HOSPIRA INC
EX-10.8
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<FILENAME>a07-4393_1ex10d8.htm
<DESCRIPTION>EX-10.8
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<p align="right" style="font-weight:bold;margin:0pt 0pt 12.0pt;page-break-after:avoid;text-align:right;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">Exhibit
10.8</font></b></p>

<p align="center" style="margin:0pt 0pt .0001pt;text-align:center;"><b><u><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">HOSPIRA
2004 <font style="text-decoration:underline;"><u>LONG-TERM STOCK INCENTIVE PLAN</u></font></font></u></b></p>

<p align="center" style="margin:0pt 0pt .0001pt;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">(As Amended and Restated as of
the Effective Date</font></b></p>

<p align="center" style="margin:0pt 0pt 12.0pt;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">and as
further amended effective as of December 13, 2006)</font></b></p>



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<p align="center" style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt;page-break-after:avoid;text-align:center;text-autospace:none;"><b><u><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">HOSPIRA
2004 LONG-TERM STOCK INCENTIVE PLAN<br>
</font></u>(As Amended and Restated as of the Effective Date<br>
and as further amended effective as of December 13, 2006)</b></p>

<p align="center" style="margin:0pt 0pt 12.0pt;text-align:center;text-autospace:none;"><u><font size="2" face="Times New Roman" style="font-size:10.0pt;">SECTION 1</font></u></p>

<p align="center" style="margin:0pt 0pt 12.0pt;text-align:center;text-autospace:none;"><u><font size="2" face="Times New Roman" style="font-size:10.0pt;">GENERAL</font></u></p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt;text-autospace:none;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">1.1</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><u>Purpose,
Effective Date and Term</u>.&#160; The purpose
of this Hospira 2004 Long-Term Stock Incentive Plan (the &#147;Plan&#148;) is to promote
the longer-term financial success of Hospira, Inc. (the &#147;Company&#148;) and its
subsidiaries by providing a means to attract, retain and reward individuals who
can and do contribute to such success and to further identify their interests
with those of the Company&#146;s shareholders. The &#147;Effective Date&#148; of the Plan is
the date on which the shares of the Company are distributed to the shareholders
of Abbott Laboratories pursuant to the Separation and Distribution Agreement entered
into between the Company and Abbott Laboratories (the &#147;Distribution&#148;).&#160; The Plan shall be unlimited in duration and,
in the event of Plan termination, shall remain in effect as long as any awards
under it are outstanding; provided, however, that no awards may be granted
under the Plan after the ten-year anniversary of the most recent approval of
the Plan by the Company&#146;s shareholders.</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt;text-autospace:none;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">1.2</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><u>Administration</u>.&#160; The authority to control and manage the
operation of the Plan shall be vested in a committee of the Company&#146;s Board of
Directors (the &#147;Committee&#148;) in accordance with Section 6.1.</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt;text-autospace:none;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">1.3</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><u>Participation</u>.&#160; Each recipient of an Abbott Conversion Award
as described in Section 4 and each other employee or director of the Company or
any subsidiary of the Company who is granted an award in accordance with the
terms of the Plan shall be a &#147;Participant&#148; in the Plan.&#160; Awards under the Plan shall be limited to
employees and directors of the Company; provided, however, that an award (other
than an award of an ISO) may be granted to an individual prior to the date on
which he first performs services as an employee or director (including
individuals who it is anticipated will transfer from Abbott to the Company
within 24 months following the Distribution) provided that such award does not
become vested prior to the date such individual commences such services.</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt;text-autospace:none;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">1.4</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><u>Definitions</u>.&#160; Capitalized terms in the Plan shall be
defined as set forth in the Plan (including the definition provisions of
Section 9).</p>

<p align="center" style="margin:0pt 0pt 12.0pt;text-align:center;text-autospace:none;"><u><font size="2" face="Times New Roman" style="font-size:10.0pt;">SECTION 2</font></u></p>

<p align="center" style="margin:0pt 0pt 12.0pt;text-align:center;text-autospace:none;"><u><font size="2" face="Times New Roman" style="font-size:10.0pt;">AWARDS</font></u></p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt;text-autospace:none;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">2.1</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><u>General</u>.&#160; Any award under the Plan may be granted
singularly, in combination with another award (or awards), or in tandem whereby
the exercise or vesting of one award held by a Participant cancels another
award held by the Participant.&#160; Each
award under the Plan shall be subject to the terms and conditions of the Plan
and such additional terms, conditions, limitations and restrictions as the
Committee shall provide with respect to such award.&#160; Subject to Section 2.3, an award may be
granted as an alternative to or replacement of an existing award </p>


