Exhibit 10.8(a)


 


HOSPIRA 2004 LONG-TERM STOCK INCENTIVE PLAN


 


ISO TERMS


 


CONVERSION STOCK OPTION AWARD


 


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


 


1.                                       Grant
of Award.  Pursuant to the
distribution of the shares of the Company to the shareholders of Abbott
Laboratories (the “Distribution”), the Participant is hereby granted this
Conversion Stock Option in replacement of the of an option the Participant held
to purchase common shares of Abbott Laboratories (the “Abbott Option”), on
substantially similar terms as the Abbott Option.  This Option replaces in its entirely, the Abbott Option and the
Abbott Option shall be null and void as of the effective date of the
Distribution.


 


2.                                       Terms
of Award.  The following words and
phrases used in  the Option Terms shall
have the meanings set forth in this paragraph 2:


 


(a)                                  The
“Participant” is                               .


 


(b)                                 The
“Grant Date” is                               .


 


(c)                                  The
“Abbott Option Grant Date” is                               .


 


(d)                                 The
number of “Covered Shares” shall be                               shares
of Stock.


 


(e)                                  The
“Exercise Price” is $                 per
share.


 


Except
where the context clearly implies to the contrary, any capitalized term in this
award shall have the meaning ascribed to that term under the Plan.  Other words and phrases used in the Option
Terms are defined pursuant to paragraph 10 or elsewhere in the Option Terms.


 


3.                                       Incentive
Stock Option.  The Option is
intended to constitute an “incentive stock option” as that term is used in Code
section 422 and to the extent permitted by such section.  To the extent that the aggregate fair market
value (determined at the time of grant) of Shares with respect to which
incentive stock options are exercisable for the first time by the Participant
during any calendar year under all plans of the Company and its Subsidiaries
exceeds $100,000, the options or portions thereof which exceed such limit
(according to the order in which they were granted) shall be treated as
nonstatutory stock options.  It should
be understood that there is no assurance that the Option will, in fact, be
treated as an incentive stock option.


 


4.                                       Date
of Exercise.  Subject to the
limitations of the Option Terms, on the first anniversary of the Abbott Option
Grant Date one-third of the Covered Shares (rounded up) may


 

















 


be
purchased; on the second anniversary of the Abbott Option Grant Date two-thirds
of the Covered Shares (rounded up) may be purchased; on the third anniversary
of the Abbott Option Grant Date the Option may be exercised in full, provided
the Expiration Date has not occurred prior to such vesting dates.


 


(a)                                  Notwithstanding
the foregoing provisions of this paragraph 4, the Option shall become fully
vested and exercisable upon a Change in Control that occurs on or before the
Date of Termination.


 


(b)                                 The
Option may be exercised (prior to or following the Date of Termination) only as
to that portion of the Covered Shares for which it is vested, as of the date of
exercise.


 


(c)                                  The
Covered Shares shall continue to vest pursuant to this Section 4 until the
Expiration Date, as defined in Section 5.


 


5.                                       Expiration.  The Option shall not be exercisable after
the Company’s close of business on the last business day that occurs prior to
the Expiration Date.  The “Expiration
Date” shall be the earliest to occur of:


 


(a)                                  the
ten-year anniversary of the Abbott Option Grant Date;


 


(b)                                 if
the termination of employment occurs for reasons other than death, Disability,
Retirement, or for Cause, the three-month anniversary of the Date of
Termination; provided, however, that if the Participant dies during such three
month period following the Date of Termination, then the three-month
anniversary of the date of death;


 


(c)                                  if
the Participant’s employment is terminated for Cause, the Date of Termination;
or


 


(d)                                 the
date on which the Participant, at any time prior to the one-year anniversary of
the Date of Termination, engages, directly or indirectly, for the benefit of
the Participant or others, in any activity, employment or business which, in
the sole opinion and discretion of the Committee, is competitive with the
Company or any of its Subsidiaries.


