**Exhibit 10.3**

 

**EMPLOYEE BENEFITS AGREEMENT**

 

**by and among**

 

**ABBOTT LABORATORIES,**

 

**TAP PHARMACEUTICAL PRODUCTS INC.**

 

**and**

 

**HOSPIRA, INC.**

 

**dated**

 

**April     , 2004**

 

----

 

**Table of Contents**

 
| Article 1  Definitions                                        |                                                                     |
|--------------------------------------------------------------------|--------------------------------------------------------------------------|
|                                                               |                                                                     |   |
| Article 2  General Principles                                 |                                                                     |
|                                                               |                                                                     |   |
| 2.1                                                                | Allocation of Liabilities                                                |   |
|                                                               |                                                                     |   |
| 2.2                                                                | Employment with Hospira                                                  |   |
|                                                               |                                                                     |   |
| 2.3                                                                | Establishment of Hospira Plans                                           |   |
|                                                               |                                                                     |   |
| 2.4                                                                | Restrictions on Employment                                               |   |
|                                                               |                                                                     |   |
| 2.5                                                                | Post-Distribution Transferred Employees and  Hospira Requested Employees |   |
|                                                               |                                                                     |   |
| Article 3  Collective Bargaining Agreements and Union Matters |                                                                     |
|                                                               |                                                                     |   |
| Article 4  U.S. Qualified and Non-Qualified Retirement Plans  |                                                                     |
|                                                               |                                                                     |   |
| 4.1                                                                | Annuity Retirement Plan                                                  |   |
|                                                               |                                                                     |   |
| 4.2                                                                | Stock Retirement Plan                                                    |   |
|                                                               |                                                                     |   |
| 4.3                                                                | Faultless Rubber Plan                                                    |   |
|                                                               |                                                                     |   |
| 4.4                                                                | Ashland 401(k) Plan                                                      |   |
|                                                               |                                                                     |   |
| 4.5                                                                | Supplemental Pension Plan                                                |   |
|                                                               |                                                                     |   |
| 4.6                                                                | Abbott Supplemental 401(k) Plan                                          |   |
|                                                               |                                                                     |   |
| Article 5  Non-U.S. Retirement Plans                          |                                                                     |
|                                                               |                                                                     |   |
| 5.1                                                                | Canadian Pension Plan                                                    |   |
|                                                               |                                                                     |   |
| 5.2                                                                | Irish Pension Plans                                                      |   |
|                                                               |                                                                     |   |
| 5.3                                                                | Overseas Managers’ Pension Plan                                     |   |
|                                                               |                                                                     |   |
| 5.4                                                                | Other Non-U.S. Retirement Plans                                          |   |
|                                                               |                                                                     |   |
| Article 6  Welfare and Fringe Benefit Plans                   |                                                                     |
|                                                               |                                                                     |   |
| 6.1                                                                | Severance Compensation and Benefits                                      |   |
|                                                               |                                                                     |   |
| 6.2                                                                | Retiree Medical And Life Insurance Coverage                              |   |
|                                                               |                                                                     |   |
| 6.3                                                                | VEBAs                                                                    |   |
|                                                               |                                                                     |   |
| 6.4                                                                | COBRA                                                                    |   |
|                                                               |                                                                     |   |
| 6.5                                                                | Matching Grant and Combined Appeal Programs                              |   |
|                                                               |                                                                     |   |
| Article 7  Equity and Executive Compensation Programs         |                                                                     |
|                                                               |                                                                     |   |
| 7.1                                                                | Equity Incentive Programs                                                |   |
|                                                               |                                                                     |   |
| 7.2                                                                | Discontinued Participation in ESPP                                       |   |

 

2

----

 
| 7.3                           | Deferred Compensation Plan                          |   |
|-------------------------------|-----------------------------------------------------|--------|
|                          |                                                |   |
| 7.4                           | Grantor Trusts                                      |   |
|                          |                                                |   |
| 7.5                           | Cash Profit Sharing                                 |   |
|                          |                                                |   |
| 7.6                           | Other Incentive Programs                            |   |
|                          |                                                |   |
| Article 8  Miscellaneous |                                                |
|                          |                                                |   |
| 8.1                           | Transfer of Records and Information                 |   |
|                          |                                                |   |
| 8.2                           | Preservation of Rights to Amend or  Terminate Plans |   |
|                          |                                                |   |
| 8.3                           | Transition Services                                 |   |
|                          |                                                |   |
| 8.4                           | Reimbursement                                       |   |
|                          |                                                |   |
| 8.5                           | Clara Abbott Foundation                             |   |
|                          |                                                |   |
| 8.6                           | Incorporation By Reference                          |   |
|                          |                                                |   |
| 8.7                           | Limitation on Enforcement                           |   |
|                          |                                                |   |
| 8.8                           | Assignability                                       |   |
|                          |                                                |   |
| 8.9                           | Further Assurances and Consents                     |   |
|                          |                                                |   |
| 8.10                          | Third Party Consent                                 |   |
|                          |                                                |   |
| 8.11                          | Effect if Distribution Does not Occur               |   |
|                          |                                                |   |
| 8.12                          | Disputes                                            |   |
|                          |                                                |   |
| 8.13                          | Schedules                                           |   |
|                          |                                                |   |
| 8.14                          | Mutual Drafting                                     |   |

 

3

----

 

**EMPLOYEE BENEFITS AGREEMENT**

 

This Employee Benefits Agreement (this “Agreement”) is made as ofApril       , 2004 by and among AbbottLaboratories (“Abbott”), Hospira, Inc. (“Hospira”) and, solely for purposes ofSections 2.4, 8.7, and 8.8, TAP Pharmaceutical Products Inc. (“TAP”).

 

**BACKGROUND**

 

Abbott and Hospira have entered into the Separation and DistributionAgreement (as defined herein) pursuant to which Abbott shall spin-off theHospira Business (as defined herein). Abbott shall accomplish this spin-off by distributing all of the commonstock of Hospira to the shareholders of Abbott as a dividend after Abbottcontributes to Hospira the assets primarily associated with the HospiraBusiness and after Hospira assumes the liabilities primarily associated withthe Hospira Business, all in accordance with the Separation and DistributionAgreement and agreements related thereto, including this Agreement.  After the Distribution (as defined herein),Abbott and Hospira shall be separate and independent corporations.

 

The employees of the Hospira Business are currently employed by theAbbott Group (as defined herein).  Theemployees of the Hospira Business are expected to become employees of theHospira Group (as defined herein) on or prior to the Distribution Date or withrespect to certain employees outside of the United States, after theDistribution Date.  This Agreementdescribes the employment and the employee benefit plan arrangements that shallapply to Transferred Employees (as defined herein).  Additional information relating to agreements of Abbott andHospira with respect to Transferred Employees are included in the Transition ServicesAgreements.

 

**AGREEMENT**

 

**Article 1**

 

**Definitions**

 

The following capitalized terms as used in this Agreement shall havethe meaning set forth below unless otherwise specified herein:

 

(a)                                  “Abbott”shall have the meaning given it in the first sentence of this Agreement.

 

(b)                                 “AbbottARP” shall mean the Abbott Laboratories Annuity Retirement Plan.

 

(c)                                  “AbbottBenefit Plan” shall mean each Benefit Plan established, maintained, orcontributed to by the Abbott Group for the benefit of Transferred Employees.

 

4

----

 

(d)                                 “AbbottCompensation Committee” shall mean the compensation committee of the board ofdirectors of Abbott.

 

(e)                                  “Abbott DCP” shall mean the AbbottLaboratories Deferred Compensation Plan.

 

(f)                                    “AbbottESPP” shall mean the Abbott Laboratories Affiliate Employee Stock Purchase Planand any sub-plan established thereunder in accordance with the laws of anynon-U.S. jurisdiction.

 

(g)                                 “AbbottGroup” shall mean Abbott and its Subsidiaries (excluding any member of theHospira Group after the Distribution) or, where the context requires, a companywithin the Abbott Group.

 

(h)                                 “Abbott KSP” shall mean the AbbottLaboratories 401(k) Supplemental Plan.

 

(i)                                     “Abbott OMPP” shall mean the OverseasManagers’ Pension Plan of Abbott Laboratories.

 

(j)                                     “AbbottOption” shall mean an option to purchase one or more Abbott common sharesgranted under the Abbott Stock Programs.

 

(k)                                  “AbbottRetained Employee” shall mean any employee other than (i) a TransferredEmployee or (ii) a Hospira Requested Employee.

 

(l)                                     “AbbottRetiree Life Plan” shall mean the Abbott Laboratories Retiree Life Plan.

 

(m)                               “AbbottRetiree Medical Plan” shall mean the Abbott Laboratories Retiree Health CarePlan.

 

(n)                                 “AbbottSRP” shall mean the Abbott Laboratories Stock Retirement Plan (Part A).

 

(o)                                 “AbbottStock Programs” shall mean, collectively, the Abbott Laboratories 1996Incentive Stock Program, the Abbott Laboratories 1991 Incentive Stock Program,and any sub-plan established under those programs in accordance with the lawsof any non-U.S. jurisdiction.

 

(p)                                 “AbbottSupplemental ARP” shall mean the Abbott Laboratories Supplemental Pension Plan.

 

(q)                                 “AbbottVEBAs” shall mean, collectively, the Abbott Laboratories Employee BenefitTrust, the Abbott Laboratories Health Care Trust, and the Abbott LaboratoriesEmployees Insurance Trust.

 

5

----

 

(r)                                    “ABOFunded Ratio” shall have the meaning given it in Section 4.1(c) of thisAgreement.

 

(s)                                  “AllocatedEmployee Number” shall mean, with respect to any country identified onSchedule 1 hereto, the number of Employees shown on Schedule 1opposite that country’s name as being the number of Employees to be transferredto the Hospira Group.

 

(t)                                    “Ashland401(k) Plan” shall mean the Abbott Laboratories Ashland Union 401(k) Plan andTrust.

 

(u)                                 “BenefitPlan” shall mean, any employment, bonus, deferred compensation, incentivecompensation, stock purchase, stock option, stock appreciation right or otherstock-based incentive, severance, change-in-control or termination pay,hospitalization or other medical, disability, life, or other insurance,supplemental unemployment benefits, profit-sharing, pension or retirement plan,program, agreement, or arrangement and each other employee benefit plan,program, agreement, or arrangement.

 

(v)                                 “COBRA”shall mean coverage required by Section 4980B of the Code and regulationsthereunder or Section 601 et. seq. of ERISA.

