Exhibit 10.1
Amended effective June 18,
2008
HOSPIRA, INC. NON-EMPLOYEE
DIRECTORS’ FEE PLAN
SECTION 1
PURPOSE
Hospira, Inc. Non-Employee
Directors’ Fee Plan (the “Plan”) has been
established by Hospira, Inc. (the “Company”),
effective as of April 30, 2004 (the “Effective
Date”) to attract and retain as members of its Board of
Directors persons who are not employees of the Company or any of
its subsidiaries but whose business experience and judgment are a
valuable asset to the Company and its subsidiaries. The Plan
provides for the payment to Directors of fees in the form of some
or all of the following: Annual Retainer Fees, Committee Chairman
Fees, Meeting Fees and Restricted Stock awards (generally, the
“Director Fees”).
SECTION 2
DIRECTORS COVERED
As used in the Plan, the term
“Director” means any person who is elected to the Board
of Directors of the Company as of the Effective Date or at any time
thereafter, and is not an employee of the Company or any of its
subsidiaries.
SECTION 3
FEES PAYABLE TO DIRECTORS
3.1
Annual Retainer Fee
. Each Director shall be
entitled to an annual retainer fee (the “Retainer Fee”)
to be paid quarterly, on the last business day of each calendar
quarter for which the Director served in the capacity as a Director
(excluding, on a pro rata basis, the partial month in which he is
first elected a Director and any whole months in which he did not
serve in such capacity). The amount of the Annual Retainer
Fee shall be as determined from time to time in the sole discretion
of the Board of Directors of the Company (the “Board”),
with such amount initially set at Fifty Thousand Dollars
($50,000.00) per year.
3.2
Committee Chairman Fee
. A Director who serves as
Chairman of any committee created by the Board shall be entitled to
an additional annual retainer fee (the “Committee Chairman
Fee”) to be paid quarterly, on the last business day of each
calendar quarter for which the Director served in the capacity as a
committee chairman (excluding, on a pro rata basis, the partial
month in which he is first selected to be the committee chairman
and any whole months in which he did not serve in such
capacity). The amount of the Committee Chairman Fee shall be
as determined from time to time in the sole discretion of the
Board, with such amount currently set as follows: (i) Seven
Thousand and Five Hundred Dollars ($7,500.00) per year for each of
the Compensation Committee, Science and Technology Committee, and
Government and Public Policy Committee; and (ii) Ten Thousand
Dollars ($10,000.00) per year for the Audit Committee.
3.3
Meeting Fees
. A Director who attends a
meeting of the Board or any committee thereof shall be entitled to
an additional fee (the “Meeting Fee”) to be paid on the
last business day of each calendar quarter in which the meeting was
held. The amount of the Meeting Fee
shall be as determined from time to time in the
sole discretion of the Board, with such amount currently set at One
Thousand and Five Hundred Dollars ($1,500.00) for each Board or
Committee Meeting attended in person and One Thousand Dollars
($1,000.00) for each meeting attended other than in person, in a
manner acceptable to the Board. In the event there is held
one or more committee or Board meetings on the same date, there
will be a Meeting Fee paid for each such meeting for that
date.
3.4
Lead Director Fees
. A Director who serves as
Lead Director of the Board shall be entitled to an additional
annual retainer fee (the “Lead Director Fee”) to be
paid quarterly, on the last business day of each calendar quarter
for which the Director served in the capacity as Lead Director
(excluding, on a pro rata basis, the partial month in which he is
first selected to be the Lead Director and any whole months in
which he did not serve in such capacity). The amount of the
Lead Director Fee shall be as determined from time to time in the
sole discretion of the Board, with such amount currently set at
Seventy-Five Thousand Dollars ($75,000.00) per year.
SECTION 4
RESTRICTED STOCK
4.1
Annual Restricted Stock
Award .
(i)
As of January 1, 2008, each
Director, who is elected a Non-Employee Director at the annual
shareholders meeting (or who retains such position if they were not
subject to election at such meeting), shall be granted shares of
Company’s Common Stock, par value $0.01 per share (the
“Stock”), with such stock subject to certain
restrictions set forth below (the “Restricted
Stock”). The Restricted Stock shall be granted
automatically to the Director on the last business day of the
calendar quarter in which the annual shareholder meeting
occurs. If more than one shareholder meeting occurs in a
given calendar year, only a single Restricted Stock award shall be
granted for such year and such award shall be granted as of the
last business day of the calendar quarter in which such first
shareholder meeting occurs.
(ii)
The number of shares covered by the
Restricted Stock award shall be equal to that number of shares
whose aggregate value (based on the Fair Market Value of a share of
Stock on the date of grant) equals One Hundred Fifty Thousand
Dollars ($150,000.00), rounded down to the next whole share. Each
Non-Employee Director as of September 28, 2007 shall be
granted automatically a Restricted Stock award equal to that number
of shares whose aggregate value (based on the Fair Market Value of
a share of Stock on September 28, 2007) equals Fifty Thousand
Dollars ($50,000.00), rounded down to the next whole
share.
