Exhibit 10.12


 


AGREEMENT REGARDING

CHANGE IN CONTROL


 


THIS AGREEMENT (“Agreement”), is made and entered into as of the    
day of April, 2004 (the “Effective Date”) by and between Hospira, Inc. (the
“Company”) and                 
(the “Executive”);


 


WITNESSETH THAT:


 


WHEREAS, the Company considers it essential to the best interests of
its shareholders to foster the continuous employment of key management
personnel, and the Board of Directors of the Company (the “Board”) recognizes
that, as is the case with many publicly held corporations, a change in control
might occur and that such possibility, and the uncertainty and questions which
it may raise among management, may result in the departure or distraction of
management personnel to the detriment of the Company and its shareholders; and


 


WHEREAS, the Board has determined that appropriate steps should be
taken to reinforce and encourage the continued attention and dedication of
members of the Company’s management, including the Executive, to their assigned
duties without distraction in the face of potentially disturbing circumstances
arising from the possibility of a change in control of the Company;


 


NOW, THEREFORE, to induce the Executive to remain in the employ of the
Company and in consideration of the premises and mutual covenants set forth
herein, IT IS HEREBY AGREED by and between the parties as follows:


 


1.   AGREEMENT
TERM. THE INITIAL “AGREEMENT TERM” SHALL BEGIN ON THE EFFECTIVE DATE AND SHALL
CONTINUE THROUGH DECEMBER 31, 2007. 
AS OF DECEMBER 31, 2004, AND AS OF EACH DECEMBER 31
THEREAFTER, THE AGREEMENT TERM SHALL EXTEND AUTOMATICALLY TO THE THIRD
ANNIVERSARY THEREOF UNLESS THE COMPANY GIVES NOTICE TO THE EXECUTIVE PRIOR TO
THE DATE OF SUCH EXTENSION THAT THE AGREEMENT TERM WILL NOT BE EXTENDED. NOTWITHSTANDING
THE FOREGOING, IF A CHANGE IN CONTROL (AS DEFINED IN SECTION 7 BELOW),
OCCURS DURING THE AGREEMENT TERM, THE AGREEMENT TERM SHALL CONTINUE THROUGH AND
TERMINATE ON THE SECOND ANNIVERSARY OF THE DATE ON WHICH THE CHANGE IN CONTROL
OCCURS.


 


2.   ENTITLEMENT
TO CHANGE IN CONTROL BENEFITS. The Executive shall be entitled to the Change in
Control Benefits described in Section 3 hereof if the Executive’s
employment by the Company is terminated during the Agreement Term but after a
Change in Control (i) by the Company for any reason other than Permanent
Disability or Cause, (ii) by the Executive for Good Reason or (iii) by the


 


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Executive for any reason during the 30-day
period commencing on the first date which is six months after the date of the
Change in Control.  For purposes of this
Agreement:


 


(a)                                  A
termination of the Executive’s employment shall be treated as a termination by
reason of “Permanent Disability” only if, due to a mental or physical
disability, the Executive is absent from the full time performance of duties
with the Company for a period of at least twelve consecutive months and fails
to return to the full time performance of duties within 30 days after receipt
of a demand by the Company to do so.


 


(b)                                 The
term “Cause” shall mean the willful engaging by the Executive in illegal
conduct or gross misconduct which is demonstrably and materially injurious to
the Company. For purposes of this Agreement, no act, or failure to act, on the
Executive’s part shall be deemed “willful” unless done, or omitted to be done,
by the Executive not in good faith and without reasonable belief that the
Executive’s action or omission was in the best interests of the Company.
Notwithstanding the foregoing, the Executive shall not be deemed to have been
terminated for Cause unless and until the Company delivers to the Executive a
copy of a resolution duly adopted by the affirmative vote of not less than
three-quarters of the entire membership of the Board at a meeting of the Board
called and held for such purpose (after reasonable notice to the Executive and
an opportunity for the Executive, together with counsel, to be heard before the
Board) finding that, in the good faith opinion of the Board, the Executive was
guilty of conduct set forth above and specifying the particulars thereof in
detail.


