Exhibit 10.3


 


EMPLOYEE BENEFITS AGREEMENT


 


by and among


 


ABBOTT LABORATORIES,


 


TAP PHARMACEUTICAL PRODUCTS INC.


 


and


 


HOSPIRA, INC.


 


dated


 


April     , 2004


 

















 


Table of Contents


 


	
  Article 1
  Definitions

  	
   

  
	
   

  	
   

  	
   

  
	
  Article 2
  General Principles

  	
   

  
	
   

  	
   

  	
   

  
	
  2.1

  	
  Allocation of Liabilities

  	
   

  
	
   

  	
   

  	
   

  
	
  2.2

  	
  Employment with Hospira

  	
   

  
	
   

  	
   

  	
   

  
	
  2.3

  	
  Establishment of Hospira Plans

  	
   

  
	
   

  	
   

  	
   

  
	
  2.4

  	
  Restrictions on Employment

  	
   

  
	
   

  	
   

  	
   

  
	
  2.5

  	
  Post-Distribution Transferred Employees and
  Hospira Requested Employees

  	
   

  
	
   

  	
   

  	
   

  
	
  Article 3
  Collective Bargaining Agreements and Union Matters

  	
   

  
	
   

  	
   

  	
   

  
	
  Article 4
  U.S. Qualified and Non-Qualified Retirement Plans

  	
   

  
	
   

  	
   

  	
   

  
	
  4.1

  	
  Annuity Retirement Plan

  	
   

  
	
   

  	
   

  	
   

  
	
  4.2

  	
  Stock Retirement Plan

  	
   

  
	
   

  	
   

  	
   

  
	
  4.3

  	
  Faultless Rubber Plan

  	
   

  
	
   

  	
   

  	
   

  
	
  4.4

  	
  Ashland 401(k) Plan

  	
   

  
	
   

  	
   

  	
   

  
	
  4.5

  	
  Supplemental Pension Plan

  	
   

  
	
   

  	
   

  	
   

  
	
  4.6

  	
  Abbott Supplemental 401(k) Plan

  	
   

  
	
   

  	
   

  	
   

  
	
  Article 5
  Non-U.S. Retirement Plans

  	
   

  
	
   

  	
   

  	
   

  
	
  5.1

  	
  Canadian Pension Plan

  	
   

  
	
   

  	
   

  	
   

  
	
  5.2

  	
  Irish Pension Plans

  	
   

  
	
   

  	
   

  	
   

  
	
  5.3

  	
  Overseas Managers’ Pension Plan

  	
   

  
	
   

  	
   

  	
   

  
	
  5.4

  	
  Other Non-U.S. Retirement Plans

  	
   

  
	
   

  	
   

  	
   

  
	
  Article 6
  Welfare and Fringe Benefit Plans

  	
   

  
	
   

  	
   

  	
   

  
	
  6.1

  	
  Severance Compensation and Benefits

  	
   

  
	
   

  	
   

  	
   

  
	
  6.2

  	
  Retiree Medical And Life Insurance Coverage

  	
   

  
	
   

  	
   

  	
   

  
	
  6.3

  	
  VEBAs

  	
   

  
	
   

  	
   

  	
   

  
	
  6.4

  	
  COBRA

  	
   

  
	
   

  	
   

  	
   

  
	
  6.5

  	
  Matching Grant and Combined Appeal Programs

  	
   

  
	
   

  	
   

  	
   

  
	
  Article 7
  Equity and Executive Compensation Programs

  	
   

  
	
   

  	
   

  	
   

  
	
  7.1

  	
  Equity Incentive Programs

  	
   

  
	
   

  	
   

  	
   

  
	
  7.2

  	
  Discontinued Participation in ESPP

  	
   

  



 


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  7.3

  	
  Deferred Compensation Plan

  	
   

  
	
   

  	
   

  	
   

  
	
  7.4

  	
  Grantor Trusts

  	
   

  
	
   

  	
   

  	
   

  
	
  7.5

  	
  Cash Profit Sharing

  	
   

  
	
   

  	
   

  	
   

  
	
  7.6

  	
  Other Incentive Programs

  	
   

  
	
   

  	
   

  	
   

  
	
  Article 8
  Miscellaneous

  	
   

  
	
   

  	
   

  	
   

  
	
  8.1

  	
  Transfer of Records and Information

  	
   

  
	
   

  	
   

  	
   

  
	
  8.2

  	
  Preservation of Rights to Amend or
  Terminate Plans

  	
   

  
	
   

  	
   

  	
   

  
	
  8.3

  	
  Transition Services

  	
   

  
	
   

  	
   

  	
   

  
	
  8.4

  	
  Reimbursement

  	
   

  
	
   

  	
   

  	
   

  
	
  8.5

  	
  Clara Abbott Foundation

  	
   

  
	
   

  	
   

  	
   

  
	
  8.6

  	
  Incorporation By Reference

  	
   

  
	
   

  	
   

  	
   

  
	
  8.7

  	
  Limitation on Enforcement

  	
   

  
	
   

  	
   

  	
   

  
	
  8.8

  	
  Assignability

  	
   

  
	
   

  	
   

  	
   

  
	
  8.9

  	
  Further Assurances and Consents

  	
   

  
	
   

  	
   

  	
   

  
	
  8.10

  	
  Third Party Consent

  	
   

  
	
   

  	
   

  	
   

  
	
  8.11

  	
  Effect if Distribution Does not Occur

  	
   

  
	
   

  	
   

  	
   

  
	
  8.12

  	
  Disputes

  	
   

  
	
   

  	
   

  	
   

  
	
  8.13

  	
  Schedules

  	
   

  
	
   

  	
   

  	
   

  
	
  8.14

  	
  Mutual Drafting

  	
   

  



 


3

















 


EMPLOYEE BENEFITS AGREEMENT


 


This Employee Benefits Agreement (this “Agreement”) is made as of
April       , 2004 by and among Abbott
Laboratories (“Abbott”), Hospira, Inc. (“Hospira”) and, solely for purposes of
Sections 2.4, 8.7, and 8.8, TAP Pharmaceutical Products Inc. (“TAP”).


 


BACKGROUND


 


Abbott and Hospira have entered into the Separation and Distribution
Agreement (as defined herein) pursuant to which Abbott shall spin-off the
Hospira Business (as defined herein). 
Abbott shall accomplish this spin-off by distributing all of the common
stock of Hospira to the shareholders of Abbott as a dividend after Abbott
contributes to Hospira the assets primarily associated with the Hospira
Business and after Hospira assumes the liabilities primarily associated with
the Hospira Business, all in accordance with the Separation and Distribution
Agreement and agreements related thereto, including this Agreement.  After the Distribution (as defined herein),
Abbott and Hospira shall be separate and independent corporations.


 


The employees of the Hospira Business are currently employed by the
Abbott Group (as defined herein).  The
employees of the Hospira Business are expected to become employees of the
Hospira Group (as defined herein) on or prior to the Distribution Date or with
respect to certain employees outside of the United States, after the
Distribution Date.  This Agreement
describes the employment and the employee benefit plan arrangements that shall
apply to Transferred Employees (as defined herein).  Additional information relating to agreements of Abbott and
Hospira with respect to Transferred Employees are included in the Transition Services
Agreements.


 


AGREEMENT


 


Article 1


 


Definitions


 


The following capitalized terms as used in this Agreement shall have
the meaning set forth below unless otherwise specified herein:


 


(a)                                  “Abbott”
shall have the meaning given it in the first sentence of this Agreement.


 


(b)                                 “Abbott
ARP” shall mean the Abbott Laboratories Annuity Retirement Plan.


 


(c)                                  “Abbott
Benefit Plan” shall mean each Benefit Plan established, maintained, or
contributed to by the Abbott Group for the benefit of Transferred Employees.


 


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(d)                                 “Abbott
Compensation Committee” shall mean the compensation committee of the board of
directors of Abbott.


 


(e)                                  “Abbott DCP” shall mean the Abbott
Laboratories Deferred Compensation Plan.


 


(f)                                    “Abbott
ESPP” shall mean the Abbott Laboratories Affiliate Employee Stock Purchase Plan
and any sub-plan established thereunder in accordance with the laws of any
non-U.S. jurisdiction.


 


(g)                                 “Abbott
Group” shall mean Abbott and its Subsidiaries (excluding any member of the
Hospira Group after the Distribution) or, where the context requires, a company
within the Abbott Group.


 


(h)                                 “Abbott KSP” shall mean the Abbott
Laboratories 401(k) Supplemental Plan.


 


(i)                                     “Abbott OMPP” shall mean the Overseas
Managers’ Pension Plan of Abbott Laboratories.


 


(j)                                     “Abbott
Option” shall mean an option to purchase one or more Abbott common shares
granted under the Abbott Stock Programs.


 


(k)                                  “Abbott
Retained Employee” shall mean any employee other than (i) a Transferred
Employee or (ii) a Hospira Requested Employee.


 


(l)                                     “Abbott
Retiree Life Plan” shall mean the Abbott Laboratories Retiree Life Plan.


 


(m)                               “Abbott
Retiree Medical Plan” shall mean the Abbott Laboratories Retiree Health Care
Plan.


 


(n)                                 “Abbott
SRP” shall mean the Abbott Laboratories Stock Retirement Plan (Part A).


 


(o)                                 “Abbott
Stock Programs” shall mean, collectively, the Abbott Laboratories 1996
Incentive Stock Program, the Abbott Laboratories 1991 Incentive Stock Program,
and any sub-plan established under those programs in accordance with the laws
of any non-U.S. jurisdiction.


 


(p)                                 “Abbott
Supplemental ARP” shall mean the Abbott Laboratories Supplemental Pension Plan.


 


(q)                                 “Abbott
VEBAs” shall mean, collectively, the Abbott Laboratories Employee Benefit
Trust, the Abbott Laboratories Health Care Trust, and the Abbott Laboratories
Employees Insurance Trust.


 


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(r)                                    “ABO
Funded Ratio” shall have the meaning given it in Section 4.1(c) of this
Agreement.


 


(s)                                  “Allocated
Employee Number” shall mean, with respect to any country identified on
Schedule 1 hereto, the number of Employees shown on Schedule 1
opposite that country’s name as being the number of Employees to be transferred
to the Hospira Group.


 


(t)                                    “Ashland
401(k) Plan” shall mean the Abbott Laboratories Ashland Union 401(k) Plan and
Trust.


