**Exhibit 10.1**

 
| ** **                     | ** ** | **Hospira, Inc.**                                 |
|--------------------------------|------------|--------------------------------------------------------|
| **Notice  of Grant of**        | ** ** | ID**:**20-0504497                                      |
| **Award  and Award Agreement** | ** ** | 275  N. Field Drive                                    |
| ** **                     | ** ** | Lake  Forest, IL 60045                                 |
| ** **                     | ** ** | ** **                                             |
| ** **                     | ** ** | **Award  Number:**                                     |
| ** **                     | ** ** | ** **                                             |
| ** **                     | ** ** | **Plan:** Hospira 2004 Long-Term Stock Incentive  Plan |
| ** **                     | ** ** | ** **                                             |
| ** **                     | ** ** | **ID:**                                                |

 

EffectiveMarch 5, 2009, you have been granted Restricted Stock Units with respectto      shares of Hospira, Inc. (theCompany) stock.

 

TheRestricted Stock Units are subject to the attainment of performance goalsdescribed in the attached Term Sheet and will become fully vested on the dateshown.

 
| **Units**    | ** **   | **Vest Type** | ** **   | **Full Vest**     |
|--------------|--------------|--------------------|--------------|------------------------|
| *** *** | *** *** | *** ***       | *** *** | *** ***           |
|         |         | On Vest Date       |         | December 31, 2011 |

 
| By  your signature and the Company’s signature below, you and the Company agree  that these Restricted Stock Units are granted under and governed by the terms  and conditions of the Hospira 2004 Long-Term Stock Incentive Plan, the  Restricted Stock Unit Award Agreement and the administrative rules governing  the Restricted Stock Agreement, all of which are attached and made a part of  this document. |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 
|                                                     |   | March 2009 |
|-----------------------------------------------------|--------|-----------------|
|                                                |   |            |
| Hospira, Inc.                                  |   | Date            |
| Name:  Christopher B. Begley                        |   |            |
| Title:  Chairman & Chief Executive Officer |   |            |
|                                                |   |            |
|                                                |   |            |
|                                                |   |            |
| Employee  Name                                      |   | Date            |

 

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**RESTRICTEDSTOCK UNIT AWARD AGREEMENT**

** **

** **

You have been selected to be a Participant in theHospira, Inc. 2004 Long-Term Stock Incentive Plan (the “Plan”), asspecified in the attached Notice of Grant of Award and Award Agreement (the “Notice”):

 

THIS AGREEMENT (“Agreement”),effective as of the date set forth in the attached Notice, is between Hospira, Inc.,a Delaware corporation (the “Company”) and the Grantee named in the Notice,pursuant to the provisions of the Plan. Except where the context clearlyimplies to the contrary, any capitalized term not defined in this Agreementshall have the meaning ascribed to that term under the Plan.

 

The parties hereto agree as follows:

 

1.   Award ofRestricted Stock Units.  The Companyhereby grants to Grantee the number of restricted stock units (the “Units”) setforth in the attached Notice subject to the terms and conditions set forth belowand in the attached Term Sheet.  The term“Units” shall include “Earned Units” as defined in Section 2(a) below.

 

2.             Restrictions. The Units are being awarded to Grantee subject to the forfeitureconditions set forth below (the “Restrictions”) which shall, unless otherwisestated, lapse, if at all, as set forth in the attached Term Sheet.

 

(a)           TheUnits are subject to the attainment of performance goals during the performanceperiod, as described in the attached Term Sheet.  The number of Units earned upon theattainment of the performance goals (the “Earned Units”) shall be determined bythe Compensation Committee of the Board of Directors (the “Committee”) uponcompletion of the performance period.

 

(b)           AnyUnits subject to the Restrictions shall be automatically forfeited upon theearliest to occur of the following: (i) except as provided in Section 6,the date of the Grantee’s termination of employment with the Company or asubsidiary for any reason other than death, Disability or Retirement; or (ii) subjectto the provisions of Section 3, the date the Grantee engages in conductwhich constitutes Restricted Activity.

