is as follows: |
Aircraft | Company Paid | Gross-up/Tax | Supp DB | |||||||||||||||||||||
Name | Usage (a) | Security | Health Care | Life Insurance | Reimbursement | Pension | ||||||||||||||||||
Rolf A. Classon | ||||||||||||||||||||||||
Charles E. Golden | ||||||||||||||||||||||||
John A. Hillenbrand II | ||||||||||||||||||||||||
Ray J. Hillenbrand | ||||||||||||||||||||||||
W August Hillenbrand | $ | 111,655 | $ | 25,770 | $ | 10,733 | $ | 178,242 | $ | 115,887 | $ | 411,171 | ||||||||||||
Ronald A. Malone | ||||||||||||||||||||||||
Jose A. Mejia | ||||||||||||||||||||||||
Eduardo R. Menasce | ||||||||||||||||||||||||
Patrick T. Ryan | ||||||||||||||||||||||||
Joanne C. Smith |
Co. Provided | Pers. Asst. | Misc. | ||||||||||||||||||
Name | Term Life Ins.(b) | Sal & Benefits | Communications | Benefits | Total | |||||||||||||||
Rolf A. Classon | $ | 792 | $ | 792 | ||||||||||||||||
Charles E. Golden | Declined | $ | 0 | |||||||||||||||||
John A. Hillenbrand II | $ | 247 | $ | 247 | ||||||||||||||||
Ray J. Hillenbrand | Declined | $ | 0 | |||||||||||||||||
W August Hillenbrand | $ | 1,524 | $ | 58,335 | $ | 12,898 | $ | 4,832 | $ | 931,047 | ||||||||||
Ronald A. Malone | $ | 276 | $ | 276 | ||||||||||||||||
Jose A. Mejia | $ | 180 | $ | 180 | ||||||||||||||||
Eduardo R. Menasce | $ | 792 | $ | 792 | ||||||||||||||||
Patrick T. Ryan | $ | 180 | $ | 180 | ||||||||||||||||
Joanne C. Smith | $ | 180 | $ | 180 |
(a) | The Company does not charge for the personal use of its aircraft, but it does report amounts related to such use as taxable income to the Internal Revenue Service. The value of the use of Company aircraft disclosed in the Director Compensation Table is based upon the incremental cost of $2,087 per flight hour to the Company and not the values reported to the IRS. | |
(b) | The value of Company provided term life insurance is the value reported as income as determined by IRS tables. Participation in the life insurance program is voluntary and may be declined as indicated. |
(5) | W August Hillenbrand and the Company entered into an agreement relating to Mr. Hillenbrand’s retirement as Chief Executive Officer of the Company on December 2, 2000. Under that |
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agreement, Mr. Hillenbrand is entitled to receive a package of benefits from the Company, including payment of life and health insurance premiums which are grossed up for tax purposes, reimbursement of medical expenses not covered by insurance, an office, a secretary, reimbursement of miscellaneous expenses, supplemental pension fund benefit payments and limited use of the Company’s corporate aircraft for personal purposes on the same basis as the Company’s Chief Executive Officer. During the fiscal year ended September 30, 2007, these benefits aggregated approximately $903,753. Additionally, during fiscal year 2007 the Company paid $25,770 for legal and security measures to address certain security threats to Mr. Hillenbrand and the Company as well as $1,524 for Company provided term life insurance. |
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• | Aligning management’s interests with those of shareholders; | ||
• | Motivating and providing incentive for employees to achieve superior results; | ||
• | Assuring clear accountabilities and providing rewards for producing results; | ||
• | Ensuring competitive compensation in order to attract and retain superior talent; and | ||
• | Ensuring simplicity and transparency in compensation structure. |
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Bard (C.R.), Inc. | Baxter International, Inc. | |||
Beckman Coulter, Inc. | Becton Dickinson & Co. | |||
Conmed Corporation | Dade Behring Holdings, Inc. | |||
Invacare Corporation | Kinetic Concepts, Inc. | |||
Mettler-Toledo International, Inc. | Respironics, Inc. | |||
Steris Corporation | Viasys Heathcare, Inc. |
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Deferred Stock Share | ||||||||
(otherwise known as | ||||||||
Restricted Stock | ||||||||
Stock Option Range | Unit) Range | |||||||
Gregory N. Miller | 0 to 22,800 | 0 to 6,000 | ||||||
Kenneth A. Camp | 0 to 28,000 | 0 to 7,400 | ||||||
Patrick D. de Maynadier | 0 to 22,800 | 0 to 6,000 | ||||||
John H. Dickey | 0 to 22,800 | 0 to 6,000 |
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Deferred Stock Shares | ||||||||
(otherwise known as | ||||||||
Stock Options | Restricted Stock Units) | |||||||
Peter H. Soderberg | 80,651 | 20,002 | ||||||
Gregory N. Miller | 13,300 | 4,500 | ||||||
Kenneth A. Camp | 20,000 | 4,000 | ||||||
Patrick D. de Maynadier | 12,500 | 3,500 | ||||||
John H. Dickey | 12,500 | 3,500 |
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• | 2007 – 2009 cumulative revenue | ||
• | 2007 – 2009 cumulative operating income | ||
• | 2007 – 2009 return on assets employed |
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Required Ownership Level | ||||
Position | (Expressed as Base Annual Salary Multiple) | |||
Chief Executive Officer | 4 x Base Annual Salary | |||
Other Named Executive Officers | 2 x Base Annual Salary |
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• | Normal Retirement Guidelines | ||
• | Deferred Compensation Program | ||
• | Pension Plan | ||
• | Savings Plan | ||
• | Supplemental Executive Retirement Plan | ||
• | Change in Control Agreements | ||
• | Severance Pay Plan |
• | accelerated vesting of outstanding time-based deferred stock awards and stock options, which have been held for at least one year; | ||
• | partial vesting of outstanding performance based deferred stock awards, which have been held for at least one year; and | ||
• | an extension of up to three years of the time to exercise eligible outstanding stock options. |
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• | a lump sum payment in cash equal to two times (three times in the case of the Chief Executive Officer) the executive’s annual base salary; |
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• | continued health and medical insurance for the executive and his dependents and continued life insurance coverage for the executive for 24 months (36 months in the case of the Chief Executive Officer), with the right to purchase continued medical insurance (at COBRA rates) from the end of this period until the executive reaches retirement age; | ||
• | a cash payment in lieu of certain perquisites, such as accrued and unpaid vacation; and | ||
• | an increase to the defined benefit and defined contribution pension benefit otherwise payable to the executive calculated by giving him equivalent credit for two additional years of age and service (or, in the case of the Chief Executive Officer, three additional years of age and service credit). |
