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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No.          )

 

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March 28, 2011

Dear Hospira Shareholder:

        You are cordially invited to attend the 2011 Annual Meeting of Shareholders of Hospira, Inc. at the Park Hyatt, 1201 24 ^th  Street, NW, Washington, D.C., on Tuesday, May 10, 2011, at 9 a.m., Eastern Time.

        This booklet includes the notice of annual meeting and the proxy statement. The proxy statement describes the business to be transacted at the meeting and provides other information about the company that you should know when you vote your shares.

        The principal business to be conducted at the meeting will be i) the election of three directors, ii) the approval of three amendments to our restated certificate of incorporation, iii) a shareholder advisory vote to approve the compensation of Hospira's named executive officers, iv) a shareholder advisory vote on the frequency of the shareholder vote to approve executive compensation, and v) the ratification of the appointment of Deloitte & Touche LLP as the firm of independent registered public accountants to serve as Hospira's auditors.

        It is important that your shares be represented, whether or not you attend the meeting. Shareholders of record can vote their shares via the Internet, by mail or by using a toll-free telephone number. Instructions for accessing the proxy materials appear on the Notice of Internet Availability of Proxy Materials mailed to you on or around March 28, 2011. If you hold shares through your broker or other intermediary, that person or institution will provide you with instructions on how to vote your shares. It is especially important that you communicate your voting instructions to your broker or other intermediary since the New York Stock Exchange does not allow them to cast votes with respect to the election of directors, the advisory vote on executive compensation, the advisory vote on frequency or other non-routine matters, unless they have received instructions from the beneficial owner of shares.

        We look forward to your participation in the 2011 annual meeting.

Sincerely,

Christopher B. Begley
Chairman

Hospira, Inc.
275 North Field Drive
Lake Forest, IL 60045
www.hospira.com

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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held on May 10, 2011

        

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        The 2011 Annual Meeting of Shareholders of Hospira, Inc. will be held at the Park Hyatt, 1201 24 ^th  Street, NW, Washington, D.C., on Tuesday, May 10, 2011, at 9 a.m., Eastern Time. The purposes of the meeting are to:

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elect three directors for three-year terms until the annual meeting in 2014 (Item 1 on the proxy card);



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approve three amendments to our restated certificate of incorporation (Items 2 - 4 on the proxy card);



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approve, by means of a shareholder advisory vote, the compensation of Hospira's named executive officers as disclosed in this proxy statement ("say on pay vote") (Item 5 on the proxy card);



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determine, by means of a shareholder advisory vote, whether the say on pay vote will occur every 1, 2 or 3 years (Item 6 on the proxy card);



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ratify the appointment of Deloitte & Touche LLP as the firm of independent registered public accountants to serve as Hospira's auditors for 2011 (Item 7 on the proxy card); and



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transact such other business as may properly come before the meeting or any adjournment or postponement of the meeting.

         The board of directors recommends that you vote FOR Items 1, 2, 3, 4, 5 and 7. The board of directors recommends that you vote for an annual vote on Item 6.

        A proxy statement with respect to the annual meeting accompanies and forms a part of this notice. We are pleased to take advantage of the Securities and Exchange Commission rules that allow companies to furnish proxy materials to their stockholders on the Internet. We believe these rules will allow us to provide our shareholders with the required information more quickly and efficiently, lower our printing and mailing costs and reduce the environmental impact of our Annual Meeting.

        Shareholders of record have been mailed a Notice of Internet Availability of Proxy Materials on or around March 28, 2011, which provides shareholders with instructions on how to access the proxy materials and our Annual Report on the Internet, and if they prefer, how to request paper copies of these materials. Hospira employees who hold Hospira shares in the Hospira 401(k) Retirement Savings Plan or the Hospira Puerto Rico Retirement Savings Plan and other shareholders who have previously requested paper copies of these materials may receive these materials by e-mail or in paper form.

        The board of directors has set the close of business on March 14, 2011, as the record date for the meeting. This means that owners of common stock as of that date are entitled to vote at the meeting and any adjournments or postponements of the meeting.

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        Your vote is important. We encourage you to read the proxy statement and to submit a proxy so that your shares will be represented and voted even if you do not attend. You may submit your proxy over the Internet or by telephone or mail. If you do attend the meeting, you may vote in person.

By order of the board of directors.

Brian J. Smith
Secretary
March 28, 2011

Hospira, Inc.
275 North Field Drive
Lake Forest, IL 60045
www.hospira.com

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HOSPIRA, INC.

PROXY STATEMENT
FOR
2011 ANNUAL MEETING OF SHAREHOLDERS

TO BE HELD ON MAY 10, 2011
GENERAL INFORMATION

Why has this proxy statement been made available?