 

(w)                               “Code”shall mean the Internal Revenue Code of 1986, as amended.

 

(x)                                   “Distribution”shall have the meaning given it in the Separation and Distribution Agreement.

 

(y)                                 “DistributionDate” shall have the meaning given it in the Separation and DistributionAgreement.

 

(z)                                   “Employee”shall mean any individual who is (i) identified or described on Schedule 2hereto, (ii) a Post-Distribution Employee, or (iii) a Hospira RequestedEmployee.

 

(aa)                            “EmploymentTaxes” shall mean withholding, payroll, social security, workers compensation,unemployment, and disability taxes imposed by any Tax Authority, and any interest,penalties, additions to tax, or additional amount with respect to the foregoingimposed on any taxpayer or consolidated, combined, or unitary group oftaxpayers.

 

(bb)                          “ERISA”shall mean the Employee Retirement Income Security Act of 1974, as amended.

 

(cc)                            “ESOP”shall mean an employee stock ownership plan, as defined inSection 407(d)(6) of ERISA and Section 4975(e)(7) of the Code.

 

6

----

 

(dd)                          “FaultlessRubber Plan” shall mean the 1950 Pension Plan of the Faultless Rubber Companyand the Pension, Insurance and Severance Award Agreement.

 

(ee)                            “Hospira”shall have the meaning given it in the first sentence of this Agreement.

 

(ff)                                “HospiraARP” shall mean the Abbott/Hospira Transitional Annuity Retirement Plan.

 

(gg)                          “HospiraBenefit Plan” shall mean any Benefit Plan established, maintained, orcontributed to by the Hospira Group.

 

(hh)                          “HospiraBoard” shall mean the board of directors of Hospira.

 

(ii)                                  “HospiraBusiness” shall have the meaning given it in the Separation and DistributionAgreement.

 

(jj)                                  “HospiraCanadian Pension Plan” shall mean a defined benefit pension plan established bythe Hospira Group with respect to employees of Hospira residing in Canada.

 

(kk)                            “HospiraGroup” shall mean Hospira and its Subsidiaries or, where the context requires,a company within the Hospira Group.

 

(ll)                                  “HospiraKSP” shall mean the Hospira 401(k) Supplemental Plan.

 

(mm)                      “HospiraOfficer” shall mean each Transferred Employee who is a “reporting officer”under Rule 16a-1(f) under the Securities Exchange Act of 1934.

 

(nn)                          “HospiraOMPP” shall mean the Overseas Managers’ Pension Plan of Hospira, Inc.

 

(oo)                          “HospiraOption” shall mean an option to purchase one or more shares of Hospira commonstock granted under the Hospira SIP in connection with the cancellation of anAbbott Option.

 

(pp)                          “HospiraRequested Employee” shall mean any employee of the Abbott Group who was hiredor transferred to another work location or position by the Abbott Group priorto, on, or following the Distribution Date, at the written request of Hospira’sCorporate Vice President of Human Resources, regardless of whether thatemployee becomes a Transferred Employee.

 

(qq)                          “HospiraSIP” shall mean the Hospira 2004 Long-Term Stock Incentive Plan.

 

7

----

 

(rr)                                “HospiraSRP” shall mean the Hospira 401(k) Retirement Savings Plan.

 

(ss)                            “HospiraSupplemental ARP” shall mean the Hospira Supplemental Pension Plan.

 

(tt)                                “HospiraVEBA” shall mean the Hospira Master Welfare Trust.

 

(uu)                          “KSPTransferred Employee” shall mean a U.S. Transferred Employee who participatesin the Abbott KSP immediately prior to the Distribution Date.

 

(vv)                          “Liabilities”shall have the meaning given it in the Separation and Distribution Agreement.

 

(ww)                      “Non-U.S.Transferred Employee” shall mean a Transferred Employee who works primarilyoutside of the United States or who works primarily in Puerto Rico.

 

(xx)                              “Post-DistributionEmployee” shall mean each sales or marketing employee of the Abbott Groupidentified by Abbott and Hospira in accordance with Step 1 of the proceduresdescribed in Schedule 3 hereto.

 

(yy)                          “Post-DistributionTransferred Employee” shall mean any Post-Distribution Employee who becomes aTransferred Employee after the Distribution Date but prior to the end of theRestricted Period.

 

(zz)                              “QDRO”shall mean a qualified domestic relations order within the meaning ofSection 206(d) of ERISA and Section 414(p) of the Code.

 

(aaa)                      “RequestEnd Date” shall mean, with respect to any Hospira Requested Employee, theearliest, if any, of the following dates: (i) the date on which Hospiraprovides notice to Abbott that Hospira does not intend to employ the HospiraRequested Employee, (ii) the date on which Hospira provides notice to Abbottthat the Hospira Requested Employee has rejected an offer of employment withthe Hospira Group, or (iii) the date following the expiration of the RestrictedPeriod in the event that the Hospira Requested Employee remains employed by theAbbott Group on that date.

 

(bbb)                   “RestrictedPeriod” shall mean the period beginning on the Distribution and ending on thesecond anniversary thereof.

 

(ccc)                      “Separationand Distribution Agreement” shall mean the Separation and DistributionAgreement by and between Abbott Laboratories and Hospira, Inc. datedApril 12, 2004.

 

8

----

 

(ddd)                   “Subsidiary”shall have the meaning given it in the Separation and Distribution Agreement.

 

(eee)                      “TAP”shall have the meaning given it in the first sentence of this Agreement.

 

(fff)                            “TaxAuthority” means, with respect to any Employment Tax, the governmental entityor political subdivision thereof that imposes such Employment Tax, and the agency (if any) charged with the collection ofsuch Employment Tax for such entity or subdivision.

 

(ggg)                   “TransferDate” shall mean, as applicable: (i) with respect to each Transferred Employee(other than a Post-Distribution Transferred Employee or a Hospira RequestedEmployee), the Distribution Date; and (ii) with respect to eachPost-Distribution Transferred Employee and each Hospira Requested Employee, thedate on which such person becomes employed by the Hospira Group.

 

(hhh)                   “TransferredEmployee” shall mean an Employee who accepts an offer of employment with theHospira Group or who continues in employment automatically by operation of lawwith the Hospira Group, in either case pursuant to Section 2.2 or 2.5 ofthis Agreement.

 

(iii)                               “TransferredExpatriate Employee” shall mean each Employee identified on Schedule 4hereto who becomes a Transferred Employee.

 

(jjj)                               “TransitionPeriod” shall mean the period beginning on the Distribution and ending onDecember 31, 2004.

 

(kkk)                      “TransitionServices Agreements” shall mean the transition services agreements and thetransition marketing and distribution agreements that are entered into inconnection with the Separation and Distribution Agreement between Abbott andHospira.

 

(lll)                               “U.S.Transferred Employee” shall mean a Transferred Employee who works primarily inthe United States (other than a Transferred Employee who works in Puerto Rico).

 

**Article 2**

 

**GeneralPrinciples**

 

**2.1****                               Allocationof Liabilities.**

 

(a)                                  HospiraLiabilities.  Effective as ofDistribution Date, and except as expressly provided in this Agreement, Hospirahereby assumes and agrees to pay, perform, fulfill and discharge allLiabilities to the extent relating to, arising out of, or resulting from:

 

9

----

 

(i)             the employment of each Transferred Employeeby the Abbott Group up to and including the Transfer Date and by the HospiraGroup on and after the Transfer Date (including, in each case, all Liabilitiesrelating to, arising out of, or resulting from Employment Taxes, any AbbottBenefit Plan or, on or after the Transfer Date, any Hospira Benefit Plan);

 

(ii)          the transfer of any Transferred Employee’semployment from the Abbott Group to the Hospira Group;

 

(iii)       all Liabilities (including Liabilities withrespect to employees, former employees and retirees) relating to, arising outof or resulting from the Faultless Rubber Plan and the Ashland 401(k) Plan.

 

(iv)      the employment (or termination of employment) ofany Hospira Requested Employee by the Abbott Group prior to, on, or after theDistribution Date (including all Liabilities to the extent relating to, arisingout of, or resulting from Employment Taxes or any Abbott Benefit Plan) subjectto Section 2.5(b) of this Agreement; and

 

(v)         obligations, Liabilities and responsibilitiesexpressly assumed by Hospira pursuant to this Agreement.

 

(b)                                 AbbottLiabilities.  Effective as of theDistribution Date, and except as expressly provided in this Agreement, Abbottshall retain and hereby agrees to pay, perform, fulfill and discharge allLiabilities to the extent relating to, arising out of, or resulting from:

 

(i)             the employment (or termination ofemployment) of each Abbott Retained Employee by the Abbott Group prior to, on,or after the Distribution Date (including all Liabilities to the extentrelating to, arising out of, or resulting from Employment Taxes or any AbbottBenefit Plan);

 

(ii)          the employment, whether prior to, on, orafter the Distribution Date, by the Abbott Group of all persons who work orworked primarily in the United States (other than Puerto Rico) and who aredeceased, retired, terminated, on pay continuation leave, or on medical leaveof absence for more than one year (including all Liabilities to the extentrelating to, arising out of, or resulting from Employment Taxes or any AbbottBenefit Plan);

 

(iii)       medical and dental claims which are incurred byany U.S. Transferred Employee (or his or her beneficiaries) prior to theTransfer Date;

 

10

----

 

(iv)      obligations, Liabilities and responsibilitiesunder (A) the Abbott Retiree Medical Plan and the Abbott Retiree Life Plan forretirement eligible Transferred Employees (as more fully described inSection 6.2 of this Agreement), (B) the Abbott DCP (as more fullydescribed in Section 7.3 of this Agreement), and (C) the grantor trusts ofTransferred Employees (as more fully described in Section 7.4 of thisAgreement); and

 

(v)         obligations, Liabilities and responsibilitiesexpressly retained by Abbott pursuant to this Agreement.

 

**2.2****                               Employmentwith Hospira.**

 

(a)                                  Offersof Employment.  As of theDistribution Date, the Hospira Group shall continue the employment (on a basisconsistent with subsection (b) below) of each Employee (who is not aPost-Distribution Employee or a Hospira Requested Employee) in jurisdictionswhere employment continues automatically by operation of law, and shall offerto employ (on a basis consistent with subsection (b) below) each otherEmployee (who is not a Post-Distribution Employee or a Hospira RequestedEmployee), or as otherwise agreed by the parties.  The parties acknowledge that the process of transferringEmployees to the Hospira Group may, as agreed upon by the parties, in certaincases, begin prior to the Distribution Date. Abbott shall use commercially reasonable efforts to ensure that noEmployee’s transfer of employment to Hospira prior to the Distribution Datewill cause a loss of coverage under any Abbott Benefit Plan prior to theDistribution Date.

