Exhibit
10.3(h)(i)


 


HOSPIRA 2004 LONG-TERM
STOCK INCENTIVE PLAN


 


NQSO TERMS


 


The Participant specified below has been granted this Option by Hospira,
Inc. (the “Company”) under the terms of the Hospira 2004 Long-Term Stock
Incentive Plan (the “Plan”).  The Option
shall be subject to the following terms and conditions (the “Option Terms”):


 


1.                                       Terms of Award. 
The following words and phrases relating to the grant of the Option
shall have the following meanings:


 


(a)                                  The “Participant” is                                   .


 


(b)                                 The “Grant Date” is                                         .


 


(c)                                  The number of “Covered Shares” shall be                  shares of Stock.


 


(d)                                 The “Exercise Price” is $                    per share.


 


Except where the context clearly implies to the
contrary, any capitalized term in this award shall have the meaning ascribed to
that term under the Plan.


 


2.                                       Non-Qualified Stock Option. 
The Option is not intended to constitute an “incentive stock option” as
that term is used in Code section 422.


 


3.                                       Date of Exercise. 
Subject to the limitations of the Option Terms, on the first anniversary
of the Grant Date one-third of the Covered Shares subject to These Options
(rounded up) may be purchased; on the second anniversary of the Grant Date two-thirds
of the Covered Shares subject to These Options (rounded up) may be purchased;
and on the third anniversary of the Grant Date these Options may be exercised
in full, provided the Expiration Date has not occurred prior to such vesting
dates.


 


(a)                                  Notwithstanding the foregoing provisions
of this paragraph 3, the Option shall become fully exercisable upon a Change in
Control that occurs on or before the Date of Termination.


 


(b)                                 The Option may be exercised (prior to or
following the Date of Termination) only as to that portion of the Covered
Shares which may be purchased under the foregoing schedule, as of the date of
exercise.


 


(c)                                  The Covered Shares shall continue to
become exercisable pursuant to this Section 3 until the Expiration Date (as
defined in Section 4).


 


(d)                                 Notwithstanding the foregoing provisions
of this paragraph 3, in the event of termination of employment for reasons
other than death, Disability or Retirement, the Option may only be exercised on
or after the Date of Termination only as to that portion 


 

















 


of the Covered
Shares for which it was exercisable immediately prior to the Date of
Termination, or became exercisable on the Date of Termination.


 


4.                                       Expiration.  The Option
shall not be exercisable after the Company’s close of business on the last
business day that occurs prior to the Expiration Date.  The “Expiration Date” shall be the earliest
to occur of:


 


(a)                                  the seven-year anniversary of the Grant
Date;


 


(b)                                 if the termination of employment occurs
for reasons other than death, Disability (as defined in Section 10) or
Retirement (as defined in Section 10), the three-month anniversary of the Date
of Termination (as defined in Section 10); provided, however, that if the
Participant dies during such three month period following the Date of
Termination, then the three-month anniversary of the date of death;


 


(c)                                  the date on which the Participant engages
in conduct which constitutes Cause;


 


(d)                                 the date on which the Participant, at any
time prior to the one-year anniversary of the Date of Termination, engages,
directly or indirectly, for the benefit of the Participant or others, in any
activity, employment or business which, in the sole opinion and discretion of
the Committee, is competitive with the Company or any of its Subsidiaries;


 


(e)                                  as provided under Restricted Activity in Section
5; or


 


(f)                                    as provided
under Other Right to Correct Payments in Section 6.


