Document:

Exhibit
10.3(i)(iii)

 

	
   

  	
  Hospira,
  Inc.

  
	
  Notice
  of Grant of

  	
  ID: 20-0504497

  
	
  Award
  and Award Agreement

  	
  275
  N. Field Drive

  
	
   

  	
  Lake
  Forest, IL 60045

  
	
   

  	
   

  
	
   

  	
  Award
  Number:

  
	
   

  	
   

  
	
   

  	
  Plan: Hospira 2004 Long-Term Stock Incentive
  Plan

  
	
   

  	
   

  
	
   

  	
  ID:

  

 

Effective
February            , 2010, you have been granted Restricted Stock
Units with respect to                shares of Hospira, Inc. (the Company) stock.

 

The
Restricted Stock Units are subject to the attainment of performance goals
described in the attached Term Sheet and will become fully vested on the date
shown.

 

	
   

  	
   

  	
  Units

  	
   

  	
  Vest Type

  	
   

  	
  Full Vest

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  On Vest Date

  	
   

  	
  December
  31, 2012

  	
   

  	
   

  

 

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

 

 

	
   

  	
   

  	
  February         , 2010

  
	
  Hospira,
  Inc.  

  	
   

  	
  Date

  
	
   

  	
   

  	
   

  
	
  Name:
  Christopher B. Begley

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Title:
  Chairman & Chief Executive Officer

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Employee
  Name

  	
   

  	
  Date

  

 

 

RESTRICTED
STOCK UNIT AWARD AGREEMENT

 

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

 

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

 

The parties hereto agree as follows:

 

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

 

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

 

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

 

(b)                                 Any Units subject to the
Restrictions shall be automatically forfeited upon the earliest to occur of the
following: (i) except as provided in Section 7, the date of the Grantee’s
termination of employment with the Company or a subsidiary for any reason other
than death, Disability or Retirement; (ii) subject to the provisions of Section
3, the date the Grantee engages in conduct which constitutes Restricted
Activity; or (iii) as provided in Section 4.

 

3.                                       Restricted Activity.

 

(a)                                  Without the prior written consent
of the Committee, the Grantee shall not, while employed by the Company and for
a period of one year following the termination of employment for any reason:

 

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

 

(ii)                      directly or
indirectly divert, take away, solicit, or assist others in soliciting any
current or prospective customer, supplier, independent contractor or service
provider 

 

 

of the Company or any affiliate or otherwise interfere with the
relationship between the Company or any affiliate and any current or
prospective customer, service provider, supplier, independent contractor or
stockholder;

 

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

 

(iv)                  engage in conduct which constitutes Cause.

 

(b)                                 If the Grantee engages in
any activity described in paragraph 3(a) above without the written consent of
the Committee, the Company, as determined by the Committee in its sole
discretion, may terminate the Agreement as of the date on which the Grantee
engaged in such Restricted Activity, and (i) the Grantee shall pay to the
Company in cash any Financial Gain the Grantee realized from the vesting of the
Units, provided that such vesting occurred within one year from the date that
the Grantee engaged in such Restricted Activity, and (ii) if the Restricted
Activity occurs prior to the delivery of the Earned Units, the Grantee shall
forfeit the Units and this Agreement shall terminate as of the date on which
the Grantee first engaged in such Restricted Activity.

 

4.                                       Other Right to Correct Payments. 
Subject to the Company’s Executive Compensation Recover Policy, and
notwithstanding anything in the Agreement to the contrary, if the Committee
determines, in its sole discretion, that the number of Units determined to be
delivered under the Agreement or the value of such Units was based on the
Company’s published financial statements that have been restated then, at the
Committee’s discretion, the Company may, but in no case later than 60 months of
such restatement:

 

(a)                                  cancel all Units (whether vested or unvested) that were based upon the financial
performance in the published financial statements that was subsequently
restated;

 

(b)                                 rescind any delivery of Units that were based upon the financial
performance in the published financial statements that was subsequently
restated; and

 

(c)                                  if any amount
has been realized from the vesting of the Units that would have been lower had the
financial results been properly reported, recover all or any Financial Gain realized
by the Grantee, as determined by the Committee in its sole discretion, that
resulted from the financial results that were subsequently restated, and the Grantee
agrees to repay and return any such Financial Gain to the Company.