 

Post-Distribution Employees shall be offered employment by the HospiraGroup, or shall continue to be employed by the Hospira Group, as the case maybe, as determined by Abbott and Hospira in accordance with Section 2.5(a)of this Agreement and the procedures described in Schedule 3 hereto andeffective at such time or times as determined in accordance with thoseprocedures.  To the extent any disputearises pursuant to this paragraph, including with respect to the proceduresdescribed in that Schedule 3, that dispute shall be resolved by mutualwritten agreement between the Chief Executive Officers of Abbott and Hospira(or their designees).

 

Hospira Requested Employees (who are not Post-Distribution Employees)shall be offered employment by the Hospira Group, or shall continue to beemployed by the Hospira Group, as the case may be, as determined by Abbott andHospira, subject to Section 2.5(b) of this Agreement.

 

(b)                                 Compensationand Benefits.  Except as expresslyprovided in this Agreement, no Transferred Employee shall participate in theAbbott Benefit Plans following his or her Transfer Date.  After the Transfer Date, the Hospira Groupmay provide compensation and benefits to a U.S. Transferred Employee orTransferred Expatriate Employee under any Hospira Benefit Plan.  Except as expressly provided in this Agreement,during the Transition Period, the Hospira Group shall provide benefits (e.g.,pension and welfare benefits) to each U.S. Transferred Employee and each

 

11

----

 

Transferred Expatriate Employee that are substantially similar to thebenefits provided to that U.S. Transferred Employee or Transferred ExpatriateEmployee immediately prior to the Transfer Date.  During the Transition Period, the Hospira Group shall provide eachU.S. Transferred Employee and each Transferred Expatriate Employee with basecompensation (including salary and hourly rate) that is not less than thecompensation provided to that U.S. Transferred Employee or TransferredExpatriate Employee immediately prior to the Transfer Date, provided, however,that the compensation of each Hospira Officer may be adjusted by the HospiraBoard (or an appropriate committee thereof) without regard to the HospiraOfficer’s compensation immediately prior to the Transfer Date.  During the Transition Period, the HospiraGroup shall make all scheduled increases to any U.S. Transferred Employee’s orTransferred Expatriate Employee’s salary or hourly rate to the extent that thescheduled increase is not already reflected in any prior discretionary increasemade by the Hospira Group to that salary or hourly rate.  The Hospira Group shall not reduce any U.S.Transferred Employee’s or Transferred Expatriate Employee’s salary or hourlyrate during the Transition Period other than: (i) the salaries of HospiraOfficers as determined by the Hospira Board (or an appropriate committeethereof) or (ii) reductions corresponding to a change in the affectedTransferred Employee’s circumstances and made in the ordinary course ofbusiness (including, but not limited to, reductions in connection with shiftchanges, schedule changes, demotions, job changes and jobperformance).  Nothing in the precedingsentence shall prevent the Hospira Group from terminating the employment of anyU.S. Transferred Employee or Transferred Expatriate Employee, whether due toindividual terminations of employment or reductions in force or otherwise, inall cases in compliance with applicable law.

 

After expiration of the Transition Period, the Hospira Group mayimplement compensation and benefits for the U.S. Transferred Employees andTransferred Expatriate Employees as it deems appropriate; provided, however,that the Hospira Group shall repatriate a Transferred Expatriate Employee tohis or her home or jurisdiction on terms no less favorable than the terms underthe Transferred Expatriate Employee’s written employment/expatriate agreementwith Abbott as in effect immediately prior to the Transfer Date.

 

The Hospira Group shall employ each Non-U.S. Transferred Employee(other than Transferred Expatriate Employees) on such terms and conditions asthe Hospira Group deems necessary or advisable, except where otherwise requiredby local law.

 

(c)                                  ServiceCredit.  Except as expressly provided in this Agreement, during the TransitionPeriod, for purposes of determining eligibility, vesting, accrued benefits, andbenefit level, each of the Hospira Benefit Plans shall give U.S. TransferredEmployees and Transferred Expatriate Employees credit for all service creditedfor those purposes by the comparable Abbott Benefit Plan as of the TransferDate, except to the extent that this service credit would result in aduplication of benefits.  For theavoidance of doubt, nothing in this Agreement shall require the Hospira Groupto provide any U.S. Transferred Employee or Transferred Expatriate Employeewith credit for his or her service with the Abbott Group (i) under any HospiraBenefit Plan after the

 

12

----

 

Transition Period or (ii) under any Hospira Benefit Plan that does not havea comparable Abbott Benefit Plan during the Transition Period.

 

(d)                                 Vacation,Holidays and Leaves of Absence.  Inaccordance with Section 2.1(a)(i) of this Agreement, effective as of theTransfer Date, Hospira shall assume all Liabilities of the Abbott Group withrespect to accrued vacation or leaves of absence, and required payments relatedthereto, for each Transferred Employee.

 

Notwithstanding the foregoing, where (and only to the extent) requiredby applicable state law, the Abbott Group shall provide each U.S. TransferredEmployee with the opportunity to elect to receive a payment of his or heraccrued vacation as of the Transfer Date, the Abbott Group shall pay thataccrued vacation to any such individual who elects to receive a payment and theHospira Group shall not assume any accrued vacation or receive the accrual withrespect to a U.S. Transferred Employee who elects a payment in accordance withthe foregoing.

 

During the Transition Period, the Hospira Group shall continue to applythe vacation, holiday and leave of absence policy or practice (whether or notlegally required) applicable to each U.S. Transferred Employee and eachTransferred Expatriate Employee immediately prior to the Transfer Date so thateach U.S. Transferred Employee and each Transferred Expatriate Employee shallbe entitled to use any vacation time or leave of absence, and/or receive anypay related thereto, to which that Employee would otherwise be entitled underthe Abbott Benefit Plans related to vacation time or leave of absence as of theTransfer Date, taking into account, to the extent applicable, any reduction invacation time for which any U.S. Transferred Employee has received a payment ofaccrued vacation as of the Transfer Date.

 

Vacation, holiday and leave of absence policies for TransferredEmployees for periods after the Transition Period shall be determined byHospira in its sole discretion.

 

**2.3****                               Establishmentof Hospira Plans.**

 

Prior to the Distribution Date, Hospira shall adopt the followingemployee benefit plans and their related trusts: (a) the Hospira SIP, (b) theHospira ARP, (c) the Hospira SRP, (d) the Hospira Health Care Plan, and (e) the Hospira Life Accident Plan.  Hospira shall also adopt (i) the HospiraSupplemental ARP, (ii) the Hospira KSP, (iii) the Hospira Flexible Benefit Plan, (iv) the Hospira Extended DisabilityPlan, and (v) the Hospira OMPP, none of which shall have a related trustunless Hospira elects, in its sole and absolute discretion, to establish arabbi trust or other trust for any of those plans.  During the Transition Period, each of the foregoing HospiraBenefit Plans, except as expressly provided in this Agreement, shall besubstantially similar in all material respects to the corresponding AbbottBenefit Plan as in effect as of the Distribution Date.  As more fully described in Articles 4, 5 and6 or as otherwise mutually agreed upon by Abbott and Hospira from time to time,Abbott shall, or shall cause the applicable Abbott Benefit Plan’s related trustto, transfer to the relevant Hospira Benefit Plan’s related trust, amountsequal to trust assets, insurance reserves, and other related assets of eachAbbott

 

13

----

 

Benefit Plan’s related trust relating to the Liabilities of such AbbottBenefit Plan assumed by Hospira or such Hospira Benefit Plan.  As more fully described in Articles 4, 5 and6, or as otherwise mutually agreed upon by Abbott and Hospira from time totime, Hospira shall, or shall cause the relevant Hospira Benefit Plan to,assume the Liabilities of the corresponding Abbott Benefit Plan with respect toall benefits accrued under that Abbott Benefit Plan by Transferred Employeesprior to the Transfer Date.  Except asexpressly provided in this Agreement, after the Transition Period, Hospira maymodify or terminate any Hospira Benefit Plan, as it deems appropriate.

 

Hospira shall cause the Hospira Benefit Plans to honor all planelections made by Transferred Employees pursuant to corresponding AbbottBenefit Plans.  Except as provided inthis Agreement, Abbott and Hospira shall use commercially reasonable efforts toensure that the Distribution and the transfer of any Transferred Employee’semployment to the Hospira Group will not entitle that Transferred Employee to adistribution or payment of benefits under any Abbott Benefit Plan.

 

**2.4****                               Restrictionson Employment**.

 

Hospira agrees that, during the Restricted Period and without theexpress written consent of Abbott or TAP, as applicable, it shall not, andshall not permit any of its Subsidiaries to, employ any person, other than aTransferred Employee, who is or was an employee of Abbott or TAP (or theirrespective Subsidiaries) and whose employment with Abbott and/or TAP (and/ortheir respective Subsidiaries) terminated at any time after August 22,2003 and before the last day of the Restricted Period.  Abbott and TAP each agree that, during theRestricted Period and without the express written consent of Hospira, eachshall not, and shall not permit any of their respective Subsidiaries to, employany person who is a Transferred Employee or any other person who becomes anemployee of Hospira or any of its Subsidiaries prior to the expiration of theRestricted Period.  The foregoingrestrictions shall not apply to any person (other than a Post-DistributionEmployee who rejects an offer of employment from the Hospira Group) whoseemployment with Hospira, Abbott or TAP (or their respective Subsidiaries), asapplicable, terminates due to a job elimination or reduction in force.

 

**2.5****                               Post-Distribution Transferred Employees and Hospira Requested Employees**.

 

(a)                                  TransferDate for Post-Distribution Transferred Employees.  The Transfer Date of each Post-Distribution Transferred Employeeshall be determined by Abbott and Hospira, provided that in no event shall theTransfer Date of any Post-Distribution Transferred Employee occur following theRestricted Period.  Unless otherwisedetermined by Abbott and Hospira or otherwise required by local law, all Post-DistributionTransferred Employees and Hospira Requested Employees working primarily in thesame country shall have the same Transfer Date.

