Exhibit 10.2

 

Hospira Corporate Officer Severance Plan

(Effective September 1, 2007 and as amended on December 10, 2008)

 

1.             Purpose.  The Hospira Corporate Officer Severance Plan (“Plan”)
was established to provide Severance Pay and other benefits to terminated
Corporate Officers of Hospira, Inc. (the “Company”) who satisfy the terms of the
Plan.  Severance Pay and benefits under the Plan shall be in lieu of any
benefits available under the Hospira Transitional Pay Plan or any other
severance plan or policy maintained by the Company or any of its subsidiaries
and affiliates (each an “Affiliate”); and benefits will not be payable under the
Plan if the relevant termination of employment results in the employee being
eligible for equivalent (or greater) severance pay and benefits under an
employment agreement between the Company or an Affiliate and the employee, or
under the Hospira, Inc. Change in Control Severance Pay Plan or any Change in
Control agreement between the Company or any Affiliate and the employee.

 

2.             Administration.  The Plan is administered by the Company’s
Corporate Vice President, Human Resources (“Administrator”), except as
specifically stated herein.  The Administrator has the complete discretion and
authority with respect to the Plan and its application.  The Administrator
reserves the right to interpret the Plan, prescribe, amend and rescind rules and
regulations relating to it, determine the terms and provisions of Severance Pay
and benefits and make all other determinations it deems necessary or advisable
for the administration of the Plan.  The determination of the Administrator in
all matters regarding the Plan shall be conclusive and binding on all persons. 
The Administrator may delegate any of his or her duties under the Plan to one or
more other persons.

 

3.             Scope.  The Plan will apply to all Corporate Officers
(“Participants”).  For purposes of the Plan, the term “Corporate Officer” means
an individual elected a corporate officer of the Company by its Board of
Directors or designated as a Plan participant by the Compensation Committee of
the Board of Directors of the Company (“Committee”) and listed on the attached
Exhibit A, but shall not include assistant officers or the Company’s Chief
Executive Officer (“CEO”).

 

4.             Eligibility for Severance Pay.  A Participant becomes entitled to
receive severance pay (“Severance Pay”) only if he or she is terminated by the
Company or an Affiliate for any of the following reasons, and the conditions
described in Section 5 below are met:

 

(a)           The Participant’s position is eliminated due to a reduction in
force or other restructuring.

 

(b)           The Participant’s employment is otherwise terminated for reasons
not related to performance, illegal activity, failure to abide by the Company’s
Code of Conduct, or other good cause as determined by the Administrator and is
otherwise considered to be involuntary.

 

Exhibit A (as revised October 21, 2009)

 

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A Participant’s eligibility for Severance Pay shall not be affected by the
Company’s decision to accept his or her resignation or retirement following the
occurrence of any of the conditions described in Sections 4(a) and 4(b). The
decision as to whether a Participant is eligible for Severance Pay and benefits
under this Plan shall be made by the Administrator, not the Participant.  If the
Participant disagrees, the Participant must follow the procedures set forth in
Section 14.

 

5.             Conditions to Receipt of Severance Pay.

 

(a)           Severance Pay is not available to a Participant otherwise eligible
for Severance Pay who transfers to another position with the Company or any
Affiliate.

 

(b)           A Participant must sign an agreement in a form provided by the
Administrator under which the Participant agrees to use all best efforts to
protect the secrecy and confidentiality of information that is confidential and
proprietary to Hospira or any of its Affiliates (“Confidential Information”) and
under which the Participant agrees that, for a period of 2 years after his or
her termination of employment the Participant will: (1) not engage, directly or
indirectly, in any activity or employment, for the benefit of the Participant or
others, in a manner that contributes to any research, discovery, development,
manufacture, importation, marketing, promotion, sale or use of any competing
Hospira product, process or service, which is related in any way to the
Participant’s employment with the Company or any of its Affiliates; (2) not
engage in any activity or employment in the performance of which any
Confidential Information obtained, provided or otherwise acquired, directly or
indirectly, during the term of employment with Hospira or any of its Affiliates
is likely to be used or disclosed, notwithstanding the Participant’s undertaking
to the contrary; (3) not solicit the customers of the Company or any of its
Affiliates or entice any employee of the Company or any of its Affiliates to
leave the employment of the Company or any of its Affiliates; and (4) inform the
Company of other employment by contacting the Administrator within 5 days of
accepting such other employment.