 

The Committee may, in its
sole discretion, effect any such recovery by obtaining repayment directly from
the Grantee, setting off the amount owed to the Company against any amount or
award that would otherwise be granted by the Company to the Grantee, reducing
any future compensation or benefit to the Grantee or any combination thereof.

 

5.                                       Death,
Disability or Retirement.  In
the event of the death, Disability or Retirement of the Grantee at any time
during the performance period, the a number of shares of Common Stock equal to
the number of Earned Units (or cash equal to the value of the shares) will be
delivered to the Grantee or the Grantee’s personal representative, upon the
determination of the number of Earned Units after the end of the performance
period, but no later than 90 days following the end of such performance period.

 

 

6.                                       Change in
Control.  In the event of a Change in
Control of the Company during the performance period, the Grantee will be
deemed to have earned an award based on the target performance goal established
by the Committee and a number of shares of Common Stock equal to the number of
deemed Earned Units (or cash equal to the value of the shares) will be
delivered to the Grantee no later than 90 days following such Change in
Control.

 

7.                                       Termination of
Employment.  In the event of the Grantee’s Involuntary
Termination of Employment during the performance period, the number of shares
of Common Stock equal to the number of Earned Units as of the date of such
Involuntary Termination of Employment will be delivered to the Grantee, upon
the determination of the number of Earned Units after the end of the
performance period, but no later than 90 days following the end of such
performance period. If Grantee’s termination of employment during the
performance period for reasons other than death, Disability or Retirement does
not constitute an Involuntary Termination of Employment, all Units shall be
forfeited.  The Company will not be
obligated to pay Grantee any consideration whatsoever for forfeited Units
(whether or not earned).

 

8.                                       Dividend
Equivalents.  Neither
dividends nor Dividend Equivalents will be paid or accrued on unvested Units.

 

9.                                       Adjustments.  If the number of outstanding shares of Common
Stock is changed as a result of stock dividend, stock split or the like without
additional consideration to the Company, the number of Units subject to this
Award shall be adjusted in accordance with the applicable provisions of the
Plan pertaining to such adjustments.

 

10.                                 Delivery of
Certificate.  Subject to
withholding of taxes as provided in Section 11 below, the Company shall deliver
to the Grantee a certificate representing a number of shares of Common Stock
equal to the number of Earned Units on which Restrictions have lapsed plus a
cash payment equal to the value of any fractional Earned Unit then credited to
the Grantee’s account, upon the lapse of Restrictions, or at a later date
specified by the Grantee in a Notice of Deferral Election filed with the
Committee within rules established to comply with section 409A of the Internal
Revenue Code of 1986, as amended, and any regulations promulgated thereunder (“Section
409A”) and in conformance with such deferral option forms under the Notice of
Deferral Election provided by the Company.

 

11.                                 Withholding
Taxes.  The Company is entitled to
withhold an amount equal to the Company’s required statutory withholding taxes
for the respective tax jurisdiction attributable to any share of Common Stock
or property deliverable in connection with the Earned Units.  Subject to such limitations as the Company
may establish from time to time, Grantee may satisfy any withholding obligation
in whole or in part by making a cash payment equal to the amount required to be
withheld.

 

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

 

13.                                 Voting and
Other Rights.

 

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

 

(b)                                 The grant of
Units does not confer upon Grantee any right to continue in the employ of the
Company or a subsidiary or to limit or interfere with the right of the Company
or a subsidiary, to terminate Grantee’s employment at any time.

 

 

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

 

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

 

14.                                 Funding.  No assets or shares of Common Stock shall be
segregated or earmarked by the Company in respect of any Units awarded
hereunder.  The grant of Units hereunder
shall not constitute a trust and shall be solely for the purpose of recording
an unsecured contractual obligation of the Company.

 

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

 

(a)                                  Cause.  The term “Cause” shall mean, in the sole
opinion and discretion of the Committee, the Grantee 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 Grantee’s duties or
in the course of employment, or (iii) wrongfully disclosed secret processes or
confidential information of the Company or its subsidiaries.

 

(b)                                 Competitive
Business.  The term “Competitive
Business” means any business activity in which the Company or any subsidiary is
actively engaged at the time the Grantee’s employment terminates.  For these purposes, entities deemed to be
engaged in Competitive Business include, by way of example and not limitation,
Abraxis BioScience, Inc., Baxter International Inc., Teva Pharmaceuticals,
Becton, Dickinson and Company, B. Braun Melsungen AG, Cardinal Healthcare Inc.,
Fresenius Medical Care AG, Terumo Medical Corporation, Patheon, Inc., and
Edwards Lifesciences Corporation.

