Exhibit
10.12(c)


January 12, 2007


Mr. John Arnott


1417 Plumwood Drive


Libertyville, IL
60048


Dear John:


This letter will confirm
our agreement with you relating to your departure from Hospira, Inc. (“Hospira”).  As used in this Agreement, the term “Hospira”
shall mean Hospira, Inc. and all of its subsidiaries and affiliates.


1.               Your last day of
work for Hospira was January 3, 2007. 
Your resignation as an officer of Hospira and director of any Hospira
subsidiary or affiliate is effective as of that date.


2.               (a)  You agree that through January 3, 2008, you
will not engage, directly or indirectly, in any activity (including but not
limited to participation on any board of directors or similar governing body of
any for-profit or non-profit entity), business or employment which is
competitive with any businesses conducted by Hospira, or that were or are under
consideration by Hospira.  You agree to
notify Hospira’s Corporate Vice President of Global Human Resources, in
writing, of any intended activity, business or employment in which you propose
to engage and the name and address of any other intended future employer.  Hospira shall have the right to advise such
person of your obligations hereunder.  If
you so request, Hospira will notify you, in writing, of whether it considers
such activity, business or employment to be inconsistent with your obligations
hereunder.


(b)  You will
not disparage, and will cause your attorneys, financial advisors, agents and
members of your immediate family not to disparage Hospira, its products, Board
of Directors, personnel or persons representing them with respect to business
or personal matters.  You will not engage
in activities that negatively affect Hospira’s reputation or its ongoing or
planned areas of operations, or its relationships with current or prospective
customers and suppliers.


(c)  You agree
to cooperate with Hospira with respect to any charge, suit, investigation,
claim or question arising regarding any matter of which you had knowledge
during your employment with Hospira. 
Such cooperation will include, but not be limited to, appearance at
depositions, assistance in responding to discovery demands and in preparing for
trial, and appearance at trial.  Hospira
will reimburse you for all reasonable expenses, including reasonable travel
expenses, incurred by you in providing such assistance.













(d)  You agree to make reasonable
efforts for an orderly business transition, and to maintain and protect the
reputation of Hospira and its affiliates, businesses, products, Board of
Directors and personnel.  You agree to
return all Hospira property in your possession, including without limitation,
computers, blackberry, cellular telephones, fax machines, reports, files,
memoranda, keys, identification cards, computer access codes, customer and
client lists and other property or materials which you have prepared or to
which you have had access, and you shall not retain any reproduction thereof.


(e)  You agree to abide by the
terms of your Hospira Employee Agreement.


3.               In exchange for the
foregoing, Hospira agrees as follows:


(a)  From January 4, 2007 through January 3, 2008,
or until you secure other full-time employment, which ever occurs first, you
will be on a Pay Continuation Leave (“PCL”). 
You may not convert your PCL to any other type of leave of absence
(including, but not limited to Short Term Medical Leave and / or participation
in the Hospira Long Term Disability Plan). 
During your PCL, Hospira will continue to pay your current salary of
$375,100.40 (less applicable deductions and amounts it is required by law to
withhold).


(b)  Through the period of your PCL, you may
continue to participate in those Hospira benefit plans in which you now
participate, provided that you continue to make the employee contributions
required by those plans.  You may not
make contributions (and no employer matching contributions will be made) under
the Hospira 401(k) Retirement Savings Plan. 
If you are a participant in a Hospira Health Care Plan on the last day
of your PCL, you may choose to elect to continue your health coverage at your
own expense in accordance with the terms of that plan (COBRA coverage).


(c)  Should you begin other full-time employment
prior to January 3, 2008, your PCL will terminate as of the date you begin that
employment and Hospira will pay you a lump sum amount equal to the remaining
salary that would have otherwise been paid under the PCL.  Your benefits participation will cease on the
date you begin this other employment, and you will be eligible for COBRA health
care coverage as described in Paragraph 3(b).


(d)  All Hospira stock options held by you as of
January 3, 2007 shall continue to vest and to be exercisable in accordance with
their terms during the period of your PCL. 
Should you begin other full-time employment prior to January 3, 2008 and
thus terminate your PCL, there will be no further vesting of stock options
after the date you begin such employment. 
Options granted under the Hospira Stock Option Program shall continue to
be exercisable for 90



 2
 









days following the
termination of your PCL (either January 3, 2008 or the date you begin other
full time employment, whichever is earlier). 
All of your options shall continue to be subject to all of the
administrative rules and procedures regarding exercise that Hospira imposes
upon option exercises generally.  It is
recommended that you contact your own tax advisor and Hospira Corporate
Compensation Department (224-212-2962) to determine the potential tax impact of
the timing of option exercise.


(e)  You are eligible to be paid
a bonus under the Hospira Performance Incentive Plan (PIP) for work performed
in 2006 as such bonus, if any, will be calculated pursuant to the processes and
procedures for PIP currently in place. 
You will not be paid any bonus, under PIP or otherwise, for work
performed in 2007.


(f)  You are eligible for four
(4) weeks of vacation pay for the 2007 calendar year.  This payment will be made in a lump sum
within 14 days of you executing this Agreement. 
You are not eligible for, and will not be paid for, any vacation benefit
for the 2006 and 2008 calendar years.