 

(c)           A Participant must satisfy any other condition specified in
Section 5 and Section 6.  During the period in which a Participant is entitled
to consider the execution of the waiver and release agreement described in
Section 6, or during such other period as is otherwise agreed to by the
Administrator and the Participant, he or she may be required to complete
unfinished business projects and be available for discussions regarding matters
relative to the Participant’s duties with the Company or any of its Affiliates.

 

(d)           A Participant must return all property and information of the
Company or any of its Affiliates.

 

(e)           A Participant must agree to pay all outstanding amounts owed to
the Company or any Affiliate and authorize the Company or Affiliate to withhold
any outstanding amounts from his or her final paycheck and/or Severance Pay.

 

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6.             Amount of Severance Pay.  The amount of Severance Pay to which a
Participant is entitled under the Plan is the sum of:

 

(a)           2 years of the Participant’s base salary at the rate in effect on
the date of termination, plus

 

(b)           for the year of termination, the Participant’s pro rata annual
incentive bonus award through the date of termination, with the determination of
the amount of such award based on an assumption that the target level of
performance has been achieved.

 

In addition to the pro-rata bonus provided under Section 6(b) above, if the
Participant’s date of termination occurs after the end of a performance period
applicable to an annual incentive bonus award in which the Participant
participates, and prior to the payment of the award, if any, for the period, the
Participant shall be entitled to a lump sum payment in cash with respect to such
prior performance period, as determined under the terms of that incentive award
arrangement.

 

A Participant who is receiving benefits under a short term disability plan
maintained by the Company or any Affiliate will be entitled to Severance Pay at
the end of the period of payment of short term disability if, and only if,
(1) he or she is not then eligible for benefits under a long term disability
plan maintained by the Company or an Affiliate, and (2) he or she is not offered
employment with the Company or an Affiliate that, in the discretion of the
Administrator, is comparable to that held by the Participant at the time the
applicable period of short term disability commenced.  A Participant will not be
entitled to Severance Pay at the end of the period of long term disability.

 

Severance Pay will be paid to a Participant in one lump sum cash payment. 
Payment will be made as soon as practicable after the last to occur of (1) the
date of the Participant’s termination of employment, (2)  the effective date of
the Participant’s executed waiver and release agreement in the form provided by
the Administrator (i) which releases the Company and its Affiliates, and their
respective officers, directors and employees, from any and all actions, suits,
proceedings, claims and demands relating to the Participant’s employment with
the Company or any Affiliate and the termination thereof, (ii) which
releases all rights and benefits required under any other severance policy or
plan maintained by the Company or any Affiliate, and (iii) under which the
Participant agrees to maintain and protect the reputation of the Company and its
Affiliates and their businesses, products and personnel, and the Participant
agrees further to not disparage the Company, any Affiliate,  or any person
representing the Company or any Affiliate, or engage in any similar activities
which reasonably could be anticipated to affect negatively the reputation of the
Company and any Affiliate and their businesses, products and personnel, and
relationships with current or prospective customers, suppliers and employees and
(3) the satisfaction of the conditions described in Sections 5(b), (c), (d) and
(e).  In any event, the payment shall be made no later than 2 ½ months after the
end of the year in which the termination described in Section 4 occurs.
Severance Pay shall be reduced by applicable amounts necessary to comply with
federal, state and local income tax withholding requirements.

 

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7.             Benefits.

 

(a)           Welfare Benefits.  A Participant entitled to Severance Pay shall
receive, at the time of payment of Severance Pay, a lump sum payment equivalent
to 130% of the cost of 72-weeks of COBRA (as defined in Section 4980B of the
Internal Revenue Code of 1986, as amended (the “Code”), and Sections 601-609 of
the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), or
any successor sections) continuation coverage premiums in lieu of any continued
medical, dental, vision, and other welfare benefits offered by the Company or
any Affiliate.  Such period of COBRA continuation coverage shall be included as
part of the period during which the Participant may elect continued group health
coverage under COBRA.

 

(b)           Outplacement Services.  A Participant entitled to Severance Pay
shall receive outplacement services, selected by the Company at its expense, for
a period commencing on the date of termination of employment and continuing
until the earlier to occur of the Participant accepting other employment or
12 months thereafter.