 

(c)                                  Date of
Termination.  The term “Date
of Termination” means the first day occurring on or after grant of the award
under this Agreement on which the Grantee 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 Grantee between the Company and a subsidiary or
between two subsidiaries; and further provided that the Grantee’s employment
shall not be considered terminated while the Grantee is on a leave of absence
from the Company or a subsidiary approved by the Grantee’s employer.  If, as a result of a sale or other
transaction, the Grantee’s employer ceases to be a subsidiary (and the Grantee’s
employer is or becomes an entity that is separate from the Company), and the
Grantee 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 Grantee’s Date of Termination caused by the Grantee being
discharged by the employer.

 

(d)                                 Disability.  The term “Disability” means the Grantee
either is unable to engage in any substantial gainful activity by reason of any
medically determinable physical or mental impairment that can be expected to
result in death or can be expected to last for a continuous period of not less
than 12 months;  or by reason of any
medically determinable physical or mental impairment that can be expected to
result in death or can be expected to last for a continuous period of not less
than 

 

 

12 months, the Grantee is receiving income replacement benefits for a
period of not less than three months under an accident and health plan covering
employees of the Company or a subsidiary.

 

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

 

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

 

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

 

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

 

16.                                 Notices.  Any written notice under this Award shall be
deemed given on the date that is two business days after it is sent in writing,
delivered either in hand, by certified mail, return receipt requested, postage
prepaid, or by Federal Express or other recognized delivery service, which
provides proof of delivery, all delivery charges prepaid, and addressed as
follows:

 

	
  To the Company:

  	
  Hospira, Inc.

  
	
   

  	
  275 N. Field Drive

  
	
   

  	
  Lake Forest, IL 60045

  
	
   

  	
  Attention: Corporate
  Secretary

  

 

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

 

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

 

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

 

18.                                 Amendment.  This Agreement may be amended in accordance
with the provisions of the Plan, and may otherwise be amended by written
agreement of the Grantee and the Company without the

 

 

consent of any other person; provided that the
Committee may amend by the Company as it shall deem necessary and appropriate
in its sole discretion to comply with the requirements of Section 409A.

 

19.                                 Plan Documents.  The Plan and the Prospectus for the Hospira, Inc.
2004 Long Term Incentive Plan are available at:

 

http://www.UBS.com/

 

or from:

 

Ms. Pam Hannon

 

Corporate Compensation,
Hospira, Inc.

 

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

 

phone:  224-212-2661 fax:  224-212-3358; e-mail:  pam.hannon@Hospira.com

 

	
   

  	
   

  
	
  GRANTEE’S
  INITIALS

  	
  INITIALS
  OF HOSPIRA, INC.’S 

  General Counsel and Secretary

  

 

 

2010 — 2012 Total
Shareholder Return (TSR) TERM SHEET

 

 

	
  PERFORMANCE
  PERIOD:

  	
   

  	
  Beginning
  January 1, 2010, and ending December 31, 2012.

  
	
   

  	
   

  	
   

  
	
  PERFORMANCE
  GOAL:

  	
   

  	
  ·

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

  

 

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

 

The
payment levels at various percentile rankings against the peer companies are
shown in the following table:

 

	
  HOSPIRA

  %Percentile Rank

  	
   

  	
  % of
  Units

  Earned

  
	
   

  	
   

  	
   

  
	
  75th

  	
   

  	
  200%

  
	
  70th

  	
   

  	
  180%

  
	
  65th

  	
   

  	
  160%

  
	
  60th

  	
   

  	
  140%

  
	
  55th

  	
   

  	
  120%

  
	
  50th

  	
   

  	
  100%

  
	
  45th

  	
   

  	
  85%

  
	
  40th

  	
   

  	
  70%

  
	
  35th

  	
   

  	
  55%

  
	
  30th

  	
   

  	
  40%

  
	
  25th

  	
   

  	
  25%

  
	
  <25th

  	
   

  	
  0%

  

 

·                          With linear
interpolation between percentiles

·                          Percentile rank
includes HOSPIRA

 

 

	
  VESTING:

  	
   

  	
  Subject
  to the terms of the Restricted Stock Unit Award Agreement, restrictions on
  the restricted stock units earned during the performance period, as
  determined above, will lapse on December 31, 2012, if the Grantee is a
  full-time active employee of the Company on that date.  