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<p style="margin:0pt 0pt 12.0pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">under the Plan or any other plan of the Company or any
subsidiary or as the form of payment for grants or rights earned or due under
any other compensation plan or arrangement of the Company or its subsidiaries,
including without limitation the Hospira Non-Employee Directors&#146; Fee Plan and
the plan of any entity acquired by the Company or any subsidiary.&#160; The types of awards that may be granted under
the Plan include:</font></p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 36.0pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(a)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><i>Stock Options</i>.&#160; A stock option represents the right to
purchase shares of Stock at an Exercise Price established by the
Committee.&#160; Any option may be either an
incentive stock option (an &#147;ISO&#148;) that is intended to satisfy the requirements
applicable to an &#147;incentive stock option&#148; described in section 422(b) of the
Code or a non-qualified option that is not intended to be an ISO, provided,
that no ISOs may be granted after the ten-year anniversary of the earlier of
the date of adoption or shareholder approval of the Plan.&#160; Unless otherwise specifically provided by its
terms, any option granted under the Plan shall be a non-qualified option.</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 36.0pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(b)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><i>Stock Appreciation Rights.</i>&#160; A stock appreciation right (a &#147;SAR&#148;) is a
right to receive, in cash or Stock, an amount equal to or based upon the excess
of: (a) the Fair Market Value of a share of Stock at the time of exercise, over
(b) an Exercise Price established by the Committee.</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 36.0pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(c)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><i>Stock Awards.</i>&#160; A stock award is a grant of shares of Stock
or a right to receive shares of Stock (or their cash equivalent or a combination
of both) in the future.&#160; Such awards may
include, but shall not be limited to, bonus shares, stock units, performance
shares, performance units, restricted stock or restricted stock units.</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 36.0pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(d)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><i>Cash Incentive Awards</i>.&#160; A cash incentive award is the grant of a
right to receive a payment of cash, determined on an individual basis or as an
allocation of an incentive pool (or Stock having a value equivalent to the cash
otherwise payable) that is contingent on the achievement of performance
objectives.</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt;text-autospace:none;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">2.2</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><u>Exercise
of Options and SARs</u>.&#160; An option or
SAR shall be exercisable in accordance with such terms and conditions and
during such periods as may be established by the Committee.&#160; In no event, however, shall an option or SAR
expire later than ten years after the date of its grant.<b>&#160; </b>The
&#147;Exercise Price&#148; of each option and SAR shall not be less than the par value of
a share of Stock; provided however, that the Exercise Price of an ISO shall not
be less than 100% of the Fair Market Value of a share of Stock on the date of
grant.&#160; The payment of the Exercise Price
of an option shall be by cash or, subject to limitations imposed by applicable
law, by such other means as the Committee may from time to time permit,
including, without limitation, (i) by promissory note, (ii) by tendering,
either actually or by attestation, shares of Stock acceptable to the Committee,
and valued at Fair Market Value as of the day of exercise, (iii) by irrevocably
authorizing a third party, acceptable to the Committee, to sell shares of Stock
(or a sufficient portion of the shares) acquired upon exercise of the option
and to 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
or (iv) by any combination thereof.</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt;text-autospace:none;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">2.3</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><u>No
Repricing</u>.&#160; Except for adjustments
pursuant to Section 3.4 (relating to the adjustment of shares), and reductions
of the Exercise Price approved by the Company&#146;s </p>


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<p style="margin:0pt 0pt 12.0pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">stockholders, the Exercise Price for any outstanding
option may not be decreased after the date of grant nor may an outstanding
option granted under the Plan be surrendered to the Company as consideration
for the grant of a replacement option with a lower exercise price.</font></p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt;text-autospace:none;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">2.4</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><u>Performance-Based
Compensation</u>. Any award under the Plan which is intended to be
&#147;performance-based compensation&#148; within the meaning of section 162(m) of the
Code shall be conditioned on the achievement of one or more objective
performance measures, to the extent required by Code section 162(m) as may be
determined by the Committee.</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 36.0pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(a)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><i>Performance Measures.</i>&#160; Such performance measures may be based on any
one or more of the following: earnings (e.g., earnings before interest and
taxes; earnings before interest, taxes, depreciation and amortization; or
earnings per share); financial return ratios (e.g., return on investment;
return on invested capital; return on equity; or return on assets); increase in
revenue, operating or net cash flows; cash flow return on investment; total
shareholder return; market share; net operating income, operating income or net
income; debt load reduction; expense management; economic value added; stock
price; and strategic business objectives, consisting of one or more objectives
based on meeting specific cost targets, business expansion goals and goals
relating to acquisitions or divestitures.&#160;
Performance measures may be based on the performance of the Company as a
whole or of any one or more business units of the Company and may be measured
relative to a peer group or an index.</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 36.0pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(b)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><i>Partial Achievement.</i>&#160; The terms of any such award may provide that
partial achievement of the performance measures may result in a payment or
vesting based upon the degree of achievement.</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 36.0pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(c)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><i>Extraordinary Items.</i>&#160; In establishing any performance measures, the
Committee may provide for the exclusion of the effects of the following items,
to the extent identified in the audited financial statements of the Company,
including footnotes, or in the Management Discussion and Analysis section of
the Company&#146;s annual report: (i) extraordinary, unusual, and/or nonrecurring
items of gain or loss; (ii) gains or losses on the disposition of a business;
(iii) changes in tax or accounting principles, regulations or laws; or (iv)
mergers or acquisitions.&#160; To the extent
not specifically excluded, such effects shall be included in any applicable
performance measure.</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt;text-autospace:none;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">2.5</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><u>Dividends
and Dividend Equivalents</u>.&#160; Any award
under the Plan, including without limitation any option or SAR, may provide the
Participant with the right to receive dividend payments or dividend equivalent
payments with respect to Stock subject to the award, which payments may be
either made currently or credited to an account for the Participant, and may be
settled in cash or Stock.</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt;text-autospace:none;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">2.6</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><u>Deferral
of Payment.</u>&#160; To the extent permitted
by the Committee or the terms of any award under the Plan, a Participant may
defer receipt of the cash or Stock otherwise payable under the award and be
credited with interest or dividend equivalents with respect thereto; provided,
however, that any award otherwise payable in stock shall continue to be payable
only in stock.</p>


