Current Report


 

 


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

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

     
Date of Report (Date of Earliest Event Reported):   November 10, 2005

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

     
Indiana 1-6651 35-1160484
_____________________
(State or other jurisdiction
_____________
(Commission
______________
(I.R.S. Employer
of incorporation) File Number) Identification No.)
      
700 State Route 46 East, Batesville, Indiana   47006-8835
_________________________________
(Address of principal executive offices)
  ___________
(Zip Code)
     
Registrant’s telephone number, including area code:   (812) 934-7000

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

 

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

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


Top of the Form

Item 1.01 Entry into a Material Definitive Agreement.

Hillenbrand Industries, Inc. and its Hill-Rom, Inc. and Hill-Rom Company, Inc. subsidiaries announced on November 16, 2005, that they have entered into an agreement in principle, in the form of a memorandum of understanding ("MOU"), with Spartanburg Regional Health Services District d/b/a Spartanburg Regional Healthcare System and the plaintiffs’ attorneys involved in the Spartanburg antitrust class action litigation to settle the case for $337.5 million. The proposed settlement also includes Hill-Rom’s commitment to continue certain company initiated practices. The proposed settlement is subject to a number of conditions, including the negotiation of a definitive settlement agreement and final court approval of that agreement following notice to class members. When finalized, the settlement is expected to resolve all of the plaintiffs’ claims and those of most U.S. purchasers or renters of Hill-Rom products from 1990 through the present. Hillenbrand and Hill-Rom believe the claims are without merit and continue to deny any and all allegations of wrongdoing. The proposed settlement is further described in the press release filed as Exhibit 99.1 to this Form 8-K and incorporated herein by reference. The MOU (without exhibits) is filed as Exhibit 99.2 to this Form 8-K and incorporated herein by reference.





Item 9.01 Financial Statements and Exhibits.

(c) Exhibits.

99.1 Press release dated November 16, 2005 issued by the Company.

99.2 Memorandum of Understanding regarding settlement entered into as of November 10, 2005.






Top of the Form

SIGNATURES

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

         
    Hillenbrand Industries, Inc.
          
November 16, 2005   By:   Gregory N. Miller
       
        Name: Gregory N. Miller
        Title: Senior Vice President and Chief Financial Officer
         
    Hillenbrand Industries, Inc.
          
November 16, 2005   By:   Richard G. Keller
       
        Name: Richard G. Keller
        Title: Vice President - Controller and Chief Accounting Officer


Top of the Form

Exhibit Index


     
Exhibit No.   Description

 
99.1
  Press release dated November 16, 2005 issued by the Company.
99.2
  Memorandum of Understanding regarding settlement entered into as of November 10, 2005.

Exhibit 99.1

HILLENBRAND INDUSTRIES, INC. ENTERS INTO AN
AGREEMENT IN PRINCIPLE TO SETTLE SPARTANBURG
ANTITRUST CLASS ACTION LITIGATION

BATESVILLE, Ind., Nov.16 2005 Hillenbrand Industries, Inc. (NYSE:HB) and its Hill-Rom, Inc. and Hill-Rom Company, Inc. subsidiaries announced today that they have entered into an agreement in principle, in the form of a memorandum of understanding, with Spartanburg Regional Health Services District d/b/a Spartanburg Regional Healthcare System and the plaintiffs’ attorneys involved in the Spartanburg antitrust class action litigation to settle the case for $337.5 million. The proposed settlement also includes Hill-Rom’s commitment to continue certain company initiated practices.

The proposed settlement is subject to a number of conditions, including the negotiation of a definitive settlement agreement and final court approval of that agreement following notice to class members, which is not anticipated to occur until early calendar 2006. When finalized, the settlement is expected to resolve all of the plaintiffs’ claims and those of most U.S. purchasers or renters of Hill-Rom products from 1990 through the present.

