Exhibit 10.3
EMPLOYEE BENEFITS AGREEMENT
BY AND AMONG
XXXXXX LABORATORIES,
TAP PHARMACEUTICAL PRODUCTS INC.
AND
HOSPIRA, INC.
DATED
________, 2004
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TABLE OF CONTENTS
Page
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Article 1 Definitions...............................................................4
Article 2 General Principles........................................................9
2.1 Allocation of Liabilities................................................9
2.2 Employment with Hospira.................................................11
2.3 Establishment of Hospira Plans..........................................13
2.4 Restrictions on Employment..............................................14
2.5 Post-Distribution Transferred Employees and Hospira Requested
Employees..........................................................14
Article 3 Collective Bargaining Agreements and Union Matters.......................15
Article 4 U.S. Qualified and Non-Qualified Retirement Plans........................15
4.1 Annuity Retirement Plan.................................................15
4.2 Stock Retirement Plan...................................................18
4.3 Faultless Rubber Plan...................................................20
4.4 Ashland 401(k) Plan.....................................................20
4.5 Supplemental Pension Plan...............................................21
4.6 Abbott Supplemental 401(k) Plan.........................................22
Article 5 Non-U.S. Retirement Plans................................................22
5.1 Canadian Pension Plan...................................................22
5.2 Irish Pension Plans.....................................................23
5.3 Overseas Managers' Pension Plan.........................................23
5.4 Other Non-U.S. Retirement Plans.........................................24
Article 6 Welfare and Fringe Benefit Plans.........................................24
6.1 Severance Compensation and Benefits.....................................24
6.2 Retiree Medical And Life Insurance Coverage.............................25
6.3 VEBAs ..................................................................26
6.4 COBRA ..................................................................26
6.5 Matching Grant and Combined Appeal Programs.............................26
Article 7 Equity and Executive Compensation Programs...............................27
7.1 Equity Incentive Programs...............................................27
7.2 Discontinued Participation in ESPP......................................28
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7.3 Deferred Compensation Plan..............................................29
7.4 Grantor Trusts..........................................................29
7.5 Cash Profit Sharing.....................................................30
7.6 Other Incentive Programs................................................30
Article 8 Miscellaneous............................................................31
8.1 Transfer of Records and Information ....................................31
8.2 Preservation of Rights to Amend or Terminate Plans......................31
8.3 Transition Services.....................................................32
8.4 Reimbursement...........................................................32
8.5 Xxxxx Xxxxxx Foundation.................................................32
8.6 Incorporation By Reference..............................................32
8.7 Limitation on Enforcement...............................................32
8.8 Assignability...........................................................32
8.9 Further Assurances and Consents.........................................33
8.10 Third Party Consent.....................................................33
8.11 Effect if Distribution Does not Occur...................................33
8.12 Disputes................................................................34
8.13 Schedules...............................................................34
8.14 Mutual Drafting.........................................................34
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EMPLOYEE BENEFITS AGREEMENT
This
Employee Benefits Agreement (this "Agreement") is made as of
_____, 2004 by and among Xxxxxx Laboratories ("Abbott"), Hospira, Inc.
("Hospira") and, solely for purposes of Sections 2.4, 8.7, and 8.8, TAP
Pharmaceutical Products Inc. ("TAP").
BACKGROUND
Abbott and Hospira have entered into the Separation and Distribution
Agreement (as defined herein) pursuant to which Abbott shall spin-off the
Hospira Business (as defined herein). Abbott shall accomplish this spin-off by
distributing all of the common stock of Hospira to the shareholders of Abbott as
a dividend after Abbott contributes to Hospira the assets primarily associated
with the Hospira Business and after Hospira assumes the liabilities primarily
associated with the Hospira Business, all in accordance with the Separation and
Distribution Agreement and agreements related thereto, including this Agreement.
After the Distribution (as defined herein), Abbott and Hospira shall be separate
and independent corporations.
The employees of the Hospira Business are currently employed by the Abbott
Group (as defined herein). The employees of the Hospira Business are expected to
become employees of the Hospira Group (as defined herein) on or prior to the
Distribution Date or with respect to certain employees outside of the United
States, after the Distribution Date. This Agreement describes the employment and
the employee benefit plan arrangements that shall apply to Transferred Employees
(as defined herein). Additional information relating to agreements of Abbott and
Hospira with respect to Transferred Employees are included in the Transition
Services Agreements.
AGREEMENT
ARTICLE 1
DEFINITIONS
The following capitalized terms as used in this Agreement shall have the
meaning set forth below unless otherwise specified herein:
(a) "Abbott" shall have the meaning given it in the first
sentence of this Agreement.
(b) "Abbott ARP" shall mean the Xxxxxx Laboratories Annuity
Retirement Plan.
(c) "Abbott Benefit Plan" shall mean each Benefit Plan
established, maintained, or contributed to by the Abbott Group for the benefit
of Transferred Employees.
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(d) "Abbott Compensation Committee" shall mean the
compensation committee of the board of directors of Abbott.
(e) "Abbott DCP" shall mean the Xxxxxx Laboratories Deferred
Compensation Plan.
(f) "Abbott ESPP" shall mean the Xxxxxx Laboratories
Affiliate Employee Stock Purchase Plan and any sub-plan established thereunder
in accordance with the laws of any non-U.S. jurisdiction.
(g) "Abbott Group" shall mean Abbott and its Subsidiaries
(excluding any member of the Hospira Group after the Distribution) or, where the
context requires, a company within the Abbott Group.
(h) "Abbott KSP" shall mean the Xxxxxx Laboratories 401(k)
Supplemental Plan.
(i) "Abbott OMPP" shall mean the Overseas Managers' Pension
Plan of Xxxxxx Laboratories.
(j) "Abbott Option" shall mean an option to purchase one or
more Abbott common shares granted under the Abbott Stock Programs.
(k) "Abbott Retained Employee" shall mean any employee other
than (i) a Transferred Employee or (ii) a Hospira Requested Employee.
(l) "Abbott Retiree Life Plan" shall mean the Xxxxxx
Laboratories Retiree Life Plan.
(m) "Abbott Retiree Medical Plan" shall mean the Xxxxxx
Laboratories Retiree Health Care Plan.
(n) "Abbott SRP" shall mean the Xxxxxx Laboratories Stock
Retirement Plan (Part A).
(o) "Abbott Stock Programs" shall mean, collectively, the
Xxxxxx Laboratories 1996 Incentive Stock Program, the Xxxxxx Laboratories 1991
Incentive Stock Program, and any sub-plan established under those programs in
accordance with the laws of any non-U.S. jurisdiction.
(p) "Abbott Supplemental ARP" shall mean the Xxxxxx
Laboratories Supplemental Pension Plan.
(q) "Abbott VEBAs" shall mean, collectively, the Xxxxxx
Laboratories Employee Benefit Trust, the Xxxxxx Laboratories Health Care Trust,
and the Xxxxxx Laboratories Employees Insurance Trust.
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(r) "ABO Funded Ratio" shall have the meaning given it in
Section 4.1(c) of this Agreement.
(s) "Allocated Employee Number" shall mean, with respect to
any country identified on Schedule 1 hereto, the number of Employees shown on
Schedule 1 opposite that country's name as being the number of Employees to be
transferred to the Hospira Group.
(t) "Ashland 401(k) Plan" shall mean the Xxxxxx Laboratories
Ashland Union 401(k) Plan and Trust.
(u) "Benefit Plan" shall mean, any employment, bonus,
deferred compensation, incentive compensation, stock purchase, stock option,
stock appreciation right or other stock-based incentive, severance,
change-in-control or termination pay, hospitalization or other medical,
disability, life, or other insurance, supplemental unemployment benefits,
profit-sharing, pension or retirement plan, program, agreement, or arrangement
and each other employee benefit plan, program, agreement, or arrangement.
(v) "COBRA" shall mean coverage required by Section 4980B of
the Code and regulations thereunder or Section 601 et. seq. of ERISA.
(w) "Code" shall mean the Internal Revenue Code of 1986, as
amended.
(x) "Distribution" shall have the meaning given it in the
Separation and Distribution Agreement.
(y) "Distribution Date" shall have the meaning given it in
the Separation and Distribution Agreement.
(z) "Employee" shall mean any individual who is (i)
identified or described on Schedule 2 hereto, (ii) a Post-Distribution Employee,
or (iii) a Hospira Requested Employee.
(aa) "Employment Taxes" shall mean withholding, payroll,
social security, workers compensation, unemployment, and disability taxes
imposed by any Tax Authority, and any interest, penalties, additions to tax, or
additional amount with respect to the foregoing imposed on any taxpayer or
consolidated, combined, or unitary group of taxpayers.
(bb) "ERISA" shall mean the Employee Retirement Income
Security Act of 1974, as amended.
(cc) "ESOP" shall mean an employee stock ownership plan, as
defined in Section 407(d)(6) of ERISA and Section 4975(e)(7) of the Code.
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(dd) "Faultless Rubber Plan" shall mean the 1950 Pension Plan
of the Faultless Rubber Company and the Pension, Insurance and Severance Award
Agreement.
(ee) "Hospira" shall have the meaning given it in the first
sentence of this Agreement.
(ff) "Hospira ARP" shall mean the Abbott/Hospira Transitional
Annuity Retirement Plan.
(gg) "Hospira Benefit Plan" shall mean any Benefit Plan
established, maintained, or contributed to by the Hospira Group.
(hh) "Hospira Board" shall mean the board of directors of
Hospira.
(ii) "Hospira Business" shall have the meaning given it in the
Separation and Distribution Agreement.
(jj) "Hospira Canadian Pension Plan" shall mean a defined
benefit pension plan established by the Hospira Group with respect to employees
of Hospira residing in Canada.
(kk) "Hospira Group" shall mean Hospira and its Subsidiaries
or, where the context requires, a company within the Hospira Group.
(ll) "Hospira KSP" shall mean the Hospira 401(k) Supplemental
Plan.
(mm) "Hospira Officer" shall mean each Transferred Employee
who is a "reporting officer" under Rule 16a-1(f) under the Securities Exchange
Act of 1934.