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<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt;text-autospace:none;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">2.7</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><u>Non-U.S.
Awards.</u>&#160; The Committee may grant
awards, in its sole discretion, to employees and directors of the Company and
its subsidiaries who are residing in jurisdictions outside of the United
States.&#160; For purposes of the foregoing,
the Committee may, in its sole discretion, vary the terms of the Plan in order
to conform any awards to the legal and tax requirements of each non-U.S.
jurisdiction where such individual resides.&#160;
The Committee may, in its sole discretion, establish one or more
sub-plans of the Plan and/or may establish administrative rules and procedures
to facilitate the operation of the Plan in such non-U.S. jurisdictions.&#160; For purposes of clarity, any terms contained
herein which are subject to variation in a non-U.S. jurisdiction and any
administrative rules and procedures established for a non-U.S. jurisdiction
shall be reflected in a written addendum to the Plan.&#160; To the extent permitted under applicable law,
the Committee may delegate its authority and responsibilities under this
Section 2.7 of the Plan to one or more officers of the Company.</p>

<p align="center" style="margin:0pt 0pt 12.0pt;text-align:center;text-autospace:none;"><u><font size="2" face="Times New Roman" style="font-size:10.0pt;">SECTION 3<br>
<br>
SHARES SUBJECT TO PLAN</font></u></p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt;text-autospace:none;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3.1</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><u>Available
Shares</u>.&#160; The shares of Stock with
respect to which awards may be made under the Plan shall be shares currently
authorized but unissued or currently held or, to the extent permitted by
applicable law, subsequently acquired by the Company as treasury shares,
including shares purchased in the open market or in private transactions.</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt;text-autospace:none;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3.2</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><u>Share
Limitations</u>.&#160; Subject to the
following provisions of this subsection 3.2, the maximum number of shares of
Stock that may be delivered to Participants and their beneficiaries under the
Plan shall be equal to Thirty One Million (31,000,000) shares of Stock (all of
which may be granted as ISOs). The maximum number of shares of Stock that may
be issued in conjunction with awards other than options and SARS shall be 25%
of that number of shares in the immediately preceding sentence.</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 36.0pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(a)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><i>Reuse of Shares.&#160;
</i>To the extent any shares of Stock covered by an award are
forfeited or are not delivered to a Participant or beneficiary for any reason,
including because the award is forfeited or canceled, or is settled in cash or
used to satisfy the applicable tax withholding obligation, such shares shall
not be deemed to have been delivered for purposes of determining the maximum
number of shares of Stock available for delivery under the Plan</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 36.0pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(b)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><i>Net Shares.&#160; </i>If
the exercise price of any stock option granted under the Plan is satisfied by
tendering shares of Stock to the Company (either actually or by attestation),
only the number of shares of Stock issued net of the shares of Stock tendered
shall be deemed delivered for purposes of determining the maximum number of
shares of Stock available for delivery under the Plan.</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt;text-autospace:none;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3.3</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><u>Limitations
on Grants to Individuals</u>.</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 36.0pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(a)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><i>Options and SARs.&#160;
</i>The maximum number of shares of Stock that may be subject to
options or SARs granted to any Participant during any calendar year (excluding
any awards intended to constitute Conversion Awards) shall be One Million
(1,000,000).</p>