 

(b)                                 HospiraRequested Employees.  As soon aspracticable following the Request End Date of any Hospira Requested Employee,Abbott shall either terminate the employment of that Hospira Requested Employeeor notify Hospira that the

 

14

----

 

Abbott Group intends to continue to employ the Hospira RequestedEmployee following the Request End Date. Notwithstanding Section 2.1(a)(iv) of this Agreement, in the eventthat Abbott notifies Hospira that the Abbott Group will continue to employ aHospira Requested Employee following Request End Date, Abbott shall retain allLiabilities relating to, arising out of, or resulting from the employment (ortermination of employment) of that Hospira Requested Employee on and followingthe Request End Date, provided that Abbott and Hospira shall negotiate toapportion those Liabilities arising in part both before and after the RequestEnd Date.

 

**Article 3**

 

**CollectiveBargaining Agreements and Union Matters**

 

Hospira shall assume all Liabilities with respect to or arising underany collective bargaining agreements with respect to U. S. TransferredEmployees in Ashland, Ohio.

 

**Article 4**

 

**U.S.Qualified and Non-Qualified Retirement Plans**

 

**4.1****                               AnnuityRetirement Plan.**

 

(a)                                  Establishmentof Hospira ARP.  Effective on orbefore the Distribution Date, Hospira shall establish the Hospira ARP, which,for the Transition Period, shall provide for a benefit formula that issubstantially similar in all material respects to the benefit formula in effectunder the Abbott ARP as of the Distribution Date.  As soon as practicable after the Distribution Date and uponreceipt by Abbott of (i) copies of the Hospira ARP; (ii) copies of certifiedresolutions of the Hospira Board (or its authorized committee or otherdelegate) evidencing adoption of the Hospira ARP and the related trust(s) andthe assumption by the Hospira ARP of the Liabilities set forth in Section 4.1(d)of this Agreement; and (iii) either (A) a favorable determination letter issuedby the Internal Revenue Service with respect to the Hospira ARP and its relatedtrust, or (B) an opinion of Hospira’scounsel, which opinion is reasonably satisfactory to Abbott’s counsel, withrespect to the qualified status of the Hospira ARP under Section 401(a) ofthe Code and the tax-exempt status of its related trust underSection 501(a) of the Code, Abbott shall direct the trustee of theAbbott ARP to transfer from the trust(s) which forms a part of the Abbott ARPto the trust(s) which forms a part of the Hospira ARP the amounts described inSection 4.1(b) of this Agreement.

 

(b)                                 ERISASection 4044 Transfer.  Theamount of assets to be transferred from the Abbott ARP to the Hospira ARP shallbe determined as of the Distribution Date in accordance with Section 4044of ERISA and shall comply in all respects with Sections 414(l) of theCode.  Assumptions not specificallydictated by Section 4044 of ERISA shall be based on the assumptions usedin the report prepared by HewittAssociates entitled Actuarial Report Abbott Laboratories Annuity RetirementPlan as of January 1, 2003 (signed October 2003).  The Hospira ARP shall receive a 

 

15

----

 

pro-rata share of anycontributions made to the Abbott ARP after the Distribution Date but on behalfof the 2003 plan year.  The pro-ratashare of the contributions for the Hospira ARP shall be determined as if the 2003plan year contribution had been part of the Abbott ARP’s assets at the time theasset allocation was performed.  Thetransfer amount described above shall be credited or debited, as applicable,with a pro rata share of the actual investment earnings or losses allocable tothe transfer amount for the period between the Distribution Date and anassessment date set by Abbott that is no more than ten (10) days prior to thedate upon which assets are actually transferred from the Abbott ARP to theHospira ARP.  During this time, benefitsfor U.S. Transferred Employees who terminate employment with the Hospira Groupshall be paid from the Abbott ARP.  Theultimate transfer amount shall be reduced by the amount of these benefits andcredited or debited by the actual investment earnings or losses from thepayment date to the assessment date set by Abbott above. ** **Inaddition, during this time, Hospira will be responsible for a pro rata share oftrustee and administration fees to the extent included in the Abbott ARP’strust expenses.  The entries in theAbbott ARP funding standard account shall be divided between the two plansbased on the guidance provided in Revenue Ruling 81-212.

 

(c)                                  AdditionalTransfer.  In addition to, andwithin sixty (60) days following, the transfer of assets from the Abbott ARP tothe Hospira ARP described in Section 4.1(b) of this Agreement, Abbottshall pay Hospira an amount equal to that amount which, if contributed byHospira to the Hospira ARP immediately following the transfer of assets requiredby Section 4.1(b) of this Agreement, would cause the ABO Funded Ratio ofthe Hospira ARP and the Abbott ARP to be equivalent as of the DistributionDate.  With respect to a plan, the ABOFunded Ratio shall equal the fair market value of assets of that plan dividedby the Accumulated Benefit Obligation of that plan, as determined under FAS 87.** **Incalculating the ABO Funded Ratio, the assets for the Hospira ARP shall includethe amount transferred directly from the Abbott ARP in accordance withSection 4.1(b) of this Agreement and the amount to be paid by Abbott inaccordance with this Section 4.1(c). The pro-rata share of the 2003plan year contributions assigned to the Abbott ARP in 4.1(b), that arecontributed following the Distribution Date, shall be taken into account forpurposes of calculating the ABO Funded Ratio of the Abbott ARP as of theDistribution Date as if those contributions had been part of the assets of theAbbott ARP on the Distribution Date. Similarly, the pro-rata share of the 2003plan year contributions assigned to the Hospira ARP in Section 4.1(b) ofthis Agreement, that are contributed following the Distribution Date, shall betaken into account for purposes of calculating the ABO Funded Ratio of theHospira ARP as of the Distribution Date as if those contributions had been partof the assets of the Hospira ARP on the Distribution Date.  With the exception of the discount rate, theAccumulated Benefit Obligation shall be calculated using the assumptions andmethodology used to calculate Abbott’s December 31, 2003, FAS 87disclosure information.  The discountrate shall be determined as of the Distribution Date using Abbott’s FAS 87discount rate setting methodology consistent with Abbott’s past practices.Hospira shall not be required to reimburse Abbott for any tax benefit receivedby Hospira with respect to any contribution to the Hospira ARP.

 

16

----

 

(d)                                 TransferredARP Liabilities.  As of theDistribution Date, Hospira shall cause the Hospira ARP to assume allLiabilities under the Abbott ARP for U.S. Transferred Employees (includingLiabilities in respect of QDROs established in relation to U.S. TransferredEmployees) and the Abbott ARP shall be relieved of all such Liabilities;provided, however that the Abbott ARP shall continue to pay benefits associatedwith those Liabilities until assets are transferred from the Abbott ARP to theHospira ARP in accordance with this Section 4.1.

 

(e)                                  HospiraARP During the Transition Period. During the Transition Period (and thereafter to the extent required byapplicable law), the Hospira ARP shall provide that:

 

(i)             U.S. Transferred Employees shall (A) beeligible to participate in the Hospira ARP to the extent they were eligible toparticipate in the Abbott ARP as of the Distribution Date, and (B) receivecredit for vesting, eligibility and benefit service for all service creditedfor those purposes under the Abbott ARP as of the Distribution Date as if thatservice had been rendered to Hospira;

 

(ii)          the compensation paid by the Abbott Group toall U.S. Transferred Employees which is recognized under the Abbott ARP as ofthe Distribution Date shall be credited and recognized for all applicablepurposes under the Hospira ARP as though it were compensation from the HospiraGroup;

 

(iii)       subject to applicable law, the accrued benefitof each U.S. Transferred Employee under the Abbott ARP as of the DistributionDate shall be paid under the Hospira ARP at the time and in a form that wouldhave been permitted under the Abbott ARP as in effect as of the DistributionDate, with employment by the Abbott Group prior to the Distribution Datetreated as employment by the Hospira Group under the Hospira ARP for purposesof determining eligibility for optional forms of benefit, early retirementbenefits, or other benefit forms;

 

(iv)      to the extent required by Section 411(d)(6)of the Code, any accrued benefit, early retirement benefit, retirement-typesubsidy, or optional form of benefit provided under the Abbott ARP during theTransition Period shall be provided by the Hospira ARP with respect to eachU.S. Transferred Employee’s accrued benefit as of the Distribution Date andservice with the Abbott Group (prior to the Distribution Date) and the HospiraGroup during the Transition Period shall be recognized for purposes ofdetermining eligibility to elect or to receive those benefits;

 

(v)         all beneficiary designations in effect underthe Abbott ARP as of the Distribution Date shall remain in effect after theDistribution Date under the Hospira ARP as if made under the Hospira

 

17

----

 

ARP unless those designations are subsequently changed in accordancewith the Hospira ARP; and

 

(vi)      the Hospira ARP shall assume and honor the termsof all QDROs in effect under the Abbott ARP as of the Distribution Date withrespect to U.S. Transferred Employees.

 

(f)                                    Compositionof Assets.  The composition of the assets that will betransferred from the Abbott ARP to the Hospira ARP shall be mutually determinedby the applicable fiduciaries of the Abbott ARP and Hospira ARP.

 

(g)                                 DeterminationLetter Requests.  Hospira shallsubmit an application to the Internal Revenue Service as soon as practicableafter the Distribution Date (but no later than the last day of the remedialamendment period as defined in applicable Code provisions) for a determinationletter regarding the qualification of the Hospira ARP and the tax status of itsrelated trust as of the Distribution Date and shall make any amendmentsreasonably requested by the Internal Revenue Service in order to receive afavorable determination letter regarding the Hospira ARP.

 

(h)                                 AbbottARP After Distribution Date.  On andafter the Distribution Date, no employees of the Hospira Group, including U.S.Transferred Employees, shall accrue any benefits under the Abbott ARP and theirservice with and compensation from the Hospira Group on or after that dateshall be disregarded for all purposes of the Abbott ARP.  Without limiting the generality of theforegoing, each U.S. Transferred Employee shall cease to be an activeparticipant in the Abbott ARP effective as of the Distribution Date.

