HOSPIRA SUPPLEMENTAL PENSION PLAN

HOSPIRA SUPPLEMENTAL PENSION PLAN

Section 1
INTRODUCTION

1-1.           Pursuant to a Separation and Distribution Agreement by and between Abbott Laboratories (“Abbott”) and Hospira, Inc.  (“Hospira”) dated as of April 12 2004, Abbott distributed as a dividend to its shareholders all of the outstanding shares of common stock, par value $0.01 per share, of Hospira, together with the associated preferred stock purchase rights, owned by Abbott (the “Distribution”).  In connection with the Distribution, Hospira established the Abbott/Hospira Transitional Annuity Retirement Plan (the “Annuity Plan”) and certain assets and liabilities were transferred from the Abbott Laboratories Annuity Retirement Plan (the “Abbott ARP”) to the Annuity Plan with respect to persons who were transferred from employment with Abbott to employment with Hospira in connection or contemporaneously with the Distribution (“Transferred Employees”).  In connection with the Distribution, Hospira also assumed certain liabilities with respect to Transferred Employees under the Abbott Laboratories Supplemental Pension Plan (the “Abbott SERP”).  Hospira now desires to establish this HOSPIRA SUPPLEMENTAL PENSION PLAN (the “Supplemental Plan”) to provide (i) the benefits associated with the obligations assumed by Hospira with respect to Transferred Employees under the Abbott SERP, (ii) pension benefits calculated under the Annuity Plan in excess of those which may be paid under that plan under the limits imposed by Section 415 of the U.S.  Internal Revenue Code of 1986, as amended (the “Code”), and the Employee Retirement Income Security Act, as amended (“ERISA”), and (iii) the additional pension benefits that would be payable under the Annuity Plan if deferred awards under the Performance Incentive Plan and, with respect to any Transferred Employee, under the Management Incentive Plan prior to the Effective Date (as defined below) were included in “final earnings” as defined

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in the Annuity Plan. This Supplemental Plan is established effective as of May 1, 2004 (the “Effective Date”).

1-2.           The Supplemental Plan shall apply to employees of Hospira and its subsidiaries and affiliates existing as of the Effective Date or thereafter created or acquired.  (Hospira and each of such subsidiaries and affiliates are hereinafter referred to as an “employer” and collectively as the “employers”).

1-3.           All benefits provided under the Supplemental Plan shall be provided from the general assets of the employers and not from any trust fund or other designated asset.  All participants in the Supplemental Plan shall be general creditors of the employers with no priority over other creditors.

1-4.           The Supplemental Plan shall be administered by the Hospira, Inc. Employee Benefit Board of Review appointed by the Board of Directors of Hospira (the “Board of Directors”) and acting under the Charter of the Hospira, Inc. Employee Benefit Board of Review (“Board of Review”).  Except as stated below, the Board of Review shall perform all powers and duties with respect to the Supplemental Plan, including the power to direct payment of benefits, allocate costs among employers, adopt amendments and determine questions of interpretation.  The Board of Directors shall have the sole authority to terminate the Supplemental Plan.

1-5.  Effective December 31, 2004, the Annuity Plan is being amended to provide that no benefits shall accrue under the Annuity Plan after such date.  Notwithstanding any provision of the Supplemental Plan to the contrary, no Annuity Plan participant shall accrue a Supplemental Plan benefit after December 31, 2004, and each Annuity Plan participant shall have his benefit under the Supplemental Plan determined as of a date that is no later than December 31, 2004.

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Section 2
ERISA ANNUITY PLAN SUPPLEMENTAL BENEFIT

2-1.           The benefits described in this Section 2 shall apply to all participants in the Annuity Plan who retire, or terminate with a vested pension under that plan, on or after the Effective Date.

2-2.           Each Annuity Plan participant whose retirement or vested pension under that plan would otherwise be limited by Section 415 of the Internal Revenue Code shall receive a supplemental pension under this Supplemental Plan in an amount, which, when added to his or her Annuity Plan pension, will equal the amount the participant would be entitled to under the Annuity Plan as in effect from time to time, based on the particular option selected by the participant, without regard to the limitations imposed by Section 415 of the Internal Revenue Code.

