**Exhibit 10.8(b)**

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

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**NQSO TERMS**

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**CONVERSION STOCK OPTION AWARD**

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The Participant specified below has been granted thisOption by Hospira, Inc. (the “Company”) under the terms of the Hospira 2004Long-Term Stock Incentive Plan (the “Plan”). The Option shall be subject to the following terms and conditions (the“Option Terms”):

 

1.                                       Grantof Award.  As of the Original AbbottOption Grant Date specified below, the Participant received a non-qualifiedstock option to purchase common shares of Abbott Laboratories.  Pursuant to the terms governing thedistribution of the shares of the Company to the shareholders of AbbottLaboratories (the “Distribution”), the portion of such option which wasoutstanding immediately prior to the Distribution was cancelled (the “CancelledAbbott Option”) and the Participant is hereby granted this Option as of theDistribution (the “Grant Date”).

 

2.                                       Termsof Award.  The following words andphrases relating to the grant of the Option shall have the following meanings:

 

(a)                                  The“Participant” is                                          .

 

(b)                                 Thenumber of “Covered Shares” under this Option is                                          sharesof Stock.

 

(c)                                  The“Exercise Price” of this Option is $                    pershare.

 

(d)                                 The“Original Abbott Option Grant Date” is                    .

 

Exceptwhere the context clearly implies to the contrary, any capitalized term in thisaward shall have the meaning ascribed to that term under the Plan.

 

3.                                       Non-QualifiedStock Option.  The Option is notintended to constitute an “incentive stock option” as that term is used in Codesection 422.

 

4.                                       Dateof Exercise.  The number of CoveredShares which may be purchased, subject to the Option Terms, on any date on orafter the Grant Date shall be in the same ratio to the total number of CoveredShares on the Grant Date, as the number of shares that could have beenpurchased on that date under the Cancelled Abbott Option is to the total numberof shares which were subject to the Cancelled Abbott Option.

 

(a)                                  Notwithstandingthe foregoing provisions of this paragraph 4, the Option shall become fullyexercisable upon a Change in Control that occurs on or before the Date ofTermination.

 

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(b)                                 TheOption may be exercised (prior to or following the Date of Termination) only asto that portion of the Covered Shares which may be purchased under theforegoing schedule, as of the date of exercise.

 

(c)                                  TheCovered Shares shall continue to become exercisable pursuant to thisSection 4 until the Expiration 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 Original Abbott Option Grant Date;

 

(b)                                 ifthe termination of employment occurs for reasons other than death, Disability(as defined in Section 10) or Retirement (as defined in Section 10),the three-month anniversary of the Date of Termination (as defined inSection 10); provided, however, that if the Participant dies during suchthree month period following the Date of Termination, then the three-monthanniversary of the date of death;

 

(c)                                  thedate on which the Participant engages in conduct which constitutes Cause; 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 the Participantand acceptable to the Committee having an aggregate Fair Market Value (valuedas of the date of exercise) that is equal to the amount of cash that wouldotherwise be required; and (ii) the Participant may pay the Exercise Price byauthorizing a third party to sell shares of Stock (or a sufficient portion ofthe shares) acquired upon exercise of the Option and remit to the Company asufficient portion of the sale proceeds to pay the entire Exercise Price andany tax withholding resulting from such exercise.  Except as otherwise provided by the Committee prior to exercise,payments made with shares of Stock in accordance with clause (i) above shall belimited to shares held by the Participant for not less than six months prior tothe payment date.  The Option shall notbe exercisable if and to the extent the Company determines that such exercisewould violate applicable state or Federal securities laws or the rules andregulations of any securities

 

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exchangeon which the Stock is traded and shall not be exercisable during any blackoutperiod 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 statetax purposes, including payroll taxes, that are applicable to such supplementaltaxable income).

 

8.                                       Replacement Options. In the event that all or a portion of the Exercise Price, or taxesincurred in connection with the exercise of the Option, are paid with thedelivery (or in the case of payment of taxes, the withholding of shares) ofother shares of Stock, the Participant shall be granted a non-qualified stockoption (the “Replacement Option”) to purchase a number of shares of Stock equalto the number of shares of stock surrendered (by actual delivery or byattestation) to satisfy the Exercise Price plus the number of sharessurrendered (by actual delivery or attestation) or withheld to satisfy theParticipant’s tax liability; provided, that, as of the time of exercise, theFair Market Value of a share of Stock is at least 125% of the ExercisePrice.  The Replacement Option shallhave an Exercise Price equal to 100% of the of the Fair Market Value of Stockon the date such Replacement Options are granted, shall be first exercisableafter the six-month anniversary of the date of grant of the Replacement Optionand shall have an expiration date of the original Option.

 

9.                                       Transferability.  The Option is not transferable by theParticipant other than by will or by the laws of descent and distribution, andduring the Participant’s life, may be exercised only by the Participant.  It may not be assigned, transferred (exceptas aforesaid), pledged or hypothecated by the Participant in any way whether byoperation of law or otherwise, and shall not be subject to execution,attachment or similar process.  Anyattempt at assignment, transfer, pledge or hypothecation, or other dispositionof this Option contrary to the provisions hereof, and the levy of anyattachment or similar process upon this option, shall be null and void andwithout effect.

 

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)

 

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wrongfully disclosed secret processes or confidentialinformation 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, the occurrence of theParticipant’s Date of Termination on or after the date (i) the Participantreaches the age of 50 and has 10 years of combined service with the Company orits Subsidiaries (as determined by the Committee), or (ii) the Participantretires pursuant to the provisions of any defined benefit retirement plansponsored by the Company or its Subsidiaries that is then applicable to theParticipant, all of the foregoing as approved by the Committee..

 

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 theCompany’s assets and business.

 

12.                                 Administration.  The authority to manage and control theoperation and administration of the Option Terms shall be vested in the Committee,and the Committee shall have all powers with respect to the Option Terms as ithas with 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.

 

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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.

 

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

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

 

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