 


(u)                                 “Benefit
Plan” shall mean, any employment, bonus, deferred compensation, incentive
compensation, stock purchase, stock option, stock appreciation right or other
stock-based incentive, severance, change-in-control or termination pay,
hospitalization or other medical, disability, life, or other insurance,
supplemental unemployment benefits, profit-sharing, pension or retirement plan,
program, agreement, or arrangement and each other employee benefit plan,
program, agreement, or arrangement.


 


(v)                                 “COBRA”
shall mean coverage required by Section 4980B of the Code and regulations
thereunder or Section 601 et. seq. of ERISA.


 


(w)                               “Code”
shall mean the Internal Revenue Code of 1986, as amended.


 


(x)                                   “Distribution”
shall have the meaning given it in the Separation and Distribution Agreement.


 


(y)                                 “Distribution
Date” shall have the meaning given it in the Separation and Distribution
Agreement.


 


(z)                                   “Employee”
shall mean any individual who is (i) identified or described on Schedule 2
hereto, (ii) a Post-Distribution Employee, or (iii) a Hospira Requested
Employee.


 


(aa)                            “Employment
Taxes” shall mean withholding, payroll, social security, workers compensation,
unemployment, and disability taxes imposed by any Tax Authority, and any interest,
penalties, additions to tax, or additional amount with respect to the foregoing
imposed on any taxpayer or consolidated, combined, or unitary group of
taxpayers.


 


(bb)                          “ERISA”
shall mean the Employee Retirement Income Security Act of 1974, as amended.


 


(cc)                            “ESOP”
shall mean an employee stock ownership plan, as defined in
Section 407(d)(6) of ERISA and Section 4975(e)(7) of the Code.


 


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(dd)                          “Faultless
Rubber Plan” shall mean the 1950 Pension Plan of the Faultless Rubber Company
and the Pension, Insurance and Severance Award Agreement.


 


(ee)                            “Hospira”
shall have the meaning given it in the first sentence of this Agreement.


 


(ff)                                “Hospira
ARP” shall mean the Abbott/Hospira Transitional Annuity Retirement Plan.


 


(gg)                          “Hospira
Benefit Plan” shall mean any Benefit Plan established, maintained, or
contributed to by the Hospira Group.


 


(hh)                          “Hospira
Board” shall mean the board of directors of Hospira.


 


(ii)                                  “Hospira
Business” shall have the meaning given it in the Separation and Distribution
Agreement.


 


(jj)                                  “Hospira
Canadian Pension Plan” shall mean a defined benefit pension plan established by
the Hospira Group with respect to employees of Hospira residing in Canada.


 


(kk)                            “Hospira
Group” shall mean Hospira and its Subsidiaries or, where the context requires,
a company within the Hospira Group.


 


(ll)                                  “Hospira
KSP” shall mean the Hospira 401(k) Supplemental Plan.


 


(mm)                      “Hospira
Officer” shall mean each Transferred Employee who is a “reporting officer”
under Rule 16a-1(f) under the Securities Exchange Act of 1934.


 


(nn)                          “Hospira
OMPP” shall mean the Overseas Managers’ Pension Plan of Hospira, Inc.


 


(oo)                          “Hospira
Option” shall mean an option to purchase one or more shares of Hospira common
stock granted under the Hospira SIP in connection with the cancellation of an
Abbott Option.


 


(pp)                          “Hospira
Requested Employee” shall mean any employee of the Abbott Group who was hired
or transferred to another work location or position by the Abbott Group prior
to, on, or following the Distribution Date, at the written request of Hospira’s
Corporate Vice President of Human Resources, regardless of whether that
employee becomes a Transferred Employee.


 


(qq)                          “Hospira
SIP” shall mean the Hospira 2004 Long-Term Stock Incentive Plan.


 


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(rr)                                “Hospira
SRP” shall mean the Hospira 401(k) Retirement Savings Plan.


 


(ss)                            “Hospira
Supplemental ARP” shall mean the Hospira Supplemental Pension Plan.


 


(tt)                                “Hospira
VEBA” shall mean the Hospira Master Welfare Trust.


 


(uu)                          “KSP
Transferred Employee” shall mean a U.S. Transferred Employee who participates
in the Abbott KSP immediately prior to the Distribution Date.


 


(vv)                          “Liabilities”
shall have the meaning given it in the Separation and Distribution Agreement.


 


(ww)                      “Non-U.S.
Transferred Employee” shall mean a Transferred Employee who works primarily
outside of the United States or who works primarily in Puerto Rico.


 


(xx)                              “Post-Distribution
Employee” shall mean each sales or marketing employee of the Abbott Group
identified by Abbott and Hospira in accordance with Step 1 of the procedures
described in Schedule 3 hereto.


 


(yy)                          “Post-Distribution
Transferred Employee” shall mean any Post-Distribution Employee who becomes a
Transferred Employee after the Distribution Date but prior to the end of the
Restricted Period.


 


(zz)                              “QDRO”
shall mean a qualified domestic relations order within the meaning of
Section 206(d) of ERISA and Section 414(p) of the Code.


 


(aaa)                      “Request
End Date” shall mean, with respect to any Hospira Requested Employee, the
earliest, if any, of the following dates: (i) the date on which Hospira
provides notice to Abbott that Hospira does not intend to employ the Hospira
Requested Employee, (ii) the date on which Hospira provides notice to Abbott
that the Hospira Requested Employee has rejected an offer of employment with
the Hospira Group, or (iii) the date following the expiration of the Restricted
Period in the event that the Hospira Requested Employee remains employed by the
Abbott Group on that date.


 


(bbb)                   “Restricted
Period” shall mean the period beginning on the Distribution and ending on the
second anniversary thereof.


 


(ccc)                      “Separation
and Distribution Agreement” shall mean the Separation and Distribution
Agreement by and between Abbott Laboratories and Hospira, Inc. dated
April 12, 2004.


 


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(ddd)                   “Subsidiary”
shall have the meaning given it in the Separation and Distribution Agreement.


 


(eee)                      “TAP”
shall have the meaning given it in the first sentence of this Agreement.


 


(fff)                            “Tax
Authority” means, with respect to any Employment Tax, the governmental entity
or political subdivision thereof that imposes such Employment Tax, and the agency (if any) charged with the collection of
such Employment Tax for such entity or subdivision.


 


(ggg)                   “Transfer
Date” shall mean, as applicable: (i) with respect to each Transferred Employee
(other than a Post-Distribution Transferred Employee or a Hospira Requested
Employee), the Distribution Date; and (ii) with respect to each
Post-Distribution Transferred Employee and each Hospira Requested Employee, the
date on which such person becomes employed by the Hospira Group.


 


(hhh)                   “Transferred
Employee” shall mean an Employee who accepts an offer of employment with the
Hospira Group or who continues in employment automatically by operation of law
with the Hospira Group, in either case pursuant to Section 2.2 or 2.5 of
this Agreement.


 


(iii)                               “Transferred
Expatriate Employee” shall mean each Employee identified on Schedule 4
hereto who becomes a Transferred Employee.


 


(jjj)                               “Transition
Period” shall mean the period beginning on the Distribution and ending on
December 31, 2004.


 


(kkk)                      “Transition
Services Agreements” shall mean the transition services agreements and the
transition marketing and distribution agreements that are entered into in
connection with the Separation and Distribution Agreement between Abbott and
Hospira.


 


(lll)                               “U.S.
Transferred Employee” shall mean a Transferred Employee who works primarily in
the United States (other than a Transferred Employee who works in Puerto Rico).


 


Article 2


 


General
Principles


 


2.1                               Allocation
of Liabilities.


 


(a)                                  Hospira
Liabilities.  Effective as of
Distribution Date, and except as expressly provided in this Agreement, Hospira
hereby assumes and agrees to pay, perform, fulfill and discharge all
Liabilities to the extent relating to, arising out of, or resulting from:


 


9

















 


(i)             the employment of each Transferred Employee
by the Abbott Group up to and including the Transfer Date and by the Hospira
Group on and after the Transfer Date (including, in each case, all Liabilities
relating to, arising out of, or resulting from Employment Taxes, any Abbott
Benefit Plan or, on or after the Transfer Date, any Hospira Benefit Plan);


 


(ii)          the transfer of any Transferred Employee’s
employment from the Abbott Group to the Hospira Group;


 


(iii)       all Liabilities (including Liabilities with
respect to employees, former employees and retirees) relating to, arising out
of or resulting from the Faultless Rubber Plan and the Ashland 401(k) Plan.


 


(iv)      the employment (or termination of employment) of
any Hospira Requested Employee by the Abbott Group prior to, on, or after the
Distribution Date (including all Liabilities to the extent relating to, arising
out of, or resulting from Employment Taxes or any Abbott Benefit Plan) subject
to Section 2.5(b) of this Agreement; and


 


(v)         obligations, Liabilities and responsibilities
expressly assumed by Hospira pursuant to this Agreement.


 


(b)                                 Abbott
Liabilities.  Effective as of the
Distribution Date, and except as expressly provided in this Agreement, Abbott
shall retain and hereby agrees to pay, perform, fulfill and discharge all
Liabilities to the extent relating to, arising out of, or resulting from:


 


(i)             the employment (or termination of
employment) of each Abbott Retained Employee by the Abbott Group prior to, on,
or after the Distribution Date (including all Liabilities to the extent
relating to, arising out of, or resulting from Employment Taxes or any Abbott
Benefit Plan);


 


(ii)          the employment, whether prior to, on, or
after the Distribution Date, by the Abbott Group of all persons who work or
worked primarily in the United States (other than Puerto Rico) and who are
deceased, retired, terminated, on pay continuation leave, or on medical leave
of absence for more than one year (including all Liabilities to the extent
relating to, arising out of, or resulting from Employment Taxes or any Abbott
Benefit Plan);


 


(iii)       medical and dental claims which are incurred by
any U.S. Transferred Employee (or his or her beneficiaries) prior to the
Transfer Date;


 


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(iv)      obligations, Liabilities and responsibilities
under (A) the Abbott Retiree Medical Plan and the Abbott Retiree Life Plan for
retirement eligible Transferred Employees (as more fully described in
Section 6.2 of this Agreement), (B) the Abbott DCP (as more fully
described in Section 7.3 of this Agreement), and (C) the grantor trusts of
Transferred Employees (as more fully described in Section 7.4 of this
Agreement); and


 


(v)         obligations, Liabilities and responsibilities
expressly retained by Abbott pursuant to this Agreement.