“While we believe the claims are without merit and continue to deny any and all allegations of wrongdoing, we took this difficult step because we believe it is in the best interest of the company, our shareholders, customers and employees,” said Ray J. Hillenbrand, Chairman of the Board of Directors of Hillenbrand Industries, Inc. “We wanted to reduce significant uncertainties involved in litigating this complex case and focus on executing our business objectives. This settlement will not require us to change current business practices, which we believe to be compliant with the law, and will enable Hill-Rom to focus first and foremost on fulfilling its mission of making a positive difference in the lives of patients and those who care for them through our focus on patient outcomes, safety and effectiveness. We are fully committed to delivering the benefits of competitive markets to our customers. ”

$50 million is to be paid to an escrow fund pending finalization of the settlement. The remainder of the settlement amount will be payable upon approval of a definitive agreement, which is currently expected to occur in early calendar 2006.

After funding the settlement, Hillenbrand will continue to have a solid financial position with continued strong operating cash flows, and remaining availability under its revolving credit facility and shelf registration statement to fund the execution of its strategic initiatives. The company currently has an untapped availability of approximately $380.0 million under its revolving credit facility and $750.0 million available under a shelf registration statement. Additionally, as of June 30, 2005, Hillenbrand had an available cash and short-term investment balance of $152.0 million.

In conjunction with this agreement in principle, Hillenbrand will recognize a pre-tax charge of $358.6 million, $226.1 million, net of tax benefits, in its fiscal 2005 fourth quarter to cover the settlement along with certain legal and other costs related to the settlement. The charge will be reflected as a separate line item on the Statement of Consolidated Income. It is expected that, if a final settlement is approved, the company’s fiscal 2006 litigation expense would be less than previously estimated. However, the company has not yet quantified that potential benefit and is not prepared to adjust its earnings guidance for fiscal 2006 at this time.

Editor’s Note: On June 30, 2003, Spartanburg Regional Healthcare System (the “Plaintiff”) filed a purported antitrust class action lawsuit against Hillenbrand and Hill-Rom in South Carolina District court alleging violations of the federal antitrust laws. Plaintiff claimed injuries caused by Hill-Rom’s discounting practices, which allegedly harmed competition and resulted in higher prices for standard and/or specialty hospital beds and/or architectural and in-room products. Details of the litigation are set forth in Hillenbrand’s most recent annual and quarterly filings with the Securities and Exchange Commission.

About Hillenbrand Industries, Inc.
Hillenbrand, headquartered in Batesville, Indiana, is a publicly traded holding company for two major wholly owned businesses serving the health care and funeral services industries. Hill-Rom Company is a manufacturer of equipment for the health care industry and a provider of associated services for wound, pulmonary and circulatory care. It is also a provider of medical equipment outsourcing and asset management services. Batesville Casket is a leading manufacturer and supplier of burial caskets, cremation products and related services to licensed funeral homes.

Disclosure Regarding Forward-Looking Statements:
Certain statements in this press release contain forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995, regarding the Company’s future plans, objectives, beliefs, expectations, representations and projections. The Company has tried, wherever possible, to identify these forward-looking statements using words such as “intend,” “proposed,” “available,” “anticipate,” “believe,” “plan,” “encourage,” “expect,” “may,” “goal,” “become,” “pursue,” “estimate,” “strategy,” “will,” “projection,” “forecast,” “continue,” “accelerate,” “promise,” “increase,” or the negative of those terms or other variations of them or by comparable terminology. The absence of such terms, however, does not mean that the statement is not forward-looking. It is important to note that forward-looking statements are not guarantees of future performance, and the Company’s actual results could differ materially from those set forth in any forward-looking statements. Factors that could cause actual results to differ from forward-looking statements include but are not limited to: the Company’s dependence on its relationships with several large national providers and group purchasing organizations, changes in death rates, costs and availability of raw materials, the success of the Company’s restructuring, realignment and cost reduction efforts, whether the Company’s new products are successful in the marketplace, changes in customers’ Medicare reimbursements, the success of the implementation of the Company’s enterprise resource planning system, compliance with FDA regulations, tax-related matters, potential exposure to antitrust, product liability or other claims, failure of the Company to execute its acquisition strategy through the consummation and successful integration of acquisitions and the ability to retain executive officers and other key personnel. For a more in depth discussion of these and other factors that could cause actual results to differ from those contained in forward-looking statements, see the discussions under the heading “Risk Factors” in the Company’s Annual Report on Form 10-K for the period ended September 30, 2004 and under the heading “Forward-Looking Statements and Factors That May Affect Future Results” in the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2005. The Company assumes no obligation to update or revise any forward-looking statements.