 

8.             Death of Participant.  No Severance Pay will be paid if a
Participant dies before satisfying Section 4 and Section 5; provided, however,
that if a Participant dies after becoming entitled to receive Severance Pay by
satisfying Section 4 and Section 5 but prior to receiving Severance Pay pursuant
to Section 4, payment of the Severance Pay determined under Section 4 will be
made to the representative of his or her estate.  Notwithstanding any provision
of this Plan to the contrary, the Administrator and the Participant’s estate may
agree to alternative means for the satisfaction of the requirements in Sections
5 (b), (c), (d) and (e).

 

9.             Effective Date of Plan.  The Plan is effective as of September 1,
2007.

 

10.           Amendment or Termination.

 

(a)           Hospira reserves the right to amend or terminate the Plan at any
time; provided, however, that no amendment or termination may adversely affect
any Severance Pay and benefits of a Participant who has terminated employment
and is entitled to Severance Pay and benefits by satisfying the requirements in
Section 4 and Section 5.  All amendments and any termination of the Plan will be
adopted by resolution of the Committee.

 

(b)           Severance Pay and benefits under the Plan are not intended to be a
vested right.

 

11.           Code Section 409A.  Notwithstanding anything to the contrary in
this Plan, the Committee may adopt such amendments to the Plan, or adopt
policies or procedures, as may be necessary or appropriate to (a) exempt
Severance Pay and benefits from Code Section 409A and/or to preserve the
intended tax treatment thereof or (b) otherwise comply with the requirements of
Code Section 409A and related regulations.

 

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12.           Governing Law.  The terms of the Plan shall, to the extent not
preempted by federal law, be governed by, and construed and enforced in
accordance with, the laws of the State of Illinois, including all matters of
construction, validity and performance.

 

13.           Miscellaneous Provisions.

 

(a)           Severance Pay and other benefits pursuant to the Plan shall not be
subject in any manner to anticipation, alienation, sale, transfer, assignment,
pledge, encumbrance or charge prior to actual receipt by a Participant, and any
attempt to so anticipate, alienate, sell, transfer, assign, pledge, encumber or
charge prior to such receipt shall be void and neither the Company nor any
Affiliate shall be liable in any manner for, or subject to, the debts,
contracts, liabilities, engagements or torts of any person entitled to any
Severance Pay or other benefits under the Plan.

 

(b)           Nothing contained in the Plan shall confer upon any individual the
right to be retained in the service of the Company or any Affiliate, nor limit
the right of the Company or Affiliate to discharge or otherwise deal with any
individual without regard to the existence of the Plan.

 

(c)           The Plan shall at all times be entirely unfunded.  No provision
shall at any time be made with respect to segregating assets of the Company or
any Affiliate for payment of any Severance Pay or other benefits hereunder.  No
employee or any other person shall have any interest in any particular assets of
the Company or any Affiliate by reason of the right to receive Severance Pay or
other benefits under the Plan, and any such employee or any other person shall
have only the rights of a general unsecured creditor of the Company or an
Affiliate with respect to any rights under the Plan.

 

14.           Appeals Procedure.  If a Participant feels he or she should be
eligible for Severance Pay or benefits under the Plan, the Participant may file
a written claim with the Administrator. If a written claim for Severance Pay or
benefits under the Plan by a Participant or his or her beneficiary is denied,
either in whole or in part, the Administrator will let the claimant know in
writing within 90 days.  If the claimant does not hear within 90 days, the
claimant may treat the claim as if it had been denied.  A notice of a denial of
a claim will refer to a specific reason or reasons for the denial of the claim;
will have specific references to the Plan provisions upon which the denial is
based; will describe any additional material or information necessary for the
claimant to perfect the claim and explain why such material information is
necessary; and will have an explanation of the Plan’s review procedure.

 

The claimant will have 60 days after the date of the denial to request in
writing for a review and a hearing.  The claimant must file a written request
with the CEO for a review.  During this time the claimant may review pertinent
documents and may submit issues and comments in writing.  The CEO will have
another 60 days in which to consider the claimant’s written request for review. 
If special circumstances require an extension of time for processing, the CEO
may have an additional 60 days to answer the

 

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claimant.  The claimant will receive a written notice if the extra days are
needed.  The claimant may submit in writing any document, issues and comments he
or she may wish.  The decision of the CEO will tell the claimant the specific
reasons for his or her actions, and refer the claimant to the specific Plan
provisions upon which its decision is based.

 

15.          Rights Under ERISA.  Each Participant in the Plan is entitled to
certain rights and protection under ERISA, which provides that all Participants
shall be entitled to:

 

(a)           Examine, without charge, at the Company’s office all Plan
documents.