 

**4.2****                               StockRetirement Plan.**

 

(a)                                  Establishmentof Hospira SRP.  Effective on orbefore the Distribution Date, Hospira shall establish the Hospira SRP.  During the Transition Period, the terms ofthe Hospira SRP shall be substantially similar in all material respects to theterms of the Abbott SRP as of the Distribution Date; provided, however, that(i) the Hospira SRP shall not be required to be an ESOP or to contain an ESOPfeature and (ii) the Hospira SRP shall not be required to make available anAbbott stock fund as an investment feature for contributions made under theHospira SRP after the Distribution Date. On or prior to the Distribution Date, Hospira shall provide Abbott with(A) a copy of the Hospira SRP; (B) a copy of certified resolutions of Hospira’sboard of directors (or its authorized committee or other delegate) evidencingadoption of the Hospira SRP and the related trust(s) and the assumption by theHospira SRP of the Liabilities set forth in Section 4.2(c) hereof; and (C)either (I) a favorable determination letter issued by the Internal RevenueService with respect to the Hospira SRP and its related trust or (II) an opinion of Hospira’s counsel, which opinionis reasonably satisfactory to Abbott’s counsel, with respect to the qualifiedstatus of the Hospira SRP under Section 401(a) of the Code and thetax-exempt status of its related trust under Section 501(a) of the Code.  As soon as practicable on or following theDistribution Date Abbott shall cause the

 

18

----

 

trustee of the Abbott SRP totransfer from the trust(s) which forms a part of the Abbott SRP to the trust(s)which forms a part of the Hospira SRP the amounts described below.

 

(b)                                 Transferof Account Balances.  The amount tobe transferred (in cash, Abbott common shares, shares of Hospira common stock,promissory notes evidencing outstanding loans to U.S. Transferred Employees andother assets or any combination thereof in cash or in kind, as instructed bythe trustees of the Abbott SRP) from the Abbott SRP to the Hospira SRP shallequal the account balances of U.S. Transferred Employees (excluding accountbalances in respect of QDROs established in relation to U.S. TransferredEmployees) under the Abbott SRP, determined as of the date of thetransfer.  Hospira shall cause thetransferred amounts to be allocated among the U.S. Transferred Employees’accounts under the Hospira SRP and to such investment funds in the same mannerin which those amounts were allocated under the Abbott SRP.  Any asset and liability transfer pursuant tothis Section 4.2 shall comply in all respects with Sections 414(l) and411(d)(6) of the Code.

 

(c)                                  AssumedSRP Liabilities.  As of the date oftransfer of the assets described in Section 4.2(b) above, Hospira shallcause the Hospira SRP to assume all Liabilities for all accrued benefits underthe Abbott SRP for the U.S. Transferred Employees (excluding Liabilities inrespect of QDROs established in relation to U.S. Transferred Employees), andthe Abbott SRP shall be relieved of all Liabilities for those benefits.

 

(d)                                 HospiraSRP During the Transition Period. During the Transition Period (and thereafter to the extent required byapplicable law), the Hospira SRP shall provide that:

 

(i)             U.S. Transferred Employees shall (A) beeligible to participate in the Hospira SRP to the extent they were eligible toparticipate in the Abbott SRP as of the Distribution Date, and (B) receivecredit for vesting purposes for all service credited for that purpose under theAbbott SRP as of the Distribution Date as if that service had been rendered toHospira;

 

(ii)          the accrued benefit of each U.S. TransferredEmployee under the Abbott SRP as of the date of the transfer of assets from theAbbott SRP (which accrued benefit shall be the U.S. Transferred Employee’saccount balance, including any outstanding promissory notes) shall be paidunder the Hospira SRP at the time and in a form that would have been permittedunder the Abbott SRP as of the Distribution Date; and

 

(iii)       all elections and beneficiary designations ineffect under the Abbott SRP as of the Distribution Date shall remain in effect afterthe Distribution Date under the Hospira SRP as if made under the Hospira SRPunless those elections or designations are subsequently changed in accordancewith the Hospira SRP.

 

19

----

 

(e)                                  DeterminationLetter Requests.  Hospira shallsubmit applications to the Internal Revenue Service as soon as practicablefollowing the Distribution Date (but no later than the last day of the remedialamendment period as defined in applicable Code provisions) for a determinationregarding the qualification of the Hospira SRP and the tax status of itsrelated trust as of the Distribution Date and shall make any amendmentsreasonably requested by the Internal Revenue Service in order to receive afavorable determination letter regarding the Hospira SRP.

 

(f)                                    AbbottSRP After Distribution Date.  On andafter the Distribution Date, no employees of the Hospira Group, including U.S.Transferred Employees, shall accrue any benefits under the Abbott SRP.  Without limiting the generality of theforegoing, U.S. Transferred Employees shall cease to be active participants inthe Abbott SRP effective as of the Distribution Date.

 

(g)                                 SRPFiduciaries.  For avoidance ofdoubt, for all periods after the Distribution Date, the parties agree that theapplicable fiduciaries of each of the Abbott SRP and the Hospira SRP,respectively, shall have the sole authority with respect to the Abbott SRP andthe Hospira SRP, respectively, to determine the investment alternatives, theterms and conditions with respect to those investment alternatives and suchother matters as are within the scope of their duties under Section 404 ofERISA.

 

(h)                                 Lossof Unvested Benefits/Distributions. For the avoidance of doubt, the transfer of any Transferred Employee’s employmentto the Hospira Group will not result in loss of that Transferred Employee’sunvested benefits under the Abbott SRP or the Hospira SRP and no TransferredEmployee shall be entitled to a distribution of his benefit under the AbbottSRP as a result of such transfer of employment.

 

(i)                                     AbbottSRP QDROs.  The Abbott SRP shallretain and honor the terms of all QDROs in effect under the Abbott SRP as ofthe Distribution Date with respect to U.S. Transferred Employees.

 

**4.3****                               FaultlessRubber Plan.**

 

Effective as of the Distribution Date, Hospira shall assume sponsorshipof and all of Abbott’s rights, powers, duties, obligations and Liabilitiesunder and with respect to the Faultless Rubber Plan.

 

**4.4****                               Ashland401(k) Plan.**

 

Effective as of the Distribution Date, Hospira shall assume sponsorshipof any and all of Abbott’s rights, powers, duties, obligations and Liabilitiesunder and with respect to the Ashland 401(k) Plan.

 

20

----

 

**4.5****                               SupplementalPension Plan.**

 

(a)                                  Establishmentof Hospira Supplemental ARP. Effective on or before the Distribution Date, Hospira shall establishthe Hospira Supplemental ARP which, for the Transition Period, shall besubstantially similar in all material respects to the Abbott Supplemental ARPas of the Distribution Date; provided, however, that Hospira shall not berequired to establish any grantor or other trusts to fund benefits under theHospira Supplemental ARP.

 

(b)                                 AssumedSupplemental ARP Liabilities. Except as provided below, as of the Distribution Date, Hospira shall,and shall cause the Hospira Supplemental ARP to, assume all Liabilities for allaccrued obligations under the Abbott Supplemental ARP for the benefits for U.S.Transferred Employees determined as of the Distribution Date, and Abbott andthe Abbott Supplemental ARP shall be relieved of all Liabilities for thosebenefits.  Notwithstanding theforegoing, the parties acknowledge that certain Liabilities of Hospira withrespect to the Hospira Supplemental ARP shall be satisfied by Abbott, asdescribed in Section 7.4 of this Agreement.

 

(c)                                  HospiraSupplemental ARP During the Transition Period.  As of the Distribution Date, the Hospira Supplemental ARP shallprovide that:

 

(i)             U.S. Transferred Employees who areparticipants in the Hospira Supplemental ARP and whose benefits are transferredto the Hospira Supplemental ARP from the Abbott Supplemental ARP shall receivecredit for vesting, eligibility and benefit service for all service creditedfor those purposes under the Abbott Supplemental ARP as of the DistributionDate as if that service had been rendered to Hospira;

 

(ii)          the compensation paid by the Abbott Group toall U.S. Transferred Employees which was recognized under the AbbottSupplemental ARP as of the Distribution Date shall be credited and recognizedfor all applicable purposes under the Hospira Supplemental ARP as though itwere compensation from the Hospira Group; and

 

(iii)       the Hospira Supplemental ARP shall not beamended in any manner that would reduce the accrued benefit (including anyearly retirement subsidy) of any U.S. Transferred Employee.

 

(d)                                 AbbottSupplemental ARP After Distribution Date. On and after the Distribution Date, no employees of the Hospira Group,including U.S. Transferred Employees, shall participate in or accrue anybenefits under the Abbott Supplemental ARP. Without limiting the generality of the foregoing, U.S. TransferredEmployees shall cease to participate in the Abbott Supplemental ARP effectiveas of the Distribution Date.

 

21

----

 

**4.6****                               AbbottSupplemental 401(k) Plan.**

 

(a)                                  Establishmentof Hospira KSP.  Effective on orbefore the Distribution Date, Hospira shall establish the Hospira KSP which,for the Transition Period, shall be substantially similar in all materialrespects to the Abbott KSP as of the Distribution Date; provided, however, that(i) Hospira may limit participation in the Hospira KSP to KSP TransferredEmployees and (ii) Hospira shall not be required to establish any grantor orother trusts to fund benefits under the Hospira KSP.

 

(b)                                 AbbottKSP Liabilities.  Except asexpressly provided in Section 4.6(c) of this Agreement, Abbott shallretain all Liabilities relating to, arising out of, or resulting from theAbbott KSP.  As of the DistributionDate, Abbott shall take all action reasonably necessary to convert the DeferredAccount (as defined in the Abbott KSP) of any KSP Transferred Employee into aTrust Account (as defined in the Abbott KSP). Except as expressly provided in Section 4.6(c) of this Agreement,on and after the Distribution Date, no employees of the Hospira Group,including KSP Transferred Employees, shall participate in or accrue anybenefits under the Abbott KSP.

 

(c)                                  HospiraKSP Book Accounts.  During theTransition Period, Hospira shall maintain an unfunded book account under theHospira KSP for KSP Transferred Employees. Hospira shall credit those accounts with (i) the amounts deferred by KSPTransferred Employees into the Hospira KSP according to elections made by thoseKSP Transferred Employees plus (ii) any related employer matching contributionsin relation to the amounts described in (i). In the absence of a new election made by KSP Transferred Employees underthe Hospira KSP, Hospira shall honor the terms of elections made by KSPTransferred Employees under the Abbott KSP. As soon as practicable followingthe Transition Period, Hospira shall pay Abbott (or the trustee of theapplicable KSP Transferred Employee’s grantor trust) an amount equal to theaggregate balance of the book accounts described above and Abbott shall ensurethat those amounts are allocated accordingly among the grantor trusts of thoseKSP Transferred Employees.  Abbott shallmaintain the grantor trusts in accordance with Section 7.4 of thisAgreement.

