Exhibit 10.1


 


Hospira Corporate Officer
Severance Plan


(Effective September 1,
2007)




 





 


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.


 

















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, which releases (i) 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, and
(ii) all rights and benefits required under any other severance policy or
plan maintained by the Company or any Affiliate, 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.


 


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 


 


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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.


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.


 


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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 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.


 


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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:

  Address:

  	
   

  	
  Hospira, Inc.

  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

  
	
   

  	
   

  	
   

  
	
  Hugh Burrill

  	
   

  	
  Corporate Vice
  President, Biosimilars Research and Development

  
	
   

  	
   

  	
   

  
	
  Lori Carlson

  	
   

  	
  Corporate Vice
  President and Treasurer

  
	
   

  	
   

  	
   

  
	
  Alejandro
  Infante

  	
   

  	
  President, The
  Americas

  
	
   

  	
   

  	
   

  
	
  Terrence Kearney

  	
   

  	
  Chief Operating
  Officer

  
	
   

  	
   

  	
   

  
	
  Christopher
  Kolber

  	
   

  	
  President,
  Global Devices

  
	
   

  	
   

  	
   

  
	
  Michael Kotsanis

  	
   

  	
  President,
  Europe, Middle East and Africa

  
	
   

  	
   

  	
   

  
	
  Jim Mahoney

  	
   

  	
  Corporate Vice
  President, Global Manufacturing Operations

  
	
   

  	
   

  	
   

  
	
  Thomas Moore

  	
   

  	
  President,
  Global Pharmaceuticals

  
	
   

  	
   

  	
   

  
	
  Edward Ogunro

  	
   

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

  
	
   

  	
   

  	
   

  
	
  Timothy Oldham

  	
   

  	
  President,
  Asia-Pacific

  
	
   

  	
   

  	
   

  
	
  Luann M. Pendy

  	
   

  	
  Corporate Vice
  President, Global Quality

  
	
   

  	
   

  	
   

  
	
  Brian Smith

  	
   

  	
  Senior Vice
  President, General Counsel and Secretary

  
	
   

  	
   

  	
   

  
	
  Ron Squarer

  	
   

  	
  Corporate Vice
  President, Global Strategy and Business Development

  
	
   

  	
   

  	
   

  
	
  Thomas Werner

  	
   

  	
  Senior Vice
  President, Finance and Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
  Henry Weishaar

  	
   

  	
  Corporate Vice
  President, Human Resources

  
	
   

  	
   

  	
   

  
	
  Valentine Yien

  	
   

  	
  Corporate Vice
  President, Operations Finance

  



 


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