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<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 36.0pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(b)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><i>Stock Awards.&#160; </i>The
maximum number of shares of Stock that may be subject to stock awards described
under paragraph 2.1(c) which are granted to any Participant during any calendar
year and are intended to be &#147;performance-based compensation&#148; (as that term is
used for purposes of Code section 162(m)), shall be Five Hundred Thousand
(500,000).</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 36.0pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(c)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><i>Cash Incentive Awards.&#160; </i>The maximum dollar amount that may
be payable to a Participant pursuant to cash incentive awards described under
paragraph 2.1(d) which are granted to any Participant during any calendar year
and are intended to be &#147;performance-based compensation&#148; (as that term is
used for purposes of Code section 162(m)), shall be Five Million Dollars ($5
million).</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 36.0pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(d)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><i>Director Fees.</i> Other than with respect to
initial grants to new Directors or one-time grants due to extraordinary
circumstances, the maximum number of shares that may be covered by awards
granted to any one individual non-employee director pursuant to Section 2.1(a)
and 2.1(b) (relating to options and SARs) shall be<b></b>One Hundred Thousand (100,000)<b></b>shares during any calendar year under the terms of the
Hospira Non-Employee Director&#146;s Fee Plan and the maximum number of shares that
may be covered by awards granted to any one individual non-employee director
pursuant to Section 2.1(c) (relating to Other Stock awards) shall be Fifty
Thousand (50,000) shares during any calendar year under the terms of the
Hospira Non-Employee Director&#146;s Fee Plan.&#160;
The foregoing limitations shall not apply to cash-based director fees
that the Non-Employee Director elects to receive in the form of Stock or Stock
Units.</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 36.0pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(e)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><i>Dividend, Dividend Equivalents and Earnings.&#160; </i>For purposes of determining
whether an award is intended to be qualified as a performance-based
compensation, the foregoing limitations of this Section 3.3, (i) the right to
receive dividends and dividend equivalents with respect to any award which is
not yet vested shall be treated as a separate award, and (ii) if the delivery
of any shares or cash under an award is deferred, any earnings, including
dividends and dividend equivalents, shall be disregarded.</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt;text-autospace:none;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3.4</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><u>Corporate
Transactions</u>.&#160; Subject to paragraphs
(a) and (b) below, in the event of a corporate transaction involving the
Company (including, without limitation, any stock dividend, stock split,
extraordinary cash dividend, recapitalization, reorganization, merger,
consolidation, split-up, spin-off, combination or exchange of shares), the
Committee shall adjust awards to preserve the benefits or potential benefits of
the awards and the Plan.&#160; The action
required by the Committee may include: (i) adjustment of the number and kind of
shares which may be delivered under the Plan; (ii) adjustment of the number and
kind of shares subject to outstanding awards; (iii) adjustment of the Exercise
Price of outstanding options and SARs; and (iv) any other adjustments that the
Committee determines to be equitable (which may include, without limitation,
(I) replacement of awards with other awards which the Committee determines have
comparable value and which are based on stock of a company resulting from the
transaction, and (II) cancellation of the award in return for cash payment of
the current value of the award, determined as though the award was fully vested
at the time of payment, provided that in the case of an option or SAR, the
amount of such payment may be the excess of the value of the Stock subject to
the option or SAR at the time of the transaction over the Exercise Price).</p>


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<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 36.0pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(a)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Notwithstanding
any other provision of this Plan, including the terms of any award granted
hereunder, if the outstanding common shares of the Company shall be combined,
or be changed into, or exchanged for, another kind of stock of the Company,
into securities of another corporation, or into property (including cash)
whether through recapitalization, reorganization, sale, merger, consolidation,
spin-off, business combination or a similar transaction (a &#147;Transaction&#148;), the
Company shall cause its successor or acquiror (or ultimate parent of any
successor or acquiror), as applicable, to assume each stock option and SAR
outstanding immediately prior to the Transaction (or to cause new options or
rights to be substituted therefor).&#160;
Pursuant to such assumed or substituted option or rights, holders of
such option or right shall thereafter be entitled to receive, upon due exercise
of any portion of the option or right, (a) in the event of a Transaction in
which the outstanding common shares of the Company are combined, or changed
into, or exchanged for, solely another kind of stock of the Company or
securities of another corporation (disregarding, for this purpose, cash paid in
lieu of fractional shares), the securities which that person would have been
entitled to receive for common shares acquired through exercise of the same
portion of such option or right immediately prior to the effective date of such
Transaction, and (b) in the event of a Transaction in which the outstanding
common shares of the Company are changed into, or exchanged for, property
(including cash) other than solely stock of the Company or securities of
another corporation (disregarding, for this purpose, cash paid in lieu of
fractional shares), securities the fair market value of which immediately
following the effective date of such Transaction (as determined by the
Committee) equals the fair market value (as determined by the Committee) of the
property which that person would have been entitled to receive for common
shares acquired through exercise of the same portion of such option or right
immediately prior to the effective date of such Transaction.&#160; In each case such assumed or substituted
option or right shall continue to be subject to the same terms and conditions
(including, without limitation, with respect to any right to receive
&#147;replacement options&#148; upon option exercise) to which it was subject immediately
prior to the Transaction.</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 36.0pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(b)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Notwithstanding
the immediately preceding paragraph, upon a Transaction in which the
outstanding common shares of the Company are changed into, or exchanged for,
property (including cash) other than solely stock of the Company or securities
of another corporation (disregarding, for this purpose, cash paid in lieu of
fractional shares) and which constitutes a Change in Control, each holder of an
option or SAR may elect to receive, immediately following such Transaction in
exchange for cancellation of any stock option or SAR held by such person
immediately prior to the Transaction, a cash payment, with respect to each
common share subject to such option or right, equal to the difference between
the value of consideration (as determined by the Committee) received by the shareholders
for a common share of the Company in the Transaction, less any applicable
purchase price.</p>


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<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt;text-autospace:none;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3.5</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><u>Delivery
of Shares</u>.&#160; Delivery of shares of
Stock or other amounts under the Plan shall be subject to the following:</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 36.0pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(a)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><i>Compliance with Applicable Laws.&#160; </i>Notwithstanding any other
provision of the Plan, the Company shall have no obligation to deliver any
shares of Stock or make any other distribution of benefits under the Plan
unless such delivery or distribution complies with all applicable laws (including,
without limitation, the requirements of the Securities Act of 1933), and the
applicable requirements of any securities exchange or similar entity.</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 36.0pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(b)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><i>Certificates.&#160; </i>To
the extent that the Plan provides for the issuance of shares of Stock, the
issuance may be effected on a non-certificated basis, to the extent not
prohibited by applicable law or the applicable rules of any stock exchange.</p>