 

****3.             Restricted Activity.****

 

(a)              Withoutthe prior written consent of the Committee, the Grantee shall not, whileemployed by the Company and for a period of one year following the terminationof employment for any reason:

 

(i)       directlyor indirectly engage or assist any person engaging in any Competitive Business,individually, or as an officer, director, employee, agent, consultant, owner,partner, lender, manager, member, principal, or in any other capacity, orrender any services to any entity that is engaged in any Competitive Business;provided, however, that the Grantee’s ownership of 1% of any class of equitysecurity of any entity engaged in any Competitive Business shall not be deemeda breach of this paragraph 3(a) provided such securities are listed on anational securities exchange or quotation system or have been registered under Section 12(g) ofthe Securities Exchange Act of 1934, as amended;

 

(ii)       directlyor indirectly divert, take away, solicit, or assist others in soliciting anycurrent or prospective customer, supplier, independent contractor or serviceprovider 

 

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of the Company or any affiliate or otherwise interfere with therelationship between the Company or any affiliate and any current orprospective customer, service provider, supplier, independent contractor orstockholder;

 

(iii)      directlyor indirectly induce any person to leave employment with the Company, orsolicit for employment other than on behalf of the Company, offer employmentto, or employ, any person who was an employee of the Company, in each casewithin six months of such inducement, solicitation, or offer; or

 

(iv)      engagein conduct which constitutes Cause.

 

(b)         Ifthe Grantee engages in any activity described in paragraph 3(a) abovewithout the written consent of the Committee, the Company, as determined by theCommittee in its sole discretion, may terminate the Agreement as of the date onwhich the Grantee engaged in such Restricted Activity, and (i) the Granteeshall pay to the Company in cash any Financial Gain the Grantee realized fromthe vesting of the Units, provided that such vesting occurred within one yearfrom the date that the Grantee engaged in such Restricted Activity, and (ii) ifthe Restricted Activity occurs prior to the delivery of the Earned Units, theGrantee shall forfeit the Units and this Agreement shall terminate as of thedate on which the Grantee first engaged in such Restricted Activity.

 

4.             Death, Disability or Retirement.  In the event of the death, Disability orRetirement of the Grantee at any time during the performance period, the anumber of shares of Common Stock equal to the number of Earned Units (or cashequal to the value of the shares) will be delivered to the Grantee or theGrantee’s personal representative, upon the determination of the number ofEarned Units after the end of the performance period, but no later than 90 daysfollowing the end of such performance period.

 

5.             Change in Control.  In the event of a Change in Control of theCompany during the performance period, the Grantee will be deemed to haveearned an award based on the target performance goal established by the Committeeand a number of shares of Common Stock equal to the number of deemed EarnedUnits (or cash equal to the value of the shares) will be delivered to theGrantee no later than 90 days following such Change in Control.

 

6.             Termination ofEmployment.  In the event of the Grantee’s InvoluntaryTermination of Employment during the performance period, the number of sharesof Common Stock equal to the number of Earned Units as of the date of suchInvoluntary Termination of Employment will be delivered to the Grantee, uponthe determination of the number of Earned Units after the end of theperformance period, but no later than 90 days following the end of suchperformance period. If Grantee’s termination of employment during theperformance period for reasons other than death, Disability or Retirement doesnot constitute an Involuntary Termination of Employment, all Units shall beforfeited.  The Company will not beobligated to pay Grantee any consideration whatsoever for forfeited Units(whether or not earned).

 

7.             Dividend Equivalents.  Neither dividends nor Dividend Equivalentswill be paid or accrued on unvested Units.

 

8.             Adjustments.  If the number of outstanding shares of CommonStock is changed as a result of stock dividend, stock split or the like withoutadditional consideration to the Company, the number of Units subject to thisAward shall be adjusted in accordance with the applicable provisions of thePlan pertaining to such adjustments.

 

9.             Delivery of Certificate.  Subject to withholding of taxes as providedin Section 10 below, the Company shall deliver to the Grantee acertificate representing a number of shares of Common Stock 

 

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equal to the number ofEarned Units on which Restrictions have lapsed plus a cash payment equal to thevalue of any fractional Earned Unit then credited to the Grantee’s account,upon the lapse of Restrictions, or at a later date specified by the Grantee ina Notice of Deferral Election filed with the Committee within rules establishedto comply with section 409A of the Internal Revenue Code of 1986, as amended,and any regulations promulgated thereunder (“Section 409A”) and inconformance with such deferral option forms under the Notice of DeferralElection provided by the Company.