 


(c)                                  The
term “Good Reason” shall mean the occurrence of any of the following
circumstances without the Executive’s express written consent:


 


(i)                                     a
significant adverse change in the nature, scope or status of the Executive’s
position, authorities or duties from those in effect immediately prior to the
Change in Control, including, without limitation, if the Executive was,
immediately prior to the Change in Control, an executive officer of a public
company, the Executive ceasing to be an executive officer of a public company;


 


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(ii)                                  the
failure by the Company to pay the Executive any portion of the Executive’s
current compensation;


 


(iii)                               a
reduction in the Executive’s annual base salary (or a material change in the
frequency of payment) as in effect immediately prior to the Change in Control
as the same may be increased from time to time;


 


(iv)                              the
failure by the Company to award the Executive an annual bonus in any year which
is at least equal to the annual bonus, awarded to the Executive under the
annual bonus plan of the Company for the year immediately preceding the year of
the Change in Control;


 


(v)                                 the
failure by the Company to award the Executive equity-based incentive
compensation (such as stock options, shares of restricted stock, or other
equity-based compensation) on a periodic basis consistent with the Company’s
practices with respect to timing, value and terms prior to the Change in
Control;


 


(vi)                              the
failure by the Company to continue to provide the Executive with the welfare
benefits, fringe benefits and perquisites enjoyed by the Executive immediately
prior to the Change in Control under any of the Company’s plans or policies,
including, but not limited to, those plans and policies providing pension, life
insurance, medical, dental, prescription, health and accident, disability,
vacation, and other executive perquisites;


 


(vii)                           the
relocation of the Company’s principal executive offices to a location more than
thirty-five miles from the location of such offices immediately prior to the
Change in Control or the Company requiring the Executive to be based anywhere
other than the Company’s principal executive offices except for required travel
to the Company’s business to an extent substantially consistent with the
Executive’s business travel obligations immediately prior to the Change in
Control; or


 


(viii)                        the
failure of the Company to obtain a satisfactory agreement from any successor to
the Company to


 


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assume and agree to perform
this Agreement as contemplated by Section 16.


 


For purposes of any
determination regarding the existence of Good Reason, any good faith
determination by the Executive that Good Reason exists shall be conclusive.


 


3.   CHANGE IN
CONTROL BENEFITS. In the event of a termination of employment entitling the
Executive to benefits in accordance with Section 2, the Executive shall
receive the following:


 


(a)                                  The
Executive shall be entitled to receive the following employee welfare benefits:
medical, health and accident, dental, prescription, disability, and life
insurance coverage for the Executive (and, where applicable under the Company’s
welfare benefit plans, the Executive’s family) through the third anniversary of
the Executive’s date of termination of employment, or, if earlier, the date on
which the Executive becomes employed by another employer. The benefits provided
by the Company shall be no less favorable in terms of coverage and cost to the
Executive than those provided under the Company’s welfare benefit plans
applicable to the Executive (and, where applicable, the Executive’s family)
prior to the Change in Control, determined as if the Executive remained in the
employ of the Company through such third anniversary.


 


(b)                                 If
the Executive’s date of termination occurs after the end of a performance
period applicable to an annual incentive (bonus) award, and prior to the
payment of the award for the period, the Executive shall be entitled to a lump
sum payment in cash no later than twenty (20) business days after the date of
termination equal to the greatest of (i) the Executive’s annual incentive
(bonus) award for that period, as determined under the terms of that incentive
award arrangement, (ii) the Executive’s annual incentive (bonus) award for that
period, with the determination of the amount of such award based on an
assumption that the target level of performance had been achieved or (iii) the
Executive’s average annual incentive (bonus) award for the three annual
performance periods preceding that period (provided that if the Executive was
not a participant in the incentive award arrangement for any of those three
prior years, the averaging period shall be reduced from three years to the
number of years during the three year period in which the Executive was a
participant; and further provided that if the Executive’s award for any such
year was reduced because


 


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the Executive was not a
participant for the full year, such amount shall be annualized for purposes of
the computation in this clause (iii)).


 


(c)                                  For
any annual incentive (bonus) plan or arrangement in which the Executive participates
for the performance period in which the Executive’s termination of employment
occurs, the Executive shall be entitled to a lump sum payment in cash no later
than twenty (20) business days after the date of termination equal to the
greater of (i) the Executive’s annual incentive (bonus) award for the
performance period that includes the date of termination, with the
determination of the amount of such award based on an assumption that the
target level of performance has been achieved or (ii) the Executive’s average
annual incentive (bonus) award for the three annual performance periods
preceding the performance period that includes the date of termination  (provided that if the Executive was not a
participant in the incentive award arrangement for any of those three prior
years, the averaging period shall be reduced from three years to the number of
years during the three year period in which the Executive was a participant;
and further provided that if the Executive’s award for any such year was reduced
because the Executive was not a participant for the full year, such amount
shall be annualized for purposes of the computation in this clause (ii));
provided that such payment shall be subject to a pro-rata reduction to reflect
the number of days in the performance period following the date of termination.
The amount payable under this paragraph (c) shall be in lieu of any amounts
that may otherwise be due to the Executive with respect to any annual incentive
(bonus) plan or arrangement in which the Executive participates for the
performance period in which the Executive’s date of termination occurs.