Section 3
1986 TAX REFORM ACT SUPPLEMENTAL BENEFIT

3-1.           The benefits described in this Section 3 shall apply to all participants in the Annuity Plan who retire, or terminate with a vested pension under that plan after the Effective Date.

3-2.           Each Annuity Plan participant shall receive a supplemental pension under this Supplemental Plan in an amount equal to the difference, if any, between:

(a)            the monthly benefit payable under the Annuity Plan plus any supplement provided by Section 2; and

(b)            the monthly benefit which would have been payable under the Annuity Plan (without regard to the limits imposed by Section 415 of the Internal Revenue Code) if the participant’s “final earnings”, as defined in the Annuity Plan, had included compensation in excess of the limits imposed by Section 401(a)(17)of the Internal Revenue Code, and any “pre-tax contributions” made by the participant under the Hospira Supplemental 401(k) Plan.

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For purposes of calculating the benefit under this Section 3-2 with respect to any Transferred Employee, any pre-tax contributions made by the participant under the Abbott Laboratories Supplemental 401(k) Plan prior to the Effective Date shall be treated as though made under the Hospira Supplemental 401(k) Plan.

Section 4
DEFERRED COMPENSATION PLAN ANNUITY PLAN SUPPLEMENTAL BENEFIT

4-1.           The benefits described in this Section 4 shall apply to all participants in the Annuity Plan who retire, or terminate with a vested pension, under that plan, on or after the Effective Date and who made a Deferral Election under the Abbott Laboratories Deferred Compensation Plan (the “Deferred Compensation Plan”) with respect to any calendar month during the one hundred twenty consecutive calendar months immediately preceding retirement or termination of employment.   For purposes of calculating the benefit under this Section 4 with respect to any Transferred Employee, amounts deferred under the Abbott Laboratories Deferred Compensation Plan prior to the Effective Date shall be treated as deferred under the Deferred Compensation Plan.

4-2.           Each Annuity Plan participant shall receive a supplemental pension under this Supplemental Plan in an amount equal to the difference, if any, between:

(a)            the monthly benefit payable under the Annuity Plan plus any supplement provided by Section 2 and Section 3; and

(b)            the monthly benefit which would have been payable under the Annuity Plan (without regard to the limits imposed by Section 415 of the Internal Revenue Code) if the participant’s “base earnings”, as defined in the Annuity Plan, included deferrals made under the Deferred Compensation Plan and any compensation in excess of the limits imposed by Section 401(a)(17)of the Internal Revenue Code

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Section 5
DEFERRED MIP ANNUITY PLAN SUPPLEMENTAL BENEFIT

5-1.           The benefits described in this Section 5 shall apply to all participants in the Annuity Plan who retire, or terminate with a vested pension, under that plan, on or after the Effective Date and who were awarded Performance Incentive Plan awards for any calendar year during the ten consecutive calendar years ending with the year of retirement or termination of employment.    For purposes of calculating the benefits under this Section 5 with respect to any Transferred Employee, awards and payments made prior to the Effective Date under the Management Incentive Plan, Awards for Performance Excellence Plan or any Division Incentive Plan maintained by Abbott shall be treated as awards and payments, as applicable, under the Performance Incentive Plan, Awards for Performance Excellence or a Division Incentive Plan maintained by Hospira after the Effective Date.

5-2.           Each Annuity Plan participant shall receive a supplemental pension under this Supplemental Plan in an amount determined as follows:

(a)            The supplemental pension shall be the difference, if any, between:

(i)             the monthly benefit payable under the Annuity Plan plus any supplement provided by Section 2, Section 3, and Section 4; and

(ii)            the monthly benefit which would have been payable under the Annuity Plan (without regard to the limits imposed by Section 415 of the Internal Revenue Code) if the participant’s “final earnings”, as defined in the Annuity Plan, were one-sixtieth of the sum of:

(A)           the participant’s total “basic earnings” (excluding any payments under the Performance Incentive Plan, Awards for Performance Excellence Plan or any Division Incentive Plan) received in the sixty consecutive calendar months for which his basic earnings (excluding any payments under the Performance Incentive Plan, Awards for Performance Excellence Plan or any Division Incentive Plan) were highest within the last one hundred twenty consecutive calendar months immediately preceding his retirement or termination of employment; and

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(B)            the amount of the participant’s total awards under the Performance Incentive Plan, Awards for Performance Excellence Plan and any Division Incentive Plan (whether paid immediately or deferred) made for the five consecutive calendar years during the ten consecutive calendar years ending with the year of retirement or termination for which such amount is the greatest and (for participants granted Performance Incentive Plan awards for less than five consecutive calendar years during such ten year period) which include all Performance Incentive Plan awards granted for consecutive calendar years within such ten year period.

(b)            That portion of any Performance Incentive Plan award which the Compensation Committee has determined shall be excluded from the participant’s “basic earnings” shall be excluded from the calculation of “final earnings” for purposes of this Section 5-2 and that portion of any award under the Management Incentive Plan which, prior to the Effective Date, the Compensation Committee of Abbott had determined would be excluded from a Transferred Employee’s “basic earnings” shall be excluded from the calculation of “final earnings” for purposes of this Section 5-2.  “Final earnings” for purposes of this subsection 5-2 shall include any compensation in excess of the limits imposed by Section 401(a)(17)of the Internal Revenue Code.

(c)            In the event the period described in subsection 5-2(a)(ii)(B) is the final five calendar years of employment and a Performance Incentive Plan award is made to the participant subsequent to retirement for the participant’s final calendar year of employment, the supplemental pension shall be adjusted by adding such new award and subtracting a portion of the earliest Performance Incentive Plan award included in the calculation, from the amount determined under subsection 5-2(a)(ii)(B).  The portion subtracted shall be equal to that portion of the participant’s final calendar year of employment during which the participant was employed by Hospira; provided, however, that in the case of any Transferred Employee whose termination occurs in 2004, the portion of the participant’s final calendar year of employment for this purpose shall include any portion of 2004 that the participant was employed by Abbott.  If such adjustment results in a greater supplemental pension, the greater pension shall be paid beginning the first month following the date of such new award.

Section 6
CORPORATE OFFICER ANNUITY PLAN SUPPLEMENTAL BENEFIT

6-1.           The benefits described in this Section 6 shall apply to all participants in the Annuity Plan who are corporate officers of Hospira as of the Effective Date or who become corporate officers thereafter, and who retire, or terminate with a vested pension under that plan on or after the Effective Date.  The term “corporate officer” for purposes of this Supplemental

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Plan shall mean an individual elected an officer of Hospira by its Board of Directors (or designated as such for purposes of this Section 6 by the Compensation Committee of the Board of Directors of Hospira), but shall not include assistant officers.  Notwithstanding the foregoing or any other provision of this Supplemental Plan to the contrary, in the case of any Transferred Employee who was a corporate officer of Abbott immediately prior to the Effective Date and who is not a corporate officer of Hospira on or after the Effective Date, benefits shall be provided under this Section 6.

6-2.           Subject to the limitations and adjustments described below, each participant described in subsection 6-1 shall receive a monthly supplemental pension under this Supplemental Plan commencing on the participant’s normal retirement date under the Annuity Plan and payable as a life annuity, equal to 6/10 of 1 percent (.006) of the participant’s final earnings (as determined under subsection 5-2) for each of the first twenty years of the participant’s benefit service (as defined in the Annuity Plan) occurring after the participant’s attainment of age 35.

6-3.           In no event shall the sum of (a) the participant’s aggregate percentage of final earnings calculated under subsection 6-2 and (b) of the participant’s aggregate percentage of final earnings calculated under subsections 5.1(a)(ii)(A) and 5-1(b)(i)of the Annuity Plan, exceed the maximum aggregate percentage of final earnings allowed under subsection 5-1 of the Annuity Plan (without regard to any limits imposed by the Internal Revenue Code), as in effect on the