<p align="center" style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt;text-align:center;text-autospace:none;"><u><font size="2" face="Times New Roman" style="font-size:10.0pt;">SECTION 4</font></u><br>
<br>
<u>ABBOTT CONVERSION AWARDS</u></p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt;text-autospace:none;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">4.1</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><u>General</u>.&#160; Certain employees transferred to the employ
of the Company and its subsidiaries have received awards under the Plan
(&#147;Conversation Awards&#148;) as of the Effective Date as replacement awards for
awards granted under the Abbott Laboratories 1996 Incentive Stock Program and
the Abbott Laboratories 1991 Incentive Stock Program (the &#147;Abbott Plans&#148;) and
cancelled in connection with the Distribution.&#160;
The number of such Conversion Awards has been determined by applying a
conversion ratio established by the committee administering the Abbott Plans in
accordance with the terms of such plans on a basis intended to be consistent
with Section 424 of the Code and applicable accounting principles.</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt;text-autospace:none;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">4.2</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><u>Share
Limitations</u>.&#160; Conversion Awards shall
be taken into account in applying the share limitations set forth in Section
3.2, but shall be excluded in calculating the individual limitations under
Section 3.3(a).</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt;text-autospace:none;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">4.3</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><u>Replacement
Options</u>.&#160; If an option granted under
the Plan constitutes a Conversion Award with respect to an option under the
Abbott Plans that provided for the grant of replacement stock options if 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 Abbott Laboratories, then
the Conversion Award shall provide for a replacement stock option (a
&#147;Replacement Option&#148;).&#160; Each Replacement
Option shall cover 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&#146;s tax liability, shall have an Exercise Price equal to 100% of
the of the Fair Market Value of Stock on the date such Replacement Option is
granted, shall be first exercisable six months from the date of grant of the
Replacement Option and shall have the expiration date of the original option.</p>


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<p align="center" style="margin:0pt 0pt 12.0pt;text-align:center;text-autospace:none;"><u><font size="2" face="Times New Roman" style="font-size:10.0pt;">SECTION 5<br>
<br>
CHANGE IN CONTROL</font></u></p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt;text-autospace:none;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">5.1</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Subject
to the provisions of Section 3.4 (relating to the adjustment of shares), and
except as otherwise provided in the Plan or the terms of any award:</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 36.0pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(a)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>If
a Participant who is an employee or Director of the Company or a subsidiary at
the time of a Change in Control then holds one or more outstanding options or
SARs, all such options and SARs then held by the Participant shall become fully
exercisable on and after the date of the Change in Control (subject to the
expiration provisions otherwise applicable to the option or SAR), and any Stock
purchased by the Participant under such option or acquired under such SAR
following such Change in Control shall be fully vested upon exercise.</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 36.0pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(b)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>If
a Participant who is an employee or Director of the Company or a subsidiary at
the time of a Change in Control then holds one or more stock awards described
in paragraph 2.1(c) or cash incentive awards described in paragraph 2.1(d),
such awards shall be fully earned and vested (and all performance measures
deemed to be achieved).</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt;text-autospace:none;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">5.2</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><u>Change
in Control</u>.&#160; For purposes of this
Plan, unless otherwise provided in an Award Agreement, the term &#147;Change in
Control&#148; shall be deemed to have occurred on the earliest of the following
dates:</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 36.0pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(a)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>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 ac&#173;quired directly from the Company or its
Affiliates) representing 20% or more of the combined voting power of the
Company&#146;s then out&#173;standing securities, excluding any Person who becomes such a
Bene&#173;ficial Owner in connection with a transaction described in clause (a) of
paragraph 5.2(c) below; or</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 36.0pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(b)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>the
date the following individuals cease for any reason to constitute a majority of
the number of directors then serving: individ&#173;uals who, on the date hereof,
constitute the Board of Directors and any new direc&#173;tor (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 direc&#173;tors of the Company) whose
appointment or election by the Board of Directors or nomination for election by
the Company&#146;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 previ&#173;ously so approved or recommended; or</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 36.0pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(c)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>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 (a) a merger or consolidation (I) immediately
following which the individuals who comprise the Board of Directors immediately
prior thereto constitute at least a majority of the Board of Directors of the
Company, the entity surviving such </p>


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<p style="margin:0pt 0pt 12.0pt 36.0pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">merger
or consolidation or, if the Company or the entity surviving such merger or
consolidation is then a subsidiary, the ultimate parent thereof and (II) which
results in the voting securities of the Company outstanding immediately prior
to such merger or consolidation contin&#173;uing to represent (either by remaining
outstanding or by being con&#173;verted 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 (b) a
merger or consolidation effected to implement a recapitalization of the Company
(or similar transaction) in which no Person is or be&#173;comes 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&#146;s then outstanding securities; or</font></p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 36.0pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(d)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>the
date 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&#146;s assets,
other than a sale or disposition by the Company of all or substantially all of
the Company&#146;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.</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 36.0pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(e)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Notwithstanding
the foregoing, a &#147;Change in Control&#148; 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<b></b>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.</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 36.0pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(f)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>For
purposes of this Plan: &#147;Affiliate&#148; shall have the meaning set forth in Rule
12b-2 promulgated under Section 12 of the Exchange Act; &#147;Beneficial Owner&#148;
shall have the meaning set forth in Rule 13d-3 under the Exchange Act;
&#147;Exchange Act&#148; shall mean the Securities Exchange Act of 1934, as amended from
time to time; and &#147;Person&#148; 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 owner&#173;ship of stock of the
Company.</p>