 


5.                                       Restricted
Activity.


 


(a)                                  The Participant
shall not, while employed by the Company and for a period of one year following
the termination of employment for any reason:


 


(i)                                     without the
prior written consent of the Committee, directly or indirectly engage or assist
any person engaging in any Competitive Business (as defined in Section 10),
individually, or as an officer, director, employee, agent, consultant, owner,
partner, lender, manager, member, principal, or in any other capacity, or
render any services to any entity that is engaged in any Competitive Business;
provided, however, that the Participant’s ownership of 1% of any class of
equity security of any entity engaged in any Competitive Business shall not be
deemed a breach of this Section 5(a) provided such securities are listed on a
national securities exchange or quotation system or have been registered under Section
12(g) of the Securities Exchange Act of 1934, as amended; or


 


(ii)                                  directly or
indirectly divert, take away, solicit, or assist others in soliciting any
current or prospective customer, supplier, independent contractor or service
provider of the Company or any affiliate or otherwise interfere with the 


 


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relationship
between the Company or any affiliate and any current or prospective customer,
service provider, supplier, independent contractor or stockholder.


 


(b)                                 The Participant
shall not, while employed by the Company and for a period of two years
following the termination of employment for any reason: directly or indirectly
induce any person to leave employment with the Company, or solicit for
employment other than on behalf of the Company, offer employment to, or employ,
any person who was an employee of the Company, in each case within six months
of such inducement, solicitation, or offer.


 


(c)                                  If the
Participant engages in any activity described in paragraph 5(a) or paragraph 5(b)
above without the written consent of the Committee, the Company, as determined
by the Committee in its sole discretion, may (i) cancel and terminate all of
the Participant’s unexercised, unexpired or unpaid Options (whether vested or
unvested) under the Plan, and (ii) rescind any exercise, payment or delivery
under any Option occurring within 12 months prior to, or at any time following,
the date of the Participant’s termination of employment for any reason.  Upon any such rescission, the Participant
shall immediately (A) pay to the Company the amount of any gain realized or
payment received, and (B) forfeit to the Company any Shares received as a
result of the rescinded exercise, payment or delivery under any Options, in
such manner and on such terms and conditions as the Committee shall require,
and the Company shall be entitled, as permitted by applicable law, to deduct
from any amounts the Company owes the Participant from time to time the amount
of any such gain realized or payment received. 
“Gain realized” shall be the excess of the Fair Market Value of the
Shares on the date of exercise over the Exercise Price, multiplied by the
number of Shares purchased.


 


6.                                       Other Right to Correct
Payments.  Subject to
the Company’s Executive Compensation Recovery Policy, and notwithstanding anything in the Option
Terms to the contrary, if the Committee
determines, in its sole discretion, that the number of Covered Shares determined
to be delivered under the Option Terms or the value of such Options was based
on the Company’s published financial statements that have been restated then,
at the Committee’s direction, the Company may, but in no case later than 60
months of such restatement:


 


(a)                                  cancel all unexercised, unexpired or unpaid Options
(whether vested or unvested) under the Plan that were based upon the financial performance in the published
financial statements that was subsequently restated;


 


(b)                                 rescind any exercise, payment or delivery
under any Option that were based upon
the financial performance in the published financial statements that was
subsequently restated; and


 


(c)                                  if any amount
has been realized from exercised Options that would have been lower had the
financial results been properly reported, recover all or any gain realized by
the Participant, as determined by the Committee in its sole discretion, under
the Option Terms that resulted from the financial results that were
subsequently restated, and the Participant agrees to repay and return any such
gain realized to the Company.


 


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The Committee may, in its
sole discretion, effect any such recovery by obtaining repayment directly from
the Participant, setting off the amount owed to the Company against any amount
or award that would otherwise be granted by the Company to the Participant,
reducing any future compensation or benefit to the Participant or any
combination thereof.  “Gain realized”
shall be as determined under Section 5(c).