###

Exhibit 99.2

SUBJECT TO RULE 408

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF SOUTH CAROLINA
SPARTANBURG DIVISION

     
Spartanburg Regional Healthcare System, on
behalf of itself and others similarly situated,
Plaintiff,
vs.
Hillenbrand Industries, Inc., Hill-Rom, Inc. and
Hill-Rom Company, Inc.,
Defendants.
 





C.A. No. 7:03-2141-HFF-BHH

MEMORANDUM OF UNDERSTANDING REGARDING SETTLEMENT

This Memorandum of Understanding (“MOU”) entered into as of November 10, 2005, concerns the settlement (the “Settlement”) between Defendants, Hillenbrand Industries, Inc., Hill-Rom, Inc. and Hill-Rom Company, Inc. (“Defendants”) and the all-customer Settlement Class (“Plaintiffs” or “Settlement Class”) relating to Spartanburg Regional Healthcare System vs. Hillenbrand Industries, et al., C.A. No. 7:03-2141-HFF-BHH (D.S.C.) (“Action”). Each of the Class Representatives (as defined in paragraph number 4 below) and Defendants (collectively the “Parties”) agree to the following:

1. Defendants will pay $337,500,000 in cash for the benefit of the Settlement Class.

2. For a period of three years, Defendants will be contractually obligated to follow the pricing policies described in the October 11, 2002 memo by Ernest Waaser.

3. Defendants will not oppose any application for attorneys’ fees by Spartanburg’s counsel.

4. The all-customer “Settlement Class” is generally defined as all purchasers or renters of any Hill-Rom products (the “Products”) during the period from 1990 through the present. The class will be fully defined in the Settlement Agreement. The Settlement Class representatives shall include Spartanburg Regional Health Services District d/b/a Spartanburg Regional Healthcare System, Spartanburg Regional Medical Center, Spartanburg Hospital for Restorative Care and B.J. Workman Memorial Hospital (individually and collectively, the “Class Representatives”).

5. The Settlement Class and the individual Class Representatives will release Defendants and all of their current and former employees, officers, directors, predecessors, successors, assigns, subsidiaries, shareholders, affiliates and divisions, and the successors and assigns thereof, from all claims and liabilities relating to the discounting, purchase or rental of the Products to the fullest extent permitted by law, thereby releasing every claim relating to or arising out of the subject matter of the instant litigation. The specific terms of the release shall be subject to agreement by counsel for the Parties. No Settlement Class member, including the Class Representatives, may receive any Settlement Proceeds without executing an individual release.

6. In full and final settlement of all released claims, Defendants will pay into an escrow fund, the agent of which shall be mutually agreed to by the Parties and subject to District Court approval. The terms of the escrow agreement shall be negotiated by the Parties. Defendants will pay into an escrow fund:

(a) $50 million within thirty (30) days of preliminary approval of this Settlement by the District Court; and

(b) an additional $287.5 million within thirty (30) days of final approval of the Settlement by the District Court (these two payments collectively constituting the “Settlement Proceeds”).