(nn) "Hospira OMPP" shall mean the Overseas Managers' Pension
Plan of Hospira, Inc.
(oo) "Hospira Option" shall mean an option to purchase one or
more shares of Hospira common stock granted under the Hospira SIP in connection
with the cancellation of an Abbott Option.
(pp) "Hospira Requested Employee" shall mean any employee of
the Abbott Group who was hired or transferred to another work location or
position by the Abbott Group prior to, on, or following the Distribution Date,
at the written request of Hospira's Corporate Vice President of Human Resources,
regardless of whether that employee becomes a Transferred Employee.
(qq) "Hospira SIP" shall mean the Hospira 2004 Long-Term Stock
Incentive Plan.
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(rr) "Hospira SRP" shall mean the Hospira 401(k) Retirement
Savings Plan.
(ss) "Hospira Supplemental ARP" shall mean the Hospira
Supplemental Pension Plan.
(tt) "Hospira VEBA" shall mean the Hospira Master Welfare
Trust.
(uu) "KSP Transferred Employee" shall mean a U.S. Transferred
Employee who participates in the Abbott KSP immediately prior to the
Distribution Date.
(vv) "Liabilities" shall have the meaning given it in the
Separation and Distribution Agreement.
(ww) "Non-U.S. Transferred Employee" shall mean a Transferred
Employee who works primarily outside of the United States or who works primarily
in Puerto Rico.
(xx) "Post-Distribution Employee" shall mean each sales or
marketing employee of the Abbott Group identified by Abbott and Hospira in
accordance with Step 1 of the procedures described in Schedule 3 hereto.
(yy) "Post-Distribution Transferred Employee" shall mean any
Post-Distribution Employee who becomes a Transferred Employee after the
Distribution Date but prior to the end of the Restricted Period.
(zz) "QDRO" shall mean a qualified domestic relations order
within the meaning of Section 206(d) of ERISA and Section 414(p) of the Code.
(aaa) "Request End Date" shall mean, with respect to any
Hospira Requested Employee, the earliest, if any, of the following dates: (i)
the date on which Hospira provides notice to Abbott that Hospira does not intend
to employ the Hospira Requested Employee, (ii) the date on which Hospira
provides notice to Abbott that the Hospira Requested Employee has rejected an
offer of employment with the Hospira Group, or (iii) the date following the
expiration of the Restricted Period in the event that the Hospira Requested
Employee remains employed by the Abbott Group on that date.
(bbb) "Restricted Period" shall mean the period beginning on
the Distribution and ending on the second anniversary thereof.
(ccc) "Separation and Distribution Agreement" shall mean the
Separation and Distribution Agreement by and between Xxxxxx Laboratories and
Hospira, Inc. dated _____________.
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(ddd) "Subsidiary" shall have the meaning given it in the
Separation and Distribution Agreement.
(eee) "TAP" shall have the meaning given it in the first
sentence of this Agreement.
(fff) "Tax Authority" means, with respect to any Employment
Tax, the governmental entity or political subdivision thereof that imposes such
Employment Tax, and the agency (if any) charged with the collection of such
Employment Tax for such entity or subdivision.
(ggg) "Transfer Date" shall mean, as applicable: (i) with
respect to each Transferred Employee (other than a Post-Distribution Transferred
Employee or a Hospira Requested Employee), the Distribution Date; and (ii) with
respect to each Post-Distribution Transferred Employee and each Hospira
Requested Employee, the date on which such person becomes employed by the
Hospira Group.
(hhh) "Transferred Employee" shall mean an Employee who accepts
an offer of employment with the Hospira Group or who continues in employment
automatically by operation of law with the Hospira Group, in either case
pursuant to Section 2.2 or 2.5 of this Agreement.
(iii) "Transferred Expatriate Employee" shall mean each
Employee identified on Schedule 4 hereto who becomes a Transferred Employee.
(jjj) "Transition Period" shall mean the period beginning on
the Distribution and ending on December 31, 2004.
(kkk) "Transition Services Agreements" shall mean the
transition services agreements and the transition marketing and distribution
agreements that are entered into in connection with the Separation and
Distribution Agreement between Abbott and Hospira.
(lll) "U.S. Transferred Employee" shall mean a Transferred
Employee who works primarily in the United States (other than a Transferred
Employee who works in Puerto Rico).
ARTICLE 2
GENERAL PRINCIPLES
2.1 ALLOCATION OF LIABILITIES.
(a) HOSPIRA LIABILITIES. Effective as of Distribution Date, and
except as expressly provided in this Agreement, Hospira hereby assumes and
agrees to pay, perform, fulfill and discharge all Liabilities to the extent
relating to, arising out of, or resulting from:
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(i) the employment of each Transferred Employee by the
Abbott Group up to and including the Transfer Date and by the Hospira Group
on and after the Transfer Date (including, in each case, all Liabilities
relating to, arising out of, or resulting from Employment Taxes, any Abbott
Benefit Plan or, on or after the Transfer Date, any Hospira Benefit Plan);
(ii) the transfer of any Transferred Employee's
employment from the Abbott Group to the Hospira Group;
(iii) all Liabilities (including Liabilities with
respect to employees, former employees and retirees) relating to, arising
out of or resulting from the Faultless Rubber Plan and the Ashland 401(k)
Plan.
(iv) the employment (or termination of employment) of
any Hospira Requested Employee by the Abbott Group prior to, on, or after
the Distribution Date (including all Liabilities to the extent relating to,
arising out of, or resulting from Employment Taxes or any Abbott Benefit
Plan) subject to Section 2.5(b) of this Agreement; and
(v) obligations, Liabilities and responsibilities
expressly assumed by Hospira pursuant to this Agreement.
(b) ABBOTT LIABILITIES. Effective as of the Distribution Date,
and except as expressly provided in this Agreement, Abbott shall retain and
hereby agrees to pay, perform, fulfill and discharge all Liabilities to the
extent relating to, arising out of, or resulting from:
(i) the employment (or termination of employment) of
each Abbott Retained Employee by the Abbott Group prior to, on, or after
the Distribution Date (including all Liabilities to the extent relating to,
arising out of, or resulting from Employment Taxes or any Abbott Benefit
Plan);
(ii) the employment, whether prior to, on, or after the
Distribution Date, by the Abbott Group of all persons who work or worked
primarily in the United States (other than Puerto Rico) and who are
deceased, retired, terminated, on pay continuation leave, or on medical
leave of absence for more than one year (including all Liabilities to the
extent relating to, arising out of, or resulting from Employment Taxes or
any Abbott Benefit Plan);
(iii) medical and dental claims which are incurred by
any U.S. Transferred Employee (or his or her beneficiaries) prior to the
Transfer Date;
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(iv) obligations, Liabilities and responsibilities
under (A) the Abbott Retiree Medical Plan and the Abbott Retiree Life Plan
for retirement eligible Transferred Employees (as more fully described in
Section 6.2 of this Agreement), (B) the Abbott DCP (as more fully described
in Section 7.3 of this Agreement), and (C) the grantor trusts of
Transferred Employees (as more fully described in Section 7.4 of this
Agreement); and
(v) obligations, Liabilities and responsibilities
expressly retained by Abbott pursuant to this Agreement.
2.2 EMPLOYMENT WITH HOSPIRA.
(a) OFFERS OF EMPLOYMENT. As of the Distribution Date, the
Hospira Group shall continue the employment (on a basis consistent with
subsection (b) below) of each Employee (who is not a Post-Distribution Employee
or a Hospira Requested Employee) in jurisdictions where employment continues
automatically by operation of law, and shall offer to employ (on a basis
consistent with subsection (b) below) each other Employee (who is not a
Post-Distribution Employee or a Hospira Requested Employee), or as otherwise
agreed by the parties. The parties acknowledge that the process of transferring
Employees to the Hospira Group may, as agreed upon by the parties, in certain
cases, begin prior to the Distribution Date. Abbott shall use commercially
reasonable efforts to ensure that no Employee's transfer of employment to
Hospira prior to the Distribution Date will cause a loss of coverage under any
Abbott Benefit Plan prior to the Distribution Date.
Post-Distribution Employees shall be offered employment by the Hospira
Group, or shall continue to be employed by the Hospira Group, as the case may
be, as determined by Abbott and Hospira in accordance with Section 2.5(a) of
this Agreement and the procedures described in Schedule 3 hereto and effective
at such time or times as determined in accordance with those procedures. To the
extent any dispute arises pursuant to this paragraph, including with respect to
the procedures described in that Schedule 3, that dispute shall be resolved by
mutual written agreement between the Chief Executive Officers of Abbott and
Hospira (or their designees).
Hospira Requested Employees (who are not Post-Distribution Employees)
shall be offered employment by the Hospira Group, or shall continue to be
employed by the Hospira Group, as the case may be, as determined by Abbott and
Hospira, subject to Section 2.5(b) of this Agreement.
(b) COMPENSATION AND BENEFITS. Except as expressly provided in
this Agreement, no Transferred Employee shall participate in the Abbott Benefit
Plans following his or her Transfer Date. After the Transfer Date, the Hospira
Group may provide compensation and benefits to a U.S. Transferred Employee or
Transferred Expatriate Employee under any Hospira Benefit Plan. Except as
expressly provided in this Agreement, during the Transition Period, the Hospira
Group shall provide benefits (e.g., pension and welfare benefits) to each U.S.
Transferred Employee and each
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Transferred Expatriate Employee that are substantially similar to the benefits
provided to that U.S. Transferred Employee or Transferred Expatriate Employee
immediately prior to the Transfer Date. During the Transition Period, the
Hospira Group shall provide each U.S. Transferred Employee and each Transferred
Expatriate Employee with base compensation (including salary and hourly rate)
that is not less than the compensation provided to that U.S. Transferred
Employee or Transferred Expatriate Employee immediately prior to the Transfer
Date, provided, however, that the compensation of each Hospira Officer may be
adjusted by the Hospira Board (or an appropriate committee thereof) without
regard to the Hospira Officer's compensation immediately prior to the Transfer
Date. During the Transition Period, the Hospira Group shall make all scheduled
increases to any U.S. Transferred Employee's or Transferred Expatriate
Employee's salary or hourly rate to the extent that the scheduled increase is
not already reflected in any prior discretionary increase made by the Hospira
Group to that salary or hourly rate. The Hospira Group shall not reduce any U.S.
