**Exhibit 10.8(a)**

 

**HOSPIRA 2004 LONG-TERM STOCK INCENTIVE PLAN**

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**ISO TERMS**

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**CONVERSION STOCK OPTION AWARD**

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The Participant has been granted an Option by Hospira,Inc. (the “Company”) under the terms of the Hospira 2004 Long-Term StockIncentive Plan (the “Plan”).  The Optionshall be subject to the terms and conditions of the Plan and the followingOption Terms (sometimes referred to as the “Option Terms”):

 

1.                                       Grantof Award.  Pursuant to thedistribution of the shares of the Company to the shareholders of AbbottLaboratories (the “Distribution”), the Participant is hereby granted thisConversion Stock Option in replacement of the of an option the Participant heldto purchase common shares of Abbott Laboratories (the “Abbott Option”), onsubstantially similar terms as the Abbott Option.  This Option replaces in its entirely, the Abbott Option and theAbbott Option shall be null and void as of the effective date of theDistribution.

 

2.                                       Termsof Award.  The following words andphrases used in  the Option Terms shallhave the meanings set forth in this paragraph 2:

 

(a)                                  The“Participant” is                               .

 

(b)                                 The“Grant Date” is                               .

 

(c)                                  The“Abbott Option Grant Date” is                               .

 

(d)                                 Thenumber of “Covered Shares” shall be                               sharesof Stock.

 

(e)                                  The“Exercise Price” is $                 pershare.

 

Exceptwhere the context clearly implies to the contrary, any capitalized term in thisaward shall have the meaning ascribed to that term under the Plan.  Other words and phrases used in the OptionTerms are defined pursuant to paragraph 10 or elsewhere in the Option Terms.

 

3.                                       IncentiveStock Option.  The Option isintended to constitute an “incentive stock option” as that term is used in Codesection 422 and to the extent permitted by such section.  To the extent that the aggregate fair marketvalue (determined at the time of grant) of Shares with respect to whichincentive stock options are exercisable for the first time by the Participantduring any calendar year under all plans of the Company and its Subsidiariesexceeds $100,000, the options or portions thereof which exceed such limit(according to the order in which they were granted) shall be treated asnonstatutory stock options.  It shouldbe understood that there is no assurance that the Option will, in fact, betreated as an incentive stock option.

 

4.                                       Dateof Exercise.  Subject to thelimitations of the Option Terms, on the first anniversary of the Abbott OptionGrant Date one-third of the Covered Shares (rounded up) may

 

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bepurchased; on the second anniversary of the Abbott Option Grant Date two-thirdsof the Covered Shares (rounded up) may be purchased; on the third anniversaryof the Abbott Option Grant Date the Option may be exercised in full, providedthe Expiration Date has not occurred prior to such vesting dates.

 

(a)                                  Notwithstandingthe foregoing provisions of this paragraph 4, the Option shall become fullyvested and exercisable upon a Change in Control that occurs on or before theDate of Termination.

 

(b)                                 TheOption may be exercised (prior to or following the Date of Termination) only asto that portion of the Covered Shares for which it is vested, as of the date ofexercise.

 

(c)                                  TheCovered Shares shall continue to vest pursuant to this Section 4 until theExpiration Date, as defined in Section 5.

 

5.                                       Expiration.  The Option shall not be exercisable afterthe Company’s close of business on the last business day that occurs prior tothe Expiration Date.  The “ExpirationDate” shall be the earliest to occur of:

 

(a)                                  theten-year anniversary of the Abbott Option Grant Date;

 

(b)                                 ifthe termination of employment occurs for reasons other than death, Disability,Retirement, or for Cause, the three-month anniversary of the Date ofTermination; provided, however, that if the Participant dies during such threemonth period following the Date of Termination, then the three-monthanniversary of the date of death;

 

(c)                                  ifthe Participant’s employment is terminated for Cause, the Date of Termination;or

 

(d)                                 thedate on which the Participant, at any time prior to the one-year anniversary ofthe Date of Termination, engages, directly or indirectly, for the benefit ofthe Participant or others, in any activity, employment or business which, inthe sole opinion and discretion of the Committee, is competitive with theCompany or any of its Subsidiaries.