 


(d)                                 The
Executive shall be entitled to a lump sum payment in cash no later than twenty
(20) business days after the Executive’s date of termination equal to the sum
of:


 


(i)                                     an
amount equal to 2.99 times the Executive’s annual salary rate in effect on the
date of the Change in Control or, if greater, as in effect immediately prior to
the date of termination; plus


 


(ii)                                  an
amount equal to 2.99 times the greater of (x) the Executive’s annual incentive
(bonus) award for the


 


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performance period that
includes the date of the Executive’s termination of employment, with the
determination of the amount of such award based on an assumption that the
target level of performance has been achieved or (y) the Executive’s average
annual incentive (bonus) award for the three annual performance periods
preceding the performance period that includes the date of termination (provided
that if the Executive was not a participant in the incentive award arrangement
for any of those three prior years, the averaging period shall be reduced from
three years to the number of years during the three year period in which the
Executive was a participant; and further provided that if the Executive’s award
for any such year was reduced because the Executive was not a participant for
the full year, such amount shall be annualized for purposes of the computation
in this clause (y).


 


The amount payable
under this paragraph (d) shall be inclusive of the amounts, if any, to which
the Executive would otherwise be entitled as severance pay under any severance
pay plan, or by law and shall be in addition to (and not inclusive of) any
amount payable under any written agreement(s) directly between the Executive
and the Company or any of its subsidiaries.


 


(e)                                  The
Executive shall be entitled to benefits under the Hospira Supplemental Pension
Plan (the “Supplemental Plan”) which shall be determined as if the Executive
had been credited for benefit accrual purposes with three additional years of
service and three additional years of eligible earnings at the higher of the
Executive’s eligible earnings on the date of termination or the Executive’s
eligible earnings on the date of the Change in Control and, for purposes of
determining the Executive’s eligibility for subsidized early retirement
benefits, determined as if the Executive were three years older than the
Executive’s actual age on the date of termination. For purposes of this
paragraph (e), “eligible earnings” shall include salary, annual incentive
(bonus) awards and all other forms of compensation used to calculate benefits
under the Supplemental Plan. The amounts of the annual incentive (bonus) awards
shall be calculated in accordance with this paragraph (e) and, to the extent
applicable, paragraphs (b) and (c) above. The Executive’s benefits under the
Supplemental Plan shall be determined, paid and


 


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administered without regard to
any termination or amendment (including any amendment affecting actuarial
factors) of such plan or of any other plan, which is adopted on or after a
Change in Control or in contemplation of a Change in Control and, subject to paragraph
(f) below, shall be paid in accordance with the terms of that plan and the
Executive’s elections under that plan. Within twenty (20) days of Executive’s
date of termination, the Company shall provide the Executive with all forms,
elections and materials required in connection with the payment of the
Executive’s benefits under that plan. Within twenty (20) days of the Company’s
receipt of properly executed and completed forms, elections and other required
materials from the Executive, the Company shall pay the additional benefits to
the extent provided by the terms of such plan.


 


(f)                                    The
Company shall provide the Executive with outplacement services and tax and
financial counseling suitable to the Executive’s position through the third
anniversary of the date of the Executive’s termination of employment, or, if
earlier, the date on which the Executive becomes employed by another employer.


 


If the
Executive is a participant in the Hospira Performance Incentive Plan or any
successor thereto, the Executive’s annual incentive (bonus) award for the
performance period which includes the date of termination under paragraphs (c)
and (d)(ii) above and, if applicable, for the period preceding the date of
termination under paragraph (b) shall, be determined under the bonus levels
communicated in writing to the Executive by the Company for such year.