Acceleration of | ||||||||||||||||||||||||||||||||||||||||||||
Continuance | Vacation | Stock Based Awards | ||||||||||||||||||||||||||||||||||||||||||
Of Heath & | And | Retirement | Restricted | Performance | ||||||||||||||||||||||||||||||||||||||||
Incentive | Welfare | Insurance | Pension | Savings Plan | Stock | Stock | Based | Tax | ||||||||||||||||||||||||||||||||||||
Salary | Comp. | Benefits | Benefits | Benefits(1) | Benefit | Options(2) | Units | Awards | Gross-Up(3) | Total(4) | ||||||||||||||||||||||||||||||||||
Peter H. Soderberg | $ | 2,520,000 | $ | 747,518 | $ | 19,077 | $ | 44,188 | N/A | $ | 698,471 | $ | 10,195 | $ | 2,420,000 | $ | 514,437 | None | $ | 6,973,886 | ||||||||||||||||||||||||
Gregory N. Miller | $ | 756,000 | $ | 185,701 | $ | 22,244 | $ | 15,738 | N/A | $ | 77,786 | $ | 73,587 | $ | 631,244 | $ | 423,654 | $ | 646,337 | $ | 2,832,291 | |||||||||||||||||||||||
Kenneth A. Camp | $ | 860,800 | $ | 318,077 | $ | 14,605 | $ | 41,028 | $ | 546,628 | $ | 83,627 | $ | 80,865 | $ | 1,641,687 | $ | 423,654 | None | $ | 4,010,971 | |||||||||||||||||||||||
Patrick D. de Maynadier | $ | 704,600 | $ | 173,634 | $ | 12,718 | $ | 15,350 | $ | 71,807 | $ | 62,530 | $ | 59,922 | $ | 675,426 | $ | 360,381 | None | $ | 2,136,368 | |||||||||||||||||||||||
John H. Dickey | $ | 496,800 | $ | 123,210 | $ | 14,605 | $ | 21,850 | $ | 183,411 | $ | 21,324 | $ | 59,749 | $ | 617,489 | $ | 255,843 | $ | 497,237 | $ | 2,291,518 |
(1) | The change-in-control pension benefit is the excess of the monthly pension amount the executive would have received starting at age 62 calculated as if he had earned two additional years of service and pay at his Annual Base Salary over the monthly Pension Plan annuity benefit, the |
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monthly SERP annuity benefit, and in the case of Mr. Camp, the additional pension benefit provided per agreement dated March 16, 2006, as discussed above. | ||
(2) | As mentioned, for purposes of these disclosures, we assumed that the stock options were cashed out on the hypothetical change in control. Whether the options would be cashed out or converted into stock of a buyer in an actual transaction would depend on the structure of the deal. However, if the options were converted into stock by the buyer, the excise tax, and thus the gross-up payments required under the agreements could be higher. | |
(3) | Computed based upon the assumption that equity awards are paid out in cash using the closing price per share of Company common stock on September 28, 2007 (the last trading day of fiscal 2007), which was $55.02 per share. We assumed an excise tax rate under Code Section 280G of 20 percent, a 35 percent federal income tax rate, a 1.45 percent Medicare tax rate and from 4.0 to 4.78 percent state and local income tax rate based on resident tax location of the executive. Mr. Soderberg’s and Mr. de Maynadier’s hypothetical change in control benefits did not exceed the threshold necessary to generate potential excise taxes subject to tax gross-up. Although Mr. Camp’s hypothetical change in control benefits did exceed the threshold, the benefits did not exceed 120% of the amount to give rise to the excise tax, and therefore his benefits are reduced as required by the agreement to the extent necessary to avoid the potential excise tax. | |
(4) | The Change in Control Agreements for Mr. Soderberg, Mr. Miller, Mr. de Maynadier and Mr. Dickey are subject to non-compete provisions and other restrictive covenants for three years following termination of employment.These restrictive covenants are valuable to the Company, and are in part consideration for the benefits payable under the Agreements. However, for purposes of this hypothetical change in control, no value or payments under the contract have been assigned to the restrictive covenants which would have the effect of reducing the excise tax and thus gross-up payments under the Agreements. |
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• | Tuition Reimbursement | ||
• | Executive Financial Planning, Estate Planning and Tax Preparation Service | ||
• | Executive Physical | ||
• | Other Benefits |
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Respectively submitted, | ||
Rolf A. Classon (Chair) | ||
Joanne C. Smith (Vice-Chair) | ||
Ronald A. Malone | ||
Patrick T. Ryan |
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(a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | (j) | |||||||||||||||||||||||||||
Change in Pension Value | ||||||||||||||||||||||||||||||||||||
Non-Equity | and Nonqualified | |||||||||||||||||||||||||||||||||||
Stock | Option | Incentive Plan | Deferred Compensation | All Other | ||||||||||||||||||||||||||||||||
Name and | Salary | Bonus | Awards | Awards | Compensation | Earnings | Compensation | Total | ||||||||||||||||||||||||||||
Principal Position | Year | $(1) | $ | $(2) | $(3) | $(4) | $(5) | $(6) | $ | |||||||||||||||||||||||||||
PETER H. SODERBERG | 2007 | $ | 830,575 | None | $ | 1,445,305 | $ | 531,680 | $ | 711,245 | $ | 6,004 | $ | 517,394 | $ | 4,042,203 | ||||||||||||||||||||
President and Chief Executive Officer; Member Board of Directors | ||||||||||||||||||||||||||||||||||||
GREGORY N. MILLER | 2007 | $ | 371,403 | None | $ | 300,702 | $ | 125,508 | $ | 174,828 | $ | 1,267 | $ | 38,893 | $ | 1,012,601 | ||||||||||||||||||||
Senior Vice President and Chief Financial Officer | ||||||||||||||||||||||||||||||||||||
KENNETH A. CAMP | 2007 | $ | 424,102 | None | $ | 745,077 | $ | 279,017 | $ | 202,881 | $ | 338,345 | $ | 42,210 | $ | 2,031,632 | ||||||||||||||||||||
Senior Vice President of the Company And President and Chief Executive Officer, Batesville Casket Company, Inc. | ||||||||||||||||||||||||||||||||||||
PATRICK D. DE MAYNADIER | 2007 | $ | 347,268 | None | $ | 301,091 | $ | 104,468 | $ | 163,447 | $ | 23,316 | $ | 31,720 | $ | 971,310 | ||||||||||||||||||||
Senior Vice President, General Counsel And Secretary | ||||||||||||||||||||||||||||||||||||
JOHN H. DICKEY | 2007 | $ | 246,421 | None | $ | 275,991 | $ | 108,310 | $ | 125,011 | $ | 63,867 | $ | 10,820 | $ | 830,420 | ||||||||||||||||||||
Senior Vice President, Human Resources |
(1) | The amounts indicated represent the dollar value of base salary earned during fiscal year 2007. | |
(2) | The amounts indicated represent the aggregate dollar amount of compensation expense, excluding the reduction for risk of forfeiture, related to deferred stock share (otherwise known as restricted stock unit) and performance based deferred stock share awards granted and recognized in our financial statements during fiscal year 2007 and includes amounts from awards granted prior to 2007. The determination of this expense is based on the methodology set forth in Notes 1 and 11 to our financial statements included in our Annual Report on Form 10-K, which was filed with the SEC on November 29, 2007. |
