**Exhibit 10.1**

 

**Hospira Corporate OfficerSeverance Plan**

**(Effective September 1,2007)**

 

 

1.                                       Purpose.  The Hospira Corporate Officer Severance Plan(“Plan”) was established to provide Severance Pay and other benefits toterminated Corporate Officers of Hospira, Inc. (the “Company”) who satisfy theterms of the Plan.  Severance Pay andbenefits under the Plan shall be in lieu of any benefits available under theHospira Transitional Pay Plan or any other severance plan or policy maintainedby the Company or any of its subsidiaries and affiliates (each an “Affiliate”);and benefits will not be payable under the Plan if the relevant termination ofemployment results in the employee being eligible for equivalent (or greater)severance pay and benefits under an employment agreement between the Company oran Affiliate and the employee, or under the Hospira, Inc. Change in ControlSeverance Pay Plan or any Change in Control agreement between the Company orany Affiliate and the employee.

2.                                       Administration.  The Plan is administered by the Company’sCorporate Vice President, Human Resources (“Administrator”), except asspecifically stated herein.  TheAdministrator has the complete discretion and authority with respect to thePlan and its application.  TheAdministrator reserves the right to interpret the Plan, prescribe, amend andrescind rules and regulations relating to it, determine the terms andprovisions of Severance Pay and benefits and make all other determinations itdeems necessary or advisable for the administration of the Plan.  The determination of the Administrator in allmatters regarding the Plan shall be conclusive and binding on all persons.  The Administrator may delegate any of his orher duties under the Plan to one or more other persons.

3.                                       Scope.  The Plan will apply to all Corporate Officers(“Participants”).  For purposes of thePlan, the term “Corporate Officer” means an individual elected a corporateofficer of the Company by its Board of Directors or designated as a Planparticipant by the Compensation Committee of the Board of Directors of theCompany (“Committee”) and listed on the attached Exhibit A, but shall notinclude assistant officers or the Company’s Chief Executive Officer (“CEO”).

4.                                       Eligibility forSeverance Pay.  AParticipant becomes entitled to receive severance pay (“Severance Pay”) only ifhe or she is terminated by the Company or an Affiliate for any of the followingreasons, and the conditions described in **Section 5**below are met:

(a)                                  The Participant’sposition is eliminated due to a reduction in force or other restructuring.

(b)                                 The Participant’semployment is otherwise terminated for reasons not related to performance,illegal activity, failure to abide by the Company’s Code of Conduct, or othergood cause as determined by the Administrator and is otherwise considered to beinvoluntary.

 

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A Participant’s eligibility for Severance Pay shallnot be affected by the Company’s decision to accept his or her resignation orretirement following the occurrence of any of the conditions described in **Sections 4(a)** and **4(b)**. Thedecision as to whether a Participant is eligible for Severance Pay and benefitsunder this Plan shall be made by the Administrator, not the Participant.  If the Participant disagrees, the Participantmust follow the procedures set forth in **Section 14**.

5.                                       Conditions toReceipt of Severance Pay.

(a)                                  Severance Payis not available to a Participant otherwise eligible for Severance Pay whotransfers to another position with the Company or any Affiliate.

(b)                                 A Participant must sign an agreement in aform provided by the Administrator under which the Participant agrees to useall best efforts to protect the secrecy and confidentiality of information thatis confidential and proprietary to Hospira or any of its Affiliates (“ConfidentialInformation”) and under which the Participant agrees that, for a period of 2years after his or her termination of employment the Participant will: (1) notengage, directly or indirectly, in any activity or employment, for the benefitof the Participant or others, in a manner that contributes to any research,discovery, development, manufacture, importation, marketing, promotion, sale oruse of any competing Hospira product, process or service, which is related inany way to the Participant’s employment with the Company or any of itsAffiliates; (2) not engage in any activity or employment in the performance ofwhich any Confidential Information obtained, provided or otherwise acquired,directly or indirectly, during the term of employment with Hospira or any ofits Affiliates is likely to be used or disclosed, notwithstanding theParticipant’s undertaking to the contrary; (3) not solicit the customers of theCompany or any of its Affiliates or entice any employee of the Company or anyof its Affiliates to leave the employment of the Company or any of itsAffiliates; and (4) inform the Company of other employment by contacting theAdministrator within 5 days of accepting such other employment.