 


4.   MITIGATION.
The Executive shall not be required to mitigate the amount of any payment
provided for in this Agreement by seeking other employment or otherwise. Except
as set forth in paragraph 3(a) with respect to benefits, the Company shall not
be entitled to set off against the amounts payable to the Executive under this
Agreement any amounts owed to the Company by the Executive, any amounts earned
by the Executive in other employment after the Executive’s termination of
employment with the Company, or any amounts which might have been earned by the
Executive in other employment had the Executive sought such other employment.


 


5.   MAKE-WHOLE
PAYMENTS. If any payment or benefit to which the Executive (or any person on
account of the Executive) is entitled, whether under this Agreement or
otherwise, in connection with a Change in Control or the Executive’s
termination of employment (a “Payment”) constitutes a “parachute payment”
within the meaning of section 280G of the Internal Revenue Code of 1986,
as amended (the “Code”), and as a result thereof the Executive is subject to a
tax under section 4999 of the Code, or any successor thereto, (an “Excise
Tax”), the Company shall pay to the Executive an additional amount (the
“Make-Whole Amount”) which is intended to make


 


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the Executive whole for such Excise Tax. The
Make-Whole Amount shall be equal to (i) the amount of the Excise Tax, plus (ii)
the aggregate amount of any interest, penalties, fines or additions to any tax
which are imposed in connection with the imposition of such Excise Tax, plus
(iii) all income, excise and other applicable taxes imposed on the Executive
under the laws of any Federal, state or local government or taxing authority by
reason of the payments required under clauses (i) and (ii) and this clause
(iii).


 


(a)                                  For
purposes of determining the Make-Whole Amount, the Executive shall be deemed to
be taxed at the highest marginal rate under all applicable local, state,
federal and foreign income tax laws for the year in which the Make-Whole Amount
is paid. The Make-Whole Amount payable with respect to an Excise Tax shall be
paid by the Company coincident with the Payment with respect to which such
Excise Tax relates.


 


(b)                                 All
calculations under this Section 5 shall be made initially by the Company
and the Company shall provide prompt written notice thereof to the Executive to
enable the Executive to timely file all applicable tax returns. Upon request of
the Executive, the Company shall provide the Executive with sufficient tax and
compensation data to enable the Executive or the Executive’s tax advisor to
independently make the calculations described in subparagraph (a) above and the
Company shall reimburse the Executive for reasonable fees and expenses incurred
for any such verification.


 


(c)                                  If
the Executive gives written notice to the Company of any objection to the
results of the Company’s calculations within 60 days of the Executive’s receipt
of written notice thereof, the dispute shall be referred for determination to
independent tax counsel selected by the Company and reasonably acceptable to
the Executive (“Tax Counsel”). The Company shall pay all fees and expenses of
such Tax Counsel. Pending such determination by Tax Counsel, the Company shall
pay the Executive the Make-Whole Amount as determined by it in good faith. The
Company shall pay the Executive any additional amount determined by Tax Counsel
to be due under this Section 5 (together with interest thereon at a rate
equal to 120% of the Federal short-term rate determined under
section 1274(d) of the Code) promptly after such determination.


 


(d)                                 The
determination by Tax Counsel shall be conclusive and binding upon all parties
unless the Internal Revenue Service, a court of competent jurisdiction, or such
other


 


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duly empowered governmental
body or agency  (a “Tax Authority”)
determines that the Executive owes a greater or lesser amount of Excise Tax
with respect to any Payment than the amount determined by Tax Counsel.


 


(e)                                  If
a Taxing Authority makes a claim against the Executive which, if successful,
would require the Company to make a payment under this Section 5, the
Executive agrees to contest the claim with counsel reasonably satisfactory to
the Company, on request of the Company subject to the following conditions:


 


(i)                                     The
Executive shall notify the Company of any such claim within 10 days of becoming
aware thereof. In the event that the Company desires the claim to be contested,
it shall promptly (but in no event more than 30 days after the notice from the
Executive or such shorter time as the Taxing Authority may specify for
responding to such claim) request the Executive to contest the claim. The
Executive shall not make any payment of any tax which is the subject of the
claim before the Executive has given the notice or during the 30-day period
thereafter unless the Executive receives written instructions from the Company
to make such payment together with an advance of funds sufficient to make the
requested payment plus any amounts payable under this Section 5 determined
as if such advance were an Excise Tax, in which case the Executive will act
promptly in accordance with such instructions.