   

  Final
  determination and distribution of the number of restricted stock units earned
  will be made after the actual TSR growth during the performance period has
  been certified by Hospira, Inc.’s independent auditor and the Audit Committee
  of the Company’s Board of Directors.

  

 

 

Appendix I

 

Peer Companies for Relative TSR Comparison

 

	
  Ticker

  	
   

  	
  Company Name

  	
   

  	
  Sector

  	
   

  
	
  ABT

  	
   

  	
  Abbott Labs

  	
   

  	
  Health Care

  	
   

  
	
  AGN

  	
   

  	
  Allergan Inc.

  	
   

  	
  Health Care

  	
   

  
	
  ABC

  	
   

  	
  AmerisourceBergen Corp.

  	
   

  	
  Health Care

  	
   

  
	
  AMGN

  	
   

  	
  Amgen

  	
   

  	
  Health Care

  	
   

  
	
  BCR

  	
   

  	
  Bard (C.R.) Inc.

  	
   

  	
  Health Care

  	
   

  
	
  BAX

  	
   

  	
  Baxter International Inc.

  	
   

  	
  Health Care

  	
   

  
	
  BDX

  	
   

  	
  Becton Dickinson

  	
   

  	
  Health Care

  	
   

  
	
  BIIB

  	
   

  	
  BIOGEN IDEC Inc.

  	
   

  	
  Health Care

  	
   

  
	
  BSX

  	
   

  	
  Boston Scientific

  	
   

  	
  Health Care

  	
   

  
	
  BMY

  	
   

  	
  Bristol-Myers Squibb

  	
   

  	
  Health Care

  	
   

  
	
  CAH

  	
   

  	
  Cardinal Health Inc.

  	
   

  	
  Health Care

  	
   

  
	
  CFN

  	
   

  	
  Carefusion Corp.

  	
   

  	
  Health Care

  	
   

  
	
  CELG

  	
   

  	
  Celgene Corp.

  	
   

  	
  Health Care

  	
   

  
	
  CEPH

  	
   

  	
  Cephalon Inc

  	
   

  	
  Health Care

  	
   

  
	
  DVA

  	
   

  	
  Davita Inc.

  	
   

  	
  Health Care

  	
   

  
	
  XRAY

  	
   

  	
  Dentsply International

  	
   

  	
  Health Care

  	
   

  
	
  ESRX

  	
   

  	
  Express Scripts

  	
   

  	
  Health Care

  	
   

  
	
  FRX

  	
   

  	
  Forest Laboratories

  	
   

  	
  Health Care

  	
   

  
	
  GENZ

  	
   

  	
  Genzyme Corp.

  	
   

  	
  Health Care

  	
   

  
	
  GILD

  	
   

  	
  Gilead Sciences

  	
   

  	
  Health Care

  	
   

  
	
  HSP

  	
   

  	
  Hospira Inc.

  	
   

  	
  Health Care

  	
   

  
	
  RX

  	
   

  	
  IMS Health Inc.

  	
   

  	
  Health Care

  	
   

  
	
  ISRG

  	
   

  	
  Intuitive Surgical Inc.

  	
   

  	
  Health Care

  	
   

  
	
  JNJ

  	
   

  	
  Johnson & Johnson

  	
   

  	
  Health Care

  	
   

  
	
  KG

  	
   

  	
  King Pharmaceuticals

  	
   

  	
  Health Care

  	
   

  
	
  LH

  	
   

  	
  Laboratory Corp. of America Holdings

  	
   

  	
  Health Care

  	
   

  
	
  LIFE

  	
   

  	
  Life Technologies Corp.

  	
   

  	
  Health Care

  	
   

  
	
  LLY

  	
   

  	
  Lilly (Eli) & Co.

  	
   

  	
  Health Care

  	
   

  
	
  MCK

  	
   

  	
  McKesson Corp. (New)

  	
   

  	
  Health Care

  	
   

  
	
  MHS

  	
   

  	
  Medco Health Solutions Inc.