 


7.                                       Method of
Option Exercise.  Subject to
the Option Terms and the Plan, the Option may be exercised in whole or in part
by filing a written notice with the Secretary of the Company at its corporate
headquarters prior to the Company’s close of business on the last business day
that occurs prior to the Expiration Date. 
Such notice shall specify the number of shares of Stock which the
Participant elects to purchase, and shall be accompanied by payment of the
Exercise Price for such shares of Stock indicated by the Participant’s
election. Payment may be by cash or by check payable to the Company, or except
as otherwise provided by the Committee before the Option is exercised: (i) all
or a portion of the Exercise Price may be paid by the Participant by delivery
of shares of Stock (by actual delivery or by attestation) owned by the
Participant and acceptable to the Committee having an aggregate Fair Market
Value (valued as of the date of exercise) that is equal to the amount of cash
that would otherwise be required; and (ii) the Participant may pay the Exercise
Price by authorizing a third party to sell shares of Stock (or a sufficient
portion of the shares) acquired upon exercise of the Option and remit to the
Company a sufficient portion of the sale proceeds to pay the entire Exercise
Price and any tax withholding resulting from such exercise.  Except as otherwise provided by the Committee
prior to exercise, payments made with shares of Stock in accordance with clause
(i) above shall be limited to shares held by the Participant for not less than
six months prior to the payment date. 
The Option shall not be exercisable if and to the extent the Company
determines that such exercise would violate applicable state or Federal
securities laws or the rules and regulations of any securities exchange on
which the Stock is traded and shall not be exercisable during any blackout
period established by the Company from time to time.


 


8.                                       Withholding.  The exercise of the Option is subject to
withholding of all applicable taxes.  At
the election of the Participant, and subject to such rules and limitations as
may be established by the Committee from time to time, such withholding
obligations may be satisfied (i) through cash payment by the Participant; (ii) through
the surrender of shares of Stock by (actual delivery or by attestation) which
the Participant already owns (provided, however, that to the extent shares
described in this clause (ii) are used to satisfy more than the minimum
statutory withholding obligation, as described below, then, except as otherwise
provided by the Committee, payments made with shares of Stock in accordance
with this clause (ii) shall be limited to shares held by the Participant for
not less than six months prior to the payment date); or (iii) through the
surrender of shares of Stock to which the Participant is otherwise entitled
under the Plan; provided, however, that such shares under this clause (iii) may
be used to satisfy not more than the Company’s minimum statutory withholding
obligation (based on minimum statutory withholding rates for Federal and state
tax purposes, including payroll taxes, that are applicable to such supplemental
taxable income).


 


9.                                       Transferability. 
The Option is not transferable by the Participant other than by will or
by the laws of descent and distribution, and during the Participant’s life, may
be exercised only by the Participant.  It
may not be assigned, transferred (except as aforesaid), pledged or 


 


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hypothecated
by the Participant in any way whether by operation of law or otherwise, and
shall not be subject to execution, attachment or similar process.  Any attempt at assignment, transfer, pledge
or hypothecation, or other disposition of this Option contrary to the provisions
hereof, and the levy of any attachment or similar process upon this option,
shall be null and void and without effect.


 


10.                                 Definitions. 
For purposes of the Option Terms, words and phrases shall be defined as
follows:


 


(a)                                  Cause.  The term “Cause”
shall mean, in the sole opinion and discretion of the Committee, the
Participant has (i) engaged in a material breach of the Company’s code of
business conduct, (ii) committed an act of fraud, embezzlement or theft in
connection with the Participant’s duties or in the course of employment, or (iii)
wrongfully disclosed secret processes or confidential information of the
Company or its subsidiaries.


 


(b)                                 Competitive Business. 
The term “Competitive Business” means any business activity in which the
Company or any Subsidiary is actively engaged at the time the Participant’s
employment terminates.  For these
purposes, entities deemed to be engaged in Competitive Business include, by way
of example and not limitation, Abraxis BioScience, Inc., Baxter International
Inc., Teva Pharmaceuticals, Becton, Dickinson and Company, B. Braun Melsungen
AG, Cardinal Healthcare Inc., Fresenius Medical Care AG, Terumo Medical
Corporation, Patheon, Inc., and Edwards Lifesciences Corporation.