 


(ii)                                  If
the Company so requests, the Executive will contest the claim by either paying
the tax claimed and suing for a refund in the appropriate court or contesting
the claim in the United States Tax Court or other appropriate court, as
directed by the Company; PROVIDED, HOWEVER, that any request by the Company for
the Executive to pay the tax shall be accompanied by an advance from the
Company to the Executive of funds sufficient to make the requested payment plus
any amounts payable under this Section 5 determined as if such advance
were an Excise Tax. If directed by the Company in writing the Executive will
take all action necessary to compromise or settle the claim, but in no event
will the Executive compromise or


 


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settle the claim or cease to
contest the claim without the written consent of the Company; PROVIDED,
HOWEVER, that the Executive may take any such action if the Executive waives in
writing the Executive’s right to a payment under this Section 5 for any
amounts payable in connection with such claim. The Executive agrees to
cooperate in good faith with the Company in contesting the claim and to comply
with any reasonable request from the Company concerning the contest of the
claim, including the pursuit of administrative remedies, the appropriate forum
for any judicial proceedings, and the legal basis for contesting the claim.
Upon request of the Company, the Executive shall take appropriate appeals of
any judgment or decision that would require the Company to make a payment under
this Section 5. Provided that the Executive is in compliance with the
provisions of this section, the Company shall be liable for and indemnify the
Executive against any loss in connection with, and all costs and expenses,
including attorneys’ fees, which may be incurred as a result of, contesting the
claim, and shall provide to the Executive within 30 days after each written
request therefor by the Executive cash advances or reimbursement for all such
costs and expenses actually incurred or reasonably expected to be incurred by
the Executive as a result of contesting the claim.


 


(f)                                    Should
a Tax Authority finally determine that an additional Excise Tax is owed, then
the Company shall pay an additional Make-Whole Amount to the Executive in a
manner consistent with this Section 5 with respect to any additional
Excise Tax and any assessed interest, fines, or penalties. If any Excise Tax as
calculated by the Company or Tax Counsel, as the case may be, is finally
determined by a Tax Authority to exceed the amount required to be paid under
applicable law, then the Executive shall repay such excess to the Company
within 30 days of such determination; provided that such repayment shall be
reduced by the amount of any taxes paid by the Executive on such excess which
is not offset by the tax benefit attributable to the repayment.


 


6.   TERMINATION
DURING POTENTIAL CHANGE IN CONTROL. If a Potential Change in Control (as
defined in Section 8) occurs during the Agreement Term, and the Company
terminates the Executive’s employment for reasons other than


 


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Permanent Disability or Cause during such
Potential Change in Control, the Executive shall be entitled to receive the
benefits that the Executive would have received under Section 3, such
benefits to be calculated based upon the Executive’s compensation prior to the
actual termination of employment but paid within 20 business days of the date
of such termination.


 


7.   CHANGE IN
CONTROL. For purposes of this Agreement, a “Change in Control” shall be deemed
to have occurred on the earliest of the following dates:


 


(a)                                  the
date any Person is or becomes the Beneficial Owner, directly or indirectly, of
securities of the Company (not including in the securities beneficially owned
by such Person any securities acquired directly from the Company or its
Affiliates) representing 20% or more of the combined voting power of the
Company’s then outstanding securities, excluding any Person who becomes such a
Beneficial Owner in connection with a transaction described in clause (i) of
paragraph (c) below; or


 


(b)                                 the
date on which the following individuals cease for any reason to constitute a
majority of the number of directors then serving: individuals who, on the date
hereof, constitute the Board and any new director (other than a director whose
initial assumption of office is in connection with an actual or threatened
election contest, including but not limited to a consent solicitation, relating
to the election of directors of the Company) whose appointment or election by
the Board or nomination for election by the Company’s shareholders was approved
or recommended by a vote of at least two-thirds (2/3) of the directors then
still in office who either were directors on the date hereof or whose
appointment, election or nomination for election was previously so approved or
recommended; or;


 


(c)                                  the
date on which there is consummated a merger or consolidation of the Company or
any direct or indirect subsidiary of the Company with any other corporation or
other entity, other than (i) a merger or consolidation (A) immediately
following which the individuals who comprise the Board immediately prior thereto
constitute at least a majority of the board of directors of the Company, the
entity surviving such merger or consolidation or, if the Company or the entity
surviving such merger or consolidation is then a subsidiary, the ultimate
parent thereof and (B) which results in the voting securities of the Company
outstanding immediately prior to such merger or consolidation continuing to
represent (either by remaining