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(3) | The amounts indicated represent the aggregate dollar amount of compensation expense, excluding the reduction for risk of forfeiture, related to stock option awards granted and recognized in our financial statements during fiscal year 2007 and includes amounts from awards granted prior to 2007. The determination of this expense is based on the methodology set forth in Notes 1 and 11 to our financial statements included in our Annual Report on Form 10-K, which was filed with the SEC on November 29, 2007. | |
(4) | The amounts indicated represent cash awards earned for fiscal year 2007 and paid in fiscal year 2008 under our STIC Plan. See the “Annual Cash Incentives” section of the Compensation Discussion and Analysis. | |
(5) | Change in Pension Value and Nonqualified Deferred Compensation earned or allocated during the fiscal year ended September 30, 2007, is as follows: |
Change in Actuarial Present Value of | Above Market Nonqualified Deferred Compensation | |||||||||||
Accumulated Pension Benefit (a) | Earnings | Total | ||||||||||
Peter H. Soderberg | N/A | $ | 6,004 | $ | 6,004 | |||||||
Gregory N. Miller | $ | 0 | $ | 1,267 | $ | 1,267 | ||||||
Kenneth A. Camp (b) | $ | 335,354 | $ | 2,991 | $ | 338,345 | ||||||
Patrick D. de Maynadier | $ | 21,389 | $ | 1,927 | $ | 23,316 | ||||||
John H. Dickey | $ | 63,648 | $ | 219 | $ | 63,867 |
(a) | See the Pension Benefits table below for additional information, including present value assumptions used in this calculation. | |
(b) | The pension benefit for Kenneth A. Camp includes the effect of the supplemental benefits per agreement dated March 16, 2006 and more fully described in footnote 7 in the following Pension Benefits table. | |
(6) | Consists of the incremental cost of aircraft usage, Company provided contributions for the savings plan, the savings plan portion of the SERP and supplemental retirement benefits. Also includes the incremental cost of professional services for tax preparation and financial planning services, and other personal benefits provided by the Company. All Other Compensation earned or allocated during the fiscal year ended September 30, 2007 is as follows: |
Aircaft | Company Contribution | Supp | Financial Planning | Other Personal | ||||||||||||||||||||||||
Name | Usage(a) | 401(K) | Supp 401(k) | Retirement | and Tax Preparation | Benefits | Total | |||||||||||||||||||||
Peter H. Soderberg | $ | 279,867 | $ | 15,785 | $ | 142,039 | $ | 75,000 | $ | 4,703 | $ | 517,394 | ||||||||||||||||
Gregory N. Miller | $ | 15,600 | $ | 23,293 | $ | 38,893 | ||||||||||||||||||||||
Kenneth A. Camp | $ | 4,034 | $ | 37,779 | $ | 397 | $ | 42,210 | ||||||||||||||||||||
Patrick D. de Maynadier | $ | 6,750 | $ | 24,515 | $ | 455 | $ | 31,720 | ||||||||||||||||||||
John H. Dickey | $ | 6,291 | $ | 4,371 | $ | 158 | $ | 10,820 |
(a) | The Company has agreed to permit the Chief Executive Officer to use the Company’s aircraft for travel to and from Mr. Soderberg’s primary and secondary residences up to a maximum of 100 occupied hours of flight time per calendar year. Accordingly, included in 2007 for Peter H. Soderberg is $279,867 for Mr. Soderberg’s use of the Company’s aircraft. While the Company does not charge for the personal use of its aircraft, and for purposes of its policy on use of Company aircraft does not regard these as personal use of Company aircraft by Mr. Soderberg, it does report amounts related to such use as taxable income to the Internal Revenue Service. The value of the use of Company aircraft disclosed in the Summary Compensation Table is based upon the incremental cost of $2,087 per flight hour to the Company and not the values reported to the IRS. |
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(i) | ||||||||||||||||||||||||||||||||||||||||||||
All Other | ||||||||||||||||||||||||||||||||||||||||||||
Stock Awards: | (j) | (l) | ||||||||||||||||||||||||||||||||||||||||||
(c) | (d) | (e) | (f) | (g) | (h) | Number of | All Other | (k) | Grant Date Fair | |||||||||||||||||||||||||||||||||||
Estimated Future Payouts Under | Estimated Future Payouts Under | Shares of | Option Awards: | Exercise or | Value of Stock | |||||||||||||||||||||||||||||||||||||||
(b) | Non-Equity Incentive Plan Awards (1) | Equity Incentive Plan Awards (2) | Stock | Number of Securities | Base Price of | and Option | ||||||||||||||||||||||||||||||||||||||
(a) | Grant | Threshold | Target | Maximum | Threshold | Target | Maximum | or Units | Underlying Options | Option Awards | Awards | |||||||||||||||||||||||||||||||||
Name | Date | $ | $ | $ | # | # | # | #(3) | #(4) | $/sh | $(5) | |||||||||||||||||||||||||||||||||
Peter H. Soderberg | $ | 0 | $ | 747,518 | $ | 1,495,036 | ||||||||||||||||||||||||||||||||||||||
12/14/2006 | 67,115 | $ | 60.14 | $ | 1,000,006 | |||||||||||||||||||||||||||||||||||||||
12/14/2006 | 16,628 | $ | 1,000,008 | |||||||||||||||||||||||||||||||||||||||||
4/5/2007 | 0 | 9,350 | 9,350 | $ | 568,994 | |||||||||||||||||||||||||||||||||||||||
Gregory N. Miller | $ | 0 | $ | 185,701 | $ | 371,402 | ||||||||||||||||||||||||||||||||||||||
11/30/2006 | 13,300 | $ | 57.91 | $ | 190,820 | |||||||||||||||||||||||||||||||||||||||
11/30/2006 | 4,500 | $ | 260,595 | |||||||||||||||||||||||||||||||||||||||||
4/5/2007 | 0 | 7,700 | 7,700 | $ | 468,584 | |||||||||||||||||||||||||||||||||||||||
Kenneth A. Camp | $ | 0 | $ | 318,077 | $ | 636,154 | ||||||||||||||||||||||||||||||||||||||
11/30/2006 | 20,000 | $ | 57.91 | $ | 286,948 | |||||||||||||||||||||||||||||||||||||||
11/30/2006 | 4,000 | $ | 231,640 | |||||||||||||||||||||||||||||||||||||||||
4/5/2007 | 0 | 7,700 | 7,700 | $ | 468,584 | |||||||||||||||||||||||||||||||||||||||
Patrick D. de Maynadier | $ | 0 | $ | 173,634 | $ | 347,268 | ||||||||||||||||||||||||||||||||||||||
11/30/2006 | 11,400 | $ | 57.91 | $ | 163,561 | |||||||||||||||||||||||||||||||||||||||
11/30/2006 | 3,500 | $ | 202,685 | |||||||||||||||||||||||||||||||||||||||||
4/5/2007 | 0 | 6,550 | 6,550 | $ | 398,600 | |||||||||||||||||||||||||||||||||||||||
John H. Dickey | $ | 0 | $ | 123,210 | $ | 246,420 | ||||||||||||||||||||||||||||||||||||||
11/30/2006 | 11,400 | $ | 57.91 | $ | 163,561 | |||||||||||||||||||||||||||||||||||||||
11/30/2006 | 3,000 | $ | 173,730 | |||||||||||||||||||||||||||||||||||||||||
4/5/2007 | 0 | 4,650 | 4,650 | $ | 282,976 |
(1) | The amounts indicated represent potential cash awards that could be paid under our STIC Program. Awards can range from 0% to 200% of the target amount. See “Annual Cash Incentives” section of the Compensation Discussion and Analysis for discussion of this program. See the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table above for the actual amounts earned, which were paid in December, 2007. | |