7. The Settlement Proceeds are the total and exclusive amount that Defendants will pay under the Settlement. In the event no final Settlement Agreement is signed by the Parties or Final Approval does not occur, the Parties’ respective obligations under the Settlement shall be null and void and the Settlement Proceeds plus any accrued interest thereon shall be returned to the Defendants, less any amounts used to pay out of pocket expenses in providing notice of the Settlement to the Settlement Class, which notice and expenses shall be subject to agreement by the Parties. In the event of Final Approval, the Settlement Proceeds plus accrued interest thereon, less any award for Plaintiffs’ counsel fees and expenses, notice to the Settlement Class and costs of administration of the Settlement as the District Court may order, shall be distributed to members of the Settlement Class pursuant to a plan of allocation approved by the Court.

8. Final Approval means the first date upon which all of the following have occurred:

(a) The Settlement Class has been certified by the District Court;

(b) Entry has been made of a final judgment of dismissal with prejudice in a form to be agreed to by the Parties; and

(c) Either (i) 30 days has passed from the date of the District Court’s entry of final judgment with no notice of appeal having been filed with the District Court or (ii) such final judgment has been affirmed by the reviewing Court to which any appeal has been taken or petition for review has been presented, and the time for further appeal or review of such affirmance has expired.

9. The Settlement Proceeds shall be reduced by the pro rata share of the Settlement Proceeds attributable to each opt out from the Settlement Class, including purchases and rentals by the U.S. Government, under a Plan of Allocation agreed to by Defendants. The Settlement is subject to rescission by Defendants if the total value of purchases and rentals by opt-outs from the Settlement Class exceeds a percentage of the total value of all purchases and rentals by the Settlement Class for the entire period 1990 – present, excluding U.S. Government purchases and rentals. This percentage is set forth in a separate, confidential letter attached as Ex. “1” hereto.

10. All proceedings in this Action are hereby stayed, except those relating to effectuating the Settlement and obtaining any approvals relating thereto.

11. The Parties will cooperate expeditiously and in good faith to prepare a final Settlement Agreement. The Parties shall cooperate in reasonably providing information necessary to effectuate a final Settlement.

12. Hillenbrand Industries, Inc. may file this MOU with the Securities and Exchange Commission. The Parties agree that press releases in substantially the forms of Exhibit A and Exhibit B may be released by Defendants and Plaintiffs, respectively. No Party hereto (including its respective officers, employees, agents and representatives, and its affiliates and their respective officers, employees, agents and representatives) shall issue or make, or cause to be issued or made, any other press release or public statements (except for communications to employees, customers and/or suppliers) related to the Action or the Settlement without prior written approval of the other Parties hereto, provided that the Parties may make any such additional disclosures, press releases or other public announcements to the extent that they receive advice of counsel from a nationally or regionally recognized law firm that such disclosure (in timing, form, substance and scope) is required under applicable laws, rules and/or regulations. The Parties agree to the same day issuance of any press releases or public announcements concerning the Settlement or Action, with the understanding that Hillenbrand Industries, Inc. must issue a press release within four business days of the signing of this MOU.

13. Defendants have denied, and continue to deny, any wrongdoing or legal liability arising from any of the facts or conduct alleged in these actions. Neither this MOU, nor the final Settlement Agreement nor any other settlement-related document is an admission that any claim which was brought or could have been brought against the Defendants has any merit whatsoever and shall not be offered or used in the actions or otherwise for any purpose whatsoever.

14. This agreement may be signed in counterparts.

AGREED:

     

     
Richard Wyatt, Esq.
Larry Macon, Esq.
Attorneys for Plaintiffs
  Richard B. Drubel, Esq.
Attorney for Defendants

     

     
Ingo Angemeier
Spartanburg Regional Health Services District
d/b/a Spartanburg Regional Healthcare System,
Spartanburg Regional Medical Center,
  Hillenbrand Industries, Inc., Hill-Rom, Inc.
and Hill-Rom Company, Inc.


Spartanburg Hospital for Restorative Care and
B.J. Workman Memorial Hospital



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