**Exhibit 10.2**

 

**HOSPIRA 2004 LONG-TERMSTOCK INCENTIVE PLAN**

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**NON-EMPLOYEE DIRECTOR RESTRICTED STOCK AGREEMENT**

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THIS AGREEMENT, entered into as of the Grant Date (as defined inparagraph 1), by and between the Director and Hospira (the “Company”);

 

**WITNESSETH THAT:**

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WHEREAS, the Company maintains the Hospira 2004 Long-Term StockIncentive Plan (the “Plan”), which is incorporated into and forms a part ofthis Agreement, the Director has agreed to serve as a Director of the Company,and the Director has been selected by the committee administering the Plan (the“Committee”) to receive a Restricted Stock Award under the Plan;

 

NOW, THEREFORE, IT IS AGREED, by and between the Company and theDirector, as follows:

 

1.             Termsof Award.  The following terms usedin this Agreement shall have the meanings set forth in this paragraph 1:

 

(a)           The “Director”is                              .

 

(b)           The “GrantDate” is                          .

 

(c)           Thenumber of shares of “Covered Shares” awarded under this Agreement is           shares.  “Covered Shares” are shares of Stock grantedunder this Agreement and are subject to the terms of this Agreement and thePlan.

 

Except where the context clearly implies to thecontrary, any capitalized term in this award shall have the meaning ascribed tothat term under the Plan.  Other wordsand phrases used in this Agreement are defined pursuant to paragraph 8 orelsewhere in this Agreement.

 

2.             Award.  The Director is hereby granted the number ofCovered Shares set forth in paragraph 1.

 

3.             Dividendsand Voting Rights.  The Directorshall be entitled to receive any dividends paid with respect to the CoveredShares that become payable during the Restricted Period (defined below);provided, however, that no dividends shall be payable to or for the benefit ofthe Director for Covered Shares with respect to record dates occurring prior tothe Grant Date, or with respect to record dates occurring on or after the date,if any, on which the Director has forfeited those Covered Shares.  Any such dividends paid with respect to theCovered Shares during the Restricted Period shall be paid at the same time asthey are paid to other shareholders of common shares of the Company.  The Director shall be entitled to vote theCovered Shares during the Restricted Period to the same extent as would havebeen applicable to the Director if the Director was then vested in the shares;provided, however, that the Director shall not be entitled to vote the shareswith respect to record dates for such voting rights arising 

 

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prior to the Grant Date, or with respect to recorddates occurring on or after the date, if any, on which the Director hasforfeited those Covered Shares. Any additional common shares of the Companyissued with respect to the Covered Shares as a result of any stock dividend,stock split or reorganization, shall be subject to the restrictions and otherprovisions of paragraphs 5, 6 and 7.

 

4.             Issuanceof Certificate.  Each certificateissued in respect of the Covered Shares granted under this Agreement shall beregistered in the name of the Director and shall be deposited in a bankdesignated by the Committee or retained by the Company.  The certification of Covered Shares isconditioned upon the Director endorsing in blank a stock power for the CoveredShares.  During the Restricted Period,all certificates evidencing the Restricted Stock will be imprinted with thefollowing legend: “The securities evidenced by this certificate are subject tothe transfer restrictions, forfeiture restrictions and other provisions of theRestricted Stock Agreement dated                        between Hospira and *[insert participantname]*.”  Upon lapse of theRestriction Period, the Director shall be entitled to have the legend removedfrom the certificate representing the Covered Shares.

 

5.             RestrictedPeriod.  The Covered Shares shall besubject to forfeiture pursuant to Section 6 for a period (the “ForfeiturePeriod”) commencing with the date of the award and ending on the earliestof the following events:

 

(a)           Theone-year anniversary of the Grant Date;

 

(b)           The firstregularly scheduled shareholders meeting following the Grant Date;

 

(c)           The Dateof Termination which occurs due to the Director’s death or Disability; or

 

(d)           The dateof a Change in Control that occurs on or before the Date of Termination.