 

10.           Withholding Taxes. The Company is entitled to withhold an amount equal to the Company’srequired statutory withholding taxes for the respective tax jurisdictionattributable to any share of Common Stock or property deliverable in connectionwith the Earned Units.  Subject to suchlimitations as the Company may establish from time to time, Grantee may satisfyany withholding obligation in whole or in part by making a cash payment equalto the amount required to be withheld.

 

11.           Nontransferability. Grantee may not directly or indirectly, by operation of law orotherwise, voluntarily or involuntarily, sell, assign, pledge, encumber, chargeor otherwise transfer any of the Units subject to this Award.

 

12.           Voting and Other Rights.

 

(a)                                  Grantee shall have no rightsas a stockholder of the Company in respect of the Earned Units, including theright to vote and to receive dividends and other distributions, until deliveryof certificates representing shares of Common Stock in satisfaction of theEarned Units.

 

(b)                                 The grant of Units does notconfer upon Grantee any right to continue in the employ of the Company or asubsidiary or to limit or interfere with the right of the Company or asubsidiary, to terminate Grantee’s employment at any time.

 

(c)                                  The grant of an award underthe Plan is a one-time benefit and does not create any contractual or otherright to receive an award in the future. Future grants, if any, will be at the sole discretion of the Company,including, but not limited to, the timing of any grant, the amount of the awardand vesting provisions.

 

(d)                                 The Committee retains theright to reduce the number of Units subject to this Award at any time prior topayment or delivery based on the performance of the Grantee.

 

13.           Funding.  Noassets or shares of Common Stock shall be segregated or earmarked by theCompany in respect of any Units awarded hereunder.  The grant of Units hereunder shall notconstitute a trust and shall be solely for the purpose of recording anunsecured contractual obligation of the Company.

 

14.           Definitions. For purposes of this Agreement, the following words shall have themeaning provided below:

 

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

 

(b)                           CompetitiveBusiness.  The term “CompetitiveBusiness” means any business activity in which the Company or any subsidiary isactively engaged at the time the Grantee’s employment terminates.  For these purposes, entities deemed to be 

 

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engaged in Competitive Business include, by way of example and notlimitation, Abraxis BioScience, Inc., Baxter International Inc., TevaPharmaceuticals, Becton, Dickinson and Company, B. Braun Melsungen AG, CardinalHealthcare Inc., Fresenius Medical Care AG, Terumo Medical Corporation,Patheon, Inc., and Edwards Lifesciences Corporation.

 

(c)                            Date ofTermination.  The term “Dateof Termination” means the first day occurring on or after grant of the awardunder this Agreement on which the Grantee is not employed by the Company or anysubsidiary, regardless of the reason for the termination of employment;provided that a termination of employment shall not be deemed to occur byreason of a transfer of the Grantee between the Company and a subsidiary orbetween two subsidiaries; and further provided that the Grantee’s employmentshall not be considered terminated while the Grantee is on a leave of absencefrom the Company or a subsidiary approved by the Grantee’s employer.  If, as a result of a sale or othertransaction, the Grantee’s employer ceases to be a subsidiary (and the Grantee’semployer is or becomes an entity that is separate from the Company), and theGrantee is not, at the end of the 30-day period following the transaction,employed by the Company or an entity that is then a subsidiary, then****the occurrence of such transaction shallbe treated as the Grantee’s Date of Termination caused by the Grantee beingdischarged by the employer.

 

(d)                           Disability.  The term “Disability” means the Granteeeither is unable to engage in any substantial gainful activity by reason of anymedically determinable physical or mental impairment that can be expected toresult in death or can be expected to last for a continuous period of not lessthan 12 months;  or by reason of anymedically determinable physical or mental impairment that can be expected toresult in death or can be expected to last for a continuous period of not lessthan 12 months, the Grantee is receiving income replacement benefits for aperiod of not less than three months under an accident and health plan coveringemployees of the Company or a subsidiary.

 

(e)                            Dividend Equivalent. “DividendEquivalent” means, with respect to any shares of Hospira common stock that areto be issued pursuant to an award at the end of the performance period, anamount equal to cash dividends that are payable to stockholders of recordduring the performance period on a like number of shares of Hospira commonstock.