Transferred Employee's or Transferred Expatriate Employee's salary or hourly
rate during the Transition Period other than: (i) the salaries of Hospira
Officers as determined by the Hospira Board (or an appropriate committee
thereof) or (ii) reductions corresponding to a change in the affected
Transferred Employee's circumstances and made in the ordinary course of business
(including, but not limited to, reductions in connection with shift changes,
schedule changes, demotions, job changes and job performance). Nothing in the
preceding sentence shall prevent the Hospira Group from terminating the
employment of any U.S. Transferred Employee or Transferred Expatriate Employee,
whether due to individual terminations of employment or reductions in force or
otherwise, in all cases in compliance with applicable law.
After expiration of the Transition Period, the Hospira Group may
implement compensation and benefits for the U.S. Transferred Employees and
Transferred Expatriate Employees as it deems appropriate; provided, however,
that the Hospira Group shall repatriate a Transferred Expatriate Employee to his
or her home or jurisdiction on terms no less favorable than the terms under the
Transferred Expatriate Employee's written employment/expatriate agreement with
Abbott as in effect immediately prior to the Transfer Date.
The Hospira Group shall employ each Non-U.S. Transferred Employee
(other than Transferred Expatriate Employees) on such terms and conditions as
the Hospira Group deems necessary or advisable, except where otherwise required
by local law.
(c) SERVICE CREDIT. Except as expressly provided in this
Agreement, during the Transition Period, for purposes of determining
eligibility, vesting, accrued benefits, and benefit level, each of the Hospira
Benefit Plans shall give U.S. Transferred Employees and Transferred Expatriate
Employees credit for all service credited for those purposes by the comparable
Abbott Benefit Plan as of the Transfer Date, except to the extent that this
service credit would result in a duplication of benefits. For the avoidance of
doubt, nothing in this Agreement shall require the Hospira Group to provide any
U.S. Transferred Employee or Transferred Expatriate Employee with credit for his
or her service with the Abbott Group (i) under any Hospira Benefit Plan after
the
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Transition Period or (ii) under any Hospira Benefit Plan that does not have a
comparable Abbott Benefit Plan during the Transition Period.
(d) VACATION, HOLIDAYS AND LEAVES OF ABSENCE. In accordance with
Section 2.1(a)(i) of this Agreement, effective as of the Transfer Date, Hospira
shall assume all Liabilities of the Abbott Group with respect to accrued
vacation or leaves of absence, and required payments related thereto, for each
Transferred Employee.
Notwithstanding the foregoing, where (and only to the extent) required
by applicable state law, the Abbott Group shall provide each U.S. Transferred
Employee with the opportunity to elect to receive a payment of his or her
accrued vacation as of the Transfer Date, the Abbott Group shall pay that
accrued vacation to any such individual who elects to receive a payment and the
Hospira Group shall not assume any accrued vacation or receive the accrual with
respect to a U.S. Transferred Employee who elects a payment in accordance with
the foregoing.
During the Transition Period, the Hospira Group shall continue to
apply the vacation, holiday and leave of absence policy or practice (whether or
not legally required) applicable to each U.S. Transferred Employee and each
Transferred Expatriate Employee immediately prior to the Transfer Date so that
each U.S. Transferred Employee and each Transferred Expatriate Employee shall be
entitled to use any vacation time or leave of absence, and/or receive any pay
related thereto, to which that Employee would otherwise be entitled under the
Abbott Benefit Plans related to vacation time or leave of absence as of the
Transfer Date, taking into account, to the extent applicable, any reduction in
vacation time for which any U.S. Transferred Employee has received a payment of
accrued vacation as of the Transfer Date.
Vacation, holiday and leave of absence policies for Transferred
Employees for periods after the Transition Period shall be determined by Hospira
in its sole discretion.
2.3 ESTABLISHMENT OF HOSPIRA PLANS.
Prior to the Distribution Date, Hospira shall adopt the following
employee benefit plans and their related trusts: (a) the Hospira SIP, (b) the
Hospira ARP, (c) the Hospira SRP, (d) the Hospira Health Care Plan, and (e) the
Hospira Life Accident Plan. Hospira shall also adopt (i) the Hospira
Supplemental ARP, (ii) the Hospira KSP, (iii) the Hospira Flexible Benefit Plan,
(iv) the Hospira Extended Disability Plan, and (v) the Hospira OMPP, none of
which shall have a related trust unless Hospira elects, in its sole and absolute
discretion, to establish a rabbi trust or other trust for any of those plans.
During the Transition Period, each of the foregoing Hospira Benefit Plans,
except as expressly provided in this Agreement, shall be substantially similar
in all material respects to the corresponding Abbott Benefit Plan as in effect
as of the Distribution Date. As more fully described in Articles 4, 5 and 6 or
as otherwise mutually agreed upon by Abbott and Hospira from time to time,
Abbott shall, or shall cause the applicable Abbott Benefit Plan's related trust
to, transfer to the relevant Hospira Benefit Plan's related trust, amounts equal
to trust assets, insurance reserves, and other related assets of each Abbott
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Benefit Plan's related trust relating to the Liabilities of such Abbott Benefit
Plan assumed by Hospira or such Hospira Benefit Plan. As more fully described in
Articles 4, 5 and 6, or as otherwise mutually agreed upon by Abbott and Hospira
from time to time, Hospira shall, or shall cause the relevant Hospira Benefit
Plan to, assume the Liabilities of the corresponding Abbott Benefit Plan with
respect to all benefits accrued under that Abbott Benefit Plan by Transferred
Employees prior to the Transfer Date. Except as expressly provided in this
Agreement, after the Transition Period, Hospira may modify or terminate any
Hospira Benefit Plan, as it deems appropriate.
Hospira shall cause the Hospira Benefit Plans to honor all plan
elections made by Transferred Employees pursuant to corresponding Abbott Benefit
Plans. Except as provided in this Agreement, Abbott and Hospira shall use
commercially reasonable efforts to ensure that the Distribution and the transfer
of any Transferred Employee's employment to the Hospira Group will not entitle
that Transferred Employee to a distribution or payment of benefits under any
Abbott Benefit Plan.
2.4 RESTRICTIONS ON EMPLOYMENT.
Hospira agrees that, during the Restricted Period and without the
express written consent of Abbott or TAP, as applicable, it shall not, and shall
not permit any of its Subsidiaries to, employ any person, other than a
Transferred Employee, who is or was an employee of Abbott or TAP (or their
respective Subsidiaries) and whose employment with Abbott and/or TAP (and/or
their respective Subsidiaries) terminated at any time after August 22, 2003 and
before the last day of the Restricted Period. Abbott and TAP each agree that,
during the Restricted Period and without the express written consent of Hospira,
each shall not, and shall not permit any of their respective Subsidiaries to,
employ any person who is a Transferred Employee or any other person who becomes
an employee of Hospira or any of its Subsidiaries prior to the expiration of the
Restricted Period. The foregoing restrictions shall not apply to any person
(other than a Post-Distribution Employee who rejects an offer of employment from
the Hospira Group) whose employment with Hospira, Abbott or TAP (or their
respective Subsidiaries), as applicable, terminates due to a job elimination or
reduction in force.
2.5 POST-DISTRIBUTION TRANSFERRED EMPLOYEES AND HOSPIRA REQUESTED
EMPLOYEES.
(a) TRANSFER DATE FOR POST-DISTRIBUTION TRANSFERRED EMPLOYEES.
The Transfer Date of each Post-Distribution Transferred Employee shall be
determined by Abbott and Hospira, provided that in no event shall the Transfer
Date of any Post-Distribution Transferred Employee occur following the
Restricted Period. Unless otherwise determined by Abbott and Hospira or
otherwise required by local law, all Post-Distribution Transferred Employees and
Hospira Requested Employees working primarily in the same country shall have the
same Transfer Date.
(b) HOSPIRA REQUESTED EMPLOYEES. As soon as practicable
following the Request End Date of any Hospira Requested Employee, Abbott shall
either terminate the employment of that Hospira Requested Employee or notify
Hospira that the
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Abbott Group intends to continue to employ the Hospira Requested Employee
following the Request End Date. Notwithstanding Section 2.1(a)(iv) of this
Agreement, in the event that Abbott notifies Hospira that the Abbott Group will
continue to employ a Hospira Requested Employee following Request End Date,
Abbott shall retain all Liabilities relating to, arising out of, or resulting
from the employment (or termination of employment) of that Hospira Requested
Employee on and following the Request End Date, provided that Abbott and Hospira
shall negotiate to apportion those Liabilities arising in part both before and
after the Request End Date.
ARTICLE 3
COLLECTIVE BARGAINING AGREEMENTS AND UNION MATTERS
Hospira shall assume all Liabilities with respect to or arising under
any collective bargaining agreements with respect to U. S. Transferred Employees
in Ashland, Ohio.
ARTICLE 4
U.S. QUALIFIED AND NON-QUALIFIED RETIREMENT PLANS
4.1 ANNUITY RETIREMENT PLAN.
(a) ESTABLISHMENT OF HOSPIRA ARP. Effective on or before the
Distribution Date, Hospira shall establish the Hospira ARP, which, for the
Transition Period, shall provide for a benefit formula that is substantially
similar in all material respects to the benefit formula in effect under the
Abbott ARP as of the Distribution Date. As soon as practicable after the
Distribution Date and upon receipt by Abbott of (i) copies of the Hospira ARP;
(ii) copies of certified resolutions of the Hospira Board (or its authorized
committee or other delegate) evidencing adoption of the Hospira ARP and the
related trust(s) and the assumption by the Hospira ARP of the Liabilities set
forth in Section 4.1(d) of this Agreement; and (iii) either (A) a favorable
determination letter issued by the Internal Revenue Service with respect to the
Hospira ARP and its related trust, or (B) an opinion of Hospira's counsel, which
opinion is reasonably satisfactory to Xxxxxx'x counsel, with respect to the
qualified status of the Hospira ARP under Section 401(a) of the Code and the
tax-exempt status of its related trust under Section 501(a) of the Code, Abbott
shall direct the trustee of the Abbott ARP to transfer from the trust(s) which
forms a part of the Abbott ARP to the trust(s) which forms a part of the Hospira
ARP the amounts described in Section 4.1(b) of this Agreement.
