Exhibit 10.11

 

HOSPIRA 401(k) SUPPLEMENTAL PLAN

 

SECTION 1
INTRODUCTION

 

1-1.                             HISTORY AND PURPOSE.  Pursuant to a Separation
and Distribution Agreement by and between Abbott Laboratories (“Abbott”) and
Hospira, Inc.  (“Hospira”) dated as of April 12, 2004, Abbott distributed as a
dividend to its shareholders all of the outstanding shares of common stock, par
value $0.01 per share, of Hospira, together with the associated preferred stock
purchase rights, owned by Abbott (the “Distribution”).  In connection with the
Distribution, Hospira established the Hospira 401(k) Retirement Savings Plan
(the “401(k) Plan”) and certain assets and liabilities were transferred from the
Abbott Laboratories Stock Retirement Plan (the “Abbott SRP”) to the 401(k) Plan
with respect to certain persons who were transferred from employment with Abbott
to employment with Hospira in connection or contemporaneously with the
Distribution (“Transferred Employees”).  In connection with the Distribution,
Abbott retained all liabilities with respect to the Abbott Laboratories 401(k)
Supplemental Plan (the “Abbott KSP”).  This Hospira 401(k) Supplemental Plan
(the “Plan”) is being established by Hospira to provide Transferred Employees a
limited opportunity to continue to accumulate capital for their retirement or
other termination of employment in excess of the contributions allowed under the
401(k) Plan.

 

1-2.                             EFFECTIVE DATE AND AUTOMATIC TERMINATION.  The
Plan shall be effective as of May 1, 2004.  The Plan shall immediately terminate
as of December 31, 2004 without any further action of any person.

 

1-3.                             ADMINISTRATION.  The Plan shall be administered
by the Compensation Committee (the “Committee”) appointed by the Board of
Directors of Hospira (the “Board of Directors”).

 

SECTION 2
ELIGIBILITY AND PARTICIPATION

 

2-1.                             PERSONS ELIGIBLE TO PARTICIPATE.  Participation
in the Plan shall be limited to employees who are Transferred Employees and who,
immediately prior to the Distribution, were participants in the Abbott KSP. 
Notwithstanding any other provision of the Plan, in no event shall a participant
be permitted to make pre-tax contributions under the Plan unless and until the
participant has made contributions under the 401(k) Plan equal to the maximum
elective deferrals permitted under section 402(g) of the Internal Revenue Code
of 1986, as amended (the “Code”), or the maximum elective contributions
permitted under the terms of the 401(k) Plan.

 

2-2.                             PARTICIPANT.  An eligible employee may elect to
participate in the Plan by electing to have contributions made on the employee’s
behalf as provided in Section 5.

 

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SECTION 3
EMPLOYEE CONTRIBUTIONS

 

3-1.                             ALLOWABLE CONTRIBUTIONS.  An eligible employee
may elect to have his employer make “pre-tax contributions” on his behalf in an
amount not greater than 18% in total of his compensation in any calendar year
for services rendered to his employer.  A pre-tax contribution made by an
employer on behalf of a participant shall reduce the participant’s compensation
at the time of payment of such compensation.  Subject to the terms and
conditions of the Plan, each election hereunder shall be in writing, and shall
be in multiples of 1% of compensation.  For purposes of determining whether the
limitations of this subsection 3-1 are satisfied for 2004, pre-tax contributions
made under the Abbott KSP prior to the Distribution shall be treated as made
under the Plan.

 

3-2.                             COMPENSATION.  A participant’s “compensation”
shall have the same meaning as that term is used in section 15.13 of the 401(k)
Plan.

 

3-3.                             MAXIMUM EMPLOYEE CONTRIBUTIONS.  In no event
shall the sum of:

 

(a)                                  the participant’s total contributions and
pre-tax contributions made under the 401(k) Plan (“401(k) plan contributions”);
plus

 

(b)                                 the participant’s total pre-tax
contributions made under the Plan;

 

for any calendar year, exceed 18% of the employee’s compensation for such year. 
In the event the limitation described in this subsection 3-3 would be exceeded
for any participant, the participant’s pre-tax contributions made under this
Plan shall be reduced until the limit is not exceeded.  For purposes of
determining  the limitation described in this subsection 3-3 for 2004, total
contributions and pre-tax contributions made under the Abbott SRP prior to the
Distribution shall be treated as made under the 401(k) Plan and pre-tax
contributions made under the Abbott KSP prior to the Distribution shall be
treated as made under the Plan.