(2) | Performance based deferred stock share (otherwise known as a restricted stock unit) awards were granted pursuant to Hillenbrand’s Stock Incentive Plan for the fiscal year ended September 30, 2007. The vesting schedules, upon satisfying performance criteria, for incentive stock awards granted during the fiscal year 2007 are disclosed in footnote 13 in the following Outstanding Equity Awards table. | |
(3) | Deferred stock share (otherwise known as a restricted stock unit) awards were granted pursuant to Hillenbrand’s Stock Incentive Plan for the fiscal year ended September 30, 2007. Dividends paid on Hillenbrand common stock will be deemed to have been paid with regard to the deferred stock shares awarded and deemed to be reinvested in Company common stock at the market value on the date of such dividend, and will be paid in additional shares on the vesting date of the underlying award. The vesting schedules for deferred stock share awards granted during the fiscal year 2007 are disclosed by individual in the footnotes in the following Outstanding Equity Awards table. | |
(4) | Options were granted pursuant to Hillenbrand’s Stock Incentive Plan for the fiscal year ended September 30, 2007. The options expire in ten years from date of grant and will vest for exercise purposes in equal increments during the first three years of the option life. Stock awards and options are granted at the discretion of the Compensation Committee of the Board of Directors. | |
(5) | The valuation of stock options, deferred stock shares and performance based deferred stock shares (otherwise known as restricted stock units) are based on the methodology set forth in Notes 1 and 11 to our financial statements included in our Annual Report on Form 10-K, which was filed with the SEC on November 29, 2007. |
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Options Awards | Stock Awards | (j) | ||||||||||||||||||||||||||||||||||
(d) | (i) | Equity Incentive | ||||||||||||||||||||||||||||||||||
Equity Incentive | Equity Incentive | Plan Awards: | ||||||||||||||||||||||||||||||||||
(b) | (c) | Plan Awards: | Plan Awards: | Market or | ||||||||||||||||||||||||||||||||
Number of | Number of | Number of | (g) | (h) | Number | Payout Value | ||||||||||||||||||||||||||||||
Securities | Securities | Securities | Number of | Market Value | of Unearned | of Unearned | ||||||||||||||||||||||||||||||
Underlying | Underlying | Underlying | (e) | Shares or | of Shares or | Shares, Units | Shares, Units | |||||||||||||||||||||||||||||
Unexercised | Unexercised | Unexercised | Option | (f) | Units of Stock | Units of Stock | or Other Rights | or Other Rights | ||||||||||||||||||||||||||||
Options | Options | Unearned | Exercise | Option | That Have | That Have | That Have | That Have | ||||||||||||||||||||||||||||
(a) | # | # | Options | Price | Expiration | Not Vested | Not Vested | Not Vested | Not Vested | |||||||||||||||||||||||||||
Name | Exercisable | Unexercisable | # | $ | Date | # (12) | $ (1) | # (13) | $ (1) | |||||||||||||||||||||||||||
Peter H. Soderberg | 4,000 | $ | 61.56 | 5/17/2012 | ||||||||||||||||||||||||||||||||
4,000 | $ | 48.51 | 2/13/2013 | |||||||||||||||||||||||||||||||||
19,605 | 39,210 | (2) | $ | 54.76 | 3/20/2016 | |||||||||||||||||||||||||||||||
67,115 | (3) | $ | 60.14 | 12/14/2016 | ||||||||||||||||||||||||||||||||
43,984 | (7) | $ | 2,420,000 | 9,350 | $ | 514,437 | ||||||||||||||||||||||||||||||
Gregory N. Miller | 4,000 | $ | 50.11 | 11/9/2011 | ||||||||||||||||||||||||||||||||
2,500 | $ | 61.49 | 4/9/2012 | |||||||||||||||||||||||||||||||||
4,000 | $ | 47.49 | 12/4/2012 | |||||||||||||||||||||||||||||||||
1,500 | $ | 48.51 | 2/13/2013 | |||||||||||||||||||||||||||||||||
5,000 | $ | 58.24 | 12/3/2013 | |||||||||||||||||||||||||||||||||
8,000 | $ | 55.58 | 12/15/2014 | |||||||||||||||||||||||||||||||||
6,067 | 12,133 | (4) | $ | 48.955 | 11/30/2015 | |||||||||||||||||||||||||||||||
13,300 | (5) | $ | 57.910 | 11/30/2016 | ||||||||||||||||||||||||||||||||
11,473 | (8) | $ | 631,244 | 7,700 | $ | 423,654 | ||||||||||||||||||||||||||||||
Kenneth A. Camp | 8,000 | $ | 52.15625 | 1/18/2008 | ||||||||||||||||||||||||||||||||
8,000 | $ | 52.15625 | 1/18/2009 | |||||||||||||||||||||||||||||||||
2,500 | $ | 29.96875 | 8/23/2009 | |||||||||||||||||||||||||||||||||
10,000 | $ | 36.3125 | 1/17/2010 | |||||||||||||||||||||||||||||||||
10,000 | $ | 45.34375 | 1/15/2011 | |||||||||||||||||||||||||||||||||
10,000 | $ | 48.64 | 4/9/2011 | |||||||||||||||||||||||||||||||||
15,000 | $ | 50.11 | 11/9/2011 | |||||||||||||||||||||||||||||||||
9,000 | $ | 61.49 | 4/9/2012 | |||||||||||||||||||||||||||||||||
20,000 | $ | 47.49 | 12/4/2012 | |||||||||||||||||||||||||||||||||
20,000 | $ | 58.24 | 12/3/2013 | |||||||||||||||||||||||||||||||||
24,000 | $ | 55.58 | 12/15/2014 | |||||||||||||||||||||||||||||||||
6,667 | 13,333 | (4) | $ | 48.955 | 11/30/2015 | |||||||||||||||||||||||||||||||
20,000 | (5) | $ | 57.910 | 11/30/2016 | ||||||||||||||||||||||||||||||||
29,838 | (9) | $ | 1,641,687 | 7,700 | $ | 423,654 | ||||||||||||||||||||||||||||||
Patrick D. de Maynadier | 15,000 | $ | 57.075 | 2/1/2012 | ||||||||||||||||||||||||||||||||
5,000 | $ | 61.49 | 4/9/2012 | |||||||||||||||||||||||||||||||||
5,000 | $ | 47.49 | 12/4/2012 | |||||||||||||||||||||||||||||||||
18,000 | $ | 58.24 | 12/3/2013 | |||||||||||||||||||||||||||||||||
18,000 | $ | 55.58 | 12/15/2014 | |||||||||||||||||||||||||||||||||
4,940 | 9,880 | (4) | $ | 48.955 | 11/30/2015 | |||||||||||||||||||||||||||||||
11,400 | (5) | $ | 57.910 | 11/30/2016 | ||||||||||||||||||||||||||||||||
12,276 | (10) | $ | 675,426 | 6,550 | $ | 360,381 | ||||||||||||||||||||||||||||||
John H. Dickey | 1,000 | $ | 52.15625 | 1/18/2008 | ||||||||||||||||||||||||||||||||
2,000 | $ | 45.34375 | 1/15/2011 | |||||||||||||||||||||||||||||||||
4,000 | $ | 50.11 | 11/9/2011 | |||||||||||||||||||||||||||||||||
2,000 | $ | 61.49 | 4/9/2012 | |||||||||||||||||||||||||||||||||
4,000 | $ | 47.49 | 12/4/2012 | |||||||||||||||||||||||||||||||||
5,000 | $ | 58.24 | 12/3/2013 | |||||||||||||||||||||||||||||||||
7,000 | $ | 55.58 | 12/15/2014 | |||||||||||||||||||||||||||||||||
2,000 | 4,000 | (4) | $ | 48.955 | 11/30/2015 | |||||||||||||||||||||||||||||||
2,934 | 5,866 | (6) | $ | 48.97 | 1/31/2016 | |||||||||||||||||||||||||||||||
11,400 | (5) | $ | 57.910 | 11/30/2016 | ||||||||||||||||||||||||||||||||
11,223 | (11) | $ | 617,489 | 4,650 | $ | 255,843 |
(1) | Value is based on the closing price of Hillenbrand common stock of $55.02 on September 28, 2007 (the last trading day of fiscal 2007) as reported on the New York Stock Exchange. | |