 


2.2                               Employment
with Hospira.


 


(a)                                  Offers
of Employment.  As of the
Distribution Date, the Hospira Group shall continue the employment (on a basis
consistent with subsection (b) below) of each Employee (who is not a
Post-Distribution Employee or a Hospira Requested Employee) in jurisdictions
where employment continues automatically by operation of law, and shall offer
to employ (on a basis consistent with subsection (b) below) each other
Employee (who is not a Post-Distribution Employee or a Hospira Requested
Employee), or as otherwise agreed by the parties.  The parties acknowledge that the process of transferring
Employees to the Hospira Group may, as agreed upon by the parties, in certain
cases, begin prior to the Distribution Date. 
Abbott shall use commercially reasonable efforts to ensure that no
Employee’s transfer of employment to Hospira prior to the Distribution Date
will cause a loss of coverage under any Abbott Benefit Plan prior to the
Distribution Date.


 


Post-Distribution Employees shall be offered employment by the Hospira
Group, or shall continue to be employed by the Hospira Group, as the case may
be, as determined by Abbott and Hospira in accordance with Section 2.5(a)
of this Agreement and the procedures described in Schedule 3 hereto and
effective at such time or times as determined in accordance with those
procedures.  To the extent any dispute
arises pursuant to this paragraph, including with respect to the procedures
described in that Schedule 3, that dispute shall be resolved by mutual
written agreement between the Chief Executive Officers of Abbott and Hospira
(or their designees).


 


Hospira Requested Employees (who are not Post-Distribution Employees)
shall be offered employment by the Hospira Group, or shall continue to be
employed by the Hospira Group, as the case may be, as determined by Abbott and
Hospira, subject to Section 2.5(b) of this Agreement.


 


(b)                                 Compensation
and Benefits.  Except as expressly
provided in this Agreement, no Transferred Employee shall participate in the
Abbott Benefit Plans following his or her Transfer Date.  After the Transfer Date, the Hospira Group
may provide compensation and benefits to a U.S. Transferred Employee or
Transferred Expatriate Employee under any Hospira Benefit Plan.  Except as expressly provided in this Agreement,
during the Transition Period, the Hospira Group shall provide benefits (e.g.,
pension and welfare benefits) to each U.S. Transferred Employee and each


 


11

















 


Transferred Expatriate Employee that are substantially similar to the
benefits provided to that U.S. Transferred Employee or Transferred Expatriate
Employee immediately prior to the Transfer Date.  During the Transition Period, the Hospira Group shall provide each
U.S. Transferred Employee and each Transferred Expatriate Employee with base
compensation (including salary and hourly rate) that is not less than the
compensation provided to that U.S. Transferred Employee or Transferred
Expatriate Employee immediately prior to the Transfer Date, provided, however,
that the compensation of each Hospira Officer may be adjusted by the Hospira
Board (or an appropriate committee thereof) without regard to the Hospira
Officer’s compensation immediately prior to the Transfer Date.  During the Transition Period, the Hospira
Group shall make all scheduled increases to any U.S. Transferred Employee’s or
Transferred Expatriate Employee’s salary or hourly rate to the extent that the
scheduled increase is not already reflected in any prior discretionary increase
made by the Hospira Group to that salary or hourly rate.  The Hospira Group shall not reduce any U.S.
Transferred Employee’s or Transferred Expatriate Employee’s salary or hourly
rate during the Transition Period other than: (i) the salaries of Hospira
Officers as determined by the Hospira Board (or an appropriate committee
thereof) or (ii) reductions corresponding to a change in the affected
Transferred Employee’s circumstances and made in the ordinary course of
business (including, but not limited to, reductions in connection with shift
changes, schedule changes, demotions, job changes and job
performance).  Nothing in the preceding
sentence shall prevent the Hospira Group from terminating the employment of any
U.S. Transferred Employee or Transferred Expatriate Employee, whether due to
individual terminations of employment or reductions in force or otherwise, in
all cases in compliance with applicable law.


 


After expiration of the Transition Period, the Hospira Group may
implement compensation and benefits for the U.S. Transferred Employees and
Transferred Expatriate Employees as it deems appropriate; provided, however,
that the Hospira Group shall repatriate a Transferred Expatriate Employee to
his or her home or jurisdiction on terms no less favorable than the terms under
the Transferred Expatriate Employee’s written employment/expatriate agreement
with Abbott as in effect immediately prior to the Transfer Date.


 


The Hospira Group shall employ each Non-U.S. Transferred Employee
(other than Transferred Expatriate Employees) on such terms and conditions as
the Hospira Group deems necessary or advisable, except where otherwise required
by local law.


 


(c)                                  Service
Credit.  Except as expressly provided in this Agreement, during the Transition
Period, for purposes of determining eligibility, vesting, accrued benefits, and
benefit level, each of the Hospira Benefit Plans shall give U.S. Transferred
Employees and Transferred Expatriate Employees credit for all service credited
for those purposes by the comparable Abbott Benefit Plan as of the Transfer
Date, except to the extent that this service credit would result in a
duplication of benefits.  For the
avoidance of doubt, nothing in this Agreement shall require the Hospira Group
to provide any U.S. Transferred Employee or Transferred Expatriate Employee
with credit for his or her service with the Abbott Group (i) under any Hospira
Benefit Plan after the


 


12

















 


Transition Period or (ii) under any Hospira Benefit Plan that does not have
a comparable Abbott Benefit Plan during the Transition Period.


 


(d)                                 Vacation,
Holidays and Leaves of Absence.  In
accordance with Section 2.1(a)(i) of this Agreement, effective as of the
Transfer Date, Hospira shall assume all Liabilities of the Abbott Group with
respect to accrued vacation or leaves of absence, and required payments related
thereto, for each Transferred Employee.


 


Notwithstanding the foregoing, where (and only to the extent) required
by applicable state law, the Abbott Group shall provide each U.S. Transferred
Employee with the opportunity to elect to receive a payment of his or her
accrued vacation as of the Transfer Date, the Abbott Group shall pay that
accrued vacation to any such individual who elects to receive a payment and the
Hospira Group shall not assume any accrued vacation or receive the accrual with
respect to a U.S. Transferred Employee who elects a payment in accordance with
the foregoing.


 


During the Transition Period, the Hospira Group shall continue to apply
the vacation, holiday and leave of absence policy or practice (whether or not
legally required) applicable to each U.S. Transferred Employee and each
Transferred Expatriate Employee immediately prior to the Transfer Date so that
each U.S. Transferred Employee and each Transferred Expatriate Employee shall
be entitled to use any vacation time or leave of absence, and/or receive any
pay related thereto, to which that Employee would otherwise be entitled under
the Abbott Benefit Plans related to vacation time or leave of absence as of the
Transfer Date, taking into account, to the extent applicable, any reduction in
vacation time for which any U.S. Transferred Employee has received a payment of
accrued vacation as of the Transfer Date.


 


Vacation, holiday and leave of absence policies for Transferred
Employees for periods after the Transition Period shall be determined by
Hospira in its sole discretion.


 


2.3                               Establishment
of Hospira Plans.


 


Prior to the Distribution Date, Hospira shall adopt the following
employee benefit plans and their related trusts: (a) the Hospira SIP, (b) the
Hospira ARP, (c) the Hospira SRP, (d) the Hospira Health Care Plan, and (e) the Hospira Life Accident Plan.  Hospira shall also adopt (i) the Hospira
Supplemental ARP, (ii) the Hospira KSP, (iii) the Hospira Flexible Benefit Plan, (iv) the Hospira Extended Disability
Plan, and (v) the Hospira OMPP, none of which shall have a related trust
unless Hospira elects, in its sole and absolute discretion, to establish a
rabbi trust or other trust for any of those plans.  During the Transition Period, each of the foregoing Hospira
Benefit Plans, except as expressly provided in this Agreement, shall be
substantially similar in all material respects to the corresponding Abbott
Benefit Plan as in effect as of the Distribution Date.  As more fully described in Articles 4, 5 and
6 or as otherwise mutually agreed upon by Abbott and Hospira from time to time,
Abbott shall, or shall cause the applicable Abbott Benefit Plan’s related trust
to, transfer to the relevant Hospira Benefit Plan’s related trust, amounts
equal to trust assets, insurance reserves, and other related assets of each
Abbott


 


13

















 


Benefit Plan’s related trust relating to the Liabilities of such Abbott
Benefit Plan assumed by Hospira or such Hospira Benefit Plan.  As more fully described in Articles 4, 5 and
6, or as otherwise mutually agreed upon by Abbott and Hospira from time to
time, Hospira shall, or shall cause the relevant Hospira Benefit Plan to,
assume the Liabilities of the corresponding Abbott Benefit Plan with respect to
all benefits accrued under that Abbott Benefit Plan by Transferred Employees
prior to the Transfer Date.  Except as
expressly provided in this Agreement, after the Transition Period, Hospira may
modify or terminate any Hospira Benefit Plan, as it deems appropriate.


 


Hospira shall cause the Hospira Benefit Plans to honor all plan
elections made by Transferred Employees pursuant to corresponding Abbott
Benefit Plans.  Except as provided in
this Agreement, Abbott and Hospira shall use commercially reasonable efforts to
ensure that the Distribution and the transfer of any Transferred Employee’s
employment to the Hospira Group will not entitle that Transferred Employee to a
distribution or payment of benefits under any Abbott Benefit Plan.


 


2.4                               Restrictions
on Employment.


 


Hospira agrees that, during the Restricted Period and without the
express written consent of Abbott or TAP, as applicable, it shall not, and
shall not permit any of its Subsidiaries to, employ any person, other than a
Transferred Employee, who is or was an employee of Abbott or TAP (or their
respective Subsidiaries) and whose employment with Abbott and/or TAP (and/or
their respective Subsidiaries) terminated at any time after August 22,
2003 and before the last day of the Restricted Period.  Abbott and TAP each agree that, during the
Restricted Period and without the express written consent of Hospira, each
shall not, and shall not permit any of their respective Subsidiaries to, employ
any person who is a Transferred Employee or any other person who becomes an
employee of Hospira or any of its Subsidiaries prior to the expiration of the
Restricted Period.  The foregoing
restrictions shall not apply to any person (other than a Post-Distribution
Employee who rejects an offer of employment from the Hospira Group) whose
employment with Hospira, Abbott or TAP (or their respective Subsidiaries), as
applicable, terminates due to a job elimination or reduction in force.


 


2.5                               Post-Distribution Transferred Employees and Hospira Requested Employees.


 


(a)                                  Transfer
Date for Post-Distribution Transferred Employees.  The Transfer Date of each Post-Distribution Transferred Employee
shall be determined by Abbott and Hospira, provided that in no event shall the
Transfer Date of any Post-Distribution Transferred Employee occur following the
Restricted Period.  Unless otherwise
determined by Abbott and Hospira or otherwise required by local law, all Post-Distribution
Transferred Employees and Hospira Requested Employees working primarily in the
same country shall have the same Transfer Date.


