Exhibit 10.3


 


Hospira Corporate Officer Severance Plan


(Effective September 1, 2007 and as amended through the Second
Amendment effective December 9, 2009)


 


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: (1) if the Participant also participates in the
Hospira Incentive Plan or a successor plan (“HIP”), 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; or (2) if the Participant
also participates in the Hospira, Inc. Performance Incentive Plan or a
successor plan (“PIP”), the Participant’s pro rata annual incentive bonus
award, if any, through the date of termination as determined under the PIP.


 


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.


 


Except as provided in the last
sentence of this paragraph, 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 (i) which releases 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, (ii) which
releases all rights and benefits required under any other severance policy
or plan maintained by the Company or any Affiliate, and (iii) under which
the Participant agrees to maintain and protect the reputation of the Company
and its Affiliates and their businesses, products and personnel, and the
Participant agrees further to not disparage the Company, any Affiliate,  or any person representing the Company or any
Affiliate, or engage in any similar activities which reasonably could be
anticipated to affect negatively the reputation of the Company and any
Affiliate and their businesses, products and personnel, and relationships with
current or prospective customers, suppliers and employees and (3) the
satisfaction of the 


 


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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. Notwithstanding any
provision contained herein, for a Participant who participates in the PIP, the
payment described in Section 6(b)(2) shall
be paid after the determination of such amount, but no later than 2 1⁄2 months
after the end of the year in which the termination described in Section 4 occurs. 
For all participants, the benefits described in this Plan shall be
forfeited if the Participant fails to execute the agreement described in Section 5(b) and the waiver and release agreement
described in this paragraph within 2 1⁄2 months after the end of the year in
which the termination described in Section 4 occurs.


 


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 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 


 


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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.


 


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 


 


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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.


 


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 


 


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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.


 


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

  
	
   

  	
   

  	
   

  
	
  Lori Carlson

  	
   

  	
  Corporate Vice President and Treasurer

  
	
   

  	
   

  	
   

  
	
  Arthur J. Fiocco, Jr.

  	
   

  	
  Corporate Vice President, Global Quality

  
	
   

  	
   

  	
   

  
	
  James H. Hardy, Jr.

  	
   

  	
  Corporate Vice President, Supply Chain

  
	
   

  	
   

  	
   

  
	
  Richard J. Hoffman

  	
   

  	
  Corporate Vice President and Controller

  
	
   

  	
   

  	
   

  
	
  Daphne Jones

  	
   

  	
  Senior Vice President and Chief Information
  Officer

  
	
   

  	
   

  	
   

  
	
  Terrence Kearney

  	
   

  	
  Chief Operating Officer

  
	
   

  	
   

  	
   

  
	
  Michael Kotsanis

  	
   

  	
  Corporate Vice President and President,
  Europe, Middle East and Africa

  
	
   

  	
   

  	
   

  
	
  Jim Mahoney

  	
   

  	
  Corporate Vice President, Global
  Manufacturing Operations

  
	
   

  	
   

  	
   

  
	
  Kenneth F. Meyers

  	
   

  	
  Senior Vice President of Organizational
  Transformation and People Development

  
	
   

  	
   

  	
   

  
	
  Thomas Moore

  	
   

  	
  Corporate Vice President and President,
  U.S.

  
	
   

  	
   

  	
   

  
	
  Timothy Oldham

  	
   

  	
  Corporate Vice President and President,
  Asia-Pacific

  
	
   

  	
   

  	
   

  
	
  Sumant
  Ramachandra

  	
   

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

  
	
   

  	
   

  	
   

  
	
  Brian Smith

  	
   

  	
  Senior Vice President, General Counsel and
  Secretary

  
	
   

  	
   

  	
   

  
	
  Ron Squarer

  	
   

  	
  Senior Vice President, Global Marketing and
  Corporate Development

  
	
   

  	
   

  	
   

  
	
  Thomas Werner

  	
   

  	
  Senior Vice President, Finance and Chief
  Financial Officer

  
	
   

  	
   

  	
   

  
	
  Valentine Yien

  	
   

  	
  Corporate Vice President, Operations
  Finance

  



 


Exhibit A (as revised October 21, 2009)