 

(f)                                    Financial Gain.  “Financial Gain” means the Fair Market Valueof the Common Stock on the date the Unit is deemed vested, multiplied by thenumber of Units actually distributed pursuant to this Agreement, reduced by anytaxes paid in countries other than the United States, to the extent that suchtaxes are not otherwise eligible for refund from the taxing authorities.

 

(g)                                 Involuntary Termination ofEmployment.  “InvoluntaryTermination of Employment” means the Grantee’s position with the Company andits affiliates is eliminated due to a reduction in force or other restructuringor the Grantee’s employment is otherwise terminated for reasons not related toperformance, illegal activity, failure to abide by the Company’s Code ofConduct, or other good cause as determined by the Committee and is otherwiseconsidered to be involuntary.

 

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(h)                                 Retirement.  “Retirement” of the Grantee means, theoccurrence of the Grantee’s Date of Termination on or after the date that theGrantee reaches the age of 55 and has 10 years of combined service with theCompany or its subsidiaries (or with Abbott Laboratories and its affiliates,provided that the Grantee transitioned employment from Abbott to the Company inconjunction with the distribution of the Company’s common stock to the Abbottshareholders) (as determined by the Committee).

 

15.           Notices.  Anywritten notice under this Award shall be deemed given on the date that is twobusiness days after it is sent in writing, delivered either in hand, bycertified mail, return receipt requested, postage prepaid, or by FederalExpress or other recognized delivery service, which provides proof of delivery,all delivery charges prepaid, and addressed as follows:

 
| To the Company: |   | Hospira, Inc.              |
|-----------------|--------|---------------------------------|
|            |   | 275 N. Field Drive              |
|            |   | Lake Forest, IL 60045           |
|            |   | Attention: Corporate  Secretary |

 

To the Grantee or his or her representative at the address of theGrantee at the time appearing in the employment records of the Company,currently as shown in the attached Notice or

 

At such other address as either party may designate by notice given tothe other in accordance with these provisions.

 

16.           Governing Law. All questions concerning the construction, validity and interpretationof this Award shall be governed by and construed according to the internal lawand not the law of conflicts of the State of Illinois.

 

17.           Amendment. This Agreement may be amended in accordance with the provisions of thePlan, and may otherwise be amended by written agreement of the Grantee and theCompany without the consent of any other person; provided that the Committeemay amend by the Company as it shall deem necessary and appropriate in its solediscretion to comply with the requirements of Section 409A.

 

18.           Plan Documents. The Plan and the Prospectus for the Hospira, Inc. 2004 Long TermIncentive Plan are available at:

 

http://www.UBS.com/

 

or from:

 

 

*Mr. Doug Owens*

 

*Corporate Compensation,Hospira, Inc.*

 

*Mail Stop  H1 South, 275 N. Field Drive, Lake Forest,IL  60045*

 

*phone:  224-212-2962; fax:  224-212-3358; e-mail:  doug.owens@Hospira.com*

 

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|                    |   |                              |
|-------------------------|--------|-----------------------------------|
|                    |   |                              |
| GRANTEE’S INITIALS |   | INITIALS OF HOSPIRA,  INC.’S |
|                    |   | General Counsel and  Secretary    |

 

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**2009 — 2011Total Shareholder Return (TSR) TERM SHEET**

 
| **PERFORMANCE  PERIOD:** |   | Beginning  January 1, 2009, and ending December 31, 2011. |
|--------------------------|--------|---------------------------------------------------------------------|
| ** **               |   |                                                                |
| **PERFORMANCE  GOAL:**   |   | ·                                                              | Relative  Total Shareholder Return (“RTSR”) compared to peer companies (identified in  Appendix I) is the FY09-11 performance measure. Relative Total Shareholder  Return is defined as the percentile rank of Hospira’s Total Shareholder  Return compared to the Total Shareholder Return of Hospira’s peer companies  over the Performance Period. Total Shareholder Return is the total rate of  return on a share of common stock, reflecting stock price appreciation plus  reinvestment of dividends and the compounding effect of dividends, adjusted  appropriately to reflect stock splits, spin-offs and similar transactions. |

 

TheBase Price of Hospira’s common stock, and each peer company’s common stock, isthe average of the closing prices for the last 30 trading days before the startof Performance Period. The average closing price for the last 30 trading daysof FY08 preceding the FY09-11 Performance Period is $     and serves as the base for relativecomparisons over the Performance Period.