(iii)
Notwithstanding anything contained
in this Section 4.1 to the contrary, a Non-Employee Director,
who is elected between any annual shareholders meetings, shall
automatically be granted Restricted Stock on the last business day
of the calendar quarter in which such Director is elected;
provided, however, that the number of shares of the Restricted
Stock granted to such Director shall be equal to that number of
shares (rounded to the next whole share) whose aggregate
value
2
(based on the Fair Market Value of a
share of Stock on the date of grant) equals One Hundred Fifty
Thousand Dollars ($150,000.00), multiplied by the fraction of A
over 12, with “A” being the number of whole
calendar months between the first day of the month coinciding with
or immediately following such Director’s election and first
day of the month during which the next annual shareholders meeting
is scheduled to occur. The term “Fair Market
Value” shall be as defined in the 2004 Plan (as defined in
Section 6.6 below).
4.2
Issuance of
Certificates . Each
certificate issued in respect of the Restricted Stock Award shall
be registered in the name of the Director and shall be deposited in
a bank designated by the Company or retained by the Company.
The certification of shares is conditioned upon the Director
endorsing in blank a stock power for the covered shares.
During the Restricted Period, all certificates evidencing the
Restricted Stock will be imprinted with the following legend:
“The securities evidenced by this certificate are subject to
the transfer restrictions, forfeiture restrictions and other
provisions of the Restricted Stock Agreement dated
between Hospira, Inc. and [insert Director name]
.” Upon lapse of the Restriction Period, the Director
shall be entitled to have the legend removed from certificates
representing the shares.
4.3
Rights . Upon issuance of the certificates, the
Directors in whose names they are registered shall, subject to the
restrictions of this Section 4, have all of the rights of a
shareholder with respect to the shares represented by the
certificate, including the right to vote such shares and to receive
cash dividends and other distributions thereon.
4.4
Forfeiture Period
. All Restricted Stock granted
under this Section 4 shall be subject to forfeiture pursuant
to Section 4.5 for a period (the “Forfeiture
Period”) commencing with the date of the award and ending on
the earliest of the following events:
(i)
The one-year anniversary of the date
of grant of Restricted Stock
(ii)
The first regularly scheduled annual
shareholders meeting following the date of grant;
(iii)
The date of the Director’s
death or disability; or
(iv)
The date of a Change in Control (as
defined in Section 5 of the 2004 Plan).
4.5
Forfeiture
. In the event that the
Director’s date of termination occurs during the Forfeiture
Period, the Director shall forfeit any and all rights and interests
with respect to such unvested Restricted Stock (or Restricted Stock
Units, if a Deferral Election, under Section 10 below, is
applicable) and the Company shall have the right to cancel any such
certificates evidencing such Restricted Stock.
4.6.
Restrictions on Sale . All Restricted Stock granted
under this Section 4 shall be subject to the following
restrictions on sale beginning on the date of grant and continuing,
except as otherwise provided below in this Section 4.6, for
all periods while the Director is actively serving as a Director of
the Company (the “Restricted Period”):
3
(i)
The shares may not be sold,
assigned, transferred, pledged, hypothecated or otherwise disposed
of, except to the extent that after the Forfeiture Period such
sale, assignment, transfer, pledge, hypothecation or other disposal
does not cause a Director to fail to meet the minimum holding
requirements under the Company’s then existing Company share
retention and ownership guidelines for Directors.
(ii)
Except as provided in paragraph
(i) of this Section 4.6, any additional common shares of
the Company issued with respect to shares covered by Awards granted
under this Section 4 as a result of any stock dividend, stock
split or reorganization, shall be subject to the restrictions and
other provisions of this Section 4.
(iii)
A Director shall not be entitled to
receive any shares prior to completion of all actions deemed
appropriate by the Company to comply with federal or state
securities laws and stock exchange requirements.
SECTION 5
CHANGE IN CONTROL
In the event of a Change in Control,
(i) all Restricted Stock awards shall become fully vested and
shall no longer be subject to the restrictions set forth in
Section 4 of this Plan, and (ii) all Deferred Fees shall
be paid to the Director at such time and in such form as set forth
in the Director’s Deferral Election.
SECTION 6
OPERATION AND ADMINISTRATION
6.1
Administration
.
(i)
The Plan and all benefits pursuant
hereto shall be administered by the full Board.
(ii)
The Board shall have the authority
and discretion to interpret and administer the Plan, to establish,
amend and rescind any rules and regulations relating to the
Plan and to determine the terms and provisions of any award
agreement made pursuant to the Plan. All questions of
interpretation with respect to the Plan, the benefits established
herein, the number of shares of Stock, or other security, or rights
granted and the terms of any agreements evidencing any of the
Director Fees (the “Award Agreements”), including the
timing, pricing, and amounts of Awards, shall be determined by the
Board, and its determination