(c)                                  A Participantmust satisfy any other condition specified in **Section 5**and**Section 6**.  Duringthe period in which a Participant is entitled to consider the execution of thewaiver and release agreement described in **Section 6**,or during such other period as is otherwise agreed to by the Administrator andthe Participant, he or she may be required to complete unfinished businessprojects and be available for discussions regarding matters relative to theParticipant’s duties with the Company or any of its Affiliates.

(d)                                 A Participantmust return all property and information of the Company or any of itsAffiliates.

(e)                                  A Participantmust agree to pay all outstanding amounts owed to the Company or any Affiliateand authorize the Company or Affiliate to withhold any outstanding amounts fromhis or her final paycheck and/or Severance Pay.

 

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6.                                       Amount ofSeverance Pay.  The amountof Severance Pay to which a Participant is entitled under the Plan is the sumof:

(a)                                  2 years of the Participant’s base salaryat the rate in effect on the date of termination, plus

(b)                                 for the year of termination, theParticipant’s pro rata annual incentive bonus award through the date oftermination, with the determination of the amount of such award based on anassumption that the target level of performance has been achieved.

In addition to the pro-ratabonus provided under **Section 6(b)**above, if the Participant’s date of termination occurs after the end of aperformance period applicable to an annual incentive bonus award in which the Participantparticipates, and prior to the payment of the award, if any, for the period,the Participant shall be entitled to a lump sum payment in cash with respect tosuch prior performance period, as determined under the terms of that incentiveaward arrangement.

A Participant who is receiving benefits under a short term disabilityplan maintained by the Company or any Affiliate will be entitled to SeverancePay at the end of the period of payment of short term disability if, and only if, (1) he or sheis not then eligible for benefits under a long term disability plan maintainedby the Company or an Affiliate, and (2) he or she is not offeredemployment with the Company or an Affiliate that, in the discretion of theAdministrator, is comparable to that held by the Participant at the time theapplicable period of short term disability commenced.  A Participant will not be entitled toSeverance Pay at the end of the period of long term disability.

Severance Pay will be paid to a Participant in one lump sum cashpayment.  Payment will be made as soon aspracticable after the last to occur of (1) the date of the Participant’stermination of employment, (2)  the effective date of the Participant’sexecuted waiver and release agreement in the form provided by theAdministrator, which releases (i) the Company and its Affiliates, andtheir respective officers, directors and employees, from any and all actions,suits, proceedings, claims and demands relating to the Participant’s employmentwith the Company or any Affiliate and the termination thereof, and(ii) all rights and benefits required under any other severance policy orplan maintained by the Company or any Affiliate, and (3) the satisfactionof the conditions described in **Sections 5(b)**,**(c),****(d)**and**(e)**. In any event, the payment shall be made no later than 2 1⁄2 months afterthe end of the year in which the termination described in **Section 4**occurs. Severance Pay shall be reduced by applicable amounts necessary tocomply with federal, state and local income tax withholding requirements.

 

7.                                       Benefits.

(a)                                  WelfareBenefits.  AParticipant entitled to Severance Pay shall receive, at the time of payment ofSeverance Pay, a lump sum payment equivalent to 130% of the cost of 72-weeksof COBRA (as defined in Section 4980B of the Internal 

 

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Revenue Code of 1986, asamended (the “Code”), and Sections 601-609 of the EmployeeRetirement Income Security Act of 1974, as amended (“ERISA”), or any successorsections) continuation coverage premiums in lieu of any continued medical,dental, vision, and other welfare benefits offered by the Company or anyAffiliate.  Such period of COBRAcontinuation coverage shall be included as part of the period during which theParticipant may elect continued group health coverage under COBRA.

(b)                                 OutplacementServices.  AParticipant entitled to Severance Pay shall receive outplacement services,selected by the Company at its expense, for a period commencing on the date oftermination of employment and continuing until the earlier to occur of theParticipant accepting other employment or 12 months thereafter.

8.                                       Death ofParticipant.  NoSeverance Pay will be paid if a Participant dies before satisfying **Section 4** and **Section 5**;provided, however, that if a Participant dies after becoming entitled toreceive Severance Pay by satisfying **Section 4** and **Section 5** but prior to receiving Severance Pay pursuant to **Section 4**, payment of the Severance Pay determined under **Section 4** will be made to the representative of his or herestate.  Notwithstanding any provision ofthis Plan to the contrary, the Administrator and the Participant’s estate mayagree to alternative means for the satisfaction of the requirements in **Sections 5 (b), (c)**, **(d)** and **(e)**.