 

**Article 5**

 

**Non-U.S.Retirement Plans**

 

**5.1****                               CanadianPension Plan.**

 

Effective on or before the Distribution Date, Hospira shall establishthe Hospira Canadian Pension Plan the terms of which shall be substantiallysimilar in all material respects to the terms of the Abbott Laboratories,Limited Retirement Income Plan as in effect immediately prior to theDistribution Date.  For two (2) yearsfollowing the Distribution Date, Hospira shall not materially amend the HospiraCanadian Pension Plan other than as required by applicable law.  The assets and Liabilities determined as ofthe Distribution Date under the Abbott Laboratories, Limited Retirement IncomePlan attributable to Non-U.S. Transferred Employees who are participants in thatplan shall be

 

22

----

 

transferred to the HospiraCanadian Pension Plan.  The amount ofassets and Liabilities subject to the transfer shall be calculated on aProjected Benefit Obligation basis, as determined under FAS 87, by Mercer Human Resource Consulting LLC,and the amount of the transfer and the terms and conditions of the transfershall be approved by Abbott’s Vice President, Compensation and Development andHospira’s Vice President of Compensation & Benefits.  Abbott and Hospira agree to use commerciallyreasonable efforts to accomplish this transfer as soon as practicable followingthe Distribution Date and to cooperate with each other to make such filings anddisclosures and obtain such approvals as may be deemed necessary or advisable.

 

**5.2****                               IrishPension Plans.**

 

The assets and Liabilities determined as of the Distribution Date underthe Abbott IrelandPension & Death Benefit Plan for Salaried Staff, Abbott Ireland Pension & Death BenefitPlan for Executive Staff, andAbbott Ireland Pension & Death Benefit Plan for Hourly Employees attributableto Non-U.S. Transferred Employees who are participants in those plans shall betransferred to defined benefit pension plans to be established by Hospira.  The amount of assets and Liabilities subjectto the transfer shall be calculated on an Accumulated Benefit Obligation basis**,**as determined under FAS 87, by thetrustees of those plans, in consultation with Mercer Human Resources Consulting LTD, and the amount of thetransfer and the terms and conditions of the transfer shall be approved byAbbott’s Vice President, Compensation and Development and Hospira’s VicePresident of Compensation & Benefits. Abbott and Hospira agree to use commercially reasonable efforts toaccomplish these transfers as soon as practicable following the DistributionDate and to cooperate with each other to make such filings and disclosures andobtain such approvals as may be deemed necessary or advisable.

 

**5.3****                               OverseasManagers’ Pension Plan.**

 

(a)                                  Establishmentof Hospira OMPP.  Effective on orbefore the Distribution Date, Hospira shall establish the Hospira OMPP whichshall be substantially similar in all material respects to the Abbott OMPP asof the Distribution Date provided, however, that Hospira may limitparticipation in the Hospira OMPP to Transferred Employees who participated inthe Abbott OMPP immediately prior to their Transfer Dates.  Except as provided below, Hospira may amendthe Hospira OMPP at any time following the Distribution Date, including duringthe Transition Period.

 

(b)                                 AssumedOMPP Liabilities.  As of theDistribution Date, Hospira shall, and shall cause the Hospira OMPP to assumeall Liabilities for all accrued obligations under the Abbott OMPP for thebenefits for Non-U.S. Transferred Employees determined as of the DistributionDate, and Abbott and the Abbott OMPP shall be relieved of all Liabilities forthose benefits.

 

(c)                                  HospiraOMPP as of Distribution Date.  As ofthe Distribution Date, the Hospira OMPP shall provide that:

 

23

----

 

(i)             Non-U.S. Transferred Employees who areparticipants in the Hospira OMPP and whose benefits are transferred to theHospira OMPP from the Abbott OMPP shall receive credit for vesting, eligibilityand benefit service for all service credited for those purposes under theAbbott OMPP as of the Distribution Date as if that service had been rendered toHospira;

 

(ii)          the compensation paid by the Abbott Group toall Non-U.S. Transferred Employees which was recognized under the Abbott OMPPas of the Distribution Date shall be credited and recognized for all applicablepurposes under the Hospira OMPP as though it were compensation from the HospiraGroup; and

 

(iii)       the Hospira OMPP shall not be amended in anymanner that would reduce the accrued benefit (including any early retirementsubsidy) of any Non-U.S. Transferred Employee.

 

(d)                                 AbbottOMPP After Distribution Date.  Onand after the Distribution Date, no employees of Hospira, including Non-U.S.Transferred Employees, shall participate in or accrue any benefits under theAbbott OMPP.  Without limiting thegenerality of the foregoing, Non-U.S. Transferred Employees shall cease toparticipate in the Abbott OMPP effective as of the Distribution Date.

 

**5.4****                               OtherNon-U.S. Retirement Plans**.  If Hospira assumes any Liabilities withrespect to Non-U.S. Transferred Employees under an Abbott Benefit Plan which isa defined benefit pension plan, and such Liabilities are not otherwiseaddressed in this Article 5, then Abbott’s Vice President, Compensationand Development and Hospira’s Vice President of Compensation and Benefits shallmutually agree as to the amount, if any, of the assets to be transferred by theAbbott Group (or the relevant Abbott Benefit Plan) to the Hospira Group (or therelevant Hospira Benefit Plan) with respect to such Liabilities.

 

**Article 6**

 

**Welfareand Fringe Benefit Plans**

 

**6.1****                               Severance Compensation and Benefits**.

 

In accordance with Section 2.1 of this Agreement, Hospira shall beresponsible for any and all Liabilities to, or relating to, TransferredEmployees relating to severance and unemployment compensation and benefits and,except as expressly provided below, Abbott shall be responsible for any and allLiabilities to, or relating to, Abbott Retained Employees relating to severanceand unemployment compensation and benefits. Notwithstanding the foregoing, in the event that, with respect to anycountry, (a) the number of Post-Distribution Transferred Employees in thatcountry at the conclusion of Abbott’s provision of transitional services inthat country is less than the

 

24

----

 

Allocated Employee Number forthat country and (b) Abbott reasonably concludes that it must layoff Post-DistributionEmployees in that country as a result of the Hospira Group’s failure to employa number of Post-Distribution Employees in that country equal to the AllocatedEmployee Number, then, subject to the following sentence, Hospira shallreimburse Abbott for the costs associated with those layoffs.  Notwithstanding the foregoing, Hospira shallnot be required to reimburse Abbott for a number of layoffs in any countrygreater than (i) the Allocated Employee Number for that country less (ii) thesum of (x) the number of Post-Distribution Transferred Employees in thatcountry and (y) thenumber of Post-Distribution Employees in that country (other thanPost-Distribution Transferred Employees) to whom Hospira makes an offer ofemployment that includes cash and long-term incentive compensation equivalentto that provided to the Post-Distribution Employee by the Abbott Group.

 

**6.2****                               Retiree Medical And Life Insurance Coverage.**

 

(a)                                  AbbottHealthcare and Life Insurance Coverage. Abbott shall extend post-retirement healthcare and life insurancecoverage under the Abbott Retiree Medical Plan and the Abbott Retiree Life Planto each U.S. Transferred Employee (including any of his or her eligibledependents) who, as of the Distribution Date, is eligible to retire under theAbbott ARP.  Any U.S. TransferredEmployee who is eligible to elect coverage (or any eligible dependent who iseligible to elect coverage) under the Abbott Retiree Medical Plan and AbbottRetiree Life Plan shall be entitled to elect to begin that coverage as of anydate elected by that U.S. Transferred Employee that is after the DistributionDate and on or after his or her termination of employment (for any reason) withthe Hospira Group.  Any post-retirementhealthcare and life insurance coverage provided to U.S. Transferred Employees(and his or her dependents) shall be subject in all respects to the terms andconditions of the Abbott Retiree Medical Plan and Abbott Retiree Life Plan asin effect from time to time.  Abbottshall be solely liable for any such post-retirement healthcare and lifeinsurance coverage.

 

(b)                                 AbbottCoverage Requirements.  Abbottexpressly reserves the right to amend, alter, modify or terminate the terms ofthe Abbott Retiree Medical Plan and/or the Abbott Retiree Life Plan, as thecase may be, at any time and to interpret the provisions of those plans withrespect to its employees, U.S. Transferred Employees and all of its otherformer employees and their respective dependents; provided, however, thatAbbott agrees that any amendments, alterations, modifications, or terminationswith respect to those plans shall be applied in a consistent manner to Abbottretirees and U.S. Transferred Employees who are eligible for coverage underthose plans.  Abbott shall not beresponsible or otherwise liable for the provision of post-retirement healthcareand life insurance coverage to any U.S. Transferred Employees other than asexpressly provided in this Section 6.2. Only service and compensation with the Abbott Group prior to theDistribution Date shall be taken into account for all purposes of the AbbottRetiree Health Plan and the Abbott Retiree Life Plan, including, but notlimited to, for purposes of determining contribution levels.

 

(c)                                  HospiraHealthcare and Life Insurance Coverage.  Nothing in this Agreement shall require Hospira to establish ormaintain any post-termination

 

25

----

 

healthcare and life insurancecoverage for any person, except as required by COBRA or other applicable law.

 

**6.3****                               VEBAs.**

 

Effective as of the Distribution Date, Hospira shall establish theHospira VEBA and shall take all actions reasonably necessary to ensure that theHospira VEBA satisfies the requirements of Section 501(c)(9) of the Codeand is exempt from tax under Section 501(a) of the Code, including, butnot limited to, filing any required determination letter filing with theInternal Revenue Service.  Effective asof the Distribution Date, after making appropriate adjustment for any incurredbut not reported claims payable from the Abbott VEBAs, Abbott shall cause eachof the Abbott VEBAs to transfer to the Hospira VEBA any remaining assets andreserves under the Abbott VEBAs which are attributable to contributions by U.S.Transferred Employees.  Abbott andHospira shall each take any and all actions as they deem necessary orappropriate to ensure that the transfer of assets and reserves from the AbbottVEBAs to the Hospira VEBA does not result in any adverse tax consequences toany of the Abbott VEBAs or the Hospira VEBA, Abbott, Hospira, or anyparticipants or beneficiaries under the Abbott VEBAs or the Hospira VEBA.  Abbott and Hospira shall cooperate with eachother to effect the provisions of this Section 6.3.

 

**6.4****                               COBRA.**

 

Effective as of the Distribution Date, Hospira shall assume allobligations for providing COBRA coverage to U.S. Transferred Employees (andtheir eligible dependents), regardless of whether the qualifying event givingrise to that coverage occurred prior to, on, or after the Distribution Date.