(b) ERISA SECTION 4044 TRANSFER. The amount of assets to be
transferred from the Abbott ARP to the Hospira ARP shall be determined as of the
Distribution Date in accordance with Section 4044 of ERISA and shall comply in
all respects with Sections 414(l) of the Code. Assumptions not specifically
dictated by Section 4044 of ERISA shall be based on the assumptions used in the
report prepared by Xxxxxx Associates entitled Actuarial Report Xxxxxx
Laboratories Annuity Retirement Plan as of January 1, 2003 (signed October
2003). The Hospira ARP shall receive a pro-rata
15
share of any contributions made to the Abbott ARP after the Distribution Date
but on behalf of the 2003 plan year. The pro-rata share of the contributions for
the Hospira ARP shall be determined as if the 2003 plan year contribution had
been part of the Abbott ARP's assets at the time the asset allocation was
performed. The transfer amount described above shall be credited or debited, as
applicable, with a pro rata share of the actual investment earnings or losses
allocable to the transfer amount for the period between the Distribution Date
and an assessment date set by Abbott that is no more than ten (10) days prior to
the date upon which assets are actually transferred from the Abbott ARP to the
Hospira ARP. During this time, benefits for U.S. Transferred Employees who
terminate employment with the Hospira Group shall be paid from the Abbott ARP.
The ultimate transfer amount shall be reduced by the amount of these benefits
and credited or debited by the actual investment earnings or losses from the
payment date to the assessment date set by Abbott above. In addition, during
this time, Hospira will be responsible for a pro rata share of trustee and
administration fees to the extent included in the Abbott ARP's trust expenses.
The entries in the Abbott ARP funding standard account shall be divided between
the two plans based on the guidance provided in Revenue Ruling 81-212.
(c) ADDITIONAL TRANSFER. In addition to, and within sixty (60)
days following, the transfer of assets from the Abbott ARP to the Hospira ARP
described in Section 4.1(b) of this Agreement, Abbott shall pay Hospira an
amount equal to that amount which, if contributed by Hospira to the Hospira ARP
immediately following the transfer of assets required by Section 4.1(b) of this
Agreement, would cause the ABO Funded Ratio of the Hospira ARP and the Abbott
ARP to be equivalent as of the Distribution Date. With respect to a plan, the
ABO Funded Ratio shall equal the fair market value of assets of that plan
divided by the Accumulated Benefit Obligation of that plan, as determined under
FAS 87. In calculating the ABO Funded Ratio, the assets for the Hospira ARP
shall include the amount transferred directly from the Abbott ARP in accordance
with Section 4.1(b) of this Agreement and the amount to be paid by Abbott in
accordance with this Section 4.1(c). The pro-rata share of the 2003 plan year
contributions assigned to the Abbott ARP in 4.1(b), that are contributed
following the Distribution Date, shall be taken into account for purposes of
calculating the ABO Funded Ratio of the Abbott ARP as of the Distribution Date
as if those contributions had been part of the assets of the Abbott ARP on the
Distribution Date. Similarly, the pro-rata share of the 2003 plan year
contributions assigned to the Hospira ARP in Section 4.1(b) of this Agreement,
that are contributed following the Distribution Date, shall be taken into
account for purposes of calculating the ABO Funded Ratio of the Hospira ARP as
of the Distribution Date as if those contributions had been part of the assets
of the Hospira ARP on the Distribution Date. With the exception of the discount
rate, the Accumulated Benefit Obligation shall be calculated using the
assumptions and methodology used to calculate Xxxxxx'x December 31, 2003, FAS 87
disclosure information. The discount rate shall be determined as of the
Distribution Date using Xxxxxx'x FAS 87 discount rate setting methodology
consistent with Xxxxxx'x past practices. Hospira shall not be required to
reimburse Abbott for any tax benefit received by Hospira with respect to any
contribution to the Hospira ARP.
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(d) TRANSFERRED ARP LIABILITIES. As of the Distribution Date,
Hospira shall cause the Hospira ARP to assume all Liabilities under the Abbott
ARP for U.S. Transferred Employees (including Liabilities in respect of QDROs
established in relation to U.S. Transferred Employees) and the Abbott ARP shall
be relieved of all such Liabilities; provided, however that the Abbott ARP shall
continue to pay benefits associated with those Liabilities until assets are
transferred from the Abbott ARP to the Hospira ARP in accordance with this
Section 4.1.
(e) HOSPIRA ARP DURING THE TRANSITION PERIOD. During the
Transition Period (and thereafter to the extent required by applicable law), the
Hospira ARP shall provide that:
(i) U.S. Transferred Employees shall (A) be eligible
to participate in the Hospira ARP to the extent they were eligible to
participate in the Abbott ARP as of the Distribution Date, and (B) receive
credit for vesting, eligibility and benefit service for all service
credited for those purposes under the Abbott ARP as of the Distribution
Date as if that service had been rendered to Hospira;
(ii) the compensation paid by the Abbott Group to all
U.S. Transferred Employees which is recognized under the Abbott ARP as of
the Distribution Date shall be credited and recognized for all applicable
purposes under the Hospira ARP as though it were compensation from the
Hospira Group;
(iii) subject to applicable law, the accrued benefit of
each U.S. Transferred Employee under the Abbott ARP as of the Distribution
Date shall be paid under the Hospira ARP at the time and in a form that
would have been permitted under the Abbott ARP as in effect as of the
Distribution Date, with employment by the Abbott Group prior to the
Distribution Date treated as employment by the Hospira Group under the
Hospira ARP for purposes of determining eligibility for optional forms of
benefit, early retirement benefits, or other benefit forms;
(iv) to the extent required by Section 411(d)(6) of the
Code, any accrued benefit, early retirement benefit, retirement-type
subsidy, or optional form of benefit provided under the Abbott ARP during
the Transition Period shall be provided by the Hospira ARP with respect to
each U.S. Transferred Employee's accrued benefit as of the Distribution
Date and service with the Abbott Group (prior to the Distribution Date) and
the Hospira Group during the Transition Period shall be recognized for
purposes of determining eligibility to elect or to receive those benefits;
(v) all beneficiary designations in effect under the
Abbott ARP as of the Distribution Date shall remain in effect after the
Distribution Date under the Hospira ARP as if made under the Hospira
17
ARP unless those designations are subsequently changed in accordance with
the Hospira ARP; and
(vi) the Hospira ARP shall assume and honor the terms
of all QDROs in effect under the Abbott ARP as of the Distribution Date
with respect to U.S. Transferred Employees.
(f) COMPOSITION OF ASSETS. The composition of the assets that
will be transferred from the Abbott ARP to the Hospira ARP shall be mutually
determined by the applicable fiduciaries of the Abbott ARP and Hospira ARP.
(g) DETERMINATION LETTER REQUESTS. Hospira shall submit an
application to the Internal Revenue Service as soon as practicable after the
Distribution Date (but no later than the last day of the remedial amendment
period as defined in applicable Code provisions) for a determination letter
regarding the qualification of the Hospira ARP and the tax status of its related
trust as of the Distribution Date and shall make any amendments reasonably
requested by the Internal Revenue Service in order to receive a favorable
determination letter regarding the Hospira ARP.
(h) ABBOTT ARP AFTER DISTRIBUTION DATE. On and after the
Distribution Date, no employees of the Hospira Group, including U.S. Transferred
Employees, shall accrue any benefits under the Abbott ARP and their service with
and compensation from the Hospira Group on or after that date shall be
disregarded for all purposes of the Abbott ARP. Without limiting the generality
of the foregoing, each U.S. Transferred Employee shall cease to be an active
participant in the Abbott ARP effective as of the Distribution Date.
4.2 STOCK RETIREMENT PLAN.
(a) ESTABLISHMENT OF HOSPIRA SRP. Effective on or before the
Distribution Date, Hospira shall establish the Hospira SRP. During the
Transition Period, the terms of the Hospira SRP shall be substantially similar
in all material respects to the terms of the Abbott SRP as of the Distribution
Date; provided, however, that (i) the Hospira SRP shall not be required to be an
ESOP or to contain an ESOP feature and (ii) the Hospira SRP shall not be
required to make available an Abbott stock fund as an investment feature for
contributions made under the Hospira SRP after the Distribution Date. On or
prior to the Distribution Date, Hospira shall provide Abbott with (A) a copy of
the Hospira SRP; (B) a copy of certified resolutions of Hospira's board of
directors (or its authorized committee or other delegate) evidencing adoption of
the Hospira SRP and the related trust(s) and the assumption by the Hospira SRP
of the Liabilities set forth in Section 4.2(c) hereof; and (C) either (I) a
favorable determination letter issued by the Internal Revenue Service with
respect to the Hospira SRP and its related trust or (II) an opinion of Hospira's
counsel, which opinion is reasonably satisfactory to Xxxxxx'x counsel, with
respect to the qualified status of the Hospira SRP under Section 401(a) of the
Code and the tax-exempt status of its related trust under Section 501(a) of the
Code. As soon as practicable on or following the Distribution Date Abbott shall
cause the
18
trustee of the Abbott SRP to transfer from the trust(s) which forms a
part of the Abbott SRP to the trust(s) which forms a part of the Hospira SRP the
amounts described below.