9.                                       Effective Dateof Plan.  The Plan is effective as ofSeptember 1, 2007.

10.                                 Amendment orTermination.

(a)                                  Hospirareserves the right to amend or terminate the Plan at any time; provided,however, that no amendment or termination may adversely affect any SeverancePay and benefits of a Participant who has terminated employment and is entitledto Severance Pay and benefits by satisfying the requirements in **Section 4** and **Section 5**.  All amendments and any termination of thePlan will be adopted by resolution of the Committee.

(b)                                 Severance Payand benefits under the Plan are not intended to be a vested right.

11.                                 Code Section409A.  Notwithstanding anything tothe contrary in this Plan, the Committee may adopt such amendments to the Plan,or adopt policies or procedures, as may be necessary or appropriate to (a)exempt Severance Pay and benefits from Code Section 409A and/or to preserve theintended tax treatment thereof or (b) otherwise comply with the requirements ofCode Section 409A and related regulations.

12.                                 Governing Law.  The terms of the Plan shall, to the extentnot preempted by federal law, be governed by, and construed and enforced inaccordance with, the laws of the State of Illinois, including all matters ofconstruction, validity and performance.

 

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13.                                 MiscellaneousProvisions.

(a)                                  Severance Payand other benefits pursuant to the Plan shall not be subject in any manner toanticipation, alienation, sale, transfer, assignment, pledge, encumbrance orcharge prior to actual receipt by a Participant, and any attempt to soanticipate, alienate, sell, transfer, assign, pledge, encumber or charge priorto such receipt shall be void and neither the Company nor any Affiliate shallbe liable in any manner for, or subject to, the debts, contracts, liabilities,engagements or torts of any person entitled to any Severance Pay or otherbenefits under the Plan.

(b)                                 Nothingcontained in the Plan shall confer upon any individual the right to be retainedin the service of the Company or any Affiliate, nor limit the right of theCompany or Affiliate to discharge or otherwise deal with any individual withoutregard to the existence of the Plan.

(c)                                  The Plan shallat all times be entirely unfunded.  Noprovision shall at any time be made with respect to segregating assets of theCompany or any Affiliate for payment of any Severance Pay or other benefitshereunder.  No employee or any otherperson shall have any interest in any particular assets of the Company or anyAffiliate by reason of the right to receive Severance Pay or other benefitsunder the Plan, and any such employee or any other person shall have only therights of a general unsecured creditor of the Company or an Affiliate withrespect to any rights under the Plan.

14.                                 AppealsProcedure.  If aParticipant feels he or she should be eligible for Severance Pay or benefitsunder the Plan, the Participant may file a written claim with theAdministrator. If a written claim for Severance Pay or benefits under the Planby a Participant or his or her beneficiary is denied, either in whole or inpart, the Administrator will let the claimant know in writing within90 days.  If the claimant does nothear within 90 days, the claimant may treat the claim as if it had beendenied.  A notice of a denial of a claimwill refer to a specific reason or reasons for the denial of the claim; willhave specific references to the Plan provisions upon which the denial is based;will describe any additional material or information necessary for the claimantto perfect the claim and explain why such material information is necessary;and will have an explanation of the Plan’s review procedure.

The claimant will have 60 days after the dateof the denial to request in writing for a review and a hearing.  The claimant must file a written request withthe CEO for a review.  During this timethe claimant may review pertinent documents and may submit issues and commentsin writing.  The CEO will have another60 days in which to consider the claimant’s written request forreview.  If special circumstances requirean extension of time for processing, the CEO may have an additional60 days to answer the claimant.  Theclaimant will receive a written notice if the extra days are needed.  The claimant may submit in writing anydocument, issues and comments he or she may wish.  The decision of the CEO will tell theclaimant the specific reasons for his or her actions, and refer the claimant tothe specific Plan provisions upon which its decision is based.

 

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15.                           Rights UnderERISA.  Each Participant in the Planis entitled to certain rights and protection under ERISA, which provides thatall Participants shall be entitled to:

(a)           Examine,without charge, at the Company’s office all Plan documents.

(b)                                 Obtain copiesof all Plan documents and other Plan information upon written request to theAdministrator.  The Administrator maymake a reasonable charge for the copies.