 


(c)                                  Date of Termination. 
The term “Date of Termination” means the first day occurring on or after
the Grant Date on which the Participant is not employed by the Company or any
Subsidiary, regardless of the reason for the termination of employment;
provided that a termination of employment shall not be deemed to occur by reason
of a transfer of the Participant between the Company and a Subsidiary or
between two Subsidiaries; and further provided that the Participant’s
employment shall not be considered terminated while the Participant is on a
leave of absence from the Company or a Subsidiary approved by the Participant’s
employer.  If, as a result of a sale or
other transaction, the Participant’s employer ceases to be a Subsidiary (and
the Participant’s employer is or becomes an entity that is separate from the
Company), and the Participant is not, at the end of the 30-day period following
the transaction, employed by the Company or an entity that is then a
Subsidiary, then  the occurrence of
such transaction shall be treated as the Participant’s Date of Termination
caused by the Participant being discharged by the employer.


 


(d)                                 Disability.  The Term “Disability”
shall mean the Participant’s disability as defined in the Hospira Extended
Disability Plan, whether or not such Participant is a participant in such
disability plan, for a period of twelve (12) consecutive months.


 


(e)                                  Retirement.  “Retirement”
of the Participant means, the occurrence of the Participant’s Date of
Termination on or after the date that the Participant reaches the age of 55 and
has 10 years of combined service with the Company or its subsidiaries (or with
Abbott Laboratories and its affiliates, provided that the Participant
transitioned 


 


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employment from
Abbott to the Company in conjunction with the distribution of the Company’s
common stock to the Abbott shareholders) (as determined by the Committee).


 


11.                                 Heirs and Successors. 
The Option Terms shall be binding upon, and inure to the benefit of, the
Company and its successors and assigns, and upon any person acquiring, whether
by merger, consolidation, purchase of assets or otherwise, all or substantially
all of the Company’s assets and business.


 


12.                                 Administration. 
The authority to manage and control the operation and administration of
the Option Terms shall be vested in the Committee, and the Committee shall have
all powers with respect to the Option Terms as it has with respect to the Plan.
Any interpretation of the Option Terms by the Committee and any decision made
by it with respect to the Option Terms is final and binding on all persons.


 


13.                                 Plan Governs. Notwithstanding anything in the Option
Terms to the contrary, the Option Terms shall be subject to the terms of the
Plan, a copy of which may be obtained by the Participant from the office of the
Secretary of the Company; and the Option Terms is subject to all
interpretations, amendments, rules and regulations promulgated by the Committee
from time to time pursuant to the Plan.


 


14.                                 Not An Employment Contract. The Option will not confer on the
Participant any right with respect to continuance of employment or other
service with the Company or any Subsidiary, nor will it interfere in any way
with any right the Company or any Subsidiary would otherwise have to terminate
or modify the terms of such Participant’s employment or other service at any
time.


 


15.                                 Notices.  Any written
notices provided for in the Option Terms or the Plan shall be in writing and
shall be deemed sufficiently given if either hand delivered or if sent by fax
or overnight courier, or by postage paid first class mail. Notices sent by mail
shall be deemed received three business days after mailing but in no event
later than the date of actual receipt. Notices shall be directed, if to the
Participant, at the Participant’s address indicated by the Company’s records,
or if to the Company, at the Company’s principal executive office.


 


16.                                 Fractional Shares. In lieu of issuing a fraction of a
share upon any exercise of the Option, resulting from an adjustment of the
Option pursuant to paragraph 3.4 of the Plan or otherwise, the Company will be
entitled to pay to the Participant an amount equal to the fair market value of
such fractional share.


 


17.                                 No Rights As Shareholder. 
The Participant shall not have any rights of a shareholder with respect to
the shares subject to the Option, until a stock certificate has been duly
issued following exercise of the Option as provided herein.


 


18.                                 Amendment.  The Option
Terms may be amended in accordance with the provisions of the Plan, and may
otherwise be amended by written agreement of the Participant and the Company
without the consent of any other person.


 


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IN WITNESS WHEREOF, the Company has caused these presents to be
executed in its name and on its behalf, all as of the Grant Date.


 


	
   

  	
  Hospira, Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Its:

  	
   

  



 


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