 

Thepayment levels at various percentile rankings against the peer companies areshown in the following table:

 

| **HOSPIRA  %Percentile Rank** | ** ** | **% of Units  Earned** | ** ** |
|------------------------------------|------------|----------------------------------|------------|
|                               |       |                             |       |
| 75th                               |       | 200                              | %          |
| 70th                               |       | 180                              | %          |
| 65th                               |       | 160                              | %          |
| 60th                               |       | 140                              | %          |
| 55th                               |       | 120                              | %          |
| 50th                               |       | 100                              | %          |
| 45th                               |       | 85                               | %          |
| 40th                               |       | 70                               | %          |
| 35th                               |       | 55                               | %          |
| 30th                               |       | 40                               | %          |
| 25th                               |       | 25                               | %          |
| <25th                           |       | 0                                | %          |

 

| ·  With linear interpolation between percentiles |
|------------------------------------------------------------|
| ·  Percentile rank includes HOSPIRA              |

 

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EarnoutOpportunities During the Performance Period:

 

·                  The Program provides the opportunity for theinterim earnout of up to one-quarter of the Units originally granted both atthe end of FY09 and again at the end of the FY 09-10 period (in this casecumulative TSR for a two-year period) based upon the individual percentileranking for these two distinct measurement periods.  The maximum interim earnout during thePerformance Period is capped at one-quarter of Units originally granted foreach of the two interim measurement periods, even if the interim measurementperiod’s performance results are above the 50th percentile.

·                  Any Units earned during the interimmeasurement periods are effectively converted to service-based restricted stockunits (RSUs) and are then subject to the Grantee’s continued employment withHospira until end of the 3-year Performance Period.

·                  The Program also provides the opportunity forthe cumulative earnout of up to 200% of the original Units granted, with themaximum payout level for the entire Performance Period, at end of the full3-year Performance Period, being the greater of (i) the maximum payoutlevel for the entire 3-year Performance Period or (ii) the total of anyUnits earned during the interim measurement periods.

 

Thefollowing examples show how the interim measurement feature works:

 

**Example 1:**

Assumptions:

·                  1,500 Units originallygranted

·                  Year 1 performance (FY08) =25th %ile

·                  Years 1 & 2(FY08-09) cumulative performance = 55th%ile

·                  Years 1 through 3 (FY08-10)cumulative performance = 50th%ile

 
|                                    |                                                                                                                                                                  | **Earned**                                                    |   |
|-----------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------|--------|
| Earnout:                                |                                                                                                                                                                  |                                                          |   |
| ·                                  | Year 1: 25thpercentile results = 25% interim earnout level based  upon actual results during the interim measurement period                                           |                                                          |   |   |
|                                    | ·                                                                                                                                                                | 25% X (1/4 of original PSU grant of 1,500 Units)              |   |   |   |
|                                    | ·                                                                                                                                                                | 25% X 375 = 94 Units earned and converted to RSUs             |   | 94 |   |
| ·                                  | Years  1 & 2: 55tht percentile  results = 120% earnout level based upon actual results but earnout is capped  at 100% during interim measurement period |                                                          |   |   |
|                                    | ·                                                                                                                                                                | 100% X (1/4 of original PSU grant of 1,500 Units)             |   |   |   |
|                                    | ·                                                                                                                                                                | 100% (1) X 375 = 375 Units earned and converted  to RSUs |   | 375 |   |
| Cumulative Subtotal  of Interim Earnout |                                                                                                                                                                  | 469                                                           |   |
|                                    |                                                                                                                                                                  |                                                          |   |   |
| ·                                  | Years 1 - 3: 50tht percentile  results = 100% earnout level based upon actual results for full 3-year  Performance Period                                        |                                                          |   |   |
|                                    | ·                                                                                                                                                                | 100% X 1,500 original PSU grant = 1,500 Units earned          |   |   |   |
| TOTAL                                   |                                                                                                                                                                  | 1,500                                                         | (2)    |

 

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(1)   Interim earnout potential is capped at 100%

(2) The 469 Units earned over the first two years of the Performance Period areincluded in this 1,500 PSU Total, i.e., an additional 1,031 Units are earnedfor the full three-year Performance Period results.