 

6.                                       Methodof Option Exercise.  Subject to theOption Terms and the Plan, the Option may be exercised in whole or in part byfiling a written notice with the Secretary of the Company at its corporateheadquarters prior to the Company’s close of business on the last business daythat occurs prior to the Expiration Date. Such notice shall specify the number of shares of Stock which theParticipant elects to purchase, and shall be accompanied by payment of theExercise Price for such shares of Stock indicated by the Participant’selection. Payment may be by cash or by check payable to the Company, or exceptas otherwise provided by the Committee before the Option is exercised: (i) allor a portion of the Exercise Price may be paid by the Participant by deliveryof shares of Stock (by actual delivery or by attestation) owned by theParticipant and acceptable to the Committee having an aggregate Fair MarketValue (valued as of the date of exercise) that is equal to the amount of cashthat would otherwise be required; and (ii) the

 

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Participantmay pay the Exercise Price by authorizing a third party to sell shares of Stock(or a sufficient portion of the shares) acquired upon exercise of the Optionand remit to the Company a sufficient portion of the sale proceeds to pay theentire Exercise Price and any tax withholding resulting from suchexercise.  Except as otherwise providedby the Committee, prior to exercise, payments made with shares of Stock inaccordance with clause (i) above shall be limited to shares held by theParticipant for not less than six months prior to the payment date.  The Option shall not be exercisable if andto the extent the Company determines that such exercise would violateapplicable state or Federal securities laws or the rules and regulations of anysecurities exchange on which the Stock is traded and shall not be exercisableduring any blackout period established by the Company from time to time.

 

7.                                       Withholding.  The exercise of the Option is subject towithholding of all applicable taxes.  Atthe election of the Participant, and subject to such rules and limitations asmay be established by the Committee from time to time, such withholdingobligations may be satisfied (i) through cash payment by the Participant; (ii)through the surrender of shares of Stock (by actual delivery or by attestation)which the Participant already owns (provided, however, that to the extentshares described in this clause (ii) are used to satisfy more than the minimumstatutory withholding obligation, as described below, then, except as otherwiseprovided by the Committee, payments made with shares of Stock in accordancewith this clause (ii) shall be limited to shares held by the Participant fornot less than six months prior to the payment date); or (iii) through thesurrender of shares of Stock to which the Participant is otherwise entitledunder the Plan; provided, however, that such shares under this clause (iii) maybe used to satisfy not more than the Company’s minimum statutory withholdingobligation (based on minimum statutory withholding rates for Federal and state taxpurposes, including payroll taxes, that are applicable to such supplementaltaxable income).

 

8.                                       ReplacementOptions.  In the event that all or aportion of the Exercise Price, or taxes incurred in connection with theexercise of the Option, are paid with the delivery (or in the case of paymentof taxes, the withholding of shares) of other shares of Stock, the Participantshall be granted a non-qualified stock option (the “Replacement Option”) topurchase a number of shares of Stock equal to the number of shares of stocksurrendered (by actual delivery or by attestation) to satisfy the ExercisePrice plus the number of shares surrendered (by actual delivery or attestation)or withheld to satisfy the Participant’s tax liability; provided, that, as ofthe time of exercise, the Fair Market Value of a share of Stock is at least125% of the Exercise Price.  TheReplacement Option shall have an Exercise Price equal to 100% of the of theFair Market Value of Stock on the date such Replacement Options are granted,shall be first exercisable six months from the date of grant of the ReplacementOption and shall have an expiration date of the original Option.

 

9.                                       Transferability.  The Option is not transferable other than asdesignated by the Participant by will or by the laws of descent anddistribution, and during the Participant’s life, may be exercised only by theParticipant.

 

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10.                                 Definitions.  For purposes of the Option Terms, words andphrases shall be defined as follows:

 

(a)                                  Cause.  The term “Cause” shall mean, in the soleopinion and discretion of the Committee, the Participant has (i) engaged in amaterial breach of the Company’s code of business conduct, (ii) committed anact of fraud, embezzlement or theft in connection with the Participant’s dutiesor in the course of employment, or (iii) wrongfully disclosed secret processesor confidential information of the Company or its subsidiaries.

 

(b)                                 Dateof Termination.  The term “Date ofTermination” means the first day occurring on or after the Grant Date on whichthe Participant is not employed by the Company or any Subsidiary, regardless ofthe reason for the termination of employment; provided that a termination ofemployment shall not be deemed to occur by reason of a transfer of theParticipant between the Company and a Subsidiary or between two Subsidiaries;and further provided that the Participant’s employment shall not be consideredterminated while the Participant is on a leave of absence from the Company or aSubsidiary approved by the Participant’s employer.  If, as a result of a sale or other transaction, the Participant’semployer ceases to be a Subsidiary (and the Participant’s employer is orbecomes an entity that is separate from the Company), and the Participant isnot, at the end of the 30-day period following the transaction, employed by theCompany or an entity that is then a Subsidiary, then****the occurrence of such transaction shall be treated as theParticipant’s Date of Termination caused by the Participant being discharged bythe employer.