 


(b)                                 Hospira
Requested Employees.  As soon as
practicable following the Request End Date of any Hospira Requested Employee,
Abbott shall either terminate the employment of that Hospira Requested Employee
or notify Hospira that the


 


14

















 


Abbott Group intends to continue to employ the Hospira Requested
Employee following the Request End Date. 
Notwithstanding Section 2.1(a)(iv) of this Agreement, in the event
that Abbott notifies Hospira that the Abbott Group will continue to employ a
Hospira Requested Employee following Request End Date, Abbott shall retain all
Liabilities relating to, arising out of, or resulting from the employment (or
termination of employment) of that Hospira Requested Employee on and following
the Request End Date, provided that Abbott and Hospira shall negotiate to
apportion those Liabilities arising in part both before and after the Request
End Date.


 


Article 3


 


Collective
Bargaining Agreements and Union Matters 


 


Hospira shall assume all Liabilities with respect to or arising under
any collective bargaining agreements with respect to U. S. Transferred
Employees in Ashland, Ohio.


 


Article 4


 


U.S.
Qualified and Non-Qualified Retirement Plans


 


4.1                               Annuity
Retirement Plan.


 


(a)                                  Establishment
of Hospira ARP.  Effective on or
before the Distribution Date, Hospira shall establish the Hospira ARP, which,
for the Transition Period, shall provide for a benefit formula that is
substantially similar in all material respects to the benefit formula in effect
under the Abbott ARP as of the Distribution Date.  As soon as practicable after the Distribution Date and upon
receipt by Abbott of (i) copies of the Hospira ARP; (ii) copies of certified
resolutions of the Hospira Board (or its authorized committee or other
delegate) evidencing adoption of the Hospira ARP and the related trust(s) and
the assumption by the Hospira ARP of the Liabilities set forth in Section 4.1(d)
of this Agreement; and (iii) either (A) a favorable determination letter issued
by the Internal Revenue Service with respect to the Hospira ARP and its related
trust, or (B) an opinion of Hospira’s
counsel, which opinion is reasonably satisfactory to Abbott’s counsel, with
respect to the qualified status of the Hospira ARP under Section 401(a) of
the Code and the tax-exempt status of its related trust under
Section 501(a) of the Code, Abbott shall direct the trustee of the
Abbott ARP to transfer from the trust(s) which forms a part of the Abbott ARP
to the trust(s) which forms a part of the Hospira ARP the amounts described in
Section 4.1(b) of this Agreement.


 


(b)                                 ERISA
Section 4044 Transfer.  The
amount of assets to be transferred from the Abbott ARP to the Hospira ARP shall
be determined as of the Distribution Date in accordance with Section 4044
of ERISA and shall comply in all respects with Sections 414(l) of the
Code.  Assumptions not specifically
dictated by Section 4044 of ERISA shall be based on the assumptions used
in the report prepared by Hewitt
Associates entitled Actuarial Report Abbott Laboratories Annuity Retirement
Plan as of January 1, 2003 (signed October 2003).  The Hospira ARP shall receive a 


 


15

















 


pro-rata share of any
contributions made to the Abbott ARP after the Distribution Date but on behalf
of the 2003 plan year.  The pro-rata
share of the contributions for the Hospira ARP shall be determined as if the 2003
plan year contribution had been part of the Abbott ARP’s assets at the time the
asset allocation was performed.  The
transfer amount described above shall be credited or debited, as applicable,
with a pro rata share of the actual investment earnings or losses allocable to
the transfer amount for the period between the Distribution Date and an
assessment date set by Abbott that is no more than ten (10) days prior to the
date upon which assets are actually transferred from the Abbott ARP to the
Hospira ARP.  During this time, benefits
for U.S. Transferred Employees who terminate employment with the Hospira Group
shall be paid from the Abbott ARP.  The
ultimate transfer amount shall be reduced by the amount of these benefits and
credited or debited by the actual investment earnings or losses from the
payment date to the assessment date set by Abbott above.  In
addition, during this time, Hospira will be responsible for a pro rata share of
trustee and administration fees to the extent included in the Abbott ARP’s
trust expenses.  The entries in the
Abbott ARP funding standard account shall be divided between the two plans
based on the guidance provided in Revenue Ruling 81-212.


 


(c)                                  Additional
Transfer.  In addition to, and
within sixty (60) days following, the transfer of assets from the Abbott ARP to
the Hospira ARP described in Section 4.1(b) of this Agreement, Abbott
shall pay Hospira an amount equal to that amount which, if contributed by
Hospira to the Hospira ARP immediately following the transfer of assets required
by Section 4.1(b) of this Agreement, would cause the ABO Funded Ratio of
the Hospira ARP and the Abbott ARP to be equivalent as of the Distribution
Date.  With respect to a plan, the ABO
Funded Ratio shall equal the fair market value of assets of that plan divided
by the Accumulated Benefit Obligation of that plan, as determined under FAS 87.  In
calculating the ABO Funded Ratio, the assets for the Hospira ARP shall include
the amount transferred directly from the Abbott ARP in accordance with
Section 4.1(b) of this Agreement and the amount to be paid by Abbott in
accordance with this Section 4.1(c). 
The pro-rata share of the 2003
plan year contributions assigned to the Abbott ARP in 4.1(b), that are
contributed following the Distribution Date, shall be taken into account for
purposes of calculating the ABO Funded Ratio of the Abbott ARP as of the
Distribution Date as if those contributions had been part of the assets of the
Abbott ARP on the Distribution Date. Similarly, the pro-rata share of the 2003
plan year contributions assigned to the Hospira ARP in Section 4.1(b) of
this Agreement, that are contributed following the Distribution Date, shall be
taken into account for purposes of calculating the ABO Funded Ratio of the
Hospira ARP as of the Distribution Date as if those contributions had been part
of the assets of the Hospira ARP on the Distribution Date.  With the exception of the discount rate, the
Accumulated Benefit Obligation shall be calculated using the assumptions and
methodology used to calculate Abbott’s December 31, 2003, FAS 87
disclosure information.  The discount
rate shall be determined as of the Distribution Date using Abbott’s FAS 87
discount rate setting methodology consistent with Abbott’s past practices.
Hospira shall not be required to reimburse Abbott for any tax benefit received
by Hospira with respect to any contribution to the Hospira ARP.


 


16

















 


(d)                                 Transferred
ARP Liabilities.  As of the
Distribution Date, Hospira shall cause the Hospira ARP to assume all
Liabilities under the Abbott ARP for U.S. Transferred Employees (including
Liabilities in respect of QDROs established in relation to U.S. Transferred
Employees) and the Abbott ARP shall be relieved of all such Liabilities;
provided, however that the Abbott ARP shall continue to pay benefits associated
with those Liabilities until assets are transferred from the Abbott ARP to the
Hospira ARP in accordance with this Section 4.1.


 


(e)                                  Hospira
ARP During the Transition Period. 
During the Transition Period (and thereafter to the extent required by
applicable law), the Hospira ARP shall provide that:


 


(i)             U.S. Transferred Employees shall (A) be
eligible to participate in the Hospira ARP to the extent they were eligible to
participate in the Abbott ARP as of the Distribution Date, and (B) receive
credit for vesting, eligibility and benefit service for all service credited
for those purposes under the Abbott ARP as of the Distribution Date as if that
service had been rendered to Hospira;


 


(ii)          the compensation paid by the Abbott Group to
all U.S. Transferred Employees which is recognized under the Abbott ARP as of
the Distribution Date shall be credited and recognized for all applicable
purposes under the Hospira ARP as though it were compensation from the Hospira
Group;


 


(iii)       subject to applicable law, the accrued benefit
of each U.S. Transferred Employee under the Abbott ARP as of the Distribution
Date shall be paid under the Hospira ARP at the time and in a form that would
have been permitted under the Abbott ARP as in effect as of the Distribution
Date, with employment by the Abbott Group prior to the Distribution Date
treated as employment by the Hospira Group under the Hospira ARP for purposes
of determining eligibility for optional forms of benefit, early retirement
benefits, or other benefit forms;


 


(iv)      to the extent required by Section 411(d)(6)
of the Code, any accrued benefit, early retirement benefit, retirement-type
subsidy, or optional form of benefit provided under the Abbott ARP during the
Transition Period shall be provided by the Hospira ARP with respect to each
U.S. Transferred Employee’s accrued benefit as of the Distribution Date and
service with the Abbott Group (prior to the Distribution Date) and the Hospira
Group during the Transition Period shall be recognized for purposes of
determining eligibility to elect or to receive those benefits;


 


(v)         all beneficiary designations in effect under
the Abbott ARP as of the Distribution Date shall remain in effect after the
Distribution Date under the Hospira ARP as if made under the Hospira


 


17

















 


ARP unless those designations are subsequently changed in accordance
with the Hospira ARP; and


 


(vi)      the Hospira ARP shall assume and honor the terms
of all QDROs in effect under the Abbott ARP as of the Distribution Date with
respect to U.S. Transferred Employees.


 


(f)                                    Composition
of Assets.  The composition of the assets that will be
transferred from the Abbott ARP to the Hospira ARP shall be mutually determined
by the applicable fiduciaries of the Abbott ARP and Hospira ARP.


 


(g)                                 Determination
Letter Requests.  Hospira shall
submit an application to the Internal Revenue Service as soon as practicable
after the Distribution Date (but no later than the last day of the remedial
amendment period as defined in applicable Code provisions) for a determination
letter regarding the qualification of the Hospira ARP and the tax status of its
related trust as of the Distribution Date and shall make any amendments
reasonably requested by the Internal Revenue Service in order to receive a
favorable determination letter regarding the Hospira ARP.


 


(h)                                 Abbott
ARP After Distribution Date.  On and
after the Distribution Date, no employees of the Hospira Group, including U.S.
Transferred Employees, shall accrue any benefits under the Abbott ARP and their
service with and compensation from the Hospira Group on or after that date
shall be disregarded for all purposes of the Abbott ARP.  Without limiting the generality of the
foregoing, each U.S. Transferred Employee shall cease to be an active
participant in the Abbott ARP effective as of the Distribution Date.