 

6.             Forfeitureof Shares.  If the Date ofTermination (as defined below) occurs during the Restricted Period, theDirector will forfeit any and all rights with respect to such unvested CoveredShares and the Company shall have the right to cancel any such certificatesevidencing such Covered Shares.

 

7.             Restrictionon Sale.  All Covered Shares shall besubject to the following restrictions on sale beginning on the date of grantand continuing for all periods while the Director is actively serving as aDirector of the Company (the “Restricted Period”):

 

(a)           Theshares may not be sold, assigned, transferred, pledged, hypothecated orotherwise disposed of, except to theextent that after the Forfeiture Period such sale, assignment, transfer,pledge, hypothecation or other disposal does not cause the Participant to failto meet the minimum holding requirements under the Company’s then existingCompany share retention and ownership guidelines applicable to the Participant.

 

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(b)           Except as provided in subparagraph (a) ofthis paragraph 7,****anyadditional common shares of the Company issued with respect to the CoveredShares as a result of any stock dividend, stock split or reorganization, shallbe subject to the restrictions and other provisions of this Agreement.

 

(c)           TheDirector shall not be entitled to receive any shares prior to completion of allactions deemed appropriate by the Company to comply with federal or statesecurities laws and stock exchange requirements.

 

8.             Definitions.  For purposes of this Agreement, the termsused in this Agreement shall be subject to the following:

 

(a)           Dateof Termination.  The term “Date ofTermination” means the day following the last date on which the Director servesas a Director for the Company.

 

(b)           Disability.  The term “Disability” shall mean theParticipant’s inability, by reason of physical or mental impairment, to performthe services required of a director of the Company, as shall be determined inthe sole discretion of the Board.

 

9.             Heirsand Successors.  This Agreement shallbe binding upon, and inure to the benefit of, the Company and its successorsand 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 ofthe Director or benefits distributable to the Director under this Agreementhave not been exercised or distributed, respectively, at the time of theDirector’s death, such rights shall be exercisable by the DesignatedBeneficiary, and such benefits shall be distributed to the DesignatedBeneficiary, in accordance with the provisions of this Agreement and thePlan.  The “Designated Beneficiary” shallbe the beneficiary or beneficiaries designated by the Director in a writingfiled with the Committee in such form and at such time as the Committee shallrequire.  If a deceased Director fails todesignate a beneficiary, or if the Designated Beneficiary does not survive theDirector, any rights that would have been exercisable by the Director and anybenefits distributable to the Director shall be exercised by or distributed tothe legal representative of the estate of the Director.  If a deceased Director designates abeneficiary and the Designated Beneficiary survives the Director but diesbefore the Designated Beneficiary’s exercise of all rights under this Agreementor before the complete distribution of benefits to the Designated Beneficiaryunder this Agreement, then any rights that would have been exercisable by theDesignated Beneficiary shall be exercised by the legal representative of theestate of the Designated Beneficiary, and any benefits distributable to theDesignated Beneficiary shall be distributed to the legal representative of theestate of the Designated Beneficiary.

 

10.           Administration.  The authority to manage and control theoperation and administration of this Agreement shall be vested in theCommittee, and the Committee shall have all powers with respect to thisAgreement as it has with respect to the Plan. Any interpretation of the Agreement by the Committee and any decisionmade by it with respect to the Agreement is final and binding.

 

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11.           PlanGoverns.  Notwithstanding anything inthis Agreement to the contrary, the terms of this Agreement shall be subject tothe terms of the Plan, a copy of which may be obtained by the Director from theoffice of the Secretary of the Company.

 

12.           Amendment.  This Agreement may be amended in accordancewith the provisions of the Plan, and may otherwise be amended by writtenagreement of the Director and the Company without the consent of any otherperson.

 

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IN WITNESS WHEREOF, the Director has executed this Agreement, and theCompany has caused these presents to be executed in its name and on its behalf,all as of the Grant Date.

 
|   |   | Director |
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|   |   | Hospira  |
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|   | By:    |     |
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|   |   |     |
|   | Its:   |     |
|        |        |          |  |

 

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