 


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outstanding or by being
converted into voting securities of the surviving entity or any parent
thereof), in combination with the ownership of any trustee or other fiduciary
holding securities under an employee benefit plan of the Company or any
subsidiary of the Company, at least 50% of the combined voting power of the
securities of the Company or such surviving entity or any parent thereof
outstanding immediately after such merger or consolidation, or (ii) a merger or
consolidation effected to implement a recapitalization of the Company (or similar
transaction) in which no Person is or becomes the Beneficial Owner, directly or
indirectly, of securities of the Company (not including in the securities
Beneficially Owned by such Person any securities acquired directly from the
Company or its Affiliates) representing 20% or more of the combined voting
power of the Company’s then outstanding securities; or


 


(d)                                 the
date on which the shareholders of the Company approve a plan of complete
liquidation or dissolution of the Company or there is consummated an agreement
for the sale or disposition by the Company of all or substantially all of the
Company’s assets, other than a sale or disposition by the Company of all or
substantially all of the Company’s assets to an entity, at least 50% of the
combined voting power of the voting securities of which are owned by
shareholders of the Company, in combination with the ownership of any trustee
or other fiduciary holding securities under an employee benefit plan of the
Company or any subsidiary of the Company, in substantially the same proportions
as their ownership of the Company immediately prior to such sale.


 


Notwithstanding the foregoing,
a “Change in Control” shall not be deemed to have occurred by virtue of the
consummation of any transaction or series of integrated transactions
immediately following which the record holders of the common stock of the
Company immediately prior to such transaction or series of transactions
continue to have  substantially the
same proportionate ownership in an entity which owns all or substantially all
of the assets of the Company immediately following such transaction or series
of transactions.


 


For purposes of this Agreement:
“Affiliate” shall have the meaning set forth in Rule 12b-2 promulgated under
Section 12 of the Exchange Act; “Beneficial Owner” shall have the meaning
set forth in Rule 13d-3 under the Exchange Act; “Exchange Act” shall


 


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mean the Securities Exchange
Act of 1934, as amended from time to time; and “Person” shall have the meaning
given in Section 3(a)(9) of the Exchange Act, as modified and used in
Sections 13(d) and 14(d) thereof, except that such term shall not include (i)
the Company or any of its subsidiaries, (ii) a trustee or other fiduciary
holding securities under an employee benefit plan of the Company or any of its
Affiliates, (iii) an underwriter temporarily holding securities pursuant to an
offering of such securities, or (iv) a corporation owned, directly or
indirectly, by the shareholders of the Company in substantially the same
proportions as their ownership of stock of the Company.


 


8.   POTENTIAL
CHANGE IN CONTROL. A “Potential Change in Control” shall exist during any
period in which the circumstances described in paragraphs (a), (b), (c) or (d),
below, exist (provided, however, that a Potential Change in Control shall cease
to exist not later than the occurrence of a Change in Control):


 


(a)                                  The
Company enters into an agreement, the consummation of which would result in the
occurrence of a Change in Control, provided that a Potential Change in Control
described in this paragraph (a) shall cease to exist upon the expiration or
other termination of all such agreements;


 


(b)                                 Any
Person (without regard to the exclusions set forth in subsections (i) through
(iv) of such definition) publicly announces an intention to take or to consider
taking actions the consummation of which would constitute a Change in Control;
provided that a Potential Change in Control described in this paragraph (b)
shall cease to exist upon the withdrawal of such intention, or upon a
determination by the Board that there is no reasonable chance that such actions
would be consummated;


 


(c)                                  Any
Person becomes the Beneficial Owner, directly or indirectly, of securities of
the Company representing 10% or more of either the then outstanding shares of
common stock of the Company or the combined voting power of the Company’s then
outstanding securities (not including in the securities beneficially owned by
such Person any securities acquired directly from the Company or its
Affiliates);


 


(d)                                 The
Board adopts a resolution to the effect that, for purposes of this Agreement, a
Potential Change in Control exists; provided that a Potential Change in Control
described in this paragraph (d) shall cease to exist upon a determination by
the Board that the reasons that gave rise


 


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to the resolution providing for
the existence of a Potential Change in Control have expired or no longer exist.