 


4.2                               Stock
Retirement Plan.


 


(a)                                  Establishment
of Hospira SRP.  Effective on or
before the Distribution Date, Hospira shall establish the Hospira SRP.  During the Transition Period, the terms of
the Hospira SRP shall be substantially similar in all material respects to the
terms of the Abbott SRP as of the Distribution Date; provided, however, that
(i) the Hospira SRP shall not be required to be an ESOP or to contain an ESOP
feature and (ii) the Hospira SRP shall not be required to make available an
Abbott stock fund as an investment feature for contributions made under the
Hospira SRP after the Distribution Date. 
On or prior to the Distribution Date, Hospira shall provide Abbott with
(A) a copy of the Hospira SRP; (B) a copy of certified resolutions of Hospira’s
board of directors (or its authorized committee or other delegate) evidencing
adoption of the Hospira SRP and the related trust(s) and the assumption by the
Hospira SRP of the Liabilities set forth in Section 4.2(c) hereof; and (C)
either (I) a favorable determination letter issued by the Internal Revenue
Service with respect to the Hospira SRP and its related trust or (II) an opinion of Hospira’s counsel, which opinion
is reasonably satisfactory to Abbott’s counsel, with respect to the qualified
status of the Hospira SRP under Section 401(a) of the Code and the
tax-exempt status of its related trust under Section 501(a) of the Code.  As soon as practicable on or following the
Distribution Date Abbott shall cause the


 


18

















 


trustee of the Abbott SRP to
transfer from the trust(s) which forms a part of the Abbott SRP to the trust(s)
which forms a part of the Hospira SRP the amounts described below.


 


(b)                                 Transfer
of Account Balances.  The amount to
be transferred (in cash, Abbott common shares, shares of Hospira common stock,
promissory notes evidencing outstanding loans to U.S. Transferred Employees and
other assets or any combination thereof in cash or in kind, as instructed by
the trustees of the Abbott SRP) from the Abbott SRP to the Hospira SRP shall
equal the account balances of U.S. Transferred Employees (excluding account
balances in respect of QDROs established in relation to U.S. Transferred
Employees) under the Abbott SRP, determined as of the date of the
transfer.  Hospira shall cause the
transferred amounts to be allocated among the U.S. Transferred Employees’
accounts under the Hospira SRP and to such investment funds in the same manner
in which those amounts were allocated under the Abbott SRP.  Any asset and liability transfer pursuant to
this Section 4.2 shall comply in all respects with Sections 414(l) and
411(d)(6) of the Code.


 


(c)                                  Assumed
SRP Liabilities.  As of the date of
transfer of the assets described in Section 4.2(b) above, Hospira shall
cause the Hospira SRP to assume all Liabilities for all accrued benefits under
the Abbott SRP for the U.S. Transferred Employees (excluding Liabilities in
respect of QDROs established in relation to U.S. Transferred Employees), and
the Abbott SRP shall be relieved of all Liabilities for those benefits.


 


(d)                                 Hospira
SRP During the Transition Period. 
During the Transition Period (and thereafter to the extent required by
applicable law), the Hospira SRP shall provide that:


 


(i)             U.S. Transferred Employees shall (A) be
eligible to participate in the Hospira SRP to the extent they were eligible to
participate in the Abbott SRP as of the Distribution Date, and (B) receive
credit for vesting purposes for all service credited for that purpose under the
Abbott SRP as of the Distribution Date as if that service had been rendered to
Hospira;


 


(ii)          the accrued benefit of each U.S. Transferred
Employee under the Abbott SRP as of the date of the transfer of assets from the
Abbott SRP (which accrued benefit shall be the U.S. Transferred Employee’s
account balance, including any outstanding promissory notes) shall be paid
under the Hospira SRP at the time and in a form that would have been permitted
under the Abbott SRP as of the Distribution Date; and


 


(iii)       all elections and beneficiary designations in
effect under the Abbott SRP as of the Distribution Date shall remain in effect after
the Distribution Date under the Hospira SRP as if made under the Hospira SRP
unless those elections or designations are subsequently changed in accordance
with the Hospira SRP.


 


19

















 


(e)                                  Determination
Letter Requests.  Hospira shall
submit applications to the Internal Revenue Service as soon as practicable
following the Distribution Date (but no later than the last day of the remedial
amendment period as defined in applicable Code provisions) for a determination
regarding the qualification of the Hospira SRP and the tax status of its
related trust as of the Distribution Date and shall make any amendments
reasonably requested by the Internal Revenue Service in order to receive a
favorable determination letter regarding the Hospira SRP.


 


(f)                                    Abbott
SRP After Distribution Date.  On and
after the Distribution Date, no employees of the Hospira Group, including U.S.
Transferred Employees, shall accrue any benefits under the Abbott SRP.  Without limiting the generality of the
foregoing, U.S. Transferred Employees shall cease to be active participants in
the Abbott SRP effective as of the Distribution Date.


 


(g)                                 SRP
Fiduciaries.  For avoidance of
doubt, for all periods after the Distribution Date, the parties agree that the
applicable fiduciaries of each of the Abbott SRP and the Hospira SRP,
respectively, shall have the sole authority with respect to the Abbott SRP and
the Hospira SRP, respectively, to determine the investment alternatives, the
terms and conditions with respect to those investment alternatives and such
other matters as are within the scope of their duties under Section 404 of
ERISA.


 


(h)                                 Loss
of Unvested Benefits/Distributions. 
For the avoidance of doubt, the transfer of any Transferred Employee’s employment
to the Hospira Group will not result in loss of that Transferred Employee’s
unvested benefits under the Abbott SRP or the Hospira SRP and no Transferred
Employee shall be entitled to a distribution of his benefit under the Abbott
SRP as a result of such transfer of employment.


 


(i)                                     Abbott
SRP QDROs.  The Abbott SRP shall
retain and honor the terms of all QDROs in effect under the Abbott SRP as of
the Distribution Date with respect to U.S. Transferred Employees.


 


4.3                               Faultless
Rubber Plan.


 


Effective as of the Distribution Date, Hospira shall assume sponsorship
of and all of Abbott’s rights, powers, duties, obligations and Liabilities
under and with respect to the Faultless Rubber Plan.


 


4.4                               Ashland
401(k) Plan.


 


Effective as of the Distribution Date, Hospira shall assume sponsorship
of any and all of Abbott’s rights, powers, duties, obligations and Liabilities
under and with respect to the Ashland 401(k) Plan.


 


20

















 


4.5                               Supplemental
Pension Plan.


 


(a)                                  Establishment
of Hospira Supplemental ARP. 
Effective on or before the Distribution Date, Hospira shall establish
the Hospira Supplemental ARP which, for the Transition Period, shall be
substantially similar in all material respects to the Abbott Supplemental ARP
as of the Distribution Date; provided, however, that Hospira shall not be
required to establish any grantor or other trusts to fund benefits under the
Hospira Supplemental ARP.


 


(b)                                 Assumed
Supplemental ARP Liabilities. 
Except as provided below, as of the Distribution Date, Hospira shall,
and shall cause the Hospira Supplemental ARP to, assume all Liabilities for all
accrued obligations under the Abbott Supplemental ARP for the benefits for U.S.
Transferred Employees determined as of the Distribution Date, and Abbott and
the Abbott Supplemental ARP shall be relieved of all Liabilities for those
benefits.  Notwithstanding the
foregoing, the parties acknowledge that certain Liabilities of Hospira with
respect to the Hospira Supplemental ARP shall be satisfied by Abbott, as
described in Section 7.4 of this Agreement.


 


(c)                                  Hospira
Supplemental ARP During the Transition Period.  As of the Distribution Date, the Hospira Supplemental ARP shall
provide that:


 


(i)             U.S. Transferred Employees who are
participants in the Hospira Supplemental ARP and whose benefits are transferred
to the Hospira Supplemental ARP from the Abbott Supplemental ARP shall receive
credit for vesting, eligibility and benefit service for all service credited
for those purposes under the Abbott Supplemental ARP as of the Distribution
Date as if that service had been rendered to Hospira;


 


(ii)          the compensation paid by the Abbott Group to
all U.S. Transferred Employees which was recognized under the Abbott
Supplemental ARP as of the Distribution Date shall be credited and recognized
for all applicable purposes under the Hospira Supplemental ARP as though it
were compensation from the Hospira Group; and


 


(iii)       the Hospira Supplemental ARP shall not be
amended in any manner that would reduce the accrued benefit (including any
early retirement subsidy) of any U.S. Transferred Employee.


 


(d)                                 Abbott
Supplemental ARP After Distribution Date. 
On and after the Distribution Date, no employees of the Hospira Group,
including U.S. Transferred Employees, shall participate in or accrue any
benefits under the Abbott Supplemental ARP. 
Without limiting the generality of the foregoing, U.S. Transferred
Employees shall cease to participate in the Abbott Supplemental ARP effective
as of the Distribution Date.


 


21

















 


4.6                               Abbott
Supplemental 401(k) Plan.


 


(a)                                  Establishment
of Hospira KSP.  Effective on or
before the Distribution Date, Hospira shall establish the Hospira KSP which,
for the Transition Period, shall be substantially similar in all material
respects to the Abbott KSP as of the Distribution Date; provided, however, that
(i) Hospira may limit participation in the Hospira KSP to KSP Transferred
Employees and (ii) Hospira shall not be required to establish any grantor or
other trusts to fund benefits under the Hospira KSP.


 


(b)                                 Abbott
KSP Liabilities.  Except as
expressly provided in Section 4.6(c) of this Agreement, Abbott shall
retain all Liabilities relating to, arising out of, or resulting from the
Abbott KSP.  As of the Distribution
Date, Abbott shall take all action reasonably necessary to convert the Deferred
Account (as defined in the Abbott KSP) of any KSP Transferred Employee into a
Trust Account (as defined in the Abbott KSP). 
Except as expressly provided in Section 4.6(c) of this Agreement,
on and after the Distribution Date, no employees of the Hospira Group,
including KSP Transferred Employees, shall participate in or accrue any
benefits under the Abbott KSP.


 


(c)                                  Hospira
KSP Book Accounts.  During the
Transition Period, Hospira shall maintain an unfunded book account under the
Hospira KSP for KSP Transferred Employees. 
Hospira shall credit those accounts with (i) the amounts deferred by KSP
Transferred Employees into the Hospira KSP according to elections made by those
KSP Transferred Employees plus (ii) any related employer matching contributions
in relation to the amounts described in (i). 
In the absence of a new election made by KSP Transferred Employees under
the Hospira KSP, Hospira shall honor the terms of elections made by KSP
Transferred Employees under the Abbott KSP. As soon as practicable following
the Transition Period, Hospira shall pay Abbott (or the trustee of the
applicable KSP Transferred Employee’s grantor trust) an amount equal to the
aggregate balance of the book accounts described above and Abbott shall ensure
that those amounts are allocated accordingly among the grantor trusts of those
KSP Transferred Employees.  Abbott shall
maintain the grantor trusts in accordance with Section 7.4 of this
Agreement.