 


6.                                       Method
of Option Exercise.  Subject to the
Option Terms and the Plan, the Option may be exercised in whole or in part by
filing a written notice with the Secretary of the Company at its corporate
headquarters prior to the Company’s close of business on the last business day
that occurs prior to the Expiration Date. 
Such notice shall specify the number of shares of Stock which the
Participant elects to purchase, and shall be accompanied by payment of the
Exercise Price for such shares of Stock indicated by the Participant’s
election. Payment may be by cash or by check payable to the Company, or except
as otherwise provided by the Committee before the Option is exercised: (i) all
or a portion of the Exercise Price may be paid by the Participant by delivery
of shares of Stock (by actual delivery or by attestation) owned by the
Participant and acceptable to the Committee having an aggregate Fair Market
Value (valued as of the date of exercise) that is equal to the amount of cash
that would otherwise be required; and (ii) the


 


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Participant
may pay the Exercise Price by authorizing a third party to sell shares of Stock
(or a sufficient portion of the shares) acquired upon exercise of the Option
and remit to the Company a sufficient portion of the sale proceeds to pay the
entire Exercise Price and any tax withholding resulting from such
exercise.  Except as otherwise provided
by the Committee, prior to exercise, payments made with shares of Stock in
accordance with clause (i) above shall be limited to shares held by the
Participant for not less than six months prior to the payment date.  The Option shall not be exercisable if and
to the extent the Company determines that such exercise would violate
applicable state or Federal securities laws or the rules and regulations of any
securities exchange on which the Stock is traded and shall not be exercisable
during any blackout period established by the Company from time to time.


 


7.                                       Withholding.  The exercise of the Option is subject to
withholding of all applicable taxes.  At
the election of the Participant, and subject to such rules and limitations as
may be established by the Committee from time to time, such withholding
obligations may be satisfied (i) through cash payment by the Participant; (ii)
through the surrender of shares of Stock (by actual delivery or by attestation)
which the Participant already owns (provided, however, that to the extent
shares described in this clause (ii) are used to satisfy more than the minimum
statutory withholding obligation, as described below, then, except as otherwise
provided by the Committee, payments made with shares of Stock in accordance
with this clause (ii) shall be limited to shares held by the Participant for
not less than six months prior to the payment date); or (iii) through the
surrender of shares of Stock to which the Participant is otherwise entitled
under the Plan; provided, however, that such shares under this clause (iii) may
be used to satisfy not more than the Company’s minimum statutory withholding
obligation (based on minimum statutory withholding rates for Federal and state tax
purposes, including payroll taxes, that are applicable to such supplemental
taxable income).


 


8.                                       Replacement
Options.  In the event that all or a
portion of the Exercise Price, or taxes incurred in connection with the
exercise of the Option, are paid with the delivery (or in the case of payment
of taxes, the withholding of shares) of other shares of Stock, the Participant
shall be granted a non-qualified stock option (the “Replacement Option”) to
purchase a number of shares of Stock equal to the number of shares of stock
surrendered (by actual delivery or by attestation) to satisfy the Exercise
Price plus the number of shares surrendered (by actual delivery or attestation)
or withheld to satisfy the Participant’s tax liability; provided, that, as of
the time of exercise, the Fair Market Value of a share of Stock is at least
125% of the Exercise Price.  The
Replacement Option shall have an Exercise Price equal to 100% of the of the
Fair Market Value of Stock on the date such Replacement Options are granted,
shall be first exercisable six months from the date of grant of the Replacement
Option and shall have an expiration date of the original Option.


 


9.                                       Transferability.  The Option is not transferable other than as
designated by the Participant by will or by the laws of descent and
distribution, and during the Participant’s life, may be exercised only by the
Participant.


 


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10.                                 Definitions.  For purposes of the Option Terms, words and
phrases shall be defined as follows:


 


(a)                                  Cause.  The term “Cause” shall mean, in the sole
opinion and discretion of the Committee, the Participant has (i) engaged in a
material breach of the Company’s code of business conduct, (ii) committed an
act of fraud, embezzlement or theft in connection with the Participant’s duties
or in the course of employment, or (iii) wrongfully disclosed secret processes
or confidential information of the Company or its subsidiaries.


 


(b)                                 Date
of Termination.  The term “Date of
Termination” means the first day occurring on or after the Grant Date on which
the Participant is not employed by the Company or any Subsidiary, regardless of
the reason for the termination of employment; provided that a termination of
employment shall not be deemed to occur by reason of a transfer of the
Participant between the Company and a Subsidiary or between two Subsidiaries;
and further provided that the Participant’s employment shall not be considered
terminated while the Participant is on a leave of absence from the Company or a
Subsidiary approved by the Participant’s employer.  If, as a result of a sale or other transaction, the Participant’s
employer ceases to be a Subsidiary (and the Participant’s employer is or
becomes an entity that is separate from the Company), and the Participant is
not, at the end of the 30-day period following the transaction, employed by the
Company or an entity that is then a Subsidiary, then  the occurrence of such transaction shall be treated as the
Participant’s Date of Termination caused by the Participant being discharged by
the employer.