 

**6.5****                               Matching Grant and Combined Appeal Programs**.

 

(a)                                  MatchingGrant Program.  Abbott shall retainall Liabilities with respect to the Abbott Laboratories Matching GrantProgram.  Abbott shall match alleligible contributions and grants made by each U.S. Transferred Employee priorto the Distribution Date, in accordance with the terms of the AbbottLaboratories Matching Grant Program. Hospira shall not be required to maintain a matching contributionprogram following the Distribution Date.

 

(b)                                 CombinedAppeal Program.  Hospira shallestablish a Combined Appeal Program with terms that are substantially similarto the terms of Abbott’s Combined Appeal Program as of the DistributionDate.  Absent a new election by a U.S.Transferred Employee under Hospira’s Combined Appeal Program, Hospira shallhonor elections made by U.S. Transferred Employees pursuant to Abbott’sCombined Appeal Program.  Hospira shallnot be required to maintain a Combined Appeal Program following the TransitionPeriod.

 

26

----

 

**Article 7**

 

**Equityand Executive Compensation Programs**

 

**7.1****                               EquityIncentive Programs.**

 

(a)                                  Treatmentof Abbott Options/Non-Retirement Eligible. Subject to Sections 7.1(c) and (d) of this Agreement, as of the DistributionDate, (i) Abbott shall cancel, as of the Distribution Date, each Abbott Optionheld by a Transferred Employee who is not eligible to retire under the AbbottARP or any other Abbott retirement plan designated by Abbott as of theDistribution Date (where that retirement eligibility shall be determined byAbbott in its sole discretion as of the Distribution Date, based on the termsand conditions of the Abbott ARP or such other retirement plan covering theapplicable Transferred Employee, as applicable) and which is outstandingimmediately prior to the Distribution Date (whether or not then exercisable),and (ii) Hospira shall grant each such Transferred Employee a Hospira Option inrespect of such cancelled Abbott Option.

 

The number of covered shares and the exercise price of the HospiraOptions shall reflect the Distribution and preserve the corresponding AbbottOption’s intrinsic value as of the Distribution Date, that value being equal to(A) the difference between the fair market value of a share of Abbott commonstock at the last closing price prior to the Distribution less that AbbottOption’s exercise price per share, multiplied by (B) the number of sharessubject to that Abbott Option.  EachHospira Option shall maintain the same ratio between the exercise price pershare and the fair market value per share as reflected in the respective AbbottOption being cancelled.  The exerciseprice and number of shares subject to a Hospira Option granted in respect ofthe cancelled Abbott Option shall be determined in accordance withSection 424 of the Code so as to retain, where applicable and possible,the tax and accounting treatment of each such Abbott Option.

 

The Hospira Options shall contain substantially similar terms andconditions as the Abbott Options for which they were substituted.  On or prior to the Distribution Date, Abbottand Hospira shall take such actions necessary to effectuate the foregoing,including compliance with securities laws and other legal requirementsassociated with the grant of stock options in the affected non-U.S.jurisdictions.  Abbott agrees to assistand facilitate the adoption and approval of the Hospira SIP in order tomaximize the possible tax benefits to Hospira consistent with the requirementsof Treasury Regulation Section 1.162-27(f)(4)(iii).

 

(b)                                 Treatmentof Abbott Options/Retirement Eligible. With respect to each Abbott Option which is held by a TransferredEmployee eligible to retire under the Abbott ARP or another Abbott retirementplan as of the Distribution Date (where that retirement eligibility shall bedetermined by Abbott in its sole discretion as of the Distribution Date, basedon the terms and conditions of the ARP or such other retirement plan coveringthe applicable Transferred Employee, as applicable) and which is outstandingimmediately prior to the Distribution Date (whether or not then

 

27

----

 

exercisable), the AbbottCompensation Committee shall take the necessary actions on or prior to theDistribution Date to provide, solely for purposes of the Abbott Stock Programs,that a retirement eligible Transferred Employee’s separation from employmentwith Abbott to be employed with Hospira, under the provisions of thisAgreement, shall be treated as a retirement from an Abbott retirement plan forpurposes of the Abbott Stock Programs. The Abbott Compensation Committee shall make adjustments to Options heldby a retirement eligible Transferred Employee in accordance with the terms ofthe Abbott Stock Programs as it deems necessary and/or appropriate to reflectthe spin-off of the Hospira Business.

 

(c)                                  AbbottOptions in Certain Non-U.S. Jurisdictions. Notwithstanding the provisions of Section 7.1(a) of this Agreement,Abbott and Hospira may mutually agree, in their sole discretion, not to cancelan Abbott Option and grant a corresponding Hospira Option in non-U.S.jurisdictions where those actions will create or trigger adverse legal,accounting or tax consequences for either Abbott, Hospira, and/or the affectedNon-U.S. Transferred Employees.  In suchcircumstances, the Abbott Options of the affected Non-U.S. TransferredEmployees shall terminate in accordance with the terms of the Abbott StockPrograms and the underlying option agreement and Hospira shall equitablycompensate the affected Non-U.S. Transferred Employees in an alternate mannerdetermined by Hospira in its sole discretion.

 

(d)                                 Treatmentof Abbott Options/Post-Distribution Transferred Employees.  Notwithstanding the provisions ofSection 7.1(a) of this Agreement, each Abbott Option held by aPost-Distribution Transferred Employee or a Hospira Requested Employee who isnot eligible to retire under the Abbott ARP or any other Abbott retirement plandesignated by Abbott as of his or her Transfer Date (where that retirementeligibility shall be determined by Abbott in its sole discretion as of thatTransfer Date, based on the terms and conditions of the ARP or such otherretirement plan covering that Employee, as applicable) and which is outstandingimmediately prior to that Transfer Date shall terminate in accordance with theterms of the Abbott Stock Programs and the underlying option agreement andHospira shall equitably compensate that Employee in an alternate mannerdetermined by Hospira in its sole discretion.

 

(e)                                  RestrictedStock.  The Abbott CompensationCommittee shall take the necessary actions on or prior to the Distribution Dateto cause the lapse of Restrictions (as defined in the applicable awardagreements) with respect to all Abbott restricted stock granted under theAbbott Stock Programs held by each Transferred Employee (retirement eligibleand non-retirement eligible) as of the Distribution Date.

 

**7.2****                               Discontinued Participation in ESPP.**

 

As of the Distribution Date, each Non-U.S. Transferred Employee (otherthan a Post-Distribution Transferred Employee or Hospira Requested Employee)who participates in the Abbott ESPP shall cease participation in the AbbottESPP and shall have his or her payroll deductions refunded by the Abbott Group assoon as administratively practicable in accordance with the terms of the AbbottESPP.  As of the Transfer Date, eachPost-Distribution Transferred Employee or Hospira Requested

 

28

----

 

Employee who participates inthe Abbott ESPP shall cease participation in the Abbott ESPP and shall have hisor her payroll deductions refunded by the Abbott Group as soon asadministratively practicable in accordance with the terms of the Abbott ESPP.

 

**7.3****                               DeferredCompensation Plan.**

 

Abbott shall retain all Liabilities relating to, arising out of, orresulting from the Abbott DCP.  Prior toApril 26, 2004 (or such later date as Abbott may determine, but in noevent later than the Distribution Date), Abbott shall amend the Abbott DCP toprovide that each Employee shall make an election, prior to April 26, 2004(or such later date as Abbott may determine, but in no event later than theDistribution Date) to either (i) treat that Employee’s commencement ofemployment with the Hospira Group as a ‘termination of employment’ (as definedin the Abbott DCP) with Abbott, provided that that Employee remains an employeeof the Abbott Group through the date immediately prior to the Distribution Dateor (ii) treat that Employee’s continuation of employment with the Hospira Groupas if it was a continuation of employment with the Abbott Group solely forpurposes of distribution of benefits (and not continued contributions).  Those U.S. Transferred Employees whoparticipate in the Abbott DCP and who do not timely execute an election shallbe treated as having made an election pursuant to (ii) above.  In the event that a Transferred Employeemakes an election pursuant to (i) above, distributions from the Abbott DCPshall not begin any sooner than one (1) year following that TransferredEmployee’s Transfer Date.  Hospiraagrees that it shall provide written notice to Abbott of the subsequenttermination of employment of a Transferred Employee who makes an electionpursuant to (ii) above, in order for Abbott to carry out its obligationshereunder.  With respect to anyTransferred Employee who makes an election pursuant to (ii) above, subsequenttermination of employment from the Hospira Group shall have the same effectunder the Abbott DCP as a termination of employment from the Abbott Group.  No deferrals shall be made under the AbbottDCP in respect of Transferred Employees with respect of any period followingthe Distribution Date.

 

**7.4****                               Grantor Trusts.**

 

(a)                                  GrantorTrust Payment Election.  On or priorto the Distribution Date, Abbott shall solicit from each U.S. TransferredEmployee, who has a grantor trust that was created pursuant to an AbbottBenefit Plan, a newly completed Grantor Trust Payment Election form for eachsuch trust.  The new forms shallacknowledge that continued employment with the Hospira Group shall have thesame effect as continued employment with the Abbott Group with respect to thedetermination of the settlement date under those trusts.  Hospira agrees that it shall provide writtennotice to Abbott of the subsequent termination of employment of a U.S.Transferred Employee with a grantor trust subject to this Section 7.4, inorder for Abbott to carry out its obligations hereunder and under the grantortrust.  Abbott agrees that it shall, asadministrator of the applicable trusts, inform the trustee of the grantortrusts of the proper settlement dates, when they occur, based on those U.S.Transferred Employees’ continued employment with, and subsequent terminationfrom, Hospira.  A subsequent termination

 

29

----

 

of employment from the HospiraGroup shall have the same effect under the terms of the grantor trusts as atermination of employment from the Abbott Group.

 

(b)                                 Maintenanceof Grantor Trusts.  Abbott willretain the Liabilities associated with the Abbott Supplemental ARP for U.S.Transferred Employees who have grantor trusts. Abbott shall continue to be obligated to maintain all U.S. TransferredEmployee’s grantor trusts which were created pursuant to any Abbott BenefitPlan and shall continue to make annual contributions as may be requiredpursuant to the terms and conditions of those grantor trusts.  Abbott shall treat any contributions relatingto services provided during the Transition Period that are made into theapplicable grantor trusts (either by Abbott or Hospira) the same ascontributions relating to services provided prior to the Distribution Datewhich were made into the trusts by Abbott.