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<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt;text-autospace:none;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">5.3</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><u>Amendment
of Section 5</u>.&#160; The provisions of this
Section 5 may not be amended or deleted, nor superseded by any other provision
of this Plan during the pendency of a Potential Change in Control.&#160; A &#147;Potential Change in Control&#148; 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):</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 36.0pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(a)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>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 Section 5.3 shall cease to exist upon the expiration or other
termination of all such agreements.</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 36.0pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(b)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>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 of Directors that there is no reasonable chance that
such actions would be consummated.</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 36.0pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(c)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>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&#146;s then
outstanding securities (not including in the securities beneficially owned by
such Person any securities acquired directly from the Company or its
Affiliates).</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 36.0pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(d)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>The
Board of Directors 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 of Directors that the reasons that gave rise to the
resolution providing for the existence of a Potential Change in Control have
expired or no longer exist.</p>

<p align="center" style="margin:0pt 0pt 12.0pt;text-align:center;text-autospace:none;"><u><font size="2" face="Times New Roman" style="font-size:10.0pt;">SECTION 6<br>
<br>
COMMITTEE</font></u></p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt;text-autospace:none;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">6.1</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><u>Administration</u>.&#160; The authority to control and manage the
operation and administration of the Plan shall be vested in a committee (the
&#147;Committee&#148;) in accordance with this Section 6.&#160;
The Committee shall be selected by the Board.&#160; Subject to applicable stock exchange rules,
if the Committee does not exist, or for any other reason determined by the
Board, the Board may take any action under the Plan that would otherwise be the
responsibility of the Committee.&#160;
Notwithstanding the foregoing, with respect to any action,
determination, interpretation or modification with respect to a specific Award
granted to a non-Employee Director, other than ministerial actions, the
Committee shall be comprised of the Board.</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt;text-autospace:none;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">6.2</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><u>Powers
of Committee</u>.&#160; The Committee&#146;s
administration of the Plan shall be subject to the following:</p>


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<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 36.0pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(a)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Subject
to the provisions of the Plan, the Committee will have the authority and
discretion to select from among the Company&#146;s employees and directors those
persons who shall receive awards, to determine the time or times of receipt, to
determine the types of awards and the number of shares covered by the awards,
to establish the terms, conditions, performance criteria, restrictions, and
other provisions of such awards, and (subject to the restrictions imposed by
Section 7) to cancel or suspend awards.</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 36.0pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(b)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>To
the extent that the Committee determines that the restrictions imposed by the
Plan preclude the achievement of the material purposes of the awards in
jurisdictions outside the United States, the Committee will have the authority
and discretion to modify those restrictions as the Committee determines to be
necessary or appropriate to conform to applicable requirements or practices of
jurisdictions outside of the United States.</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 36.0pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(c)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>The
Committee will have the authority and discretion to interpret the Plan, to
establish, amend, and rescind any rules and regulations relating to the Plan,
and to make all other determinations that may be necessary or advisable for the
administration of the Plan.</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 36.0pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(d)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Any
interpretation of the Plan by the Committee and any decision made by it under
the Plan is final and binding on all persons.</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 36.0pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(e)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>In
controlling and managing the operation and administration of the Plan, the
Committee shall take action in a manner that conforms to the articles and
by-laws of the Company, and applicable state corporate law.</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt;text-autospace:none;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">6.3</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><u>Delegation
by Committee</u>.&#160; Except to the extent
prohibited by applicable law, the applicable rules of a stock exchange or this
Plan, or as necessary to comply with the exemptive provisions of Rule 16b-3
under the Exchange Act, the Committee may allocate all or any portion of its
responsibilities and powers to any one or more of its members and may delegate
all or any part of its responsibilities and powers to any person or persons
selected by it, including without limitation, (a) delegating to a committee of
one or more members of the Board who are not &#147;independent directors&#148; within the
meaning of Section 162(m) of the Code, the authority to grant awards under the
Plan to eligible persons who are either (i) not then &#147;covered employees,&#148;
within the meaning of Section 162(m) of the Code and are not expected to be
&#147;covered employees&#148; at the time of recognition of income resulting from such
award or (ii) not persons with respect to whom the Company wishes to comply
with Section 162(m) of the Code and/or (b) delegating to a committee of one or
more members of the Board who are not &#147;non-employee directors,&#148; within the
meaning of Rule 16b-3, the authority to grant awards under the Plan to eligible
persons who are not then subject to Section 16 of the Exchange Act.&#160; Any such allocation or delegation may be
revoked by the Committee at any time.&#160; To
the extent permitted by applicable law and resolution of the Board, the
Committee may delegate all or any part of its responsibilities to any officer
of the Company.</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt;text-autospace:none;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">6.4</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><u>Information
to be Furnished to Committee</u>.&#160; As may
be permitted by applicable law, the Company and its subsidiaries shall furnish
the Committee with such data and information as it determines may be required
for it to discharge its duties.&#160; The
records of the Company and its subsidiaries as to an employee&#146;s or
Participant&#146;s employment, termination of </p>