(2) | The options were granted on March 20, 2006. Remaining unexercisable options will vest 50% each on March 20, 2008 and 2009, respectively. |
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(3) | The options were granted on December 14, 2006. The options will vest 33 1/3% each on December 14, 2007, 2008 and 2009, respectively. | |
(4) | The options were granted on November 30, 2005. Remaining unexercisable options will vest 50% each on November 30, 2007 and 2008, respectively. | |
(5) | The options were granted on November 30, 2006. The options will vest 33 1/3% each on November 30, 2007, 2008 and 2009, respectively. | |
(6) | The options were granted on January 31, 2006. Remaining unexercised options will vest 50% each on January 31, 2008 and 2009, respectively. | |
(7) | Peter H. Soderberg was awarded 16,628 deferred stock shares (otherwise known as restricted stock units) on December 14, 2006 which will vest 20%; 25%; 25%; and 30% on December 15, 2008; 2009; 2010; and 2011 respectively. Mr. Soderberg was also awarded 23,740 deferred stock shares on March 20, 2006, which vested 33.3% on September 21, 2006 and March 21, 2007 respectively, and which will vest 33.3% on March 21, 2008. Mr. Soderberg was also awarded 18,262 deferred stock shares on March 20, 2006 which will vest 20%; 25%; 25%; and 30% on March 21, 2008; 2009; 2010; and 2011 respectively. | |
(8) | Gregory N. Miller was awarded 4,500 deferred stock shares (otherwise known as restricted stock units) on November 30, 2006 which will vest 20%; 25%; 25%; and 30% on December 1, 2008; 2009; 2010; and 2011 respectively. Mr. Miller was also awarded 4,810 deferred stock shares on November 30, 2005, which will vest 20%; 25%; 25%; and 30% on December 1, 2007, 2008; 2009; and 2010 respectively. Mr. Miller was also awarded 1,500 deferred stock shares on December 15, 2004, which vested 20% on December 16, 2006 and which will vest 25%; 25%; and 30% on December 16, 2007; 2008; and 2009 respectively. Mr. Miller was also awarded 1,000 deferred stock shares on December 3, 2003, which vested 20% and 25% on December 4, 2005 and 2006, respectively; and which will vest 25% and 30% on December 4, 2007 and 2008, respectively. | |
(9) | Kenneth A. Camp was awarded 4,000 deferred stock shares (otherwise known as restricted stock units) on November 30, 2006 which will vest 20%; 25%; 25%; and 30% on December 1, 2008; 2009; 2010; and 2011 respectively. Mr. Camp was also awarded 18,671 deferred stock shares on March 16, 2006, which vested 15% on March 17, 2007 and which will vest 15%; 15%; and 55% on March 17, 2008; 2009; and 2010 respectively. Mr. Camp was also awarded 3,700 deferred stock shares on November 30, 2005, which will vest 20%; 25%; 25%; and 30% on December 1, 2007; 2008; 2009; and 2010 respectively. Mr. Camp was also awarded 3,600 deferred stock shares on December 15, 2004, which vested 20% on December 16, 2006 and which will vest 25%; 25%; and 30% on December 16, 2007; 2008; and 2009 respectively. Mr. Camp was also awarded 4,000 deferred stock shares on December 3, 2003, which vested 20% and 25% on December 4, 2005 and 2006 respectively; and will vest 25% and 30% on December 4, 2007 and 2008, respectively. | |
(10) | Patrick D. de Maynadier was awarded 3,500 deferred stock shares (otherwise known as restricted stock units) on November 30, 2006 which will vest 20%; 25%; 25%; and 30% on December 1, 2008; 2009; 2010; and 2011 respectively. Mr. de Maynadier was also awarded 3,900 deferred stock shares on November 30, 2005, which will vest 20%; 25%; 25%; and 30% on December 1, 2007, 2008; 2009; and 2010 respectively. Mr. de Maynadier was also awarded 3,000 deferred stock shares on December 15, 2004, which vested 20% on December 16, 2006 and which will vest 25%, 25%; and 30% on December 16, 2007; 2008; and 2009 respectively. Mr. de Maynadier was also awarded 3,500 deferred stock shares on December 3, 2003, which vested 20% and 25% on December 4, 2005 and 2006 respectively; and will vest 25% and 30% on December 4, 2007 and 2008, respectively. |
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(11) | John H. Dickey was awarded 3,000 deferred stock shares (otherwise known as restricted stock units) on November 30, 2006 which will vest 20%; 25%; 25%; and 30% on December 1, 2008; 2009; 2010; and 2011 respectively. Mr. Dickey was also awarded 2,250 deferred stock shares on January 31, 2006, which will vest 20%; 25%; 25%; and 30% on February 1, 2008; 2009; 2010; and 2011 respectively. Mr. Dickey was also awarded 2,000 deferred stock shares on November 30, 2005, which will vest 20%; 25%; 25%; and 30% on December 1, 2007, 2008; 2009; and 2010 respectively. Mr. Dickey was also awarded 2,000 deferred stock shares on December 15, 2004, which vested 20% on December 16, 2006 and which will vest 25%; 25%; and 30% on December 16, 2007; 2008; and 2009 respectively. Mr. Dickey was also awarded 2,000 deferred stock shares on December 3, 2003, which vested 20% and 25% on December 4, 2005 and 2006, respectively; and will vest 25% and 30% on December 4, 2007 and 2008, respectively. | |
(12) | Dividends paid on Hillenbrand common stock will be deemed to have been paid with regard to the deferred stock shares (otherwise known as restricted stock units) awarded and deemed to be reinvested in Hillenbrand common stock at the market value on the date of such dividend, and will be paid in additional shares on the vesting date of the underlying award. Generally, vesting is contingent upon continued employment. In the case of retirement, death or disability, vesting may be accelerated for options and deferred stock awards held over one year from issue date of award. | |
(13) | Performance based deferred stock shares (otherwise known as restricted stock units) were awarded on April 5, 2007 which will vest 20%; 20%; and 60% on December 10, 2007; 2008; and 2009, respectively, if certain performance goals are met. Vesting is also contingent on continued employment, except in the case of retirement, death or disability for awards over one year from issue date of award. |
(b) | (c) | (d) | (e) | |||||||||||||
Options Awards | Stock Awards | |||||||||||||||
Number of | Number of | |||||||||||||||
Shares | Shares | |||||||||||||||
Acquired on | Value Realized | Acquired on | Value Realized | |||||||||||||
(a) | Exercise | on Exercise | Vesting | on Vesting | ||||||||||||
Name | # | $(1) | # | $(2) | ||||||||||||
Peter H. Soderberg | 0 | $ | 0 | 8,059 | $ | 471,492 | ||||||||||
Gregory N. Miller | 0 | $ | 0 | 894 | $ | 52,448 | ||||||||||
Kenneth A. Camp | 2,000 | $ | 33,195 | 5,093 | $ | 297,278 | ||||||||||
Patrick D. de Maynadier | 0 | $ | 0 | 1,871 | $ | 109,922 | ||||||||||
John H. Dickey | 0 | $ | 0 | 1,159 | $ | 68,565 |