 


(c)                                  Disability.  The term “Disability” shall mean the
Participant’s disability as defined in the Hospira Extended Disability Plan,
whether or not such Participant is a participant in such disability plan, for a
period of twelve (12) consecutive months.


 


(d)                                 Retirement.  “Retirement” of the Participant means, the
occurrence of the Participant’s Date of Termination on or after the date (i)
the Participant reaches the age of 50 and has 10 years of combined service with
the Company or its Subsidiaries (as determined by the Committee), or (ii) the
Participant retires pursuant to the provisions of any defined benefit
retirement plan sponsored by the Company or its Subsidiaries that is then
applicable to the Participant, all of the foregoing as approved by the
Committee.


 


11.                                 Heirs
and Successors.  The Option Terms
shall be binding upon, and inure to the benefit of, the Company and its
successors and assigns, and upon any person acquiring, whether by merger, consolidation,
purchase of assets or otherwise, all or substantially all of the Company’s
assets and business. If any rights exercisable by the Participant or benefits
deliverable to the Participant under the Option Terms have not been exercised
or delivered, respectively, at the time of the Participant’s death, such rights
shall be exercisable by the Designated Beneficiary, and such benefits shall be
delivered to the Designated Beneficiary, in accordance with the provisions of
the Option Terms and the Plan. The “Designated Beneficiary” shall be the
beneficiary or beneficiaries designated by the Participant in a writing filed
with the Committee in such form and at such time as the Committee shall
require. If a deceased Participant fails to designate a beneficiary, or if the
Designated Beneficiary does not survive the


 


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Participant,
any rights that would have been exercisable by the Participant and any benefits
distributable to the Participant shall be exercised by or distributed to the
legal representative of the estate of the Participant. If a deceased
Participant designates a beneficiary and the Designated Beneficiary survives
the Participant but dies before the Designated Beneficiary’s exercise of all
rights under the Option Terms or before the complete distribution of benefits
to the Designated Beneficiary under the Option Terms, then any rights that
would have been exercisable by the Designated Beneficiary shall be exercised by
the legal representative of the estate of the Designated Beneficiary, and any
benefits distributable to the Designated Beneficiary shall be distributed to
the legal representative of the estate of the Designated Beneficiary.


 


12.                                 Administration.  The authority to manage and control the operation
and administration of the Option Terms shall be vested in the Committee, and
the Committee shall have all powers with respect to the Option Terms as it has
with respect to the Plan. Any interpretation of the Option Terms by the
Committee and any decision made by it with respect to the Option Terms is final
and binding on all persons.


 


13.                                 Plan
Governs. Notwithstanding anything in the Option Terms to the contrary, the
Option Terms shall be subject to the terms of the Plan, a copy of which may be
obtained by the Participant from the office of the Secretary of the Company;
and the Option Terms is subject to all interpretations, amendments, rules and
regulations promulgated by the Committee from time to time pursuant to the
Plan.


 


14.                                 Not
An Employment Contract. The Option will not confer on the Participant any
right with respect to continuance of employment or other service with the
Company or any Subsidiary, nor will it interfere in any way with any right the
Company or any Subsidiary would otherwise have to terminate or modify the terms
of such Participant’s employment or other service at any time.


 


15.                                 Notices.  Any written notices provided for in the
Option Terms or the Plan shall be in writing and shall be deemed sufficiently
given if either hand delivered or if sent by fax or overnight courier, or by
postage paid first class mail. Notices sent by mail shall be deemed received
three business days after mailing but in no event later than the date of actual
receipt. Notices shall be directed, if to the Participant, at the Participant’s
address indicated by the Company’s records, or if to the Company, at the
Company’s principal executive office.


 


16.                                 Fractional
Shares. In lieu of issuing a fraction of a share upon any exercise of the
Option, resulting from an adjustment of the Option pursuant to paragraph 3.4 of
the Plan or otherwise, the Company will be entitled to pay to the Participant
an amount equal to the fair market value of such fractional share.


 


17.                                 No
Rights As Shareholder.  The
Participant shall not have any rights of a shareholder with respect to the
shares subject to the Option, until a stock certificate has been duly issued
following exercise of the Option as provided herein.


 


18.                                 Amendment.  The Option Terms may be amended in
accordance with the provisions of the Plan, and may otherwise be amended by
written agreement of the Participant and the Company without the consent of any
other person.


 


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


 


	
   

  	
  Hospira, Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Its:

  	
   

  



 


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