 


Article 5


 


Non-U.S.
Retirement Plans


 


5.1                               Canadian
Pension Plan.


 


Effective on or before the Distribution Date, Hospira shall establish
the Hospira Canadian Pension Plan the terms of which shall be substantially
similar in all material respects to the terms of the Abbott Laboratories,
Limited Retirement Income Plan as in effect immediately prior to the
Distribution Date.  For two (2) years
following the Distribution Date, Hospira shall not materially amend the Hospira
Canadian Pension Plan other than as required by applicable law.  The assets and Liabilities determined as of
the Distribution Date under the Abbott Laboratories, Limited Retirement Income
Plan attributable to Non-U.S. Transferred Employees who are participants in that
plan shall be


 


22

















 


transferred to the Hospira
Canadian Pension Plan.  The amount of
assets and Liabilities subject to the transfer shall be calculated on a
Projected Benefit Obligation basis, as determined under FAS 87, by Mercer Human Resource Consulting LLC,
and the amount of the transfer and the terms and conditions of the transfer
shall be approved by Abbott’s Vice President, Compensation and Development and
Hospira’s Vice President of Compensation & Benefits.  Abbott and Hospira agree to use commercially
reasonable efforts to accomplish this transfer as soon as practicable following
the Distribution Date and to cooperate with each other to make such filings and
disclosures and obtain such approvals as may be deemed necessary or advisable.


 


5.2                               Irish
Pension Plans.


 


The assets and Liabilities determined as of the Distribution Date under
the Abbott Ireland
Pension & Death Benefit Plan for Salaried Staff, Abbott Ireland Pension & Death Benefit
Plan for Executive Staff, and
Abbott Ireland Pension & Death Benefit Plan for Hourly Employees attributable
to Non-U.S. Transferred Employees who are participants in those plans shall be
transferred to defined benefit pension plans to be established by Hospira.  The amount of assets and Liabilities subject
to the transfer shall be calculated on an Accumulated Benefit Obligation basis, as determined under FAS 87, by the
trustees of those plans, in consultation with Mercer Human Resources Consulting LTD, and the amount of the
transfer and the terms and conditions of the transfer shall be approved by
Abbott’s Vice President, Compensation and Development and Hospira’s Vice
President of Compensation & Benefits. 
Abbott and Hospira agree to use commercially reasonable efforts to
accomplish these transfers as soon as practicable following the Distribution
Date and to cooperate with each other to make such filings and disclosures and
obtain such approvals as may be deemed necessary or advisable.


 


5.3                               Overseas
Managers’ Pension Plan.


 


(a)                                  Establishment
of Hospira OMPP.  Effective on or
before the Distribution Date, Hospira shall establish the Hospira OMPP which
shall be substantially similar in all material respects to the Abbott OMPP as
of the Distribution Date provided, however, that Hospira may limit
participation in the Hospira OMPP to Transferred Employees who participated in
the Abbott OMPP immediately prior to their Transfer Dates.  Except as provided below, Hospira may amend
the Hospira OMPP at any time following the Distribution Date, including during
the Transition Period.


 


(b)                                 Assumed
OMPP Liabilities.  As of the
Distribution Date, Hospira shall, and shall cause the Hospira OMPP to assume
all Liabilities for all accrued obligations under the Abbott OMPP for the
benefits for Non-U.S. Transferred Employees determined as of the Distribution
Date, and Abbott and the Abbott OMPP shall be relieved of all Liabilities for
those benefits.


 


(c)                                  Hospira
OMPP as of Distribution Date.  As of
the Distribution Date, the Hospira OMPP shall provide that:


 


23

















 


(i)             Non-U.S. Transferred Employees who are
participants in the Hospira OMPP and whose benefits are transferred to the
Hospira OMPP from the Abbott OMPP shall receive credit for vesting, eligibility
and benefit service for all service credited for those purposes under the
Abbott OMPP as of the Distribution Date as if that service had been rendered to
Hospira;


 


(ii)          the compensation paid by the Abbott Group to
all Non-U.S. Transferred Employees which was recognized under the Abbott OMPP
as of the Distribution Date shall be credited and recognized for all applicable
purposes under the Hospira OMPP as though it were compensation from the Hospira
Group; and


 


(iii)       the Hospira OMPP shall not be amended in any
manner that would reduce the accrued benefit (including any early retirement
subsidy) of any Non-U.S. Transferred Employee.


 


(d)                                 Abbott
OMPP After Distribution Date.  On
and after the Distribution Date, no employees of Hospira, including Non-U.S.
Transferred Employees, shall participate in or accrue any benefits under the
Abbott OMPP.  Without limiting the
generality of the foregoing, Non-U.S. Transferred Employees shall cease to
participate in the Abbott OMPP effective as of the Distribution Date.


 


5.4                               Other
Non-U.S. Retirement Plans.  If Hospira assumes any Liabilities with
respect to Non-U.S. Transferred Employees under an Abbott Benefit Plan which is
a defined benefit pension plan, and such Liabilities are not otherwise
addressed in this Article 5, then Abbott’s Vice President, Compensation
and Development and Hospira’s Vice President of Compensation and Benefits shall
mutually agree as to the amount, if any, of the assets to be transferred by the
Abbott Group (or the relevant Abbott Benefit Plan) to the Hospira Group (or the
relevant Hospira Benefit Plan) with respect to such Liabilities.


 


Article 6


 


Welfare
and Fringe Benefit Plans


 


6.1                               Severance Compensation and Benefits.


 


In accordance with Section 2.1 of this Agreement, Hospira shall be
responsible for any and all Liabilities to, or relating to, Transferred
Employees relating to severance and unemployment compensation and benefits and,
except as expressly provided below, Abbott shall be responsible for any and all
Liabilities to, or relating to, Abbott Retained Employees relating to severance
and unemployment compensation and benefits. 
Notwithstanding the foregoing, in the event that, with respect to any
country, (a) the number of Post-Distribution Transferred Employees in that
country at the conclusion of Abbott’s provision of transitional services in
that country is less than the


 


24

















 


Allocated Employee Number for
that country and (b) Abbott reasonably concludes that it must layoff Post-Distribution
Employees in that country as a result of the Hospira Group’s failure to employ
a number of Post-Distribution Employees in that country equal to the Allocated
Employee Number, then, subject to the following sentence, Hospira shall
reimburse Abbott for the costs associated with those layoffs.  Notwithstanding the foregoing, Hospira shall
not be required to reimburse Abbott for a number of layoffs in any country
greater than (i) the Allocated Employee Number for that country less (ii) the
sum of (x) the number of Post-Distribution Transferred Employees in that
country and (y) the
number of Post-Distribution Employees in that country (other than
Post-Distribution Transferred Employees) to whom Hospira makes an offer of
employment that includes cash and long-term incentive compensation equivalent
to that provided to the Post-Distribution Employee by the Abbott Group.


 


6.2                               Retiree Medical And Life Insurance Coverage.


 


(a)                                  Abbott
Healthcare and Life Insurance Coverage. 
Abbott shall extend post-retirement healthcare and life insurance
coverage under the Abbott Retiree Medical Plan and the Abbott Retiree Life Plan
to each U.S. Transferred Employee (including any of his or her eligible
dependents) who, as of the Distribution Date, is eligible to retire under the
Abbott ARP.  Any U.S. Transferred
Employee who is eligible to elect coverage (or any eligible dependent who is
eligible to elect coverage) under the Abbott Retiree Medical Plan and Abbott
Retiree Life Plan shall be entitled to elect to begin that coverage as of any
date elected by that U.S. Transferred Employee that is after the Distribution
Date and on or after his or her termination of employment (for any reason) with
the Hospira Group.  Any post-retirement
healthcare and life insurance coverage provided to U.S. Transferred Employees
(and his or her dependents) shall be subject in all respects to the terms and
conditions of the Abbott Retiree Medical Plan and Abbott Retiree Life Plan as
in effect from time to time.  Abbott
shall be solely liable for any such post-retirement healthcare and life
insurance coverage.


 


(b)                                 Abbott
Coverage Requirements.  Abbott
expressly reserves the right to amend, alter, modify or terminate the terms of
the Abbott Retiree Medical Plan and/or the Abbott Retiree Life Plan, as the
case may be, at any time and to interpret the provisions of those plans with
respect to its employees, U.S. Transferred Employees and all of its other
former employees and their respective dependents; provided, however, that
Abbott agrees that any amendments, alterations, modifications, or terminations
with respect to those plans shall be applied in a consistent manner to Abbott
retirees and U.S. Transferred Employees who are eligible for coverage under
those plans.  Abbott shall not be
responsible or otherwise liable for the provision of post-retirement healthcare
and life insurance coverage to any U.S. Transferred Employees other than as
expressly provided in this Section 6.2. 
Only service and compensation with the Abbott Group prior to the
Distribution Date shall be taken into account for all purposes of the Abbott
Retiree Health Plan and the Abbott Retiree Life Plan, including, but not
limited to, for purposes of determining contribution levels.


 


(c)                                  Hospira
Healthcare and Life Insurance Coverage.  Nothing in this Agreement shall require Hospira to establish or
maintain any post-termination


 


25

















 


healthcare and life insurance
coverage for any person, except as required by COBRA or other applicable law.


 


6.3                               VEBAs.


 


Effective as of the Distribution Date, Hospira shall establish the
Hospira VEBA and shall take all actions reasonably necessary to ensure that the
Hospira VEBA satisfies the requirements of Section 501(c)(9) of the Code
and is exempt from tax under Section 501(a) of the Code, including, but
not limited to, filing any required determination letter filing with the
Internal Revenue Service.  Effective as
of the Distribution Date, after making appropriate adjustment for any incurred
but not reported claims payable from the Abbott VEBAs, Abbott shall cause each
of the Abbott VEBAs to transfer to the Hospira VEBA any remaining assets and
reserves under the Abbott VEBAs which are attributable to contributions by U.S.
Transferred Employees.  Abbott and
Hospira shall each take any and all actions as they deem necessary or
appropriate to ensure that the transfer of assets and reserves from the Abbott
VEBAs to the Hospira VEBA does not result in any adverse tax consequences to
any of the Abbott VEBAs or the Hospira VEBA, Abbott, Hospira, or any
participants or beneficiaries under the Abbott VEBAs or the Hospira VEBA.  Abbott and Hospira shall cooperate with each
other to effect the provisions of this Section 6.3.