(b) TRANSFER OF ACCOUNT BALANCES. The amount to be transferred
(in cash, Abbott common shares, shares of Hospira common stock, promissory notes
evidencing outstanding loans to U.S. Transferred Employees and other assets or
any combination thereof in cash or in kind, as instructed by the trustees of the
Abbott SRP) from the Abbott SRP to the Hospira SRP shall equal the account
balances of U.S. Transferred Employees (excluding account balances in respect of
QDROs established in relation to U.S. Transferred Employees) under the Abbott
SRP, determined as of the date of the transfer. Hospira shall cause the
transferred amounts to be allocated among the U.S. Transferred Employees'
accounts under the Hospira SRP and to such investment funds in the same manner
in which those amounts were allocated under the Abbott SRP. Any asset and
liability transfer pursuant to this Section 4.2 shall comply in all respects
with Sections 414(l) and 411(d)(6) of the Code.
(c) ASSUMED SRP LIABILITIES. As of the date of transfer of the
assets described in Section 4.2(b) above, Hospira shall cause the Hospira SRP to
assume all Liabilities for all accrued benefits under the Abbott SRP for the
U.S. Transferred Employees (excluding Liabilities in respect of QDROs
established in relation to U.S. Transferred Employees), and the Abbott SRP shall
be relieved of all Liabilities for those benefits.
(d) HOSPIRA SRP DURING THE TRANSITION PERIOD. During the
Transition Period (and thereafter to the extent required by applicable law), the
Hospira SRP shall provide that:
(i) U.S. Transferred Employees shall (A) be eligible
to participate in the Hospira SRP to the extent they were eligible to
participate in the Abbott SRP as of the Distribution Date, and (B) receive
credit for vesting purposes for all service credited for that purpose under
the Abbott SRP as of the Distribution Date as if that service had been
rendered to Hospira;
(ii) the accrued benefit of each U.S. Transferred
Employee under the Abbott SRP as of the date of the transfer of assets from
the Abbott SRP (which accrued benefit shall be the U.S. Transferred
Employee's account balance, including any outstanding promissory notes)
shall be paid under the Hospira SRP at the time and in a form that would
have been permitted under the Abbott SRP as of the Distribution Date; and
(iii) all elections and beneficiary designations in
effect under the Abbott SRP as of the Distribution Date shall remain in
effect after the Distribution Date under the Hospira SRP as if made under
the Hospira SRP unless those elections or designations are subsequently
changed in accordance with the Hospira SRP.
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(e) DETERMINATION LETTER REQUESTS. Hospira shall submit
applications to the Internal Revenue Service as soon as practicable following
the Distribution Date (but no later than the last day of the remedial amendment
period as defined in applicable Code provisions) for a determination regarding
the qualification of the Hospira SRP and the tax status of its related trust as
of the Distribution Date and shall make any amendments reasonably requested by
the Internal Revenue Service in order to receive a favorable determination
letter regarding the Hospira SRP.
(f) ABBOTT SRP AFTER DISTRIBUTION DATE. On and after the
Distribution Date, no employees of the Hospira Group, including U.S. Transferred
Employees, shall accrue any benefits under the Abbott SRP. Without limiting the
generality of the foregoing, U.S. Transferred Employees shall cease to be active
participants in the Abbott SRP effective as of the Distribution Date.
(g) SRP FIDUCIARIES. For avoidance of doubt, for all periods
after the Distribution Date, the parties agree that the applicable fiduciaries
of each of the Abbott SRP and the Hospira SRP, respectively, shall have the sole
authority with respect to the Abbott SRP and the Hospira SRP, respectively, to
determine the investment alternatives, the terms and conditions with respect to
those investment alternatives and such other matters as are within the scope of
their duties under Section 404 of ERISA.
(h) LOSS OF UNVESTED BENEFITS/DISTRIBUTIONS. For the avoidance
of doubt, the transfer of any Transferred Employee's employment to the Hospira
Group will not result in loss of that Transferred Employee's unvested benefits
under the Abbott SRP or the Hospira SRP and no Transferred Employee shall be
entitled to a distribution of his benefit under the Abbott SRP as a result of
such transfer of employment.
(i) ABBOTT SRP QDROS. The Abbott SRP shall retain and honor the
terms of all QDROs in effect under the Abbott SRP as of the Distribution Date
with respect to U.S. Transferred Employees.
4.3 FAULTLESS RUBBER PLAN.
Effective as of the Distribution Date, Hospira shall assume
sponsorship of and all of Xxxxxx'x rights, powers, duties, obligations and
Liabilities under and with respect to the Faultless Rubber Plan.
4.4 ASHLAND 401(k) PLAN.
Effective as of the Distribution Date, Hospira shall assume
sponsorship of any and all of Xxxxxx'x rights, powers, duties, obligations and
Liabilities under and with respect to the Ashland 401(k) Plan.
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4.5 SUPPLEMENTAL PENSION PLAN.
(a) ESTABLISHMENT OF HOSPIRA SUPPLEMENTAL ARP. Effective on or
before the Distribution Date, Hospira shall establish the Hospira Supplemental
ARP which, for the Transition Period, shall be substantially similar in all
material respects to the Abbott Supplemental ARP as of the Distribution Date;
provided, however, that Hospira shall not be required to establish any grantor
or other trusts to fund benefits under the Hospira Supplemental ARP.
(b) ASSUMED SUPPLEMENTAL ARP LIABILITIES. Except as provided
below, as of the Distribution Date, Hospira shall, and shall cause the Hospira
Supplemental ARP to, assume all Liabilities for all accrued obligations under
the Abbott Supplemental ARP for the benefits for U.S. Transferred Employees
determined as of the Distribution Date, and Abbott and the Abbott Supplemental
ARP shall be relieved of all Liabilities for those benefits. Notwithstanding the
foregoing, the parties acknowledge that certain Liabilities of Hospira with
respect to the Hospira Supplemental ARP shall be satisfied by Abbott, as
described in Section 7.4 of this Agreement.
(c) HOSPIRA SUPPLEMENTAL ARP DURING THE TRANSITION PERIOD. As
of the Distribution Date, the Hospira Supplemental ARP shall provide that:
(i) U.S. Transferred Employees who are participants in
the Hospira Supplemental ARP and whose benefits are transferred to the
Hospira Supplemental ARP from the Abbott Supplemental ARP shall receive
credit for vesting, eligibility and benefit service for all service
credited for those purposes under the Abbott Supplemental ARP as of the
Distribution Date as if that service had been rendered to Hospira;
(ii) the compensation paid by the Abbott Group to all
U.S. Transferred Employees which was recognized under the Abbott
Supplemental ARP as of the Distribution Date shall be credited and
recognized for all applicable purposes under the Hospira Supplemental ARP
as though it were compensation from the Hospira Group; and
(iii) the Hospira Supplemental ARP shall not be amended
in any manner that would reduce the accrued benefit (including any early
retirement subsidy) of any U.S. Transferred Employee.
(d) ABBOTT SUPPLEMENTAL ARP AFTER DISTRIBUTION DATE. On and
after the Distribution Date, no employees of the Hospira Group, including U.S.
Transferred Employees, shall participate in or accrue any benefits under the
Abbott Supplemental ARP. Without limiting the generality of the foregoing, U.S.
Transferred Employees shall cease to participate in the Abbott Supplemental ARP
effective as of the Distribution Date.
21
4.6 ABBOTT SUPPLEMENTAL 401(k) PLAN.
(a) ESTABLISHMENT OF HOSPIRA KSP. Effective on or before the
Distribution Date, Hospira shall establish the Hospira KSP which, for the
Transition Period, shall be substantially similar in all material respects to
the Abbott KSP as of the Distribution Date; provided, however, that (i) Hospira
may limit participation in the Hospira KSP to KSP Transferred Employees and (ii)
Hospira shall not be required to establish any grantor or other trusts to fund
benefits under the Hospira KSP.
(b) ABBOTT KSP LIABILITIES. Except as expressly provided in
Section 4.6(c) of this Agreement, Abbott shall retain all Liabilities relating
to, arising out of, or resulting from the Abbott KSP. As of the Distribution
Date, Abbott shall take all action reasonably necessary to convert the Deferred
Account (as defined in the Abbott KSP) of any KSP Transferred Employee into a
Trust Account (as defined in the Abbott KSP). Except as expressly provided in
Section 4.6(c) of this Agreement, on and after the Distribution Date, no
employees of the Hospira Group, including KSP Transferred Employees, shall
participate in or accrue any benefits under the Abbott KSP.
(c) HOSPIRA KSP BOOK ACCOUNTS. During the Transition Period,
Hospira shall maintain an unfunded book account under the Hospira KSP for KSP
Transferred Employees. Hospira shall credit those accounts with (i) the amounts
deferred by KSP Transferred Employees into the Hospira KSP according to
elections made by those KSP Transferred Employees plus (ii) any related employer
matching contributions in relation to the amounts described in (i). In the
absence of a new election made by KSP Transferred Employees under the Hospira
KSP, Hospira shall honor the terms of elections made by KSP Transferred
Employees under the Abbott KSP. As soon as practicable following the Transition
Period, Hospira shall pay Abbott (or the trustee of the applicable KSP
Transferred Employee's grantor trust) an amount equal to the aggregate balance
of the book accounts described above and Abbott shall ensure that those amounts
are allocated accordingly among the grantor trusts of those KSP Transferred
Employees. Abbott shall maintain the grantor trusts in accordance with Section
7.4 of this Agreement.
ARTICLE 5
NON-U.S. RETIREMENT PLANS
5.1 CANADIAN PENSION PLAN.
Effective on or before the Distribution Date, Hospira shall establish
the Hospira Canadian Pension Plan the terms of which shall be substantially
similar in all material respects to the terms of the Xxxxxx Laboratories,
Limited Retirement Income Plan as in effect immediately prior to the
Distribution Date. For two (2) years following the Distribution Date, Hospira
shall not materially amend the Hospira Canadian Pension Plan other than as
required by applicable law. The assets and Liabilities determined as of the
Distribution Date under the Xxxxxx Laboratories, Limited Retirement Income Plan
attributable to Non-U.S. Transferred Employees who are participants in that plan
shall be
22
transferred to the Hospira Canadian Pension Plan. The amount of assets and
Liabilities subject to the transfer shall be calculated on a Projected Benefit
Obligation basis, as determined under FAS 87, by Xxxxxx Human Resource
Consulting LLC, and the amount of the transfer and the terms and conditions of
the transfer shall be approved by Xxxxxx'x Vice President, Compensation and
Development and Hospira's Vice President of Compensation & Benefits. Abbott and
Hospira agree to use commercially reasonable efforts to accomplish this transfer
as soon as practicable following the Distribution Date and to cooperate with
each other to make such filings and disclosures and obtain such approvals as may
be deemed necessary or advisable.