  	
   

  	
  Health Care

  	
   

  
	
  MDT

  	
   

  	
  Medtronic Inc.

  	
   

  	
  Health Care

  	
   

  
	
  MRK

  	
   

  	
  Merck & Co.

  	
   

  	
  Health Care

  	
   

  
	
  MIL

  	
   

  	
  Millipore Corp.

  	
   

  	
  Health Care

  	
   

  
	
  MYL

  	
   

  	
  Mylan Inc.

  	
   

  	
  Health Care

  	
   

  
	
  PDCO

  	
   

  	
  Patterson Cos. Inc.

  	
   

  	
  Health Care

  	
   

  
	
  PKI

  	
   

  	
  PerkinElmer

  	
   

  	
  Health Care

  	
   

  
	
  PFE

  	
   

  	
  Pfizer Inc.

  	
   

  	
  Health Care

  	
   

  
	
  DGX

  	
   

  	
  Quest Diagnostics

  	
   

  	
  Health Care

  	
   

  
	
  STJ

  	
   

  	
  St Jude Medical

  	
   

  	
  Health Care

  	
   

  
	
  SYK

  	
   

  	
  Stryker Corp.

  	
   

  	
  Health Care

  	
   

  
	
  THC

  	
   

  	
  Tenet Healthcare Corp.

  	
   

  	
  Health Care

  	
   

  
	
  TMO

  	
   

  	
  Thermo Fisher Scientific

  	
   

  	
  Health Care

  	
   

  
	
  VAR

  	
   

  	
  Varian Medical Systems

  	
   

  	
  Health Care

  	
   

  

 

 

	
  WAT

  	
   

  	
  Waters Corporation

  	
   

  	
  Health Care

  	
   

  
	
  WPI

  	
   

  	
  Watson Pharmaceuticals

  	
   

  	
  Health Care

  	
   

  
	
  ZMH

  	
   

  	
  Zimmer Holdings

  	
   

  	
  Health CareExhibit
10.4

 

HOSPIRA,
INC.

2004
PERFORMANCE INCENTIVE PLAN

 

(Effective April 30, 2004, as amended
effective January 1, 2010)

 

 

HOSPIRA,
INC.

2004
PERFORMANCE INCENTIVE PLAN

 

SECTION 1.           Establishment and Purposes

 

1.1           Establishment of the Plan.  Hospira, Inc. (“Hospira”) hereby establishes
the “Hospira, Inc. Performance Incentive Plan” the (“Plan”), as set forth in
this document.  The Plan shall become
effective as of April 30, 2004 (the “Effective Date”) and shall remain in
effect as provided in Section 6.1 hereof.

 

1.2           Purposes of the Plan.  The purposes of the Plan are to:

 

(a)           Provide
flexibility to Hospira in its ability to attract, motivate, and retain the
services of participants in the Plan (“Participants”) who make significant
contributions to Hospira’s success and to allow Participants to share in the
success of Hospira;

 

(b)           Optimize
the profitability and growth of Hospira through incentives which are consistent
with Hospira’s goals and which link the performance objectives of Participants
to those of Hospira’s shareholders; and

 

(c)           Provide
Participants with an incentive for excellence in individual performance.

 

SECTION 2.           Administration

 

2.1           General.  The Plan shall be administered by the
Compensation Committee (the “Committee”) of the Board of Directors of Hospira
(the “Board”).

 

2.2           Authority of the Committee.  The Committee will have full authority to
administer the Plan, including the authority to interpret and construe any
provision of the Plan, and to establish and amend rules pertaining thereto.  All rules, regulations and interpretations
shall be conclusive and binding on all persons. 
The Committee has sole responsibility for selecting Participants,
establishing performance objectives, setting award targets, and determining
award amounts.

 

2.3           Delegation by the Committee.  The Committee from time to time may delegate
the performance of certain ministerial functions in connection with the Plan,
such as the keeping of records, to such person or persons as the Committee may
select.  The cost of administration of
the Plan will be paid by Hospira.

 

SECTION 3.           Eligibility and Participation

 

3.1           Eligibility and Participation.  Eligibility for participation in the Plan
shall be limited to officers of Hospira and its subsidiaries.  Participants in the Plan will be determined
annually by the Committee from those officers eligible to participate in the
Plan.

 

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SECTION 4.           Performance Objectives.

