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)


 

















 


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 1⁄2 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)