 

SECTION 4
EMPLOYER CONTRIBUTIONS

 

For the 2004 calendar year, Hospira shall make a contribution on behalf of each
participant in the Plan who makes pre-tax contributions under the Plan during
such year at the rate of two percent (2%) of compensation in excess of the limit
in effect for such year under Code Section 401(a)(17).  Such employer
contribution shall be in an amount equal to the contribution the participant
would have received under section 3.6 of the 401(k) Plan with respect to such
pre-tax contributions had such pre-tax contributions been made under section 3.2
of the 401(k) Plan.  A participant who suspends his pre-tax contributions to the
Plan during any calendar year shall receive an employer contribution under this
Section 4 based on the basic contributions made by the participant during such
year.  For purposes of determining whether a participant’s compensation exceeds
the limit of Code Section 401(a)(17) for the 2004 calendar year, compensation
paid to the participant by Abbott prior to the Distribution shall be taken into
account and aggregated with compensation paid to the participant by Hospira
after the Distribution.

 

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SECTION 5
ELECTIONS

 

5-1.                             ELECTIONS PROCEDURES.  Except as provided in
subsection 5-2, a participant’s election with respect to pre-tax contributions
in effect under the Abbott KSP immediately prior to the Distribution shall
continue in effect under this Plan from and after the effective date hereof as
though made hereunder and the participant shall not be permitted to revoke such
election.

 

5-2.                             LIMITED CHANGES.  A participant who has an
election in effect under subsection 5-1 may increase or decrease such pre-tax
contributions during 2004 by filing a written election with the Committee.  A
participant may make no more than two such elections under this subsection 5-2
during such calendar year and any such elections made under the Abbott KSP prior
to the Distribution shall be deemed to have been made pursuant to this
subsection 5-2.  Any election filed under this subsection 5-2 shall become
effective for compensation earned no earlier then the first payroll period
commencing after receipt of the election by the Committee.  Any election filed
under this subsection 5-2 shall remain in effect for compensation earned during
the remainder of such calendar year unless changed by a subsequent election
under this subsection 5-2.

 

SECTION 6
FUNDING EMPLOYER AND EMPLOYEE CONTRIBUTIONS

 

Each participant’s pre-tax contributions and employer contributions shall be
retained by Hospira and shall be credited to a Deferred Account established
under subsection 7-1.

 

SECTION 7
ACCOUNTING

 

7-1.                             SEPARATE ACCOUNTS.  The Committee shall
maintain a bookkeeping account (a “Deferred Account”) in the name of each
participant which shall be comprised of any pre-tax contributions made on behalf
of the participant under subsection 3-1 and any employer contributions made on
behalf of the participant under Section 4.

 

7-2.                             DESIGNATION OF BENEFICIARIES.  Subject to the
conditions and limitations set forth below, each participant, and after a
participant’s death, each primary beneficiary designated by a participant in
accordance with the provisions of this subsection 7-2, shall have the right from
time to time to designate a primary beneficiary or beneficiaries and, successive
or contingent beneficiary or beneficiaries to receive unpaid amounts from the
participant’s Deferred Account under the Plan.  Beneficiaries may be a natural
person or persons or a fiduciary, such as a trustee of a trust or the legal
representative of an estate.  Any such designation shall take effect upon the
death of the participant or such beneficiary, as the case may be, or in the case
of any fiduciary beneficiary, upon the termination of all of its duties (other
than the duty to dispose of the right to receive amounts remaining to be paid
under the Plan).  The conditions and limitations relating to the designation of
beneficiaries are as follows:

 

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(a)                                  A nonfiduciary beneficiary shall have the
right to designate a further beneficiary or beneficiaries only if the original
participant or the next preceding primary beneficiary, as the case may be, shall
have expressly so provided in writing; and

 

(b)                                 A fiduciary beneficiary shall designate as a
further beneficiary or beneficiaries only those persons or other fiduciaries who
are entitled to receive the amounts payable from the participant’s account under
the trust or estate of which it is a fiduciary.