(1) | Based upon the difference between the price of Hillenbrand common stock on the New York Stock Exchange at the time of exercise and the exercise price for the stock options exercised. |
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(2) | Based upon the average of the high and low price of Hillenbrand common stock on the New York Stock Exchange on the date the stock awards vest or if the vesting date is a non-trading day, then the next trading day thereafter. |
(c) | (d) | (e) | ||||||||||||||
Number of | Present Value | Payments | ||||||||||||||
(b) | Years Credited | of Accumulated | During Last | |||||||||||||
(a) | Plan Name | Service | Benefit | Fiscal Year | ||||||||||||
Name | (1)(2) | #(3) | $(4) | $ | ||||||||||||
Peter H. Soderberg (5) | N/A | N/A | N/A | N/A | ||||||||||||
Gregory N. Miller (6) | Pension Plan | 2 | $ | 15,293 | $ | 0 | ||||||||||
Kenneth A. Camp (7) | Pension Plan | 26 | $ | 651,130 | $ | 0 | ||||||||||
SERP | 27 | $ | 1,637,236 | $ | 0 | |||||||||||
Patrick D. de Maynadier | Pension Plan | 5 | $ | 57,775 | $ | 0 | ||||||||||
SERP | 5 | $ | 79,771 | $ | 0 | |||||||||||
John H. Dickey | Pension Plan | 26 | $ | 359,421 | $ | 0 | ||||||||||
SERP | 26 | $ | 107,009 | $ | 0 |
(1) | The Pension Plan covers officers of Hillenbrand and other employees. Contributions to the Pension Plan by Hillenbrand are made on an actuarial basis, and no specific contributions are determined or set aside for any individual. Effective June 30, 2003, the Pension Plan was closed to new participants. Existing participants, effective January 1, 2004 were given the choice of remaining in the Pension Plan and to continue earning credited service or to freeze their accumulated benefit as of January 1, 2004 and to participate in an enhanced defined contribution savings plan. Benefits under the Pension Plan are not subject to deductions for Social Security or other offset amounts. Employees, including officers of Hillenbrand, who retire under the Pension Plan, receive fixed benefits calculated by means of a formula that takes into account the highest average annual calendar year eligible compensation earned over five consecutive years and the employee’s years of service. | |
The Pension Plan permits participants with 5 or more years of credited service to retire as early as age 55 but with a reduction in the amount of their monthly benefit. The reduction is .25% for each month the actual retirement date precedes the participant’s normal retirement date at age 65 up to a maximum of 30%. | ||
(2) | Hillenbrand maintains the Pension Plan portion of the SERP to provide additional retirement benefits to certain employees selected by the Compensation Committee or the Chief Executive Officer of Hillenbrand whose retirement benefits under the Pension Plan are reduced, curtailed or otherwise limited as a result of certain limitations under the Internal Revenue Code. The additional retirement benefits provided by the SERP are for certain Pension Plan participants chosen by the Compensation Committee, in an amount equal to the benefits under the Pension Plan which are so reduced, curtailed or limited by reason of the application of such limitation. “Compensation” under the SERP means the corresponding definition of compensation under the |
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Pension Plan plus a percentage of a participant’s eligible compensation as determined under Hillenbrand’s Short-Term Incentive Compensation Program. The retirement benefit to be paid under the SERP is from the general assets of Hillenbrand, and such benefits are generally payable at the time and in the manner benefits are payable under the Pension Plan. | ||
(3) | This column represents the years of service as of September 30, 2007. | |
(4) | This column represents the total discounted value of the monthly single life annuity benefit earned as of September 30, 2007 assuming the executive leaves Hillenbrand at this date and retires at age 65. The present value is not the monthly or annual lifetime benefit that would be paid to the executive. The present values are based on a 6.5 percent discount rate at September 30, 2007. The present values assume no pre-retirement mortality and utilize the 2007 Current Liability Blended Mortality Table projected to 2014 within the general RP2000CH mortality tables. | |
(5) | Peter H. Soderberg does not participate in the Pension Plan or the Pension Plan portion of the SERP, since the pension plans were closed to new participants effective June 30, 2003. Mr. Soderberg participates in the Savings Plan and the Savings Plan portion of the SERP and has accumulated two years of vested service in those plans. | |
(6) | Gregory N. Miller has two years credited service in the Pension Plan, in which he has elected to freeze his accumulated benefit as of January 1, 2004. Mr. Miller participates in the Savings Plan and the Savings Plan portion of the SERP and has accumulated six years of vested service in those plans. | |
(7) | On March 16, 2006, Hillenbrand agreed to provide supplemental benefits to Kenneth A. Camp, Senior Vice President of the Company and Chief Executive Officer of Batesville Casket Company, under the SERP. The agreement provides that if Mr. Camp remains employed by the Company 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 Pension Plan portion of 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 the Company or Batesville is terminated after March 16, 2007 due to disability or death, | ||
(ii) | Mr. Camp’s employment with the Company 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 the Company occurs, or | ||
(iv) | a sale, transfer or disposition of substantially all of our assets or capital stock of Batesville occurs, |
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(b) | (c) | (d) | (f) | |||||||||||||||||||||
Executive | Registrant | Aggregate | (e) | Aggregate | ||||||||||||||||||||
Contributions in | Contributions in | Earnings in | Aggregate | Balance at | ||||||||||||||||||||
Last Fiscal | Last Fiscal | Last Fiscal | Withdrawals/ | Last Fiscal | ||||||||||||||||||||
(a) | Year | Year | Year | Distributions | Year End | |||||||||||||||||||
Name | Plan | $(1) | $ | $ (3) | $ | $ | ||||||||||||||||||
Peter H. Soderberg | SERP(2) | N/A | $ | 142,039 | $ | 12,211 | None | $ | 228,325 | |||||||||||||||
Supp. Ret. Acct. (4) | N/A | $ | 75,000 | $ | 10,055 | None | $ | 163,291 | ||||||||||||||||
Vested Deferred Stock (5) | None | None | $ | 3,840 | None | $ | 188,058 | |||||||||||||||||
Gregory N. Miller | SERP(2) | N/A | $ | 23,293 | $ | 4,564 | None | $ | 70,246 | |||||||||||||||
Kenneth A. Camp | SERP(2) | N/A | $ | 37,779 | $ | 10,578 | None | $ | 154,286 | |||||||||||||||
Patrick D. de Maynadier | SERP(2) | N/A | $ | 24,515 | $ | 6,816 | None | $ | 99,507 | |||||||||||||||