 


9.   STOCK AND
OPTION AWARDS. With respect to any award granted to the Executive under any of
the Company’s stock incentive plans, including the Company’s 2004 Long-Term
Stock Incentive Plan (the “Program”) or any successor program, the following
shall apply:


 


(a)                                  if
the award (other than Conversion Awards, [as defined in the Program] that are
incentive stock options granted pursuant to Section 422 of the Internal
Revenue Code (each a “Converted Incentive Stock Option”) prior to the first
date on which the agreement regarding Change in Control, dated as of the 1st
day of January, 2000, by and between Abbott Laboratories and the Executive
(“Original Agreement”), was executed)includes a provision substantially similar
to the provision contained in the first paragraph in Appendix A, then after a
Change in Control no forfeiture shall be effected pursuant to such provision
unless the Executive shall have been terminated for “Cause” within the meaning
of paragraph 2(b) above;


 


(b)                                 if
the award (other than a Converted Incentive Stock Option granted prior to
June 20, 2003) includes a provision substantially similar to the provision
contained in the second paragraph in Appendix A, then after a Change in Control
no forfeiture shall be effected pursuant to such provision unless the Executive
shall have been terminated for “Cause” within the meaning of paragraph 2(b)
above; and


 


(c)                                  if
the Executive becomes entitled to Change in Control Benefits under
Section 2 above, then in determining the Executive’s rights with respect
to that award, other than Converted Incentive Stock Options granted prior to
the first date on which the Original Agreement was executed, the Executive
shall be treated as having incurred a termination of employment due to
retirement.


 


10.   WITHHOLDING.
All payments to the Executive under this Agreement will be subject to
withholding of applicable taxes. The Company shall withhold the applicable
taxes in an amount calculated at the minimum statutory rate and shall pay the
amount so withheld to the appropriate tax authority.


 


11.   NONALIENATION.
The interests of the Executive under this Agreement are not subject in any
manner to anticipation, alienation, sale, transfer,


 


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assignment, pledge, encumbrance, attachment,
or garnishment by creditors of the Executive or the Executive’s beneficiary.


 


12.   AMENDMENT.
This Agreement may be amended or canceled only by mutual agreement of the
parties in writing without the consent of any other person. So long as the
Executive lives, no person, other than the parties hereto, shall have any
rights under or interest in this Agreement or the subject matter hereof.


 


13.   APPLICABLE
LAW. The provisions of this Agreement shall be construed in accordance with the
laws of the State of Illinois, without regard to the conflict of law provisions
of any state.


 


14.   SEVERABILITY.
The invalidity or unenforceability of any provision of this Agreement will not
affect the validity or enforceability of any other provision of this Agreement,
and this Agreement will be construed as if such invalid or unenforceable
provision were omitted (but only to the extent that such provision cannot be
appropriately reformed or modified).


 


15.   WAIVER OF
BREACH. No waiver by any party hereto of a breach of any provision of this
Agreement by any other party, or of compliance with any condition or provision
of this Agreement to be performed by such other party, will operate or be
construed as a waiver of any subsequent breach by such other party of any similar
or dissimilar provisions and conditions at the same or any prior or subsequent
time. The failure of any party hereto to take any action by reason of such
breach will not deprive such party of the right to take action at any time
while such breach continues.


 


16.   SUCCESSORS,
ASSUMPTION OF CONTRACT. This Agreement shall be binding upon and inure to the
benefit of the Company and any successor of the Company. The Company will
require any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business and/or
assets of the Company to expressly assume and agree to perform this Agreement
in the same manner and to the same extent that the Company would be required to
perform it if no succession had taken place. This Agreement is personal to the
Executive and may not be assigned by the Executive without the written consent
of the Company. However, to the extent that rights or benefits under this
Agreement otherwise survive the Executive’s death, the Executive’s heirs and
estate shall succeed to such rights and benefits pursuant to the Executive’s
will or the laws of descent and distribution; provided that the Executive shall
have the right at any time and from time to time, by notice delivered to the
Company, to designate or to change the beneficiary or beneficiaries with
respect to such benefits.