 

(c)                                  Disability.  The term “Disability” shall mean theParticipant’s disability as defined in the Hospira Extended Disability Plan,whether or not such Participant is a participant in such disability plan, for aperiod of twelve (12) consecutive months.

 

(d)                                 Retirement.  “Retirement” of the Participant means, theoccurrence of the Participant’s Date of Termination on or after the date (i)the Participant reaches the age of 50 and has 10 years of combined service withthe Company or its Subsidiaries (as determined by the Committee), or (ii) theParticipant retires pursuant to the provisions of any defined benefitretirement plan sponsored by the Company or its Subsidiaries that is thenapplicable to the Participant, all of the foregoing as approved by theCommittee.

 

11.                                 Heirsand Successors.  The Option Termsshall be binding upon, and inure to the benefit of, the Company and itssuccessors and assigns, and upon any person acquiring, whether by merger, consolidation,purchase of assets or otherwise, all or substantially all of the Company’sassets and business. If any rights exercisable by the Participant or benefitsdeliverable to the Participant under the Option Terms have not been exercisedor delivered, respectively, at the time of the Participant’s death, such rightsshall be exercisable by the Designated Beneficiary, and such benefits shall bedelivered to the Designated Beneficiary, in accordance with the provisions ofthe Option Terms and the Plan. The “Designated Beneficiary” shall be thebeneficiary or beneficiaries designated by the Participant in a writing filedwith the Committee in such form and at such time as the Committee shallrequire. If a deceased Participant fails to designate a beneficiary, or if theDesignated Beneficiary does not survive the

 

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Participant,any rights that would have been exercisable by the Participant and any benefitsdistributable to the Participant shall be exercised by or distributed to thelegal representative of the estate of the Participant. If a deceasedParticipant designates a beneficiary and the Designated Beneficiary survivesthe Participant but dies before the Designated Beneficiary’s exercise of allrights under the Option Terms or before the complete distribution of benefitsto the Designated Beneficiary under the Option Terms, then any rights thatwould have been exercisable by the Designated Beneficiary shall be exercised bythe legal representative of the estate of the Designated Beneficiary, and anybenefits distributable to the Designated Beneficiary shall be distributed tothe legal representative of the estate of the Designated Beneficiary.

 

12.                                 Administration.  The authority to manage and control the operationand administration of the Option Terms shall be vested in the Committee, andthe Committee shall have all powers with respect to the Option Terms as it haswith respect to the Plan. Any interpretation of the Option Terms by theCommittee and any decision made by it with respect to the Option Terms is finaland binding on all persons.

 

13.                                 PlanGoverns. Notwithstanding anything in the Option Terms to the contrary, theOption Terms shall be subject to the terms of the Plan, a copy of which may beobtained by the Participant from the office of the Secretary of the Company;and the Option Terms is subject to all interpretations, amendments, rules andregulations promulgated by the Committee from time to time pursuant to thePlan.

 

14.                                 NotAn Employment Contract. The Option will not confer on the Participant anyright with respect to continuance of employment or other service with theCompany or any Subsidiary, nor will it interfere in any way with any right theCompany or any Subsidiary would otherwise have to terminate or modify the termsof such Participant’s employment or other service at any time.

 

15.                                 Notices.  Any written notices provided for in theOption Terms or the Plan shall be in writing and shall be deemed sufficientlygiven if either hand delivered or if sent by fax or overnight courier, or bypostage paid first class mail. Notices sent by mail shall be deemed receivedthree business days after mailing but in no event later than the date of actualreceipt. Notices shall be directed, if to the Participant, at the Participant’saddress indicated by the Company’s records, or if to the Company, at theCompany’s principal executive office.

 

16.                                 FractionalShares. In lieu of issuing a fraction of a share upon any exercise of theOption, resulting from an adjustment of the Option pursuant to paragraph 3.4 ofthe Plan or otherwise, the Company will be entitled to pay to the Participantan amount equal to the fair market value of such fractional share.

 

17.                                 NoRights As Shareholder.  TheParticipant shall not have any rights of a shareholder with respect to theshares subject to the Option, until a stock certificate has been duly issuedfollowing exercise of the Option as provided herein.

 

18.                                 Amendment.  The Option Terms may be amended inaccordance with the provisions of the Plan, and may otherwise be amended bywritten agreement of the Participant and the Company without the consent of anyother person.

 

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IN WITNESS WHEREOF, the Company has caused thesepresents to be executed in its name and on its behalf, all as of the GrantDate.

 
|   | Hospira, Inc. |
|--------|---------------|
|   |          |
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|   | By:           |   |
|   | Its:          |   |

 

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