        Our board of directors is soliciting proxies for use at our annual meeting of shareholders to be held on May 10, 2011, and any adjournments or postponements of the meeting. The meeting will be held at the Park Hyatt, 1201 24 ^th  Street, NW, Washington, D.C. and will begin at 9 a.m., Eastern Time. In order to solicit your proxy, we have made these materials available to you on the Internet, by e-mail, or by mail. We made these materials available to shareholders on or around March 28, 2011.

What will be voted on at the annual meeting?

        Shareholders will vote on the following matters:

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election of three directors for a three-year term;



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approval of three amendments to our restated certificate of incorporation;



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approval, by means of a shareholder advisory vote, of the compensation of Hospira's named executive officers as disclosed in this proxy statement;



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determine, by means of a shareholder advisory vote, whether the say on pay vote will occur every 1, 2 or 3 years; and



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ratify the appointment of Deloitte & Touche LLP as the firm of independent registered public accountants to serve as Hospira's auditors for 2011.

Why did I receive a notice in the mail regarding the Internet availability of proxy materials instead of a full set of proxy materials?

        Pursuant to rules adopted by the Securities and Exchange Commission (the "SEC"), we have elected to provide access to our proxy materials over the Internet. Accordingly, we are sending a Notice of Internet Availability of Proxy Materials (the "Notice") to our stockholders of record and beneficial owners. All stockholders will have the ability to access the proxy materials referred to in the Notice or to request a printed set of the proxy materials. Instructions on how to access the proxy materials over the Internet or to request a printed copy may be found in the Notice. In addition, stockholders may request to receive proxy materials in printed form by mail or electronically by e-mail on an ongoing basis. Your election to receive proxy materials by e-mail will remain in effect until you terminate it. If you choose to receive future proxy materials by e-mail, you will receive an e-mail next year with instructions containing a link to those materials and a link to the proxy voting site. Hospira employees who hold Hospira shares in the Hospira 401(k) Retirement Savings Plan or the Hospira Puerto Rico Retirement Savings Plan and other shareholders who have previously requested paper copies of these materials will receive these materials by e-mail or in paper form.

        We elected to use electronic notice and access for our proxy materials because we believe it will reduce our printing and mailing costs, and thereby, reduce the environmental impact of our annual shareholders' meeting.

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Who may vote at the meeting?

        The board of directors has set a record date of March 14, 2011 (the "record date"), meaning that shareholders of record at the close of business on that date may vote at the meeting, or at adjournments or postponements of the meeting.

How many votes do I have?

        You have one vote for each share of common stock you hold.

What constitutes a quorum?

        The presence in person or by proxy of the holders of shares of common stock representing a majority of all issued and outstanding shares of common stock entitled to vote will constitute a quorum. On March 14, 2011, there were 167,255,697 shares of common stock issued and outstanding.

        Shares of common stock represented by a properly completed proxy will be counted as present at the meeting for purposes of determining a quorum, even if the proxy indicates that the shareholder is abstaining from voting. Your shares will be counted for purposes of determining a quorum if you are present and vote in person at the meeting, or if you vote on the Internet, by telephone, or by properly submitting a proxy card or voting instruction form by mail.

What vote is required to approve each matter?

        Election of Directors.     Directors receiving a majority of the votes cast (the number of shares voted "for" a director must exceed the number of votes cast "against" that director) will be elected as a director.

        Approval of Three Amendments to our Restated Certificate of Incorporation.     The affirmative vote of 66- ² / 3 % of the outstanding shares is required for the approval of these amendments.

        Approval of the Say on Pay Vote.     The affirmative vote of a majority of the votes cast is required for approval of this item. This proposal is advisory in nature, which means that the vote is not binding upon the company. The opinions expressed by shareholders on this matter will be taken into consideration when making future executive compensation decisions.

        Frequency of Say on Pay Vote.     The option of one year, two years or three years that receives the highest number of votes cast by shareholders will be the frequency for the say on pay vote that has been selected by shareholders. This proposal is advisory in nature, which means that the vote is not binding upon the company. However, our current intent is to implement the option that receives the most votes from shareholders.

        Ratification of Auditors.     The affirmative vote of a majority of the votes cast is required for approval of this item.

        Abstentions and broker non-votes (discussed below) will not be counted either for or against these matters and, assuming the presence of a quorum, abstentions and broker non-votes will have no effect.

What happens if a director nominee does not receive a majority of the votes cast in an uncontested election?

        In 2011, all nominees for the election of directors are currently serving on the board. A nominee who is serving as a director, but who is not elected at the annual meeting, would, under Delaware law, continue to serve on the board as a "holdover director." However, under our bylaws, any director that fails to be elected must tender his or her resignation to the board promptly following certification of the shareholder vote. Our independent directors (excluding the director who tendered the resignation)

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would be required to determine whether to accept or reject the resignation, or whether to take any other action. The board would then act on the tendered resignation, and publicly disclose its decision, within 90 days following certification of the shareholder vote.