John H. Dickey | SERP(2) | N/A | $ | 4,371 | $ | 794 | None | $ | 12,357 |
(1) | Under the Hillenbrand Industries, Inc. Executive Deferred Compensation Program (“Deferred Compensation Program”) certain executives of Hillenbrand who are chosen by the Compensation Committee may elect to defer all or a portion of their base salary compensation, payments under the Short-Term Incentive Compensation Program and certain other benefits to be paid in years later than when such amounts are due. All or a portion of short term incentive compensation may be deferred by the executive and invested either in cash, which will bear interest at a prime rate in effect from time to time or at other rates determined by the Compensation Committee, or common stock to be paid at the end of the deferral period. As of September 30, 2007 none of the Named Executive Officers are participating or have balances in the Deferred Compensation Program. | |
(2) | Hillenbrand maintains the Savings Plan portion of the SERP to provide additional retirement benefits to certain employees selected by the Compensation Committee or the Chief Executive Officer of Hillenbrand whose retirement benefits under the Savings Plan are reduced, curtailed or otherwise limited as a result of certain limitations under the Internal Revenue Code. The additional retirement benefits provided by the SERP are for certain Savings Plan participants chosen by the Compensation Committee, in an amount equal to the benefits under the Savings Plan which are so reduced, curtailed or limited by reason of the application of such limitation. Additionally, certain participants in the SERP who are selected by the Compensation Committee may annually accrue an additional benefit of a certain percentage of such participants’ Compensation (as defined below) for such year (the current percentage is three), and the amount of the retirement benefit shall equal the sum of such annual accruals plus additional earnings based on the monthly prime rate in effect from time to time or at other rates determined by the Compensation Committee. | |
“Compensation” under the SERP means the corresponding definition of compensation under the Savings Plan plus a percentage of a participant’s eligible compensation as determined under Hillenbrand’s Short-Term Incentive Compensation Program. Amounts |
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reported here are also reported as Supplemental 401(k) and Supplemental Retirement in the Summary Compensation Table under the column entitled “All Other Compensation” and further disclosed in Footnote 6 thereto. A lump sum cash payment is available to the participant within one year of retirement or termination of employment. In the alternative a participant may defer receipt by electing a stream of equal annual payments for up to 15 years. | ||
(3) | The above-market or preferential earnings portion of these amounts are reported in the Summary Compensation Table under the column entitled “Change in Pension Value and Nonqualified Deferred Compensation Earnings” and further disclosed in Footnote 5 thereto. | |
(4) | Peter H. Soderberg participates in a nonqualified deferred compensation plan established for the benefit of Mr. Soderberg, pursuant to which Mr. Soderberg was credited with $75,000 within 30 days after March 20, 2006 and will be credited with $75,000 on each anniversary thereafter during Mr. Soderberg’s employment. Amounts credited to Mr. Soderberg’s account under this plan bear interest at a prime rate in effect from time to time or at other rates determined by the Compensation Committee. Mr. Soderberg will be fully vested in all amounts credited to his account under this plan and will be entitled to receive the balance of the account in a lump sum cash payment on or as soon as possible after the date that is six months after the date of the termination of Mr. Soderberg’s employment with Hillenbrand. | |
(5) | Vested deferred stock shares (otherwise known as restricted stock units) were awarded to Peter H. Soderberg as an outside member of the Company’s Board of Directors in fiscal years 2004 and 2005. Dividends paid on Hillenbrand common stock will be deemed to have been paid with regard to the vested deferred stock shares awarded and deemed to be reinvested in Company common stock at the market value on the date of such dividend, and will be paid in additional shares on the delivery date of the underlying award. Delivery of these shares occurs on the six month anniversary of the date Mr. Soderberg ceases to be a member of the Board of Directors of the Company. The value is based on the closing price of Hillenbrand common stock of $55.02 on September 28, 2007 (the last trading day of fiscal 2007) as reported on the New York Stock Exchange. |
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Accelerated | Accelerated | Continuance | ||||||||||||||||||
Salary & Other | Vesting of | Vesting of | Of Health & | |||||||||||||||||
Event | Cash Payments | Stock Options | Stock Awards | Welfare Benefits | Total | |||||||||||||||
Permanent Disability | $ | 1,769,305 | $ | 10,195 | $ | 1,487,301 | $ | 10,319 | $ | 3,277,120 | ||||||||||
Death | $ | 1,279,826 | $ | 10,195 | $ | 1,487,301 | $ | 3,324 | $ | 2,780,646 | ||||||||||
Termination without Cause | $ | 1,619,826 | $ | 1,487,301 | $ | 10,319 | $ | 3,117,446 | ||||||||||||
Resignation with Good Reason | $ | 1,619,826 | $ | 1,487,301 | $ | 10,319 | $ | 3,117,446 | ||||||||||||
Termination for Cause | $ | 32,308 | $ | 32,308 | ||||||||||||||||
Resignation without Good Reason | $ | 32,308 | $ | 32,308 | ||||||||||||||||
Retirement | $ | 779,826 | $ | 779,826 |
Accelerated | Accelerated | Continuance | ||||||||||||||||||
Salary & Other | Vesting of | Vesting of | Of Health & | |||||||||||||||||
Event | Cash Payments | Stock Options | Stock Awards | Welfare Benefits | Total | |||||||||||||||
Permanent Disability | $ | 2,517,359 | $ | 73,587 | $ | 378,813 | $ | 11,722 | $ | 2,981,481 | ||||||||||
Death | $ | 707,509 | $ | 73,587 | $ | 378,813 | $ | 6,229 | $ | 1,166,138 | ||||||||||
Termination without Cause | $ | 730,894 | $ | 16,231 | $ | 747,125 | ||||||||||||||
Resignation with Good Reason | $ | 730,894 | $ | 16,231 | $ | 747,125 | ||||||||||||||
Termination for Cause | $ | 21,808 | $ | 21,808 | ||||||||||||||||
Resignation without Good Reason | $ | 21,808 | $ | 21,808 | ||||||||||||||||
Retirement | $ | 207,509 | $ | 207,509 |
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Accelerated | Accelerated | Continuance | ||||||||||||||||||
Salary & Other | Vesting of | Vesting of | Of Health & | |||||||||||||||||
Event | Cash Payments | Stock Options | Stock Awards | Welfare Benefits | Total | |||||||||||||||
Permanent Disability | $ | 1,001,068 | $ | 80,865 | $ | 1,417,315 | $ | 11,262 | $ | 2,510,510 | ||||||||||