 

4.1           Performance Objectives.  The Plan’s performance objectives (the “Performance
Objectives”) shall be determined with reference to Hospira’s Earnings Before
Interest, Taxes, Depreciation and Amortization (“EBITDA”).

 

4.2           Individual Base Award Allocation —
Defined.

 

(a)           For
the performance period beginning on the Effective Date and ending on December 31,
2004 (the “2004 Period”), the base award allocation for the Chief Executive
Officer, if a Participant for such period, shall be .020 of Hospira’s EBITDA
for the 2004 Period.  The base award
allocation for the Chief Operating Officer, if a participant for such period,
shall be .015 of Hospira’s EBITDA for the 2004 Period.  The base award allocation for any other
Participant shall be .010 of Hospira’s EBITDA for the 2004 Period.

 

(b)           For
all fiscal years beginning after December 31, 2004, the base award allocation
for the Chief Executive Officer, if a Participant for such fiscal year, shall
be .020 of Hospira’s EBITDA for that fiscal year.  The base award allocation for the Chief
Operating Officer, if a participant for such fiscal year, shall be .015 of
Hospira’s EBITDA for that fiscal year. 
The base award allocation for any other Participant shall be .010 of
Hospira’s EBITDA for that fiscal year.

 

SECTION 5.           Final Awards

 

5.1           Final Award Allocation.  As soon as practical after the close of each
fiscal year, a Participant’s final award allocation will be determined solely
on the basis of the Performance Objectives. 
In determining a Participant’s final award allocation, the Committee
will have the discretion to reduce, but not increase, a Participant’s base
award allocation, provided that a Participant’s individual performance will be
considered by the Committee in exercising that discretion.

 

5.2           Payment of Awards.  A Participant’s final award allocation will
be paid or deferred in the manner and at the time(s) established by the
Committee but no later than 2 1⁄2 months after the end of the fiscal year to
which the award relates.

 

5.3           Right to Correct Payments.  Subject to Hospira’s Executive Compensation
Recovery Policy, and notwithstanding anything in the Plan to the contrary, if
the Committee determines, in its sole discretion, that an award was based on
Hospira’s published financial statements that have been restated then, at the
Committee’s direction, Hospira may, but in no case later than 60 months of such
restatement:

 

(a)           correct any payment that was based upon the financial performance
in the published financial statements that was subsequently restated; and

 

(b)           if any payment would
have been lower had the financial results been properly reported, recover any
payment to the Participant under the Plan that was calculated based upon the
achievement of the financial results that were subsequently restated.

 

The Committee may, in its
sole discretion, effect any recovery by obtaining repayment directly from the
Participant, setting off the amount owed to the Company against any amount or
award that 

 

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would otherwise be granted by the Company to the
Participant, reducing any future compensation or benefit to the Participant or
any combination thereof.

 

SECTION 6.           Duration, Amendment and
Termination

 

6.1           Duration of the Plan.  The Plan shall commence on the Effective
Date, as described in Section 1.1 hereof, and shall remain in effect until
terminated by the Board.

 

6.2           Amendment and Termination.  The Board, in its sole discretion, may modify
or amend any or all of the provisions of the Plan at any time and, without
notice, may suspend or terminate it entirely. 
However, no such modification may, without the consent of the
Participant, reduce the right of a Participant to a payment or distribution to
which the Participant is entitled by reason of an outstanding award allocation.

 

SECTION 7.           Successors

 

7.1           Obligations.  All obligations of Hospira under the Plan
with respect to awards granted hereunder shall be binding on any successor to
Hospira, whether the existence of such successor is the result of a direct or
indirect purchase, merger, consolidation, or otherwise, of all or substantially
all of the business and/or assets of Hospira.

 

SECTION 8.           Grantor Trusts

 

8.1           2004 Payments.  With respect to the final award allocation
for the 2004 Period, based on elections previously filed with Abbott
Laboratories for the 2004 calendar year, solely with respect to participants
who have grantor trusts that were established under a similar Abbott
Laboratories incentive program, Hospira shall distribute such 2004 Period award
to the participant in a manner that facilitates the contribution of such
amounts to such participant’s grantor trust in a manner prescribed under the
1986 Abbott Laboratories Management Incentive Plan.  Hospira shall have no obligation to maintain
or make any future contributions to such grantor trusts, other than as herein
provided.

 

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