HOSPIRA 2004 LONG-TERM STOCK INCENTIVE PLAN PERFORMANCE BASED RESTRICTED STOCK UNIT AGREEMENT

The number of “Performance Restricted Stock Units” awarded under this Agreement is __________. “Performance Restricted Stock Units” are units of shares of Stock representing the right to receive an equal number of shares of Stock on the Delivery Date.

The "Delivery Date" is the date on which the shares of Stock represented by the Participant’s vested Performance Restricted Stock Units become deliverable to the Participant, which date shall be the earliest of the three-year anniversary of the Grant Date if the shares vest pursuant to paragraph 4(b); a Change in Control but only as provided in paragraph 4(c); or the Participant’s Date of Termination due to death, Disability or Retirement, or by the Company without Cause. The shares of Stock shall be delivered in an equal whole number of shares of Stock (plus cash equal to the Fair Market Value of any fractional share) to the Participant, or to his/her personal representative in the event of the Participant’s death or Disability, on the Delivery Date or within 30 days following such Delivery Date.

The Performance Restricted Stock Units shall be subject to forfeiture pursuant to paragraph 4(d) for a period (the "Forfeiture Period") commencing with the date of the award and ending on the last business day that occurs prior to the three-year anniversary of the Grant Date.

The Performance Restricted Stock Units shall vest on any trading day after the average of the closing price of the Stock over a period of any 30 consecutive trading days commencing on or after the Grant Date equals or exceeds $34.74.

The Performance Restricted Stock Units to the extent they have not vested in accordance with paragraph 4(b) and to the extent they have not previously been forfeited pursuant to paragraph 4(d), shall vest upon the date of a Change in Control that occurs on or before the Date of Termination if the successor company (or parent thereof) has not either (i) assumed the Performance Restricted Stock Units effective on the date of the Change in Control, without any modifications except as provided in the next sentence, or (ii) replaced it with comparable restricted stock units as of such date having the same intrinsic value as the Performance Restricted Stock Units, and the same vested percentage and vesting schedule as the Performance Restricted Stock Units. The Performance Restricted Stock Units (if assumed) or the replacement restricted stock units shall provide for full vesting if, within the first 24 months following the date of the Change in Control, the Participant is involuntarily terminated for any or no reason or if the Participant terminates with Good Reason.

The Performance Restricted Stock Units shall be automatically forfeited upon the earliest to occur of the following: (i) the Participant’s Date of Termination for any reason other than death, Disability or Retirement, or by the Company for Cause (except as provided in paragraph 4(c)); (ii) subject to the provisions of paragraph 5, the date the Participant engages in conduct which constitutes Restricted Activity; or (iii) the last business day that occurs prior to the three-year anniversary of the Grant Date, to the extent they have not vested on or before such date in accordance with paragraph 4(b) or 4(c).

The Participant shall not, while employed by the Company and for a period of one year following his/her Date of Termination:

without the prior written consent of the Committee, directly or indirectly engage or assist any person engaging in any Competitive Business individually, or as an officer, director, employee, agent, consultant, owner, partner, lender, manager, member, principal or in any other capacity, or render any services to any entity that is engaged in any Competitive Business; provided, however, that the Participant’s ownership of 1% of any class of equity security of any entity engaged in any Competitive Business shall not be deemed a breach of this paragraph 5(a) provided such securities are listed on a national securities exchange or quotation system or have been registered under Section 12(g) of the Securities Exchange Act of 1934, as amended; or

directly or indirectly divert, take away, solicit, or assist others in soliciting any current or prospective customer, supplier, independent contractor or service provider of the Company or any subsidiary or otherwise interfere with the relationship between the Company or any subsidiary and any current or prospective customer, service provider, supplier, independent contractor or stockholder; or

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

If the Participant engages in any activity described in paragraph 5(a) without the written consent of the Committee, the Company, as determined by the Committee in its sole discretion, may terminate this Agreement and forfeit all of the Performance Restricted Stock Units (whether vested or unvested), and the Participant shall immediately pay to the Company in cash the amount of any Financial Gain realized by the Participant from the delivery of the Performance Restricted Stock Units, provided that such delivery occurred within one year from the date that the Participant engaged in such Restricted Activity. The Committee may, in its sole discretion, recover any amount owed by the Participant by setting off such amount against any amount or award that would otherwise be granted or paid by the Company to the Participant, reducing any future compensation or benefit to the Participant or any combination thereof.

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

rescind any delivery of shares of Stock that was based upon the financial performance in the published financial statements that was subsequently restated; and

if any amount or value has been realized from the delivery of the Performance Restricted Stock Units that would have been lower had the financial results been properly reported, recover all or any Financial Gain realized by the Participant, as determined by the Committee in its sole discretion, that resulted from the financial results that were subsequently restated, and the Participant agrees to repay and return any such Financial Gain to the Company. The Committee may, in its sole discretion, effect any such recovery by obtaining repayment directly from the Participant, setting off the amount owed to the Company against any amount or award that would otherwise be granted by the Company to the Participant, reducing any future compensation or benefit to the Participant or any combination thereof.

Cause. The term “Cause” means, in the sole opinion and discretion of the Committee, the Participant has (i) engaged in a material breach of the Company’s code of business conduct, (ii) committed an act of fraud, embezzlement or theft in connection with the Participant’s duties or in the course of employment, or (iii) wrongfully disclosed secret processes or confidential information of the Company or its subsidiaries.

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

Date of Termination. The term “Date of Termination” means the first day occurring on or after the Grant Date on which the Participant is not employed by the Company or any of its subsidiaries, regardless of the reason for the termination of employment; provided that a termination of employment shall not be deemed to occur by reason of a transfer of the Participant between the Company and a subsidiary or between two subsidiaries; and further provided that the Participant’s employment shall not be considered terminated while the Participant is on a leave of absence from the Company or a subsidiary approved by the Participant’s employer. If, as a result of a sale or other transaction, the Participant’s employer ceases to be a subsidiary (and the Participant’s employer is or becomes an entity that is separate from the Company), and the Participant is not, at the end of the 30‑day period following the transaction, employed by the Company or an entity that is then a subsidiary, then the occurrence of such transaction shall be treated as the Participant’s Date of Termination caused by the Participant being discharged by the employer.

Disability. The term “Disability” means the Participant either is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a

Financial Gain. The term “Financial Gain” means the Fair Market Value of the Common Stock on the Delivery Date of the shares of Stock represented by the Participant’s vested Performance Restricted Stock Units, multiplied by the number of shares of Stock actually delivered pursuant to this Agreement, reduced by any taxes paid in countries other than the United States, to the extent that such taxes are not otherwise eligible for refund from the taxing authorities.

Good Reason. The term “Good Reason” means the occurrence of any of the following circumstances without the Participant's express written consent:

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

the failure by the Company to pay the Participant any portion of the Participant's current compensation;

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

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

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

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

the relocation of the Company's principal executive offices to a location more than thirty-five miles from the location of such offices immediately prior to the

the failure of the Company to obtain a satisfactory agreement from any successor to the Company to assume and agree to perform this Agreement as contemplated by paragraph 4.

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