5.2 IRISH PENSION PLANS.
The assets and Liabilities determined as of the Distribution Date
under the Xxxxxx Ireland Pension & Death Benefit Plan for Salaried Staff, Xxxxxx
Ireland Pension & Death Benefit Plan for Executive Staff, and Xxxxxx Ireland
Pension & Death Benefit Plan for Hourly Employees attributable to Non-U.S.
Transferred Employees who are participants in those plans shall be transferred
to defined benefit pension plans to be established by Hospira. The amount of
assets and Liabilities subject to the transfer shall be calculated on an
Accumulated Benefit Obligation basis, as determined under FAS 87, by the
trustees of those plans, in consultation with Xxxxxx Human Resources Consulting
LTD, and the amount of the transfer and the terms and conditions of the transfer
shall be approved by Xxxxxx'x Vice President, Compensation and Development and
Hospira's Vice President of Compensation & Benefits. Abbott and Hospira agree to
use commercially reasonable efforts to accomplish these transfers as soon as
practicable following the Distribution Date and to cooperate with each other to
make such filings and disclosures and obtain such approvals as may be deemed
necessary or advisable.
5.3 OVERSEAS MANAGERS' PENSION PLAN.
(a) ESTABLISHMENT OF HOSPIRA OMPP. Effective on or before the
Distribution Date, Hospira shall establish the Hospira OMPP which shall be
substantially similar in all material respects to the Abbott OMPP as of the
Distribution Date provided, however, that Hospira may limit participation in the
Hospira OMPP to Transferred Employees who participated in the Abbott OMPP
immediately prior to their Transfer Dates. Except as provided below, Hospira may
amend the Hospira OMPP at any time following the Distribution Date, including
during the Transition Period.
(b) ASSUMED OMPP LIABILITIES. As of the Distribution Date,
Hospira shall, and shall cause the Hospira OMPP to assume all Liabilities for
all accrued obligations under the Abbott OMPP for the benefits for Non-U.S.
Transferred Employees determined as of the Distribution Date, and Abbott and the
Abbott OMPP shall be relieved of all Liabilities for those benefits.
(c) HOSPIRA OMPP AS OF DISTRIBUTION DATE. As of the
Distribution Date, the Hospira OMPP shall provide that:
23
(i) Non-U.S. Transferred Employees who are
participants in the Hospira OMPP and whose benefits are transferred to the
Hospira OMPP from the Abbott OMPP shall receive credit for vesting,
eligibility and benefit service for all service credited for those purposes
under the Abbott OMPP as of the Distribution Date as if that service had
been rendered to Hospira;
(ii) the compensation paid by the Abbott Group to all
Non-U.S. Transferred Employees which was recognized under the Abbott OMPP
as of the Distribution Date shall be credited and recognized for all
applicable purposes under the Hospira OMPP as though it were compensation
from the Hospira Group; and
(iii) the Hospira OMPP shall not be amended in any
manner that would reduce the accrued benefit (including any early
retirement subsidy) of any Non-U.S. Transferred Employee.
(d) ABBOTT OMPP AFTER DISTRIBUTION DATE. On and after the
Distribution Date, no employees of Hospira, including Non-U.S. Transferred
Employees, shall participate in or accrue any benefits under the Abbott OMPP.
Without limiting the generality of the foregoing, Non-U.S. Transferred Employees
shall cease to participate in the Abbott OMPP effective as of the Distribution
Date.
5.4 OTHER NON-U.S. RETIREMENT PLANS. If Hospira assumes any
Liabilities with respect to Non-U.S. Transferred Employees under an Abbott
Benefit Plan which is a defined benefit pension plan, and such Liabilities are
not otherwise addressed in this Article 5, then Xxxxxx'x Vice President,
Compensation and Development and Hospira's Vice President of Compensation and
Benefits shall mutually agree as to the amount, if any, of the assets to be
transferred by the Abbott Group (or the relevant Abbott Benefit Plan) to the
Hospira Group (or the relevant Hospira Benefit Plan) with respect to such
Liabilities.
ARTICLE 6
WELFARE AND FRINGE BENEFIT PLANS
6.1 SEVERANCE COMPENSATION AND BENEFITS.
In accordance with Section 2.1 of this Agreement, Hospira shall be
responsible for any and all Liabilities to, or relating to, Transferred
Employees relating to severance and unemployment compensation and benefits and,
except as expressly provided below, Abbott shall be responsible for any and all
Liabilities to, or relating to, Abbott Retained Employees relating to severance
and unemployment compensation and benefits. Notwithstanding the foregoing, in
the event that, with respect to any country, (a) the number of Post-Distribution
Transferred Employees in that country at the conclusion of Xxxxxx'x provision of
transitional services in that country is less than the
24
Allocated Employee Number for that country and (b) Abbott reasonably concludes
that it must layoff Post-Distribution Employees in that country as a result of
the Hospira Group's failure to employ a number of Post-Distribution Employees in
that country equal to the Allocated Employee Number, then, subject to the
following sentence, Hospira shall reimburse Abbott for the costs associated with
those layoffs. Notwithstanding the foregoing, Hospira shall not be required to
reimburse Abbott for a number of layoffs in any country greater than (i) the
Allocated Employee Number for that country less (ii) the sum of (x) the number
of Post-Distribution Transferred Employees in that country and (y) the number of
Post-Distribution Employees in that country (other than Post-Distribution
Transferred Employees) to whom Hospira makes an offer of employment that
includes cash and long-term incentive compensation equivalent to that provided
to the Post-Distribution Employee by the Abbott Group.
6.2 RETIREE MEDICAL AND LIFE INSURANCE COVERAGE.
(a) XXXXXX HEALTHCARE AND LIFE INSURANCE COVERAGE. Abbott shall
extend post-retirement healthcare and life insurance coverage under the Abbott
Retiree Medical Plan and the Abbott Retiree Life Plan to each U.S. Transferred
Employee (including any of his or her eligible dependents) who, as of the
Distribution Date, is eligible to retire under the Abbott ARP. Any U.S.
Transferred Employee who is eligible to elect coverage (or any eligible
dependent who is eligible to elect coverage) under the Abbott Retiree Medical
Plan and Abbott Retiree Life Plan shall be entitled to elect to begin that
coverage as of any date elected by that U.S. Transferred Employee that is after
the Distribution Date and on or after his or her termination of employment (for
any reason) with the Hospira Group. Any post-retirement healthcare and life
insurance coverage provided to U.S. Transferred Employees (and his or her
dependents) shall be subject in all respects to the terms and conditions of the
Abbott Retiree Medical Plan and Abbott Retiree Life Plan as in effect from time
to time. Abbott shall be solely liable for any such post-retirement healthcare
and life insurance coverage.
(b) ABBOTT COVERAGE REQUIREMENTS. Abbott expressly reserves the
right to amend, alter, modify or terminate the terms of the Abbott Retiree
Medical Plan and/or the Abbott Retiree Life Plan, as the case may be, at any
time and to interpret the provisions of those plans with respect to its
employees, U.S. Transferred Employees and all of its other former employees and
their respective dependents; provided, however, that Abbott agrees that any
amendments, alterations, modifications, or terminations with respect to those
plans shall be applied in a consistent manner to Abbott retirees and U.S.
Transferred Employees who are eligible for coverage under those plans. Abbott
shall not be responsible or otherwise liable for the provision of
post-retirement healthcare and life insurance coverage to any U.S. Transferred
Employees other than as expressly provided in this Section 6.2. Only service and
compensation with the Abbott Group prior to the Distribution Date shall be taken
into account for all purposes of the Abbott Retiree Health Plan and the Abbott
Retiree Life Plan, including, but not limited to, for purposes of determining
contribution levels.
(c) HOSPIRA HEALTHCARE AND LIFE INSURANCE COVERAGE. Nothing in
this Agreement shall require Hospira to establish or maintain any
post-termination
25
healthcare and life insurance coverage for any person, except as required by
COBRA or other applicable law.
6.3 VEBAs.
Effective as of the Distribution Date, Hospira shall establish the
Hospira VEBA and shall take all actions reasonably necessary to ensure that the
Hospira VEBA satisfies the requirements of Section 501(c)(9) of the Code and is
exempt from tax under Section 501(a) of the Code, including, but not limited to,
filing any required determination letter filing with the Internal Revenue
Service. Effective as of the Distribution Date, after making appropriate
adjustment for any incurred but not reported claims payable from the Abbott
VEBAs, Abbott shall cause each of the Abbott VEBAs to transfer to the Hospira
VEBA any remaining assets and reserves under the Abbott VEBAs which are
attributable to contributions by U.S. Transferred Employees. Abbott and Hospira
shall each take any and all actions as they deem necessary or appropriate to
ensure that the transfer of assets and reserves from the Abbott VEBAs to the
Hospira VEBA does not result in any adverse tax consequences to any of the
Abbott VEBAs or the Hospira VEBA, Abbott, Hospira, or any participants or
beneficiaries under the Abbott VEBAs or the Hospira VEBA. Abbott and Hospira
shall cooperate with each other to effect the provisions of this Section 6.3.
6.4 COBRA.
Effective as of the Distribution Date, Hospira shall assume all
obligations for providing COBRA coverage to U.S. Transferred Employees (and
their eligible dependents), regardless of whether the qualifying event giving
rise to that coverage occurred prior to, on, or after the Distribution Date.
6.5 MATCHING GRANT AND COMBINED APPEAL PROGRAMS.
(a) MATCHING GRANT PROGRAM. Abbott shall retain all Liabilities
with respect to the Xxxxxx Laboratories Matching Grant Program. Abbott shall
match all eligible contributions and grants made by each U.S. Transferred
Employee prior to the Distribution Date, in accordance with the terms of the
Xxxxxx Laboratories Matching Grant Program. Hospira shall not be required to
maintain a matching contribution program following the Distribution Date.
