Exhibit 10.1


 


Executive
Compensation Recovery Policy


 


In the event
of a restatement of Hospira’s published financial results, the Committee will
review the facts and circumstance that led to the restatement.  If the Committee determines that any bonus,
equity-based award or other compensation was made to a current or former executive
officer based on the original financial statements, the Committee may at its
discretion, but in no case later than 60 months of such restatement, adjust
such compensation negatively or positively. 
The committee may seek to recover from such executive officer the part
of any bonus, equity-based award or other compensation that was paid based upon
the financial performance in the published financial statements that was subsequently
restated.


 


In exercising
its discretion, the Committee shall consider and weigh all factors that it
deems appropriate and relevant, such as the degree to which the restatement was
material as measured by the injury suffered by Hospira and its shareholders due
to the restatement, the degree to which the restatement is due to misconduct or
malfeasance and the degree to which the executive officer was involved in
misconduct or malfeasance.  The decision
of the Committee may be the same for all executive officers or may vary among
the executive officers, but in any event shall be final and binding on all
executive officers.


 


In the case of
cash compensation, if the amount of the payment would have been lower than the
amount actually awarded had the financial results been properly reported, the
Committee may require repayment of all or any portion of a payment that was
calculated based upon the achievement of the financial results that were
subsequently restated.


 


In the case of
equity-based compensation, if the amount realized by the executive officer
(i.e., from the exercise of stock options or the granting of stock based upon
the vesting of performance share units) would have been lower had the financial
results been properly reported, the Committee may require payment of all or any
portion of the gains realized by the executive officer that resulted from the
financial results that were subsequently restated.  For stock options,  “gain realized” shall be the excess of the “fair market value” of the
shares on the date of exercise, as determined by the Committee in its sole
discretion,  over the exercise price,
multiplied by the number of shares purchased. 
For performance share units, “gain realized” shall be the “fair market
value” of the shares on the date they are deemed vested, as determined by the
Committee in its sole discretion, multiplied by the number of shares actually
distributed to the executive officer, reduced by any taxes paid in countries
other than the United States, to the extent that such taxes are not otherwise
eligible for refund from the taxing authorities.


 


In the event
that the executive officer does not repay any sums required by the Committee
due to any restatement of the financial results, the Committee may pursue such
legal remedies as may be appropriate to recoup any such sums that the
individual fails to repay as required by the Committee under this Policy
regardless of whether the affected individual is still employed by
Hospira.  In addition to all other available remedies, the
Committee may set off the amount owed by any such executive officer against any
amount


 

















 


or award
that would otherwise be granted by Hospira to the executive officer, reduce any
future compensation or benefit to such executive officer or any combination
thereof.


 


For purposes
of this Policy, the term “executive officer” means any individual: designated
by the Company as an “officer” for purposes of Section 16 of the
Securities Exchange Act of 1934; or elected a corporate officer of Hospira by
its Board of Directors, but not including assistant officers.  This Policy shall apply to all published financial
statements, including those published prior to its adoption and shall apply to
individuals who were executive officers during the periods covered by the
published financial statement regardless of whether such individual is still
employed by Hospira at such time as the published financial statements are
restated or at such time as the Committee seeks to adjust any previously paid
compensation under this Policy.