 

(c)                                  NecessaryActions.  Abbott shall take allcommercially reasonable actions deemed necessary to give effect to thisSection 7.4, including, but not limited to, amending the grantor trusts orany related Abbott Benefit Plan.

 

(d)                                 HospiraContributions.  Hospira shall beobligated to make contributions to the applicable grantor trusts with respectto any amounts earned for services rendered to the Hospira Group during theTransition Period, whether those amounts are paid directly to the trustee forthe applicable grantor trusts or to Abbott for contributions into theapplicable grantor trusts, at the same time and in the same manner, ascontributions are made by Abbott with respect to any amounts earned forservices rendered to Abbott prior to the Distribution Date.

 

**7.5****                               Cash ProfitSharing.**

 

Each U.S. Transferred Employee who participated in the Abbott CashProfit Sharing Plan immediately prior to the Distribution Date and who remainsemployed by the Hospira Group after the Distribution Date and throughNovember 15, 2004, shall be entitled to receive from Hospira a cashpayment for the 2004 plan year ending September 30, 2004 based on the samepercentage of eligible earnings used under the Abbott Cash Profit Sharing Planfor such plan year.** **The terms and conditions of payments to be made byHospira pursuant to this Section 7.5 shall be substantially similar in allmaterial respects to those that applied under the Abbott Cash Profit SharingPlan as in effect on the Distribution Date. Hospira shall make all determinations of payments under thisSection 7.5 and shall be solely responsible for all payments to or withrespect to U.S. Transferred Employees hereunder.  Hospira shall have no obligation to provide any cash profitsharing plan in respect of periods following September 30, 2004.

 

**7.6****                               OtherIncentive Programs.**

 

During the Transition Period, Hospira shall provide U.S. TransferredEmployees with Hospira cash incentive programs (other than the Abbott CashProfit Sharing Plan, the treatment of which is addressed in Section 7.5above) on terms and conditions which are substantially similar in all materialrespects to the terms and conditions of the cash incentive programs provided tothose U.S. Transferred Employees

 

30

----

 

on the Distribution Date;provided, however that, after the Distribution Date, Hospira may change theperformance metrics and criteria to reflect its incentive strategies.  All payments to U.S. Transferred Employeesunder the cash incentive programs described in this Section 7.6 shall bemade at such times as prescribed by those programs.  Hospira shall make in its sole discretion all determinations ofpayments under the cash incentive programs described in this Section 7.6 withrespect to U.S. Transferred Employees and shall be solely responsible for allpayments to or with respect to U.S. Transferred Employees hereunder.  Hospira shall have no obligation to continueany cash incentive program following the Transition Period.

 

**Article 8**

 

**Miscellaneous**

 

**8.1****                               Transfer of Records and Information.**

 

Subject to applicable law,Abbott shall transfer to Hospira any and all employment records and information(including, but not limited to, any Form W-2 or other Internal Revenue Serviceforms) with respect to Transferred Employees and other records reasonablyrequired by Hospira to enable Hospira to properly carry out its obligationsunder this Agreement.  Such transfer ofrecords and information shall generally occur as soon as administratively practicablefollowing (a) the date hereof or (b) with respect to records and informationthat are relevant to services provided in the Transition Services Agreements,the date upon which the provision of those services terminates.  After the transfer of those records toHospira, Hospira shall permit Abbott to have reasonable access to such recordsand such information, each as set forth in Article VI of the Separationand Distribution Agreement.

 

**8.2**                               **Preservationof Rights to Amend or Termi****nate Plans.**

 

Nothing in this Agreement shall be construed as a limitation on theright of the Abbott Group or the Hospira Group to amend or terminate anyBenefit Plan so long as that amendment or termination is not contrary to thisAgreement.  In addition, nothing in thisAgreement shall be construed as a limitation on the right of the Abbott Groupor the Hospira Group to amend any Benefit Plan to conform to requirements ofapplicable law or the provisions of a collective bargaining agreement,including any changes that are effective during the Transition Period.

 

31

----

 

**8.3****                               TransitionServices.**

 

Except as otherwise provided in the Transition Services Agreements oras otherwise expressly provided herein, neither party shall have anyresponsibility for providing services to the other party with respect toemployee or Benefit Plan matters after the Distribution Date.

 

**8.4****                               Reimbursement.**

 

Abbottand Hospira acknowledge that the Abbott Group, on the one hand, and the HospiraGroup, on the other hand, may incur costs and expenses (including, withoutlimitation, contributions to Benefit Plans and the payment of insurancepremiums) which are, as set forth in this Agreement, the responsibility of theother party.  Accordingly, Abbott andHospira agree to reimburse each other, as soon as practicable but in any eventwithin thirty (30) days of receipt from the other party of appropriateverification, for all such costs and expenses.

 

**8.5****                               ClaraAbbott Foundation.**

 

For purposes of clarification, no reference to benefits or Benefit Plancontained in this Agreement shall include or affect the benefits and servicesprovided to employees or retirees of the Abbott Group by the Clara AbbottFoundation.

 

**8.6****                               IncorporationBy Reference.**

 

The following sections of the Separation and Distribution Agreement arehereby incorporated into this Agreement by reference: Section 9.01.Counterparts; Entire Agreement; Corporate Power; Facsimile Signatures,Section 9.02. Governing Law, Section 9.04. Third Party Beneficiaries,Section 9.05. Notices, Section 9.06. Severability, Section 9.07.Force Majeure, Section 9.08. Responsibility for Expenses,Section 9.09. Headings, Section 9.10. Survival of Covenants,Section 9.12. Waivers of Default, and Section 9.13. Amendments.

 

**8.7****                               Limitationon Enforcement.**

 

This Agreement is an agreement solely between Abbott and Hospira and,to the extent applicable, TAP.  Nothingin this Agreement, whether express or implied, confers upon any employee of theAbbott Group, the Hospira Group, TAP, any Employee, any beneficiary of an Employee,any former employee of the Abbott Group or TAP or any other person, any rightsor remedies, including, but not limited to any right to (a) employment orrecall; (b) continued employment or continued service for any specified period;or (c) claim any particular compensation, benefit or aggregation of benefits,of any kind or nature.

 

**8.8****                               Assignability.**

 

This Agreement will be binding upon and inure to the benefit of theparties hereto and their respective successors and permitted assigns; provided,however,

 

32

----

 

that no party hereto may assignits respective rights or delegate its respective obligations under thisAgreement without the express prior written consent of the other partieshereto.  Notwithstanding the foregoing,this Agreement will be assignable in whole in connection with a merger orconsolidation or the sale of all or substantially all of the Assets (as definedin the Separation and Distribution Agreement) of a party hereto so long as theresulting, surviving or transferee Person (as defined in the Separation andDistribution Agreement) assumes all the obligations of the relevant partyhereto by operation of law or pursuant to an agreement in form and substancereasonably satisfactory to the other parties hereto.

 

**8.9****                               FurtherAssurances and Consents.**

 

In addition to the actions specifically provided elsewhere in thisAgreement, each of the parties hereto shall use commercially reasonable effortsto (a) execute and deliver such further instruments and documents and take suchother actions as the other party may reasonably request in order to effectuatethe purposes of this Agreement and carry out the terms hereof; (b) take orcause to be taken, all actions and do, or cause to be done, all things,reasonably necessary, proper or advisable under applicable laws, regulationsand agreements or otherwise to consummate and make effective the transactionscontemplated by this Agreement, including, without limitation, usingcommercially reasonable efforts to obtain any consent and approvals and to makeany filings and applications necessary or desirable in order to consummate thetransactions contemplated by this Agreement; provided that no party heretoshall be obligated to pay any consideration therefor (except for filing feesand other similar charges) to any third party from whom those consents,approvals and amendments are required or to take any action or omit to take anyaction if the taking or the omission to take action would be unreasonably burdensometo the party or the business thereof.

 

**8.10****                        ThirdParty Consent.**

 

If the obligation of any party under this Agreement is dependent on theconsent of a third party, such as a vendor or insurance company, and thatconsent is withheld, Abbott and Hospira shall use commercially reasonableefforts to implement the applicable provisions of this Agreement to the fullestextent practicable.  If any provision ofthis Agreement cannot be implemented due to the failure of a third party toconsent, Abbott and Hospira shall negotiate in good faith to implement theprovision in a mutually satisfactory manner, taking into account the originalpurposes of the provision in light of the Distribution and communications toaffected Transferred Employees.

 

**8.11****                        Effect if Distribution Does not Occur.**

 

If the Distribution does not occur, then all actions and events thatare to be taken under this Agreement as of the Distribution Date or otherwisein connection with the Distribution, shall not be taken or occur except to theextent specifically provided by Abbott.

 

33

----

 

**8.12****                        Disputes.**

 

Abbott and Hospira agree to use commercially reasonable efforts toresolve in an amicable manner any and all controversies, disputes and claimsbetween them arising out of or related in any way to this Agreement.  Abbott and Hospira agree that anycontroversy, dispute or claim (whether arising in contract, tort or otherwise)arising out of or related in any way to this Agreement, which cannot be amicablyresolved informally will be resolved pursuant to the alternative disputeresolution procedures set forth in Article VII of the Separation andDistribution Agreement and the Master ADR Agreement attached hereto asSchedule 5.

 

**8.13****                        Schedules.**

 

As of the Distribution Date, the parties shall update Schedules 2 and 4to this Agreement.

 

**8.14****                        MutualDrafting.**

 

This Agreement will be deemed to be the joint work product of theparties and any rule of construction that a document shall be interpreted or construedagainst a drafter of such document shall not be applicable.

 

34

----

 

The parties have caused this Agreement to be signed by their authorizedrepresentatives as of the Distribution Date.

 
| **HOSPIRA, INC.**                                      | **ABBOTT LABORATORIES** |
|--------------------------------------------------------|-------------------------|
|                                                   |                    |
|                                                   |                    |
| **By**                                                 |                    |   | **By** |   |   |
|                                                   |                    |
|                                                   |                    |
| **Title**                                              |                    |   | **Title** |   |   |
|                                                   |                    |
|                                                   |                    |
| **Solely for purposes of Sections 2.4, 8.7,  and 8.8** |                    |
|                                                   |                    |
| **TAP PHARMACEUTICAL PRODUCTS INC.**                   |                    |
|                                                   |                    |
| **By**                                                 |                    |   |   |
|                                                        |                         |  |  |  |  |  |  |  |

 

35

----