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<p style="margin:0pt 0pt 12.0pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">employment, leave of absence, reemployment and
compensation shall be conclusive on all persons unless determined to be
incorrect.&#160; Subject to applicable law,
Participants and other persons entitled to benefits under the Plan must furnish
the Committee such evidence, data or information as the Committee considers
desirable to carry out the terms of the Plan.</font></p>

<p align="center" style="margin:0pt 0pt 12.0pt;text-align:center;text-autospace:none;"><u><font size="2" face="Times New Roman" style="font-size:10.0pt;">SECTION 7<br>
<br>
AMENDMENT AND TERMINATION</font></u></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:none;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Subject to the limitations of Section 5.3, the Board
may, at any time, amend or terminate the Plan, and may amend any Award
Agreement, provided that no amendment or termination may, in the absence of
written consent to the change by the affected Participant (or, if the
Participant is not then living, the affected beneficiary), adversely affect the
rights of any Participant or beneficiary under any Award granted under the Plan
prior to the date such amendment is adopted by the Board; and further provided,
that adjustments pursuant to Section 3.4 (and not in violation of paragraphs
(a) and (b) thereof) shall not be subject to the foregoing limitations of this
Section 7; and further provided that no amendment may (i) remove the provisions
of subsection 2.3 (relating to option repricing), (ii) materially increase the
benefits accruing to Participants under the Plan, (iii) materially increase the
aggregate number of securities which may be issued under the Plan, or (iv)
materially modify the requirements for participation in the Plan, unless the
amendment is approved by the Company&#146;s stockholders.</font></p>

<p align="center" style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt;text-align:center;text-autospace:none;"><u><font size="2" face="Times New Roman" style="font-size:10.0pt;">SECTION 8</font></u><br>
<br>
<u>GENERAL TERMS</u></p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt;text-autospace:none;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">8.1</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><u>No
Implied Rights</u>.</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 36.0pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(a)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><i>No Rights to Specific Assets.&#160; </i>Neither a Participant nor any
other person shall, by reason of participation in the Plan, acquire any right
in or title to any assets, funds or property of the Company or any subsidiary
whatsoever, including, without limitation, any specific funds, assets, or other
property which the Company or any subsidiary, in its sole discretion, may set
aside in anticipation of a liability under the Plan.&#160; A Participant shall have only a contractual
right to the Stock or amounts, if any, payable under the Plan, unsecured by any
assets of the Company or any subsidiary, and nothing contained in the Plan
shall constitute a guarantee that the assets of the Company or any subsidiary
shall be sufficient to pay any benefits to any person.</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 36.0pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(b)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><i>No Contractual Right to Employment or Future
Awards.&#160; </i>The Plan does not
constitute a contract of employment, and selection as a Participant will not
give any participating employee the right to be retained in the employ of the
Company or any subsidiary, nor any right or claim to any benefit under the
Plan, unless such right or claim has specifically accrued under the terms of
the Plan.&#160; Except as otherwise provided
in the Plan, no award under the Plan shall confer upon the holder thereof any
rights as a shareholder of the Company prior to the date on which the
individual fulfills all conditions for receipt of such rights.</p>


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<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt;text-autospace:none;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">8.2</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><u>Transferability</u>.&#160; The Committee may provide at the time it
makes an award under the Plan or at any time thereafter that such award may be
transferable by the Participant, subject to such limitations as the Committee
may impose.&#160; Except as otherwise so
provided by the Committee, awards under the Plan are not transferable except as
designated by the Participant by will or by the laws of descent and
distribution.</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt;text-autospace:none;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">8.3</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><u>Form
and Time of Elections</u>.&#160; Unless
otherwise specified herein, each election required or permitted to be made by
any Participant or other person entitled to benefits under the Plan, and any
permitted modification, or revocation thereof, shall be filed with the Company
at such times, in such form, and subject to such restrictions and limitations,
not inconsistent with the terms of the Plan, as the Committee shall require.</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt;text-autospace:none;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">8.4</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><u>Evidence</u>.&#160; Evidence required of anyone under the Plan
may be by certificate, affidavit, document or other information which the
person acting on it considers pertinent and reliable, and signed, made or
presented by the proper party or parties.</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt;text-autospace:none;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">8.5</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><u>Tax
Withholding</u>.&#160; All distributions under
the Plan are subject to withholding of all applicable taxes, and the Committee
may condition the delivery of any shares or other benefits under the Plan on
satisfaction of the applicable withholding obligations.&#160; Except as otherwise provided by the
Committee, such withholding obligations may be satisfied (i) through cash
payment by the Participant; (ii) through the surrender of shares of Stock which
the Participant already owns; or (iii) through the surrender of shares of Stock
to which the Participant is otherwise entitled under the Plan; provided,
however, that except as otherwise specifically provided by the Committee, such
shares under clause (iii) may not be used to satisfy more than the Company&#146;s
minimum statutory withholding obligation.</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt;text-autospace:none;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">8.6</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><u>Action
by Company or Subsidiary</u>.&#160; Any action
required or permitted to be taken by the Company or any subsidiary shall be by
resolution of its board of directors, or by action of one or more members of
the board (including a committee of the board) who are duly authorized to act
for the board, or (except to the extent prohibited by applicable law or
applicable rules of any stock exchange) by a duly authorized officer of such
company.</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt;text-autospace:none;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">8.7</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><u>Successors</u>.&#160; All obligations of the Company under this
Plan shall be binding upon and inure to the benefit of any successor to the
Company, 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, stock, and/or assets of the Company.</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt;text-autospace:none;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">8.8</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><u>Gender
and Number</u>.&#160; Where the context
admits, words in any gender shall include any other gender, words in the
singular shall include the plural and the plural shall include the singular.</p>


