Split Dollar Life Insurance Plan

Exhibit 10.3


SPLIT DOLLAR LIFE INSURANCE AGREEMENT
(Collateral Assignment Method)


THIS AGREEMENT is made on March 11, 1998, between Hillenbrand Industries, Inc., an Indiana corporation (the "Corporation"), and "Name" (referred to herein as the "Owner" or the "Employee").


RECITALS:


A. The Employee is a valued employee of "Company", a subsidiary of the Corporation.


B. The Owner owns a policy of life insurance ("Policy") on the life of the Employee, as shown on Exhibit A, attached hereto. The insurance company issuing the Policy is called the "Insurer."


C. The Corporation wishes the Employee to continue his employment with the Corporation and, as an inducement thereto, the Corporation is willing to assist the Owner in the payment of premiums for the Policy as provided in this Agreement.


D. The parties intend this Agreement to constitute a plan of split dollar life insurance under Revenue Ruling 64-328, 1964-2 C.B. 11, and Revenue Ruling 66-110, 1966-1 C.B. 12.


THEREFORE, for value received, the parties agree:


1. PREMIUM PAYMENTS. Until this Agreement is terminated, the Corporation and the Owner shall make the premium payments on the Policy, as defined in Exhibit A, as provided in this section.


1.1 PAYMENT OF PREMIUM. The Owner shall pay an amount equal to the Owner's Payments (as hereinafter defined), either directly or through the Corporation. The Corporation shall timely pay the remaining balance of all premiums for the Policy.


1.2 OWNER'S PAYMENTS. The Owner's Payment shall be that portion of the annual premium payment equal to the cost (as determined below) of providing the death benefit payable (as listed on Exhibit A) to the Owner's designated beneficiary. The Owner's cost shall be equal to the lesser of (a) the P.S. 58 table rate; (b) the Insurer's table rates; or (c) the Insurer's lowest current published premium rate for annually renewable term insurance on the life of the Employee for standard risk for the death benefit listed in Exhibit A.


1.3 INTEREST IN THE POLICY. For purposes of this Agreement, the Corporation's "Interest" in the Policy is an amount equal to (1) the total premiums paid on the Policy reduced by (2) the amount of the Owner's Payments actually reimbursed by the Owner from the date of this Agreement to the date as of which the Corporation's Interest is being determined, and further reduced by (3) any prior payments to the Corporation in reduction of its Interest in the Policy.


2. OWNERSHIP OF THE POLICIES. Except as otherwise specifically provided in this Agreement, the Owner is the sole and absolute owner of the Policy, and may exercise all ownership rights granted to the Owner thereof by the terms of such Policy; provided, however, that the Owner shall not borrow against the cash surrender value of the Policy. Except as specifically provided in this Agreement, the Corporation shall have no incidents of ownership in the Policy.


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3. CORPORATION'S RIGHTS.


3.1 In consideration of the Corporation's payment of premiums as provided in Section 1, and as collateral security for the payment of the Corporation's Interest, the Owner has collaterally assigned to the Corporation, by document entitled "Collateral Assignment," attached hereto as Exhibit B, the following rights in the Policy:


(a) The right to receive, upon the partial or total surrender of the Policy by the Owner, the cash surrender value of the Policy up to the amount of the Corporation's Interest in the Policy;


(b) The right to receive, upon the death of the Employee, the net death benefit of the Policy, up to the amount of the Corporation's Interest in Policy; and


(c) The right to borrow in accordance with the loan provisions of the Policy and to pledge its interest in the Policy as security for a loan from a third party, provided that any such loan obtained by the Corporation shall not at any time exceed the amount of the Corporation's Interest in the Policy and that the Corporation shall be liable for the payment of interest on any such Policy loan. During the term of this Agreement, the Owner agrees not to borrow in accordance with the loan provisions of the Policy or to pledge its interest in the Policy as security for a loan from a third party.


3.2 The Owner shall execute and file with the Insurer the Collateral Assignment. As between the Owner and the Corporation, this Agreement shall take precedence over any provision of the Collateral Assignment. Upon full payment to the Corporation of the amount of its Interest in a Policy, the Corporation shall release the collateral assignment of the Policy.


3.3 The parties agree that benefits under the Policy may be paid by the Insurer either by separate checks to the Corporation and Owner, or by a joint check. In the latter instance, the Owner and the Corporation agree that the benefits shall be divided as provided in this Agreement.


4. TERMINATION OF THIS AGREEMENT.


4.1 EVENTS OF TERMINATION. This Agreement shall terminate as to the ...