 

Any beneficiary designation or grant of any power to any beneficiary under this
subsection may be exercised only by an instrument in writing, executed by the
person making the designation or granting such power and filed with the
Secretary of Hospira during such person’s lifetime or prior to the termination
of a fiduciary’s duties.  If a deceased participant or a deceased nonfiduciary
beneficiary who had the right to designate a beneficiary as provided above dies
without having designated a further beneficiary, or if no beneficiary designated
as provided above is living or qualified and acting, the Committee, in its
discretion, may direct distribution of the amount remaining from time to time to
either:

 

(i)                                     any one or more or all of the next of
kin (including the surviving spouse) of the participant or the deceased
beneficiary, as the case may be, and in such proportions as the Committee
determines; or

 

(ii)                                  the legal representative of the estate of
the deceased participant or deceased beneficiary as the case may be.

 

Any beneficiary designation in effect with respect to a participant under the
Abbott KSP immediately prior to the effective date shall remain in effect under
the Plan as though made hereunder until changed by the participant in accordance
with the provisions of this subsection 7.4.

 

7-3.                             NON-ASSIGNABILITY AND FACILITY OF PAYMENT. 
Amounts payable to participants and their beneficiaries under the Plan are not
in any way subject to their debts and other obligations, and may not be
voluntarily or involuntarily sold, transferred or assigned; provided that the
preceding provisions of this section shall not be construed as restricting in
any way a designation right granted to a beneficiary pursuant to the terms of
subsection 7-2.  When a participant or the beneficiary of a participant is under
legal disability, or in the Committee’s opinion is in any way incapacitated so
as to be unable to manage his or her financial affairs, the Committee may direct
that payments shall be made to the participant’s or beneficiary’s legal
representative, or to a relative or friend of the participant or beneficiary for
the benefit of the participant or beneficiary, or the Committee may direct the
payment or distribution for the benefit of the participant or beneficiary in any
manner that the Committee determines.

 

7-4.                             PAYER OF AMOUNTS ALLOCATED TO PARTICIPANTS. 
Any employer contribution made on behalf of a participant in the Plan and any
interest credited thereto (and to other contributions) will be paid by the
employer (or such employer’s successor) by whom the participant was employed
during the calendar year for which any amount was allocated, and for that
purpose, if a participant shall have been employed by two or more employers
during any calendar year the amount allocated under this Plan for that year
shall be an obligation of each of

 

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the respective employers in proportion to the respective amounts of compensation
paid by each of them in that calendar year.

 

7-5.                             MANNER OF PAYMENT.  All pre-tax contributions
and employer contributions, less the approximate aggregate federal, state and
local individual income taxes (determined as set forth below), shall be paid to
Abbott by Hospira as soon as practicable after the last complete payroll period
of the calendar quarter in which the contributions were made.  Abbott will
contribute such amount to a Grantor Trust established by the applicable
participant in accordance with the Abbott KSP.  Hospira shall pay to the
participant an amount equal to the approximate aggregate federal, state and
local individual income taxes (determined as set forth below).  Upon Hospira’s
payment of the foregoing amounts, Hospira’s obligations under and with respect
to participants and all other persons with respect to such contributions  shall
be satisfied in full.  For purposes of determining the approximate federal,
state and local individual income taxes for a participant for purposes of this
subsection 7-5, the participant’s federal income tax rate shall be deemed to be
the highest marginal rate of federal individual income tax in effect in the
calendar year in which a calculation under this subsection 7-5 is to be made,
and state and local tax rates shall be deemed to be the highest marginal rates
of individual income tax in effect in the state and locality of the
participant’s residence on the date such a calculation is made, net of any
federal tax benefits.

 

SECTION 8
MISCELLANEOUS

 

8-1.                             RULES.  The Committee may establish such rules
and regulations as it may consider necessary or desirable for the effective and
efficient administration of the Plan.

 

8-2.                             TAXES.  Any employer shall be entitled, if
necessary or desirable, to pay, or withhold the amount of any federal, state or
local tax, attributable to any amounts payable by it under the Plan after giving
the person entitled to receive such amount notice as far in advance as
practicable, and may defer making payment of any amount with respect to which
any such tax question may be pending unless and until indemnified to its
satisfaction.