 


6.4                               COBRA.


 


Effective as of the Distribution Date, Hospira shall assume all
obligations for providing COBRA coverage to U.S. Transferred Employees (and
their eligible dependents), regardless of whether the qualifying event giving
rise to that coverage occurred prior to, on, or after the Distribution Date.


 


6.5                               Matching Grant and Combined Appeal Programs.


 


(a)                                  Matching
Grant Program.  Abbott shall retain
all Liabilities with respect to the Abbott Laboratories Matching Grant
Program.  Abbott shall match all
eligible contributions and grants made by each U.S. Transferred Employee prior
to the Distribution Date, in accordance with the terms of the Abbott
Laboratories Matching Grant Program. 
Hospira shall not be required to maintain a matching contribution
program following the Distribution Date.


 


(b)                                 Combined
Appeal Program.  Hospira shall
establish a Combined Appeal Program with terms that are substantially similar
to the terms of Abbott’s Combined Appeal Program as of the Distribution
Date.  Absent a new election by a U.S.
Transferred Employee under Hospira’s Combined Appeal Program, Hospira shall
honor elections made by U.S. Transferred Employees pursuant to Abbott’s
Combined Appeal Program.  Hospira shall
not be required to maintain a Combined Appeal Program following the Transition
Period.


 


26

















 


Article 7


 


Equity
and Executive Compensation Programs


 


7.1                               Equity
Incentive Programs.


 


(a)                                  Treatment
of Abbott Options/Non-Retirement Eligible. 
Subject to Sections 7.1(c) and (d) of this Agreement, as of the Distribution
Date, (i) Abbott shall cancel, as of the Distribution Date, each Abbott Option
held by a Transferred Employee who is not eligible to retire under the Abbott
ARP or any other Abbott retirement plan designated by Abbott as of the
Distribution Date (where that retirement eligibility shall be determined by
Abbott in its sole discretion as of the Distribution Date, based on the terms
and conditions of the Abbott ARP or such other retirement plan covering the
applicable Transferred Employee, as applicable) and which is outstanding
immediately prior to the Distribution Date (whether or not then exercisable),
and (ii) Hospira shall grant each such Transferred Employee a Hospira Option in
respect of such cancelled Abbott Option.


 


The number of covered shares and the exercise price of the Hospira
Options shall reflect the Distribution and preserve the corresponding Abbott
Option’s intrinsic value as of the Distribution Date, that value being equal to
(A) the difference between the fair market value of a share of Abbott common
stock at the last closing price prior to the Distribution less that Abbott
Option’s exercise price per share, multiplied by (B) the number of shares
subject to that Abbott Option.  Each
Hospira Option shall maintain the same ratio between the exercise price per
share and the fair market value per share as reflected in the respective Abbott
Option being cancelled.  The exercise
price and number of shares subject to a Hospira Option granted in respect of
the cancelled Abbott Option shall be determined in accordance with
Section 424 of the Code so as to retain, where applicable and possible,
the tax and accounting treatment of each such Abbott Option.


 


The Hospira Options shall contain substantially similar terms and
conditions as the Abbott Options for which they were substituted.  On or prior to the Distribution Date, Abbott
and Hospira shall take such actions necessary to effectuate the foregoing,
including compliance with securities laws and other legal requirements
associated with the grant of stock options in the affected non-U.S.
jurisdictions.  Abbott agrees to assist
and facilitate the adoption and approval of the Hospira SIP in order to
maximize the possible tax benefits to Hospira consistent with the requirements
of Treasury Regulation Section 1.162-27(f)(4)(iii).


 


(b)                                 Treatment
of Abbott Options/Retirement Eligible. 
With respect to each Abbott Option which is held by a Transferred
Employee eligible to retire under the Abbott ARP or another Abbott retirement
plan as of the Distribution Date (where that retirement eligibility shall be
determined by Abbott in its sole discretion as of the Distribution Date, based
on the terms and conditions of the ARP or such other retirement plan covering
the applicable Transferred Employee, as applicable) and which is outstanding
immediately prior to the Distribution Date (whether or not then


 


27

















 


exercisable), the Abbott
Compensation Committee shall take the necessary actions on or prior to the
Distribution Date to provide, solely for purposes of the Abbott Stock Programs,
that a retirement eligible Transferred Employee’s separation from employment
with Abbott to be employed with Hospira, under the provisions of this
Agreement, shall be treated as a retirement from an Abbott retirement plan for
purposes of the Abbott Stock Programs. 
The Abbott Compensation Committee shall make adjustments to Options held
by a retirement eligible Transferred Employee in accordance with the terms of
the Abbott Stock Programs as it deems necessary and/or appropriate to reflect
the spin-off of the Hospira Business.


 


(c)                                  Abbott
Options in Certain Non-U.S. Jurisdictions. 
Notwithstanding the provisions of Section 7.1(a) of this Agreement,
Abbott and Hospira may mutually agree, in their sole discretion, not to cancel
an Abbott Option and grant a corresponding Hospira Option in non-U.S.
jurisdictions where those actions will create or trigger adverse legal,
accounting or tax consequences for either Abbott, Hospira, and/or the affected
Non-U.S. Transferred Employees.  In such
circumstances, the Abbott Options of the affected Non-U.S. Transferred
Employees shall terminate in accordance with the terms of the Abbott Stock
Programs and the underlying option agreement and Hospira shall equitably
compensate the affected Non-U.S. Transferred Employees in an alternate manner
determined by Hospira in its sole discretion.


 


(d)                                 Treatment
of Abbott Options/Post-Distribution Transferred Employees.  Notwithstanding the provisions of
Section 7.1(a) of this Agreement, each Abbott Option held by a
Post-Distribution Transferred Employee or a Hospira Requested Employee who is
not eligible to retire under the Abbott ARP or any other Abbott retirement plan
designated by Abbott as of his or her Transfer Date (where that retirement
eligibility shall be determined by Abbott in its sole discretion as of that
Transfer Date, based on the terms and conditions of the ARP or such other
retirement plan covering that Employee, as applicable) and which is outstanding
immediately prior to that Transfer Date shall terminate in accordance with the
terms of the Abbott Stock Programs and the underlying option agreement and
Hospira shall equitably compensate that Employee in an alternate manner
determined by Hospira in its sole discretion.


 


(e)                                  Restricted
Stock.  The Abbott Compensation
Committee shall take the necessary actions on or prior to the Distribution Date
to cause the lapse of Restrictions (as defined in the applicable award
agreements) with respect to all Abbott restricted stock granted under the
Abbott Stock Programs held by each Transferred Employee (retirement eligible
and non-retirement eligible) as of the Distribution Date.


 


7.2                               Discontinued Participation in ESPP.


 


As of the Distribution Date, each Non-U.S. Transferred Employee (other
than a Post-Distribution Transferred Employee or Hospira Requested Employee)
who participates in the Abbott ESPP shall cease participation in the Abbott
ESPP and shall have his or her payroll deductions refunded by the Abbott Group as
soon as administratively practicable in accordance with the terms of the Abbott
ESPP.  As of the Transfer Date, each
Post-Distribution Transferred Employee or Hospira Requested


 


28

















 


Employee who participates in
the Abbott ESPP shall cease participation in the Abbott ESPP and shall have his
or her payroll deductions refunded by the Abbott Group as soon as
administratively practicable in accordance with the terms of the Abbott ESPP.


 


7.3                               Deferred
Compensation Plan.


 


Abbott shall retain all Liabilities relating to, arising out of, or
resulting from the Abbott DCP.  Prior to
April 26, 2004 (or such later date as Abbott may determine, but in no
event later than the Distribution Date), Abbott shall amend the Abbott DCP to
provide that each Employee shall make an election, prior to April 26, 2004
(or such later date as Abbott may determine, but in no event later than the
Distribution Date) to either (i) treat that Employee’s commencement of
employment with the Hospira Group as a ‘termination of employment’ (as defined
in the Abbott DCP) with Abbott, provided that that Employee remains an employee
of the Abbott Group through the date immediately prior to the Distribution Date
or (ii) treat that Employee’s continuation of employment with the Hospira Group
as if it was a continuation of employment with the Abbott Group solely for
purposes of distribution of benefits (and not continued contributions).  Those U.S. Transferred Employees who
participate in the Abbott DCP and who do not timely execute an election shall
be treated as having made an election pursuant to (ii) above.  In the event that a Transferred Employee
makes an election pursuant to (i) above, distributions from the Abbott DCP
shall not begin any sooner than one (1) year following that Transferred
Employee’s Transfer Date.  Hospira
agrees that it shall provide written notice to Abbott of the subsequent
termination of employment of a Transferred Employee who makes an election
pursuant to (ii) above, in order for Abbott to carry out its obligations
hereunder.  With respect to any
Transferred Employee who makes an election pursuant to (ii) above, subsequent
termination of employment from the Hospira Group shall have the same effect
under the Abbott DCP as a termination of employment from the Abbott Group.  No deferrals shall be made under the Abbott
DCP in respect of Transferred Employees with respect of any period following
the Distribution Date.


 


7.4                               Grantor Trusts.


 


(a)                                  Grantor
Trust Payment Election.  On or prior
to the Distribution Date, Abbott shall solicit from each U.S. Transferred
Employee, who has a grantor trust that was created pursuant to an Abbott
Benefit Plan, a newly completed Grantor Trust Payment Election form for each
such trust.  The new forms shall
acknowledge that continued employment with the Hospira Group shall have the
same effect as continued employment with the Abbott Group with respect to the
determination of the settlement date under those trusts.  Hospira agrees that it shall provide written
notice to Abbott of the subsequent termination of employment of a U.S.
Transferred Employee with a grantor trust subject to this Section 7.4, in
order for Abbott to carry out its obligations hereunder and under the grantor
trust.  Abbott agrees that it shall, as
administrator of the applicable trusts, inform the trustee of the grantor
trusts of the proper settlement dates, when they occur, based on those U.S.
Transferred Employees’ continued employment with, and subsequent termination
from, Hospira.  A subsequent termination


 


29

















 


of employment from the Hospira
Group shall have the same effect under the terms of the grantor trusts as a
termination of employment from the Abbott Group.