 

(b)           Obtain copies of all Plan documents and other Plan information
upon written request to the Administrator.  The Administrator may make a
reasonable charge for the copies.

 

In addition to creating rights for Participants, ERISA imposes duties upon the
people who are responsible for the operation of an employee benefit plan.  The
people who operate the Plan, called “fiduciaries” of the Plan, have a duty to do
so prudently and in the interest of the Participants and beneficiaries.  No one,
including the Company, any Affiliate or any other person, may fire a Participant
or otherwise discriminate against a Participant in any way to prevent him or her
from obtaining a benefit or exercising his or her rights under ERISA.  If a
Participant’s claim for a benefit is denied in whole or in part, he or she must
receive a written explanation of the reason for the denial.  A Participant has
the right to have the CEO review and reconsider his or her written claim.  Under
ERISA, there are steps a Participant can take to enforce the above rights.  For
instance, if a Participant requests materials from the Administrator and does
not receive them within thirty (30) days, he or she may file suit in a federal
court.  In such a case the court may require the Company to provide the
materials and pay the Participant up to $110 a day until the Participant
receives the materials, unless the materials were not sent because of reasons
beyond the control of the Company.  If a Participant has a claim for benefits,
which is denied or ignored, in whole or in part, he or she may file suit in a
state or federal court.  If a Participant is discriminated against for asserting
his or her rights, he or she may ask assistance from the United States
Department of Labor, or he or she may file suit in a federal court.  The court
will decide who should pay the court costs and legal fees.  If the Participant
is successful, the court may order the person he or she has sued to pay these
costs and fees.  If the Participant loses, the court may order him or her to pay
these costs and fees, for example, if it finds his or her claim to be
frivolous.  If a Participant has questions about the Plan, he or she should
contact the Administrator.  If a Participant has any questions about this
statement or about his or her rights under ERISA, he or she should contact the
nearest Area Office of the United States Labor-Management Services
Administration, Department of Labor.

 

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16.           Plan Facts:

 

Company:

 

Hospira, Inc.

Address:

 

275 North Field Drive

 

 

Lake Forest, IL 60045

 

 

 

Plan Name:

 

Hospira Corporate Officer Severance Plan

 

 

 

Type of Plan:

 

Severance Plan-Welfare Benefits Plan

 

 

 

Plan Year:

 

Calendar year

 

 

 

Employer Identification Number (EIN):

 

20-0504497

 

 

 

Plan Administrator:

 

Corporate Vice President, Human Resources

 

 

 

Business Address:

 

275 North Field Drive

 

 

Lake Forest, IL 60045

 

 

 

Agent for Service of Legal Process:

 

Corporate Vice President, Human Resources

 

 

 

Address

 

275 North Field Drive

 

 

Lake Forest, IL 60045

 

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Hospira Corporate Officer Severance Plan

 

Exhibit A

List of Plan Participants

 

Name

 

Position

 

 

 

Lori Carlson

 

Corporate Vice President and Treasurer

 

 

 

Arthur J. Fiocco, Jr.

 

Corporate Vice President, Global Quality

 

 

 

James H. Hardy, Jr.

 

Corporate Vice President, Supply Chain

 

 

 

Richard J. Hoffman

 

Corporate Vice President and Controller

 

 

 

Daphne Jones

 

Senior Vice President and Chief Information Officer

 

 

 

Terrence Kearney

 

Chief Operating Officer

 

 

 

Michael Kotsanis

 

Corporate Vice President and President, Europe, Middle East and Africa

 

 

 

Jim Mahoney

 

Corporate Vice President, Global Manufacturing Operations

 

 

 

Kenneth F. Meyers

 

Senior Vice President of Organizational Transformation and People Development

 

 

 

Thomas Moore

 

Corporate Vice President and President, U.S.

 

 

 

Timothy Oldham

 

Corporate Vice President and President, Asia-Pacific

 

 

 

Sumant Ramachandra

 

Senior Vice President, Research and Development, Medical and Regulatory Affairs
and Chief Scientific Officer

 

 

 

Brian Smith

 

Senior Vice President, General Counsel and Secretary

 

 

 

Ron Squarer

 

Senior Vice President, Global Marketing and Corporate Development

 

 

 

Thomas Werner

 

Senior Vice President, Finance and Chief Financial Officer

 

 

 

Valentine Yien

 

Corporate Vice President, Operations Finance

 

Exhibit A (as revised October 21, 2009)

 

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