Exhibit
10.4


 


HOSPIRA,
INC.


2004
PERFORMANCE INCENTIVE PLAN


 


(Effective April 30, 2004, as amended
effective January 1, 2010)


 

















 


HOSPIRA,
INC.


2004
PERFORMANCE INCENTIVE PLAN


 


SECTION 1.           Establishment and Purposes


 


1.1           Establishment of the Plan.  Hospira, Inc. (“Hospira”) hereby establishes
the “Hospira, Inc. Performance Incentive Plan” the (“Plan”), as set forth in
this document.  The Plan shall become
effective as of April 30, 2004 (the “Effective Date”) and shall remain in
effect as provided in Section 6.1 hereof.


 


1.2           Purposes of the Plan.  The purposes of the Plan are to:


 


(a)           Provide
flexibility to Hospira in its ability to attract, motivate, and retain the
services of participants in the Plan (“Participants”) who make significant
contributions to Hospira’s success and to allow Participants to share in the
success of Hospira;


 


(b)           Optimize
the profitability and growth of Hospira through incentives which are consistent
with Hospira’s goals and which link the performance objectives of Participants
to those of Hospira’s shareholders; and


 


(c)           Provide
Participants with an incentive for excellence in individual performance.


 


SECTION 2.           Administration


 


2.1           General.  The Plan shall be administered by the
Compensation Committee (the “Committee”) of the Board of Directors of Hospira
(the “Board”).


 


2.2           Authority of the Committee.  The Committee will have full authority to
administer the Plan, including the authority to interpret and construe any
provision of the Plan, and to establish and amend rules pertaining thereto.  All rules, regulations and interpretations
shall be conclusive and binding on all persons. 
The Committee has sole responsibility for selecting Participants,
establishing performance objectives, setting award targets, and determining
award amounts.


 


2.3           Delegation by the Committee.  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.  The cost of administration of
the Plan will be paid by Hospira.


 


SECTION 3.           Eligibility and Participation


 


3.1           Eligibility and Participation.  Eligibility for participation in the Plan
shall be limited to officers of Hospira and its subsidiaries.  Participants in the Plan will be determined
annually by the Committee from those officers eligible to participate in the
Plan.


 


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SECTION 4.           Performance Objectives.


 


4.1           Performance Objectives.  The Plan’s performance objectives (the “Performance
Objectives”) shall be determined with reference to Hospira’s Earnings Before
Interest, Taxes, Depreciation and Amortization (“EBITDA”).


 


4.2           Individual Base Award Allocation —
Defined.


 


(a)           For
the performance period beginning on the Effective Date and ending on December 31,
2004 (the “2004 Period”), the base award allocation for the Chief Executive
Officer, if a Participant for such period, shall be .020 of Hospira’s EBITDA
for the 2004 Period.  The base award
allocation for the Chief Operating Officer, if a participant for such period,
shall be .015 of Hospira’s EBITDA for the 2004 Period.  The base award allocation for any other
Participant shall be .010 of Hospira’s EBITDA for the 2004 Period.


 


(b)           For
all fiscal years beginning after December 31, 2004, the base award allocation
for the Chief Executive Officer, if a Participant for such fiscal year, shall
be .020 of Hospira’s EBITDA for that fiscal year.  The base award allocation for the Chief
Operating Officer, if a participant for such fiscal year, shall be .015 of
Hospira’s EBITDA for that fiscal year. 
The base award allocation for any other Participant shall be .010 of
Hospira’s EBITDA for that fiscal year.


 


SECTION 5.           Final Awards


 


5.1           Final Award Allocation.  As soon as practical after the close of each
fiscal year, a Participant’s final award allocation will be determined solely
on the basis of the Performance Objectives. 
In determining a Participant’s final award allocation, the Committee
will have the discretion to reduce, but not increase, a Participant’s base
award allocation, provided that a Participant’s individual performance will be
considered by the Committee in exercising that discretion.


 


5.2           Payment of Awards.  A Participant’s final award allocation will
be paid or deferred in the manner and at the time(s) established by the
Committee but no later than 2 1⁄2 months after the end of the fiscal year to
which the award relates.


 


5.3           Right to Correct Payments.  Subject to Hospira’s Executive Compensation
Recovery Policy, and notwithstanding anything in the Plan to the contrary, if
the Committee determines, in its sole discretion, that an award was based on
Hospira’s published financial statements that have been restated then, at the
Committee’s direction, Hospira may, but in no case later than 60 months of such
restatement:


 


(a)           correct any payment that was based upon the financial performance
in the published financial statements that was subsequently restated; and


 


(b)           if any payment would
have been lower had the financial results been properly reported, recover any
payment to the Participant under the Plan that was calculated based upon the
achievement of the financial results that were subsequently restated.


 


The Committee may, in its
sole discretion, effect any recovery by obtaining repayment directly from the
Participant, setting off the amount owed to the Company against any amount or
award that 


 


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would otherwise be granted by the Company to the
Participant, reducing any future compensation or benefit to the Participant or
any combination thereof.


 


SECTION 6.           Duration, Amendment and
Termination


 


6.1           Duration of the Plan.  The Plan shall commence on the Effective
Date, as described in Section 1.1 hereof, and shall remain in effect until
terminated by the Board.


 


6.2           Amendment and Termination.  The Board, in its sole discretion, may modify
or amend any or all of the provisions of the Plan at any time and, without
notice, may suspend or terminate it entirely. 
However, no such modification may, without the consent of the
Participant, reduce the right of a Participant to a payment or distribution to
which the Participant is entitled by reason of an outstanding award allocation.


 


SECTION 7.           Successors


 


7.1           Obligations.  All obligations of Hospira under the Plan
with respect to awards granted hereunder shall be binding on any successor to
Hospira, whether the existence of such successor is the result of a direct or
indirect purchase, merger, consolidation, or otherwise, of all or substantially
all of the business and/or assets of Hospira.


 


SECTION 8.           Grantor Trusts


 


8.1           2004 Payments.  With respect to the final award allocation
for the 2004 Period, based on elections previously filed with Abbott
Laboratories for the 2004 calendar year, solely with respect to participants
who have grantor trusts that were established under a similar Abbott
Laboratories incentive program, Hospira shall distribute such 2004 Period award
to the participant in a manner that facilitates the contribution of such
amounts to such participant’s grantor trust in a manner prescribed under the
1986 Abbott Laboratories Management Incentive Plan.  Hospira shall have no obligation to maintain
or make any future contributions to such grantor trusts, other than as herein
provided.


 


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