(b) COMBINED APPEAL PROGRAM. Hospira shall establish a Combined
Appeal Program with terms that are substantially similar to the terms of
Xxxxxx'x Combined Appeal Program as of the Distribution Date. Absent a new
election by a U.S. Transferred Employee under Hospira's Combined Appeal Program,
Hospira shall honor elections made by U.S. Transferred Employees pursuant to
Xxxxxx'x Combined Appeal Program. Hospira shall not be required to maintain a
Combined Appeal Program following the Transition Period.
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ARTICLE 7
EQUITY AND EXECUTIVE COMPENSATION PROGRAMS
7.1 EQUITY INCENTIVE PROGRAMS.
(a) TREATMENT OF ABBOTT OPTIONS/NON-RETIREMENT ELIGIBLE. Subject
to Sections 7.1(c) and (d) of this Agreement, as of the Distribution Date, (i)
Abbott shall cancel, as of the Distribution Date, each Abbott Option held by a
Transferred Employee who is not eligible to retire under the Abbott ARP or any
other Abbott retirement plan designated by Abbott as of the Distribution Date
(where that retirement eligibility shall be determined by Abbott in its sole
discretion as of the Distribution Date, based on the terms and conditions of the
Abbott ARP or such other retirement plan covering the applicable Transferred
Employee, as applicable) and which is outstanding immediately prior to the
Distribution Date (whether or not then exercisable), and (ii) Hospira shall
grant each such Transferred Employee a Hospira Option in respect of such
cancelled Abbott Option.
The number of covered shares and the exercise price of the Hospira
Options shall reflect the Distribution and preserve the corresponding Abbott
Option's intrinsic value as of the Distribution Date, that value being equal to
(A) the difference between the fair market value of a share of Abbott common
stock at the last closing price prior to the Distribution less that Abbott
Option's exercise price per share, multiplied by (B) the number of shares
subject to that Abbott Option. Each Hospira Option shall maintain the same ratio
between the exercise price per share and the fair market value per share as
reflected in the respective Abbott Option being cancelled. The exercise price
and number of shares subject to a Hospira Option granted in respect of the
cancelled Abbott Option shall be determined in accordance with Section 424 of
the Code so as to retain, where applicable and possible, the tax and accounting
treatment of each such Abbott Option.
The Hospira Options shall contain substantially similar terms and
conditions as the Abbott Options for which they were substituted. On or prior to
the Distribution Date, Abbott and Hospira shall take such actions necessary to
effectuate the foregoing, including compliance with securities laws and other
legal requirements associated with the grant of stock options in the affected
non-U.S. jurisdictions. Abbott agrees to assist and facilitate the adoption and
approval of the Hospira SIP in order to maximize the possible tax benefits to
Hospira consistent with the requirements of Treasury Regulation Section
1.162-27(f)(4)(iii).
(b) TREATMENT OF ABBOTT OPTIONS/RETIREMENT ELIGIBLE. With
respect to each Abbott Option which is held by a Transferred Employee eligible
to retire under the Abbott ARP or another Abbott retirement plan as of the
Distribution Date (where that retirement eligibility shall be determined by
Abbott in its sole discretion as of the Distribution Date, based on the terms
and conditions of the ARP or such other retirement plan covering the applicable
Transferred Employee, as applicable) and which is outstanding immediately prior
to the Distribution Date (whether or not then
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exercisable), the Abbott Compensation Committee shall take the necessary actions
on or prior to the Distribution Date to provide, solely for purposes of the
Abbott Stock Programs, that a retirement eligible Transferred Employee's
separation from employment with Abbott to be employed with Hospira, under the
provisions of this Agreement, shall be treated as a retirement from an Abbott
retirement plan for purposes of the Abbott Stock Programs. The Abbott
Compensation Committee shall make adjustments to Options held by a retirement
eligible Transferred Employee in accordance with the terms of the Abbott Stock
Programs as it deems necessary and/or appropriate to reflect the spin-off of the
Hospira Business.
(c) ABBOTT OPTIONS IN CERTAIN NON-U.S. JURISDICTIONS.
Notwithstanding the provisions of Section 7.1(a) of this Agreement, Abbott and
Hospira may mutually agree, in their sole discretion, not to cancel an Abbott
Option and grant a corresponding Hospira Option in non-U.S. jurisdictions where
those actions will create or trigger adverse legal, accounting or tax
consequences for either Abbott, Hospira, and/or the affected Non-U.S.
Transferred Employees. In such circumstances, the Abbott Options of the affected
Non-U.S. Transferred Employees shall terminate in accordance with the terms of
the Abbott Stock Programs and the underlying option agreement and Hospira shall
equitably compensate the affected Non-U.S. Transferred Employees in an alternate
manner determined by Hospira in its sole discretion.
(d) TREATMENT OF ABBOTT OPTIONS/POST-DISTRIBUTION TRANSFERRED
EMPLOYEES. Notwithstanding the provisions of Section 7.1(a) of this Agreement,
each Abbott Option held by a Post-Distribution Transferred Employee or a Hospira
Requested Employee who is not eligible to retire under the Abbott ARP or any
other Abbott retirement plan designated by Abbott as of his or her Transfer Date
(where that retirement eligibility shall be determined by Abbott in its sole
discretion as of that Transfer Date, based on the terms and conditions of the
ARP or such other retirement plan covering that Employee, as applicable) and
which is outstanding immediately prior to that Transfer Date shall terminate in
accordance with the terms of the Abbott Stock Programs and the underlying option
agreement and Hospira shall equitably compensate that Employee in an alternate
manner determined by Hospira in its sole discretion.
(e) RESTRICTED STOCK. The Abbott Compensation Committee shall
take the necessary actions on or prior to the Distribution Date to cause the
lapse of Restrictions (as defined in the applicable award agreements) with
respect to all Abbott restricted stock granted under the Abbott Stock Programs
held by each Transferred Employee (retirement eligible and non-retirement
eligible) as of the Distribution Date.
7.2 DISCONTINUED PARTICIPATION IN ESPP.
As of the Distribution Date, each Non-U.S. Transferred Employee (other
than a Post-Distribution Transferred Employee or Hospira Requested Employee) who
participates in the Abbott ESPP shall cease participation in the Abbott ESPP and
shall have his or her payroll deductions refunded by the Abbott Group as soon as
administratively practicable in accordance with the terms of the Abbott ESPP. As
of the Transfer Date, each Post-Distribution Transferred Employee or Hospira
Requested
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Employee who participates in the Abbott ESPP shall cease participation
in the Abbott ESPP and shall have his or her payroll deductions refunded by the
Abbott Group as soon as administratively practicable in accordance with the
terms of the Abbott ESPP.
7.3 DEFERRED COMPENSATION PLAN.
Abbott shall retain all Liabilities relating to, arising out of, or
resulting from the Abbott DCP. Prior to ______, 2004 (or such later date as
Abbott may determine, but in no event later than the Distribution Date), Abbott
shall amend the Abbott DCP to provide that each Employee shall make an election,
prior to ______, 2004 (or such later date as Abbott may determine, but in no
event later than the Distribution Date) to either (i) treat that Employee's
commencement of employment with the Hospira Group as a 'termination of
employment' (as defined in the Abbott DCP) with Abbott, provided that that
Employee remains an employee of the Abbott Group through the date immediately
prior to the Distribution Date or (ii) treat that Employee's continuation of
employment with the Hospira Group as if it was a continuation of employment with
the Abbott Group solely for purposes of distribution of benefits (and not
continued contributions). Those U.S. Transferred Employees who participate in
the Abbott DCP and who do not timely execute an election shall be treated as
having made an election pursuant to (ii) above. In the event that a Transferred
Employee makes an election pursuant to (i) above, distributions from the Abbott
DCP shall not begin any sooner than one (1) year following that Transferred
Employee's Transfer Date. Hospira agrees that it shall provide written notice to
Abbott of the subsequent termination of employment of a Transferred Employee who
makes an election pursuant to (ii) above, in order for Abbott to carry out its
obligations hereunder. With respect to any Transferred Employee who makes an
election pursuant to (ii) above, subsequent termination of employment from the
Hospira Group shall have the same effect under the Abbott DCP as a termination
of employment from the Abbott Group. No deferrals shall be made under the Abbott
DCP in respect of Transferred Employees with respect of any period following the
Distribution Date.
7.4 GRANTOR TRUSTS.
(a) GRANTOR TRUST PAYMENT ELECTION. On or prior to the
Distribution Date, Abbott shall solicit from each U.S. Transferred Employee, who
has a grantor trust that was created pursuant to an Abbott Benefit Plan, a newly
completed Grantor Trust Payment Election form for each such trust. The new forms
shall acknowledge that continued employment with the Hospira Group shall have
the same effect as continued employment with the Abbott Group with respect to
the determination of the settlement date under those trusts. Hospira agrees that
it shall provide written notice to Abbott of the subsequent termination of
employment of a U.S. Transferred Employee with a grantor trust subject to this
Section 7.4, in order for Abbott to carry out its obligations hereunder and
under the grantor trust. Abbott agrees that it shall, as administrator of the
applicable trusts, inform the trustee of the grantor trusts of the proper
settlement dates, when they occur, based on those U.S. Transferred Employees'
continued employment with, and subsequent termination from, Hospira. A
subsequent termination
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of employment from the Hospira Group shall have the same effect under the terms
of the grantor trusts as a termination of employment from the Abbott Group.
(b) MAINTENANCE OF GRANTOR TRUSTS. Abbott will retain the
Liabilities associated with the Abbott Supplemental ARP for U.S. Transferred
Employees who have grantor trusts. Abbott shall continue to be obligated to
maintain all U.S. Transferred Employee's grantor trusts which were created
pursuant to any Abbott Benefit Plan and shall continue to make annual
contributions as may be required pursuant to the terms and conditions of those
grantor trusts. Abbott shall treat any contributions relating to services
provided during the Transition Period that are made into the applicable grantor
trusts (either by Abbott or Hospira) the same as contributions relating to
services provided prior to the Distribution Date which were made into the trusts
by Abbott.