 


(b)                                 Maintenance
of Grantor Trusts.  Abbott will
retain the Liabilities associated with the Abbott Supplemental ARP for U.S.
Transferred Employees who have grantor trusts. 
Abbott shall continue to be obligated to maintain all U.S. Transferred
Employee’s grantor trusts which were created pursuant to any Abbott Benefit
Plan and shall continue to make annual contributions as may be required
pursuant to the terms and conditions of those grantor trusts.  Abbott shall treat any contributions relating
to services provided during the Transition Period that are made into the
applicable grantor trusts (either by Abbott or Hospira) the same as
contributions relating to services provided prior to the Distribution Date
which were made into the trusts by Abbott.


 


(c)                                  Necessary
Actions.  Abbott shall take all
commercially reasonable actions deemed necessary to give effect to this
Section 7.4, including, but not limited to, amending the grantor trusts or
any related Abbott Benefit Plan.


 


(d)                                 Hospira
Contributions.  Hospira shall be
obligated to make contributions to the applicable grantor trusts with respect
to any amounts earned for services rendered to the Hospira Group during the
Transition Period, whether those amounts are paid directly to the trustee for
the applicable grantor trusts or to Abbott for contributions into the
applicable grantor trusts, at the same time and in the same manner, as
contributions are made by Abbott with respect to any amounts earned for
services rendered to Abbott prior to the Distribution Date.


 


7.5                               Cash Profit
Sharing.


 


Each U.S. Transferred Employee who participated in the Abbott Cash
Profit Sharing Plan immediately prior to the Distribution Date and who remains
employed by the Hospira Group after the Distribution Date and through
November 15, 2004, shall be entitled to receive from Hospira a cash
payment for the 2004 plan year ending September 30, 2004 based on the same
percentage of eligible earnings used under the Abbott Cash Profit Sharing Plan
for such plan year.  The terms and conditions of payments to be made by
Hospira pursuant to this Section 7.5 shall be substantially similar in all
material respects to those that applied under the Abbott Cash Profit Sharing
Plan as in effect on the Distribution Date. 
Hospira shall make all determinations of payments under this
Section 7.5 and shall be solely responsible for all payments to or with
respect to U.S. Transferred Employees hereunder.  Hospira shall have no obligation to provide any cash profit
sharing plan in respect of periods following September 30, 2004.


 


7.6                               Other
Incentive Programs.


 


During the Transition Period, Hospira shall provide U.S. Transferred
Employees with Hospira cash incentive programs (other than the Abbott Cash
Profit Sharing Plan, the treatment of which is addressed in Section 7.5
above) on terms and conditions which are substantially similar in all material
respects to the terms and conditions of the cash incentive programs provided to
those U.S. Transferred Employees


 


30

















 


on the Distribution Date;
provided, however that, after the Distribution Date, Hospira may change the
performance metrics and criteria to reflect its incentive strategies.  All payments to U.S. Transferred Employees
under the cash incentive programs described in this Section 7.6 shall be
made at such times as prescribed by those programs.  Hospira shall make in its sole discretion all determinations of
payments under the cash incentive programs described in this Section 7.6 with
respect to U.S. Transferred Employees and shall be solely responsible for all
payments to or with respect to U.S. Transferred Employees hereunder.  Hospira shall have no obligation to continue
any cash incentive program following the Transition Period.


 


Article 8


 


Miscellaneous


 


8.1                               Transfer of Records and Information.


 


Subject to applicable law,
Abbott shall transfer to Hospira any and all employment records and information
(including, but not limited to, any Form W-2 or other Internal Revenue Service
forms) with respect to Transferred Employees and other records reasonably
required by Hospira to enable Hospira to properly carry out its obligations
under this Agreement.  Such transfer of
records and information shall generally occur as soon as administratively practicable
following (a) the date hereof or (b) with respect to records and information
that are relevant to services provided in the Transition Services Agreements,
the date upon which the provision of those services terminates.  After the transfer of those records to
Hospira, Hospira shall permit Abbott to have reasonable access to such records
and such information, each as set forth in Article VI of the Separation
and Distribution Agreement.


 


8.2                               Preservation
of Rights to Amend or Terminate Plans.


 


Nothing in this Agreement shall be construed as a limitation on the
right of the Abbott Group or the Hospira Group to amend or terminate any
Benefit Plan so long as that amendment or termination is not contrary to this
Agreement.  In addition, nothing in this
Agreement shall be construed as a limitation on the right of the Abbott Group
or the Hospira Group to amend any Benefit Plan to conform to requirements of
applicable law or the provisions of a collective bargaining agreement,
including any changes that are effective during the Transition Period.


 


31

















 


8.3                               Transition
Services.


 


Except as otherwise provided in the Transition Services Agreements or
as otherwise expressly provided herein, neither party shall have any
responsibility for providing services to the other party with respect to
employee or Benefit Plan matters after the Distribution Date.


 


8.4                               Reimbursement.


 


Abbott
and Hospira acknowledge that the Abbott Group, on the one hand, and the Hospira
Group, on the other hand, may incur costs and expenses (including, without
limitation, contributions to Benefit Plans and the payment of insurance
premiums) which are, as set forth in this Agreement, the responsibility of the
other party.  Accordingly, Abbott and
Hospira agree to reimburse each other, as soon as practicable but in any event
within thirty (30) days of receipt from the other party of appropriate
verification, for all such costs and expenses.


 


8.5                               Clara
Abbott Foundation.


 


For purposes of clarification, no reference to benefits or Benefit Plan
contained in this Agreement shall include or affect the benefits and services
provided to employees or retirees of the Abbott Group by the Clara Abbott
Foundation.


 


8.6                               Incorporation
By Reference.


 


The following sections of the Separation and Distribution Agreement are
hereby incorporated into this Agreement by reference: Section 9.01.
Counterparts; Entire Agreement; Corporate Power; Facsimile Signatures,
Section 9.02. Governing Law, Section 9.04. Third Party Beneficiaries,
Section 9.05. Notices, Section 9.06. Severability, Section 9.07.
Force Majeure, Section 9.08. Responsibility for Expenses,
Section 9.09. Headings, Section 9.10. Survival of Covenants,
Section 9.12. Waivers of Default, and Section 9.13. Amendments.


 


8.7                               Limitation
on Enforcement.


 


This Agreement is an agreement solely between Abbott and Hospira and,
to the extent applicable, TAP.  Nothing
in this Agreement, whether express or implied, confers upon any employee of the
Abbott Group, the Hospira Group, TAP, any Employee, any beneficiary of an Employee,
any former employee of the Abbott Group or TAP or any other person, any rights
or remedies, including, but not limited to any right to (a) employment or
recall; (b) continued employment or continued service for any specified period;
or (c) claim any particular compensation, benefit or aggregation of benefits,
of any kind or nature.


 


8.8                               Assignability.


 


This Agreement will be binding upon and inure to the benefit of the
parties hereto and their respective successors and permitted assigns; provided,
however,


 


32

















 


that no party hereto may assign
its respective rights or delegate its respective obligations under this
Agreement without the express prior written consent of the other parties
hereto.  Notwithstanding the foregoing,
this Agreement will be assignable in whole in connection with a merger or
consolidation or the sale of all or substantially all of the Assets (as defined
in the Separation and Distribution Agreement) of a party hereto so long as the
resulting, surviving or transferee Person (as defined in the Separation and
Distribution Agreement) assumes all the obligations of the relevant party
hereto by operation of law or pursuant to an agreement in form and substance
reasonably satisfactory to the other parties hereto.


 


8.9                               Further
Assurances and Consents.


 


In addition to the actions specifically provided elsewhere in this
Agreement, each of the parties hereto shall use commercially reasonable efforts
to (a) execute and deliver such further instruments and documents and take such
other actions as the other party may reasonably request in order to effectuate
the purposes of this Agreement and carry out the terms hereof; (b) take or
cause to be taken, all actions and do, or cause to be done, all things,
reasonably necessary, proper or advisable under applicable laws, regulations
and agreements or otherwise to consummate and make effective the transactions
contemplated by this Agreement, including, without limitation, using
commercially reasonable efforts to obtain any consent and approvals and to make
any filings and applications necessary or desirable in order to consummate the
transactions contemplated by this Agreement; provided that no party hereto
shall be obligated to pay any consideration therefor (except for filing fees
and other similar charges) to any third party from whom those consents,
approvals and amendments are required or to take any action or omit to take any
action if the taking or the omission to take action would be unreasonably burdensome
to the party or the business thereof.


 


8.10                        Third
Party Consent.


 


If the obligation of any party under this Agreement is dependent on the
consent of a third party, such as a vendor or insurance company, and that
consent is withheld, Abbott and Hospira shall use commercially reasonable
efforts to implement the applicable provisions of this Agreement to the fullest
extent practicable.  If any provision of
this Agreement cannot be implemented due to the failure of a third party to
consent, Abbott and Hospira shall negotiate in good faith to implement the
provision in a mutually satisfactory manner, taking into account the original
purposes of the provision in light of the Distribution and communications to
affected Transferred Employees.


 


8.11                        Effect if Distribution Does not Occur.


 


If the Distribution does not occur, then all actions and events that
are to be taken under this Agreement as of the Distribution Date or otherwise
in connection with the Distribution, shall not be taken or occur except to the
extent specifically provided by Abbott.


 


33

















 


8.12                        Disputes.


 


Abbott and Hospira agree to use commercially reasonable efforts to
resolve in an amicable manner any and all controversies, disputes and claims
between them arising out of or related in any way to this Agreement.  Abbott and Hospira agree that any
controversy, dispute or claim (whether arising in contract, tort or otherwise)
arising out of or related in any way to this Agreement, which cannot be amicably
resolved informally will be resolved pursuant to the alternative dispute
resolution procedures set forth in Article VII of the Separation and
Distribution Agreement and the Master ADR Agreement attached hereto as
Schedule 5.


 


8.13                        Schedules.


 


As of the Distribution Date, the parties shall update Schedules 2 and 4
to this Agreement.


 


8.14                        Mutual
Drafting.


 


This Agreement will be deemed to be the joint work product of the
parties and any rule of construction that a document shall be interpreted or construed
against a drafter of such document shall not be applicable.


 


34

















 


The parties have caused this Agreement to be signed by their authorized
representatives as of the Distribution Date.


 


	
  HOSPIRA, INC.

  	
  ABBOTT LABORATORIES

  
	
   

  	
   

  
	
   

  	
   

  
	
  By

  	
   

  	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Title

  	
   

  	
   

  	
  Title

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Solely for purposes of Sections 2.4, 8.7,
  and 8.8

  	
   

  
	
   

  	
   

  
	
  TAP PHARMACEUTICAL PRODUCTS INC.

  	
   

  
	
   

  	
   

  
	
  By

  	
   

  	
   

  	
   

  
									



 


35