**Exhibit 10.9**

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**HOSPIRA,INC.**

**2004PERFORMANCE INCENTIVE PLAN**

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**HOSPIRA,INC.**

**2004PERFORMANCE INCENTIVE PLAN**

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SECTION 1.    Establishmentand Purposes

 

1.1                                 Establishmentof the Plan.  Hospira, Inc.(“Hospira”) hereby establishes the “Hospira, Inc. Performance Incentive Plan”the (“Plan”), as set forth in this document. The Plan shall become effective as of April 30, 2004 (the“Effective Date”) and shall remain in effect as provided in Section 6.1hereof.

 

1.2                                 Purposesof the Plan.  The purposes of the Planare to:

 

(a)                                  Provideflexibility to Hospira in its ability to attract, motivate, and retain theservices of participants in the Plan (“Participants”) who make significantcontributions to Hospira’s success and to allow Participants to share in thesuccess of Hospira;

 

(b)                                 Optimizethe profitability and growth of Hospira through incentives which are consistentwith Hospira’s goals and which link the performance objectives of Participantsto those of Hospira’s shareholders; and

 

(c)                                  ProvideParticipants with an incentive for excellence in individual performance.

 

SECTION 2.    Administration

 

2.1                                 General.  The Plan shall be administered by theCompensation and Nominations Committee (the “Committee”) of the Board ofDirectors of Hospira (the “Board”).

 

2.2                                 Authorityof the Committee.  The Committeewill have full authority to administer the Plan, including the authority tointerpret and construe any provision of the Plan, and to establish and amendrules pertaining thereto.  All rules,regulations and interpretations shall be conclusive and binding on allpersons.  The Committee has soleresponsibility for selecting Participants, establishing performance objectives,setting award targets, and determining award amounts.

 

2.3                                 Delegationby the Committee.  The Committeefrom time to time may delegate the performance of certain ministerial functionsin connection with the Plan, such as the keeping of records, to such person orpersons as the Committee may select. The cost of administration of the Plan will be paid by Hospira.

 

SECTION 3.    Eligibilityand Participation

 

3.1                                 Eligibilityand Participation.  Eligibility forparticipation in the Plan shall be limited to officers of Hospira and itssubsidiaries.  Participants in the Planwill be determined annually by the Committee from those officers eligible toparticipate in the Plan.

 

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SECTION 4.    PerformanceObjectives.

 

4.1                                 PerformanceObjectives.  The Plan’s performanceobjectives (the “Performance Objectives”) shall be determined with reference toHospira’s Earnings Before Interest, Taxes, Depreciation and Amortization(“EBITDA”) excluding****any specialitems identified in the Company’s quarterly or annual earnings releases andprepared in accordance with generally accepted accounting principles.

 

4.2                                 IndividualBase Award Allocation – Defined.

 

(a)                                  Forthe performance period beginning on the Effective Date and ending onDecember 31, 2004 (the “2004 Period”), the base award allocation for theChief Executive Officer, if a Participant for such period, shall be .020 ofHospira’s EBITDA for the 2004 Period. The base award allocation for the Chief Operating Officer, if aparticipant for such period, shall be .015 of Hospira’s EBITDA for the 2004Period.  The base award allocation forany other Participant shall be .010 of Hospira’s EBITDA for the 2004 Period.

 

(b)                                 Forall fiscal years beginning after December 31, 2004, the base awardallocation for the Chief Executive Officer, if a Participant for such fiscalyear, shall be .020 of Hospira’s EBITDA for that fiscal year.  The base award allocation for the ChiefOperating Officer, if a participant for such fiscal year, shall be .015 ofHospira’s EBITDA for that fiscal year. The base award allocation for any other Participant shall be .010 ofHospira’s EBITDA for that fiscal year

 

SECTION 5.    Final Awards

 

5.1                                 FinalAward Allocation.  As soon aspractical after the close of each fiscal year, a Participant’s final awardallocation will be determined solely on the basis of the PerformanceObjectives.  In determining aParticipant’s final award allocation, the Committee will have the discretion toreduce, but not increase, a Participant’s base award allocation, provided thata Participant’s individual performance will be considered by the Committee inexercising that discretion.

 

5.2                                 Paymentof Awards.  A Participant’s finalaward allocation will be paid or deferred in the manner and at the time(s)established by the Committee.

 

SECTION 6.    Duration,Amendment and Termination

 

6.1                                 Durationof the Plan.  The Plan shallcommence on the Effective Date, as described in Section 1.1 hereof, andshall remain in effect until terminated by the Board.

 

6.2                                 Amendmentand Termination.  The Board, in itssole discretion, may modify or amend any or all of the provisions of the Planat any time and, without notice, may suspend or terminate it entirely.  However, no such modification may, withoutthe consent of the Participant, reduce the right of a Participant to a paymentor distribution to which the Participant is entitled by reason of anoutstanding award allocation.

 

SECTION 7.    Successors

 

7.1                                 Obligations.  All obligations of Hospira under the Planwith respect to awards granted hereunder shall be binding on any successor toHospira, whether the existence of such successor is the result of a direct orindirect purchase, merger, consolidation, or otherwise, of all or substantiallyall of the business and/or assets of Hospira.

 

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SECTION 8.    GrantorTrusts

 

8.1                                 2004Payments.  With respect to the finalaward allocation for the 2004 Period, based on elections previously filed withAbbott Laboratories for the 2004 calendar year, solely with respect toparticipants who have grantor trusts that were established under a similarAbbott Laboratories incentive program, Hospira shall distribute such 2004Period award to the participant in a manner that facilitates the contributionof such amounts to such participant’s grantor trust in a manner prescribedunder the 1986 Abbott Laboratories Management Incentive Plan.  Hospira shall have no obligation to maintainor make any future contributions to such grantor trusts, other than as hereinprovided.

 

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