Death | $ | 851,185 | $ | 80,865 | $ | 1,417,315 | $ | 3,728 | $ | 2,353,093 | ||||||||||
Termination without Cause | $ | 947,123 | $ | 15,594 | $ | 962,717 | ||||||||||||||
Resignation with Good Reason | $ | 947,123 | $ | 15,594 | $ | 962,717 | ||||||||||||||
Termination for Cause | $ | 33,108 | $ | 33,108 | ||||||||||||||||
Resignation without Good Reason | $ | 33,108 | $ | 33,108 | ||||||||||||||||
Retirement | $ | 351,185 | $ | 80,865 | $ | 1,417,315 | $ | 7,302 | $ | 1,856,667 |
Also see the table regarding Mr. Camp’s potential benefits on a change of control above under "—Compensation Discussion and Analysis—Retirement, Change in Control Agreements and Severance—Change in Control Agreements.” |
Accelerated | Accelerated | Continuance | ||||||||||||||||||
Salary & Other | Vesting of | Vesting of | Of Health & | |||||||||||||||||
Event | Cash Payments | Stock Options | Stock Awards | Welfare Benefits | Total | |||||||||||||||
Permanent Disability | $ | 2,341,862 | $ | 59,922 | $ | 479,059 | $ | 7,259 | $ | 2,888,102 | ||||||||||
Death | $ | 687,183 | $ | 59,922 | $ | 479,059 | $ | 3,324 | $ | 1,229,488 | ||||||||||
Termination without Cause | $ | 674,946 | $ | 10,051 | $ | 684,997 | ||||||||||||||
Resignation with Good Reason | $ | 674,946 | $ | 10,051 | $ | 684,997 | ||||||||||||||
Termination for Cause | $ | 13,549 | $ | 13,549 | ||||||||||||||||
Resignation without Good Reason | $ | 13,549 | $ | 13,549 | ||||||||||||||||
Retirement | $ | 187,183 | $ | 187,183 |
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Accelerated | Accelerated | Continuance | ||||||||||||||||||
Salary & Other | Vesting of | Vesting of | Of Health & | |||||||||||||||||
Event | Cash Payments | Stock Options | Stock Awards | Welfare Benefits | Total | |||||||||||||||
Permanent Disability | $ | 1,514,997 | $ | 59,749 | $ | 449,183 | $ | 8,673 | $ | 2,032,602 | ||||||||||
Death | $ | 639,118 | $ | 59,749 | $ | 449,183 | $ | 3,728 | $ | 1,151,778 | ||||||||||
Termination without Cause | $ | 486,256 | $ | 12,010 | $ | 498,266 | ||||||||||||||
Resignation with Good Reason | $ | 486,256 | $ | 12,010 | $ | 498,266 | ||||||||||||||
Termination for Cause | $ | 19,108 | $ | 19,108 | ||||||||||||||||
Resignation without Good Reason | $ | 19,108 | $ | 19,108 | ||||||||||||||||
Retirement | $ | 142,318 | $ | 142,318 |
Number of securities | ||||||||||||
remaining available for | ||||||||||||
Number of securities to | Weighted-average exercise | issuance under equity | ||||||||||
be issued upon exercise | price of outstanding | compensation plans | ||||||||||
of outstanding options, | options, warrants and | (excluding securities | ||||||||||
warrants and rights | rights ($) | reflected in column (a)) | ||||||||||
Plan Category | (a) | (b) | (c) | |||||||||
Equity compensation plans approved by security holders | 2,891,759 | $ | 43.17845 | 2,492,150 | ||||||||
Equity compensation plans not approved by security holders (1)(2) | 10,419 | $ | 0.00000 | 0 | ||||||||
Total | 2,902,178 | $ | 43.02344 | 2,492,150 |
(1) | Under the Hillenbrand Industries Stock Award Program, which has not been approved by security holders, shares of common stock have been granted to certain key employees. All shares granted under this program are contingent upon continued employment over specified terms. During 1999, 45,000 shares were granted under this program, 20,000 of which were canceled for lack of continued employment. During 2001, an additional 56,500 shares were granted under this program, 10,500 of which have been canceled. Dividends, payable in stock accrue on the grants and are subject to the same specified terms as the original grants. Shares granted in 1999 had a |
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fair value of $27.81 per share and those in 2001 had a range of fair values from $49.76 to $50.85. Of these grants, 5,000 shares became vested on January 1, 2002; 25,000 shares vested on October 5, 2002; 1,500 shares vested on December 6, 2002; 6,500 shares vested on January 1, 2003 and 33,000 shares vested on January 17, 2004. Accrued dividends related to the grants also vested accordingly. A total of 7,562 deferred shares were vested as of September 30, 2007 under this program and will be issuable at a future date. | ||
(2) | Members of the Board of Directors may elect to defer fees earned and invest them in common stock of the Company under the Hillenbrand Industries Directors’ Deferred Compensation Plan, which has not been approved by security holders. A total of 2,857 deferred shares were vested as of September 30, 2007 under this program and will be issuable at a future date. |
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Eduardo R. Menascé (Vice Chairman)
Ray J. Hillenbrand
(Each of whom the Board of Directors has determined is an independent director under applicable
standards)
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Admission Ticket | ||
Electronic Voting Instructions | ||
You can vote by Internet or telephone! | ||
Available 24 hours a day, 7 days a week! | ||
Instead of mailing your proxy, you may choose one of the two voting methods outlined below to vote your proxy. | ||
VALIDATION DETAILS ARE LOCATED BELOW IN THE TITLE BAR. | ||
Proxies submitted by the Internet or telephone must be received by 1:00 a.m., Central Time, on February 8, 2008. | ||
Vote by Internet | ||
• Log on to the Internet and go to www.investorvote.com | ||
• Follow the steps outlined on the secured website. | ||
Vote by telephone | ||
• Call toll free 1-800-652-VOTE (8683) within the United States, Canada & Puerto Rico any time on a touch tone telephone. There isNO CHARGEto you for the call. | ||
• Follow the instructions provided by the recorded message. |
Using ablack ink pen, mark your votes with anXas shown in this example. Please do not write outside the designated areas. | x |
For | Withhold | For | Withhold | For | Withhold | |||||||||||
01 - Patrick T. Ryan | [ ] | [ ] | 02 - Ronald A. Malone | [ ] | [ ] | 03 - Charles E. Golden | [ ] | [ ] | ||||||||
(to serve a one-year term) | (to serve a two-year term) | (to serve a three-year term) | ||||||||||||||
For | Withhold | For | Withhold | |||||||||||||
04 - W August Hillenbrand | [ ] | [ ] | 05 - Joanne C. Smith | [ ] | [ ] | |||||||||||
(to serve a three-year term) | (to serve a three-year term) |
2. | Ratification of the appointment of PricewaterhouseCoopers LLP as the independent registered public accounting firm. | For [ ] | Against [ ] | Abstain [ ] | |||||
3. | In their discretion upon such other business as may properly come before the meeting or any adjournment thereof. |
Date (mm/dd/yyyy) – Please print date below. | Signature 1 - Please keep signature within the box | Signature 2 - Please keep signature within the box | ||