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<p align="center" style="margin:0pt 0pt 12.0pt;text-align:center;text-autospace:none;"><u><font size="2" face="Times New Roman" style="font-size:10.0pt;">SECTION 9</font></u></p>

<p align="center" style="margin:0pt 0pt 12.0pt;text-align:center;text-autospace:none;"><u><font size="2" face="Times New Roman" style="font-size:10.0pt;">DEFINED TERMS</font></u></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:none;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">In addition to the other definitions contained herein,
the following definitions shall apply:</font></p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 36.0pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(a)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><u>Affiliates</u>.&#160; The term &#147;Affiliates&#148; has the meaning
ascribed to it in paragraph 5.2(f).</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 36.0pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(b)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><u>Beneficial
Owner</u>.&#160; The term &#147;Beneficial Owner&#148;
has the meaning ascribed to it in paragraph 5.2(f).</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 36.0pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(c)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><u>Board</u>.&#160; The term &#147;Board&#148; means the Board of Directors
of the Company.</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 36.0pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(d)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><u>Change
in Control</u>.&#160; The term &#147;Change in
Control&#148; has the meaning ascribed to it in Section 5.2.</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 36.0pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(e)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><u>Code</u>.&#160; The term &#147;Code&#148; means the Internal Revenue
Code of 1986, as amended.&#160; A reference to
any provision of the Code shall include reference to any successor provision of
the Code.</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 36.0pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(f)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><u>Committee</u>.&#160; The term &#147;Committee&#148; means the Committee
acting under Section 6.</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 36.0pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(g)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><u>Company</u>.&#160; The term &#147;Company&#148; means Hospira, Inc. and
its successors and assigns.</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 36.0pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(h)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><u>Conversion
Award</u>.&#160; The term &#147;Conversion Award&#148;
means an award described in Section 4.1.</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 36.0pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(i)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><u>Director</u>.&#160; The term &#147;Director&#148; means a member of the
Board.</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 36.0pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(j)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><u>Distribution</u>.&#160; The term &#147;Distribution&#148; means the
distribution of Company shares to shareholders of Abbott Laboratories pursuant
to the Separation and Distribution Agreement.</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 36.0pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(k)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><u>Exchange
Act</u>.&#160; The term &#147;Exchange Act&#148; has the
meaning ascribed to it by paragraph 5.2(f).</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 36.0pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(l)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><u>Exercise
Price</u>.&#160; The term &#147;Exercise Price&#148;
means the price established with respect to an option or SAR pursuant to
Section 2.2.</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 36.0pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(m)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><u>Fair
Market Value</u>.&#160; The &#147;Fair Market
Value&#148; of the Stock at any time shall be determined in such manner as the
Committee may deem equitable, or as required by applicable law or regulation.</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 36.0pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(n)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><u>ISO</u>.&#160; The term ISO has the meaning ascribed to it
in paragraph 2.1(a).</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 36.0pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(o)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><u>Participant</u>.&#160; The term &#147;Participant&#148; means any individual
who has received an award under the Plan.</p>


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<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 36.0pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(p)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><u>Person</u>.&#160; The term &#147;Person&#148; has the meaning ascribed to
it by paragraph 5.2(f).</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 36.0pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(q)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><u>Potential
Change in Control</u>.&#160; The term
&#147;Potential Change in Control&#148; has the meaning ascribed to it in Section 5.3.</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 36.0pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(r)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><u>SAR</u>.&#160; The term &#147;SAR&#148; has the meaning ascribed to it
in paragraph 2.1(b).</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 36.0pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(s)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><u>Separation
and Distribution Agreement</u>.&#160; The term
&#147;Separation and Distribution Agreement&#148; means the agreement entered into
between the Company and Abbott Laboratories pursuant to which Abbott
Laboratories accomplished the spin-off of the Hospira Business (as defined
therein).</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 36.0pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(t)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><u>Stock</u>.&#160; The term &#147;Stock&#148; means common stock of the
Company.</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 36.0pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(u)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><u>Transaction</u>.&#160; The term &#147;Transaction&#148; has the meaning
ascribed to it in paragraph 3.4(a).</p>


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