 

8-3.                             RIGHTS OF PARTICIPANTS.  Employment rights of
participants with Hospira and its subsidiaries shall not be enlarged or affected
by reason of establishment of or inclusion as a participant in the Plan. 
Nothing contained in the Plan shall require Hospira or any subsidiary to
segregate or earmark any assets, funds or property for the purpose of payment of
any amounts which may have been deferred.  The Deferred Accounts established
pursuant to subsection 7-1 are for the convenience of the administration of the
Plan and no trust relationship with respect to such Accounts is intended or
should be implied.  Participant’s rights shall be limited to payment to them at
the time or times and in such amounts as are contemplated by the Plan.  Any
decision made by the Committee which is within its sole and uncontrolled
discretion, shall be conclusive and binding upon all persons whomsoever.

 

8-4.                             GENDER.  For purposes of the Plan, words in the
masculine gender shall include the feminine and neuter genders, the singular
shall include the plural and the plural shall include the singular.

 

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8-5.                             MANNER OF ACTION BY COMMITTEE.  A majority of
the members of the Committee qualified to act on any particular question may act
by meeting or by writing signed without meeting, and may execute any instrument
or document required or delegate to one of its members authority to sign.  The
Committee from time to time may delegate the performance of certain ministerial
functions in connection with the Plan, such as the keeping of records, to such
person or persons as the Committee may select.  Except as otherwise expressly
provided in the Plan, the costs of administration of the Plan will be paid by
Hospira.  Any notice required to be given to, or any document required to be
filed with the Committee, will be properly given or filed if mailed or delivered
in writing to the Secretary of Hospira.

 

8-6.                             RELIANCE UPON ADVICE.  The Board of Directors
and the Committee may rely upon any information or advice furnished to it by any
Officer of Hospira or by Hospira’s independent auditors, or other consultants,
and shall be fully protected in relying upon such information or advice.  No
member of the Board of Directors or the Committee shall be liable for any act or
failure to act on their part, excepting only any acts done or omitted to be done
in bad faith, nor shall they be liable for any act or failure to act of any
other member.

 

SECTION 9
AMENDMENT, TERMINATION AND CHANGE OF
CONDITIONS RELATING TO PAYMENTS

 

The Plan will be effective from its effective date until December 31, 2004.  The
Board of Directors reserves the right to amend the Plan from time to time and to
terminate the Plan at any time.  No such amendment or any termination of the
Plan shall reduce any fixed or contingent obligations which shall have arisen
under the Plan prior to the date of such amendment or termination.

 

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TABLE OF CONTENTS

 

SECTION 1

INTRODUCTION

 

1-1.

HISTORY AND PURPOSE

 

1-2.

EFFECTIVE DATE AND AUTOMATIC TERMINATION

 

1-3.

ADMINISTRATION

 

SECTION 2

ELIGIBILITY AND PARTICIPATION

 

2-1.

PERSONS ELIGIBLE TO PARTICIPATE

 

2-2.

PARTICIPANT

 

SECTION 3

EMPLOYEE CONTRIBUTIONS

 

3-1.

ALLOWABLE CONTRIBUTIONS

 

3-2.

COMPENSATION

 

3-3.

MAXIMUM EMPLOYEE CONTRIBUTIONS

 

SECTION 4

EMPLOYER CONTRIBUTIONS

 

SECTION 5

ELECTIONS

 

5-1.

ELECTIONS PROCEDURES

 

5-2.

LIMITED CHANGES

 

SECTION 6

FUNDING EMPLOYER AND EMPLOYEE CONTRIBUTIONS

 

SECTION 7

ACCOUNTING

 

7-1.

SEPARATE ACCOUNTS

 

7-2.

DESIGNATION OF BENEFICIARIES

 

7-3.

NON-ASSIGNABILITY AND FACILITY OF PAYMENT

 

7-4.

PAYER OF AMOUNTS ALLOCATED TO PARTICIPANTS

 

7-5.

MANNER OF PAYMENT

 

SECTION 8

MISCELLANEOUS

 

8-1.

RULES

 

8-2.

TAXES

 

8-3.

RIGHTS OF PARTICIPANTS

 

8-4.

GENDER

 

8-5.

MANNER OF ACTION BY COMMITTEE

 

8-5.

RELIANCE UPON ADVICE

 

 

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SECTION 9

AMENDMENT, TERMINATION AND CHANGE OF CONDITIONS RELATING TO PAYMENTS

 

 

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