 

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| **VESTING:** |   | Subject  to the terms of the Restricted Stock Unit Award Agreement, restrictions on  the restricted stock units earned during the performance period, as  determined above, will lapse on December 31, 2011, if the Grantee is a  full-time active employee of the Company on that date.        |
|--------------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ** **   |   |                                                                                                                                                                                                                                                                                                 |
| ** **   |   | Final  determination and distribution of the number of restricted stock units earned  will be made after the actual TSR growth during the performance period has  been certified by Hospira, Inc.’s independent auditor and the Audit  Committee of the Company’s Board of Directors. |

 

**Example 2:**

Assumptions:

·                  1,500 Units originallygranted

·                  Year 1 performance = 25th %ile

·                  Years 1& 2 cumulativeperformance = 100th%ile

·                  Years 1-3 cumulativeperformance = 10th%ile

 
|                 |                                                                                                                                  | **Earned**                                           |   |
|----------------------|---------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------|--------|
| Earnout:             |                                                                                                                                  |                                                 |   |
| ·               | Year 1:  25thpercentile results = 25%  earnout level based upon actual results during the interim measurement period             |                                                 |   |   |
|                 | ·                                                                                                                                | 25% X (1/4 of original PSU  grant of 1,500 Units)    |   |   |   |
|                 | ·                                                                                                                                | 25% X 375 = 94 Units  earned and converted to RSUs   |   | 94 |   |
|                 |                                                                                                                                  |                                                 |   |   |   |
| ·               | Years 1 & 2:  100thpercentile results = 100%  earnout level based upon actual results during interim measurement period |                                                 |   |   |
|                 | ·                                                                                                                                | 100% X (1/4 of original  PSU grant of 1,500 Units)   |   |   |   |
|                 | ·                                                                                                                                | 100% X 375 = 375 Units  earned and converted to RSUs |   | 375 |   |
|                 |                                                                                                                                  |                                                 |   | 1,000 |   |
| Cumulative  Subtotal |                                                                                                                                  | 469                                                  |   |
|                 |                                                                                                                                  |                                                 |   |   |
| ·               | Years 1-3 :  10thtpercentile results = 0%  earnout level based upon actual results for full 3-year Performance Period            |                                                 |   |   |
|                 | ·                                                                                                                                | 0% X 1,500 original PSU  grant = 0 Units earned      |   |   |   |
| TOTAL                |                                                                                                                                  | 469                                                  | (2)    |

 

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**(2)  Even though the finalperformance earns a cumulative 0% payout, the Grantee had an interim earnout of469 Units for year 1 and years 1&2**

 

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Appendix I

 

**Peer Companies for Relative TSR Comparison**

** **
| **Ticker** | ** ** | **Company  Name**          | ** ** | **Sector**  |
|------------|------------|----------------------------|------------|-------------|
| ABT        |       | Abbott Labs                |       | Health Care |
| AGN        |       | Allergan Inc.              |       | Health Care |
| ABC        |       | AmerisourceBergen Corp.    |       | Health Care |
| AMGN       |       | Amgen                      |       | Health Care |
| BCR        |       | Bard (C.R.) Inc.           |       | Health Care |
| BAX        |       | Baxter International Inc.  |       | Health Care |
| BDX        |       | Becton Dickinson           |       | Health Care |
| BIIB       |       | BIOGEN IDEC Inc.           |       | Health Care |
| BSX        |       | Boston Scientific          |       | Health Care |
| BMY        |       | Bristol-Myers Squibb       |       | Health Care |
| CAH        |       | Cardinal Health Inc.       |       | Health Care |
| CELG       |       | Celgene Corp.              |       | Health Care |
| CEPH       |       | Cephalon Inc               |       | Health Care |
| COV        |       | Covidien Ltd.              |       | Health Care |
| XRAY       |       | Dentsply International     |       | Health Care |
| FRX        |       | Forest Laboratories        |       | Health Care |
| GENZ       |       | Genzyme Corp.              |       | Health Care |
| GILD       |       | Gilead Sciences            |       | Health Care |
| HSP        |       | Hospira Inc.               |       | Health Care |
| RX         |       | IMS Health Inc.            |       | Health Care |
| ISRG       |       | Intuitive Surgical Inc.    |       | Health Care |
| JNJ        |       | Johnson & Johnson |       | Health Care |
| KG         |       | King Pharmaceuticals       |       | Health Care |
| LIFE       |       | Life Technologies Corp.    |       | Health Care |
| LLY        |       | Lilly (Eli) & Co. |       | Health Care |
| MCK        |       | McKesson Corp. (New)       |       | Health Care |
| MDT        |       | Medtronic Inc.             |       | Health Care |
| MRK        |       | Merck & Co.       |       | Health Care |
| MIL        |       | Millipore Corp.            |       | Health Care |
| MYL        |       | Mylan Inc.                 |       | Health Care |
| PDCO       |       | Patterson Cos. Inc.        |       | Health Care |
| PKI        |       | PerkinElmer                |       | Health Care |
| PFE        |       | Pfizer Inc.                |       | Health Care |
| SGP        |       | Schering-Plough            |       | Health Care |
| STJ        |       | St Jude Medical            |       | Health Care |
| SYK        |       | Stryker Corp.              |       | Health Care |
| TMO        |       | Thermo Fisher Scientific   |       | Health Care |
| VAR        |       | Varian Medical Systems     |       | Health Care |
| WAT        |       | Waters Corporation         |       | Health Care |
| WPI        |       | Watson Pharmaceuticals     |       | Health Care |
| WYE        |       | Wyeth                      |       | Health Care |
| ZMH        |       | Zimmer Holdings            |       | Health Care |