(g)  Hospira will pay for the use
of executive outplacement services for you through January 3, 2008.


(h)  You will be entitled to
maintain the use of your company telephone through January 3, 2008, and Hospira
agrees to continue to pay for your telephone usage through January 3, 2008.


(i)  No other payments or
benefits will be made beyond those described in Paragraphs 3(a)-(h).


4.               You will inform
Hospira by contacting the Corporate Vice President of Global Human Resources
within seven (7) days of accepting other full-time employment.  Should you fail to do so, Hospira is relieved
of any obligation to make further payments to you hereunder and you agree to
promptly remit to Hospira any amounts received from Hospira for the period of
time beginning with the date you began full-time employment forward.


5.               Except to the
extent limited by subparagraph 6(c) and except for claims, demands, and causes
of action (“Claims”) for the nonperformance of this Agreement, Hospira and you
hereby forever waive, release and discharge each and the other, as well as the
officers, directors, employees, agents and shareholders of Hospira from
liability, as follows:



 3
 









(a)  With respect to any and all
Claims whatsoever, whether known or unknown, related to your employment by
Hospira or your resignation and termination of employment, (i) you hereby
forever waive, release and discharge Hospira and the officers, directors,
employees, agents and shareholders of Hospira from liability from all such
Claims or in the future may have, and (ii) Hospira hereby forever waives,
releases and discharges you from all such Claims.


(b)  With respect to all other
Claims whatsoever, whether known or unknown, (i) you hereby forever waive, release
and discharge Hospira and the officers, directors, employees, agents and
shareholders of Hospira from liability from all such Claims you may now have
and (ii) Hospira hereby forever waives, releases and discharges you from
liability from all such Claims Hospira now has.


Both parties agree not to attempt to assert any such Claims at any
time.


6.                           The
following provisions are included in compliance with Section 7 of the Federal
Age Discrimination in Employment Act of 1967. 
You are hereby advised of the following:


(a)  You
acknowledge that this Agreement is supported by consideration described in
Paragraph 3, to which you would not otherwise be entitled.


(b)  The release
and agreement not to sue contained in Paragraph 5 apply to, among other things,
any and all claims you have against Hospira under the Federal Age
Discrimination in Employment Act.


(c)  This
Agreement shall not be deemed to waive any rights or claims relating to age
discrimination arising after the date you sign this Agreement.


(d)  You acknowledge
that you have been given the opportunity to consult with attorneys of your
choosing, financial advisors and members of your immediate family.


(e)  You have 21
days from the date of your receipt of this Agreement to decide whether or not
to sign it.  You may take the entire 21
days to decide whether to sign this Agreement and the offer contained in this
Agreement will remain open during that 21-day period.



 4
 









(f)  You may revoke this
Agreement, in writing, at any time within seven days after you sign it, and
this Agreement will not become effective or enforceable until the eighth day
following your signing of it.  To revoke
this Agreement you must notify, in writing, the Corporate Vice President of Global
Human Resources for the revocation to be effective.


(g)  You acknowledge that you
have not relied on any representation, written or oral, not set forth in this
Agreement and that you have entered into this Agreement voluntarily and with
full knowledge of its final and binding effect.


7.                           You
will be entitled to indemnification from Hospira to the same extent as other
former directors and officers of Hospira, in accordance with Hospira by-laws as
they may exist from time to time.  You
are also entitled to coverage under the directors and officers liability
insurance coverage maintained by Hospira (as in effect from time to time) to
the same extent as other former officers and directors of Hospira; provided,
however, that nothing in this Paragraph 7 shall be construed to require Hospira
to continue to maintain any such directors and officers liability coverage.


8.                           If any
portion of this Agreement should be ruled invalid, the balance of this
Agreement shall continue in full force and effect.


9.                           This
Agreement shall be governed by, and construed in accordance with, the laws of
Illinois, regardless of the laws that might otherwise apply under applicable
conflicts of laws principle.


10.                     This
Agreement constitutes the complete understanding between you and Hospira
relating to your departure and supersedes any and all prior agreements,
promises, representations, or inducements with the exception of your Hospira
Employee Agreement, which remains in full force and effect.  No promises or agreements made subsequent to
the execution of this Agreement by these parties shall be binding unless
reduced to writing and signed by John Arnott and Hospira’s Corporate Vice
President of Global Human Resources.  The
Agreement regarding Change in Control dated April 30, 2004 between you and
Hospira is terminated effective January 3, 2007.



 5
 









If this letter accurately
sets forth our understanding, please sign and return this letter.


	
  Sincerely,

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  HOSPIRA, INC.

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  /s/ Henry A.
  Weishaar

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Henry A.
  Weishaar

  	
   

  	
   

  	
   

  	
   

  
	
  Corporate Vice
  President

  	
   

  	
   

  	
   

  	
   

  
	
  Global Human
  Resources

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  HAW/nae

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ACCEPTED:

  	
  /s/ John Arnott

  	
   

  	
   

  	
  Date:  January
  15, 2007

  	
   

  	
   

  
	
   

  	
   John Arnott

  	
   

  	
   

  	
   

  	
   

  
								



 



 6