 


17.   NOTICES.
Notices and all other communications provided for in this Agreement shall be in
writing and shall be delivered personally or sent by registered or certified
mail, return receipt requested, postage prepaid (provided that international
mail shall be sent via overnight or two-day delivery), or sent by facsimile or
prepaid overnight courier to the parties at the addresses set forth below. Such
notices, demands, claims and other communications shall be deemed given:


 


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(a)                                  in
the case of delivery by overnight service with guaranteed next day delivery,
the next day or the day designated for delivery;


 


(b)                                 in
the case of certified or registered U.S. mail, five days after deposit in the
U.S. mail; or


 


(c)                                  in
the case of facsimile, the date upon which the transmitting party received
confirmation of receipt by facsimile, telephone or otherwise;


 


provided,
however, that in no event shall any such communications be deemed to be given
later than the date they are actually received. Communications that are to be
delivered by the U.S. mail or by overnight service or two-day delivery service
are to be delivered to the addresses set forth below:


 


to the
Company:


 


Corporate Vice
President of Human Resources


 Hospira, Inc.


275 North Field Road


Lake Forest Illinois 60064


 


with a copy
(which shall not constitute notice) to:


 


General Counsel and Secretary


Hospira, Inc.


275 North Field Road


Lake Forest, Illinois 60064


 


or to the
Executive:


 


Name


Address


City, State  Zip


 


Each party, by
written notice furnished to the other party, may modify the applicable delivery
address, except that notice of change of address shall be effective only upon
receipt.


 


18.   RESOLUTION
OF ALL DISPUTES. Any controversy or claim arising out of or relating to this
Agreement (or the breach thereof) (a “Dispute”) shall be settled by alternative
dispute resolution procedures in accordance with Appendix B hereto.  During the pendency of any Dispute, the
Company shall continue to pay the Executive the full compensation in effect
when the notice giving rise to the Dispute was given (including, but not
limited to, salary) and continue the Executive (and, where applicable, the
Executive’s family) as a participant in all compensation, benefit and


 


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insurance plans in which the Executive was
participating when the notice giving rise to the Dispute was given, until such
Dispute is resolved.


 


19.   LEGAL AND
ENFORCEMENT COSTS. The provisions of this Section 19 shall apply if it
becomes necessary or desirable for the Executive to retain legal counsel or
incur other costs and expenses in connection with enforcing any and all rights
under this Agreement or any other compensation plan maintained by the Company,
including, but not limited to the Hospira 2004 Long-Term Stock Incentive Plan,
the Hospira Performance Incentive Plan, the Hospira 401(k) Supplemental Plan,
the Hospira Supplemental Pension Plan, the Hospira Management Incentive Plan
or, in each case, any trust adopted pursuant thereto:


 


(a)                                  The
Executive shall be entitled to recover from the Company reasonable attorneys’
fees, costs and expenses incurred in connection with such enforcement or
defense.


 


(b)                                 Payments
required under this Section 19 shall be made by the Company to the
Executive (or directly to the Executive’s attorney) promptly following
submission to the Company of appropriate documentation evidencing the
incurrence of such attorneys’ fees, costs, and expenses.


 


(c)                                  The
Executive shall be entitled to select legal counsel; provided, however, that
such right of selection shall not affect the requirement that any costs and
expenses reimbursable under this Section 19 be reasonable.


 


(d)                                 The
Executive’s rights to payments under this Section 19 shall not be affected
by the final outcome of any dispute with the Company.


 


20.   SURVIVAL
OF AGREEMENT. Except as otherwise expressly provided in this Agreement, the
rights and obligations of the parties to this Agreement shall survive the
termination of the Executive’s employment with the Company.


 


21.   ENTIRE
AGREEMENT. Except as otherwise provided herein, this Agreement constitutes the
entire agreement between the parties concerning the subject matter hereof and
supersedes all prior or contemporaneous agreements, between the parties
relating to the subject matter hereof; provided, however, that nothing in this
Agreement shall be construed to limit any policy or agreement that is otherwise
applicable relating to confidentiality, rights to inventions, copyrightable
material, business and/or technical information, trade secrets, solicitation of
employees, interference with relationships with other businesses, competition,
and other similar policies or agreement for the protection of the business and
operations of the Company and the subsidiaries.


 


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22.   COUNTERPARTS.
This Agreement may be executed in two or more counterparts, any one of which
shall be deemed the original without reference to the others.


 


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IN WITNESS THEREOF, the Executive has hereunto set his hand, and the
Company has caused these presents to be executed in its name and on its behalf,
and its corporate seal to be hereunto affixed on this          
day of            ,
2004, all as of the Effective Date.


 


 


	
   

  	
   

  	
   

  
	
   

  	
  EXECUTIVE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  HOSPIRA, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Its

  	
   

  	
   

  
	
   

  	
   

  
	
  ATTEST:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (Seal)

  	
   

  	
   

  



 


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