 

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

 

**NOTICE OF DEFERRAL ELECTION****FORM**

 

Subjectto the provisions of the Hospira 2004 Long-Term Stock Incentive Plan (the “Plan”),the Notice of Grant of Award and Award Agreement (“Notice”) and the RestrictedStock Unit Award Agreement (“Agreement”),  I hereby elect to defer the receipt of the EarnedUnits, that would otherwise be issued as specified in the Agreement,  in accordance with the election below (“Election”).All capitalized terms are as defined herein or as defined in the Plan, theNotice or the Agreement.

 

**I.****             ****DISTRIBUTIONCOMMENCEMENT DATE**

 

Ihereby acknowledge and agree that the distribution of my Earned Units shallbegin after the end of the performance period identified in the Agreement (“PerformancePeriod”) but no later than 90 days following the end of such Performance Period(“Distribution Commencement Date”).

 

**II.****           ****EARNEDUNITS DEFERRAL**

 

Pursuant to Section 9 of the Agreement, I hereby elect to deferthe receipt of           % ofthe Earned Units (“Deferred Units”).

 

**III.****          ****DISTRIBUTIONMETHOD**

 

The Deferred Units shall be distributed in accordance with the deferreddistribution date (“Deferred Distribution Date”) as follows:

 

(   )          On the January 1 thatnext follows the date that is                 (not to exceed 10 years) year(s) after the Distribution Commencement Date.

 

(   )          In annual installments for [          ]year(s) (not to exceed 10 years) beginning on the DistributionCommencement Date and each anniversary thereof.

 

Notwithstandingthe foregoing, I understand that, distribution of the Earned Units inconnection with my death, Involuntary Termination of Employment, Disability,Retirement or upon a Change in Control during the Performance Period shall bemade in accordance with the applicable provisions of the Agreement.

 

**ALL DISTRIBUTIONS WILL BE IN THE FORM OFCOMPANY STOCK**(any fractional shares and Dividend Equivalents, if any, will be paid in cash).

 

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**IV.****          ****EFFECTIVEDATE AND DEFERRAL CHANGES**

 

This Election shall first become effective asof the date submitted to the Company and shall remain in effect for allsubsequent years until modified or revoked by filing a new Election form.

 

I understand that the deferral specified above may be changed only byan election completed and filed with the secretary of the Company at least 12months prior to my Distribution Commencement Date, which will delaycommencement of my distribution by 5 years. Any change to my distribution method will be void if my DistributionCommencement Date actually occurs within 12 months after the date my change isfiled with the Company.

 
| Name:      |            |   |
|------------|-----------------|--------|
|       | (Please  Print) |   |
|       |            |   |
| Address:   |            |   |
|       |            |   |
|       |            |   |
| Signature: |            |   |
|       |            |   |
| Date:      |            |   |

 

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