(c) NECESSARY ACTIONS. Abbott shall take all commercially
reasonable actions deemed necessary to give effect to this Section 7.4,
including, but not limited to, amending the grantor trusts or any related Abbott
Benefit Plan.
(d) HOSPIRA CONTRIBUTIONS. Hospira shall be obligated to make
contributions to the applicable grantor trusts with respect to any amounts
earned for services rendered to the Hospira Group during the Transition Period,
whether those amounts are paid directly to the trustee for the applicable
grantor trusts or to Abbott for contributions into the applicable grantor
trusts, at the same time and in the same manner, as contributions are made by
Abbott with respect to any amounts earned for services rendered to Abbott prior
to the Distribution Date.
7.5 CASH PROFIT SHARING.
Each U.S. Transferred Employee who participated in the Abbott Cash
Profit Sharing Plan immediately prior to the Distribution Date and who remains
employed by the Hospira Group after the Distribution Date and through November
15, 2004, shall be entitled to receive from Hospira a cash payment for the 2004
plan year ending September 30, 2004 based on the same percentage of eligible
earnings used under the Abbott Cash Profit Sharing Plan for such plan year. The
terms and conditions of payments to be made by Hospira pursuant to this Section
7.5 shall be substantially similar in all material respects to those that
applied under the Abbott Cash Profit Sharing Plan as in effect on the
Distribution Date. Hospira shall make all determinations of payments under this
Section 7.5 and shall be solely responsible for all payments to or with respect
to U.S. Transferred Employees hereunder. Hospira shall have no obligation to
provide any cash profit sharing plan in respect of periods following September
30, 2004.
7.6 OTHER INCENTIVE PROGRAMS.
During the Transition Period, Hospira shall provide U.S. Transferred
Employees with Hospira cash incentive programs (other than the Abbott Cash
Profit Sharing Plan, the treatment of which is addressed in Section 7.5 above)
on terms and conditions which are substantially similar in all material respects
to the terms and conditions of the cash incentive programs provided to those
U.S. Transferred Employees
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on the Distribution Date; provided, however that, after the Distribution Date,
Hospira may change the performance metrics and criteria to reflect its incentive
strategies. All payments to U.S. Transferred Employees under the cash incentive
programs described in this Section 7.6 shall be made at such times as prescribed
by those programs. Hospira shall make in its sole discretion all determinations
of payments under the cash incentive programs described in this Section 7.6 with
respect to U.S. Transferred Employees and shall be solely responsible for all
payments to or with respect to U.S. Transferred Employees hereunder. Hospira
shall have no obligation to continue any cash incentive program following the
Transition Period.
ARTICLE 8
MISCELLANEOUS
8.1 TRANSFER OF RECORDS AND INFORMATION.
Subject to applicable law, Abbott shall transfer to Hospira any and
all employment records and information (including, but not limited to, any Form
W-2 or other Internal Revenue Service forms) with respect to Transferred
Employees and other records reasonably required by Hospira to enable Hospira to
properly carry out its obligations under this Agreement. Such transfer of
records and information shall generally occur as soon as administratively
practicable following (a) the date hereof or (b) with respect to records and
information that are relevant to services provided in the Transition Services
Agreements, the date upon which the provision of those services terminates.
After the transfer of those records to Hospira, Hospira shall permit Abbott to
have reasonable access to such records and such information, each as set forth
in Article VI of the Separation and Distribution Agreement.
8.2 PRESERVATION OF RIGHTS TO AMEND OR TERMINATE PLANS.
Nothing in this Agreement shall be construed as a limitation on the
right of the Abbott Group or the Hospira Group to amend or terminate any Benefit
Plan so long as that amendment or termination is not contrary to this Agreement.
In addition, nothing in this Agreement shall be construed as a limitation on the
right of the Abbott Group or the Hospira Group to amend any Benefit Plan to
conform to requirements of applicable law or the provisions of a collective
bargaining agreement, including any changes that are effective during the
Transition Period.
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8.3 TRANSITION SERVICES.
Except as otherwise provided in the Transition Services Agreements or
as otherwise expressly provided herein, neither party shall have any
responsibility for providing services to the other party with respect to
employee or Benefit Plan matters after the Distribution Date.
8.4 REIMBURSEMENT.
Abbott and Hospira acknowledge that the Abbott Group, on the one hand,
and the Hospira Group, on the other hand, may incur costs and expenses
(including, without limitation, contributions to Benefit Plans and the payment
of insurance premiums) which are, as set forth in this Agreement, the
responsibility of the other party. Accordingly, Abbott and Hospira agree to
reimburse each other, as soon as practicable but in any event within thirty (30)
days of receipt from the other party of appropriate verification, for all such
costs and expenses.
8.5 XXXXX XXXXXX FOUNDATION.
For purposes of clarification, no reference to benefits or Benefit
Plan contained in this Agreement shall include or affect the benefits and
services provided to employees or retirees of the Abbott Group by the Xxxxx
Xxxxxx Foundation.
8.6 INCORPORATION BY REFERENCE.
The following sections of the Separation and Distribution Agreement
are hereby incorporated into this Agreement by reference: Section 9.01.
Counterparts; Entire Agreement; Corporate Power; Facsimile Signatures, Section
9.02. Governing Law, Section 9.04. Third Party Beneficiaries, Section 9.05.
Notices, Section 9.06. Severability, Section 9.07. Force Majeure, Section 9.08.
Responsibility for Expenses, Section 9.09. Headings, Section 9.10. Survival of
Covenants, Section 9.12. Waivers of Default, and Section 9.13. Amendments.
8.7 LIMITATION ON ENFORCEMENT.
This Agreement is an agreement solely between Abbott and Hospira and,
to the extent applicable, TAP. Nothing in this Agreement, whether express or
implied, confers upon any employee of the Abbott Group, the Hospira Group, TAP,
any Employee, any beneficiary of an Employee, any former employee of the Abbott
Group or TAP or any other person, any rights or remedies, including, but not
limited to any right to (a) employment or recall; (b) continued employment or
continued service for any specified period; or (c) claim any particular
compensation, benefit or aggregation of benefits, of any kind or nature.
8.8 ASSIGNABILITY.
This Agreement will be binding upon and inure to the benefit of the
parties hereto and their respective successors and permitted assigns; provided,
however,
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that no party hereto may assign its respective rights or delegate its
respective obligations under this Agreement without the express prior written
consent of the other parties hereto. Notwithstanding the foregoing, this
Agreement will be assignable in whole in connection with a merger or
consolidation or the sale of all or substantially all of the Assets (as defined
in the Separation and Distribution Agreement) of a party hereto so long as the
resulting, surviving or transferee Person (as defined in the Separation and
Distribution Agreement) assumes all the obligations of the relevant party hereto
by operation of law or pursuant to an agreement in form and substance reasonably
satisfactory to the other parties hereto.
8.9 FURTHER ASSURANCES AND CONSENTS.
In addition to the actions specifically provided elsewhere in this
Agreement, each of the parties hereto shall use commercially reasonable efforts
to (a) execute and deliver such further instruments and documents and take such
other actions as the other party may reasonably request in order to effectuate
the purposes of this Agreement and carry out the terms hereof; (b) take or cause
to be taken, all actions and do, or cause to be done, all things, reasonably
necessary, proper or advisable under applicable laws, regulations and agreements
or otherwise to consummate and make effective the transactions contemplated by
this Agreement, including, without limitation, using commercially reasonable
efforts to obtain any consent and approvals and to make any filings and
applications necessary or desirable in order to consummate the transactions
contemplated by this Agreement; provided that no party hereto shall be obligated
to pay any consideration therefor (except for filing fees and other similar
charges) to any third party from whom those consents, approvals and amendments
are required or to take any action or omit to take any action if the taking or
the omission to take action would be unreasonably burdensome to the party or the
business thereof.
8.10 THIRD PARTY CONSENT.
If the obligation of any party under this Agreement is dependent on
the consent of a third party, such as a vendor or insurance company, and that
consent is withheld, Abbott and Hospira shall use commercially reasonable
efforts to implement the applicable provisions of this Agreement to the fullest
extent practicable. If any provision of this Agreement cannot be implemented due
to the failure of a third party to consent, Abbott and Hospira shall negotiate
in good faith to implement the provision in a mutually satisfactory manner,
taking into account the original purposes of the provision in light of the
Distribution and communications to affected Transferred Employees.
8.11 EFFECT IF DISTRIBUTION DOES NOT OCCUR.
If the Distribution does not occur, then all actions and events that
are to be taken under this Agreement as of the Distribution Date or otherwise in
connection with the Distribution, shall not be taken or occur except to the
extent specifically provided by Abbott.
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8.12 DISPUTES.
Abbott and Hospira agree to use commercially reasonable efforts to
resolve in an amicable manner any and all controversies, disputes and claims
between them arising out of or related in any way to this Agreement. Abbott and
Hospira agree that any controversy, dispute or claim (whether arising in
contract, tort or otherwise) arising out of or related in any way to this
Agreement, which cannot be amicably resolved informally will be resolved
pursuant to the alternative dispute resolution procedures set forth in Article
VII of the Separation and Distribution Agreement and the Master ADR Agreement
attached hereto as Schedule 5.
8.13 SCHEDULES.
As of the Distribution Date, the parties shall update Schedules 2 and
4 to this Agreement.
8.14 MUTUAL DRAFTING.
This Agreement will be deemed to be the joint work product of the
parties and any rule of construction that a document shall be interpreted or
construed against a drafter of such document shall not be applicable.
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The parties have caused this Agreement to be signed by their
authorized representatives as of the Distribution Date.
HOSPIRA, INC. XXXXXX LABORATORIES
BY BY
---------------------------- -----------------------------
TITLE TITLE
------------------------- --------------------------
SOLELY FOR PURPOSES OF SECTIONS 2.4, 8.7, AND 8.8
TAP PHARMACEUTICAL PRODUCTS INC.
BY
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