In addition to creatingrights for Participants, ERISA imposes duties upon the people who areresponsible for the operation of an employee benefit plan.  The people who operate the Plan, called “fiduciaries”of the Plan, have a duty to do so prudently and in the interest of theParticipants and beneficiaries.  No one,**includingthe Company, any Affiliate or any other person, may fire a Participant orotherwise discriminate against a Participant in any way to prevent him or herfrom obtaining a benefit or exercising his or her rights under ERISA.  If a Participant’s claim for a benefit isdenied in whole or in part, he or she must receive a written explanation of thereason for the denial.  A Participant hasthe right to have the CEO review and reconsider his or her written claim.  Under ERISA, there are steps a Participantcan take to enforce the above rights. For instance, if a Participant requests materials from the Administratorand does not receive them within thirty (30) days, he or she may file suitin a federal court.  In such a case thecourt may require the Company to provide the materials and pay the Participantup to $110 a day until the Participant receives the materials, unless thematerials were not sent because of reasons beyond the control of the Company.  If a Participant has a claim for benefits,which is denied or ignored, in whole or in part, he or she may file suit in astate or federal court.  If a Participantis discriminated against for asserting his or her rights, he or she may askassistance from the United States Department of Labor, or he or she may filesuit in a federal court.  The court willdecide who should pay the court costs and legal fees.  If the Participant is successful, the courtmay order the person he or she has sued to pay these costs and fees.  If the Participant loses, the court may orderhim or her to pay these costs and fees, for example, if it finds his or herclaim to be frivolous.  If a Participanthas questions about the Plan, he or she should contact the Administrator.  If a Participant has any questions about thisstatement or about his or her rights under ERISA, he or she should contact thenearest Area Office of the United States Labor-Management ServicesAdministration, Department of Labor.

 

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16.           Plan Facts:  
| Company:  Address:                    |   | Hospira, Inc.  275 North Field Drive  Lake Forest, IL 60045 |
|---------------------------------------|--------|-------------------------------------------------------------|
| Plan Name:                            |   | Hospira Corporate Officer Severance Plan                    |
| Type of Plan:                         |   | Severance Plan-Welfare Benefits Plan                        |
| Plan Year:                            |   | Calendar year                                               |
| Employer Identification Number (EIN): |   | 20-0504497                                                  |
| Plan Administrator:                   |   | Corporate Vice President, Human Resources                   |
| Business Address:                     |   | 275 North Field Drive  Lake Forest, IL 60045                |
| Agent for Service of Legal Process:   |   | Corporate Vice President, Human Resources                   |
| Address                               |   | 275 North Field Drive  Lake Forest, IL 60045                |
|                                  |   |                                                        |

 

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Hospira CorporateOfficer Severance Plan

 

Exhibit A

List of PlanParticipants 

 
| **Name**            | ** ** | **Position**                                                                                                   |
|---------------------|------------|----------------------------------------------------------------------------------------------------------------|
|                |       |                                                                                                           |
| Hugh Burrill        |       | Corporate Vice  President, Biosimilars Research and Development                                                |
|                |       |                                                                                                           |
| Lori Carlson        |       | Corporate Vice  President and Treasurer                                                                        |
|                |       |                                                                                                           |
| Alejandro  Infante  |       | President, The  Americas                                                                                       |
|                |       |                                                                                                           |
| Terrence Kearney    |       | Chief Operating  Officer                                                                                       |
|                |       |                                                                                                           |
| Christopher  Kolber |       | President,  Global Devices                                                                                     |
|                |       |                                                                                                           |
| Michael Kotsanis    |       | President,  Europe, Middle East and Africa                                                                     |
|                |       |                                                                                                           |
| Jim Mahoney         |       | Corporate Vice  President, Global Manufacturing Operations                                                     |
|                |       |                                                                                                           |
| Thomas Moore        |       | President,  Global Pharmaceuticals                                                                             |
|                |       |                                                                                                           |
| Edward Ogunro       |       | Senior Vice  President, Research and Development, Medical and Regulatory Affairs and Chief  Scientific Officer |
|                |       |                                                                                                           |
| Timothy Oldham      |       | President,  Asia-Pacific                                                                                       |
|                |       |                                                                                                           |
| Luann M. Pendy      |       | Corporate Vice  President, Global Quality                                                                      |
|                |       |                                                                                                           |
| Brian Smith         |       | Senior Vice  President, General Counsel and Secretary                                                          |
|                |       |                                                                                                           |
| Ron Squarer         |       | Corporate Vice  President, Global Strategy and Business Development                                            |
|                |       |                                                                                                           |
| Thomas Werner       |       | Senior Vice  President, Finance and Chief Financial Officer                                                    |
|                |       |                                                                                                           |
| Henry Weishaar      |       | Corporate Vice  President, Human Resources                                                                     |
|                |       |                                                                                                           |
| Valentine Yien      |       | Corporate Vice  President, Operations Finance                                                                  |

 

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