How do I vote by proxy?

        If you are a shareholder of record, you have a choice of voting over the Internet, voting by telephone using a toll-free telephone number, voting in person by attending the annual meeting, or voting by requesting and completing a proxy card and mailing it in a postage-paid envelope. To vote over the Internet or by telephone, follow the instructions provided on your proxy card or with the Notice. The Internet and telephone voting facilities for shareholders of record will close at 11:59 p.m., Eastern Time, on May 9, 2011. Other deadlines may apply to you if your stock is held of record by a bank, a broker or other nominee.

        The proxies will vote your shares on each matter as you direct. If you do not indicate how your shares are to be voted on a matter, properly completed proxies will be voted for the election of the directors, approval of each of the amendments to our restated certificate of incorporation, approval of the advisory vote on executive compensation, approval of an annual frequency for the say on pay vote, and the ratification of Deloitte & Touche LLP as the firm of independent registered public accountants to serve as our auditors. Other matters that properly come before the meeting will be voted upon by the proxies in accordance with their best judgment. Our corporate secretary has not received timely and proper notice from shareholders on any other matter to be presented at the meeting.

How do I vote if I hold my shares through a broker, bank or other nominee?

        If you hold your shares through a broker, bank or other nominee, you may instruct that person to vote your shares by following instructions that such person gives you. Most brokers offer voting by mail, by telephone and on the Internet.

What is a broker non-vote and how does it affect the voting requirements?

        If your shares are held by a broker, the broker will ask you how you want your shares to be voted. If you give the broker instructions, the broker will vote your shares as you direct. If you do not give instructions, one of two things can happen. On matters on which the broker is prohibited from exercising voting authority ("non-routine" matters), which is called a "broker non-vote," your shares will not be voted. Broker non-votes will have no effect on the number of votes required to approve any of the matters being voted on at the meeting. On matters on which the broker is permitted to exercise voting authority ("routine" matters), the broker will vote your shares in its discretion. We believe that it is likely that the brokers may exercise voting authority on the amendments to our restated certificate of incorporation and the ratification of the independent public accountants, but may not exercise voting authority on any other items up for vote at this annual meeting. Brokers do not have the ability to cast votes for the election of directors, the advisory vote on executive compensation, or the advisory vote on frequency unless they have received instructions from the beneficial owner of the shares.

How do I vote if I hold shares through the Hospira 401(k) Retirement Savings Plan or the Hospira Puerto Rico Retirement Savings Plan?

        If you hold shares through the Hospira 401(k) Retirement Savings Plan or the Hospira Puerto Rico Retirement Savings Plan, you will receive materials that will contain instructions to the respective trustee of each plan's trust as to how to vote your shares. You may vote your shares by completing a proxy card, or you may vote by telephone or Internet by following the instructions provided with the materials. If you do not vote shares you hold in the Hospira 401(k) Retirement Savings Plan, Fiduciary Counselors Inc. will vote your shares in its discretion. Fiduciary Counselors may use its own discretion

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with respect to those shares under the Hospira 401(k) Retirement Savings Plan for which voting instructions are not received on a timely basis. Fiduciary Counselors is the independent fiduciary of the plan for purposes of monitoring the suitability of acquiring and holding Hospira shares. If you do not vote shares you hold in the Hospira Puerto Rico Retirement Savings Plan, the trustee of that plan's trust, Banco Popular de Puerto Rico, will vote your shares in the same proportion as shares voted by the other participants.

How do I vote in person?

        If you are a shareholder of record, you may vote your shares in person at the meeting. However, we encourage you to vote by proxy in advance, even if you plan to attend the meeting.

Can I revoke a proxy?

        Yes. You can revoke your proxy by:

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giving written notice to our corporate secretary;



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delivering a later-dated proxy or resubmitting your vote by telephone or over the Internet; or



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voting in person at the meeting.

If I submit a proxy, will my vote be kept confidential?

        Our policy is that all proxies, ballots, and voting tabulations that can reveal how a particular shareholder has voted be kept confidential and not be disclosed, except:

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where disclosure may be required by law or regulation;



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where disclosure may be necessary in order for us to assert or defend claims;



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where a shareholder expressly requests disclosure;



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to allow the inspectors of election to certify the results of a vote; or



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in other limited circumstances, such as a contested election or a proxy solicitation not approved and recommended by the board of directors.

Who will be tabulating and certifying votes at the meeting?

        We have engaged Broadridge Investor Communication Solutions ("Broadridge") to serve as the tabulator of votes and a representative of Broadridge to serve as inspector of election and to certify the votes.

Who will pay the costs and expenses for this proxy solicitation?

        We will pay all costs of soliciting proxies, including charges made by brokers and other persons holding common stock in their names or in the names of nominees, for reasonable expenses incurred in sending proxy materials to beneficial owners and obtaining their proxies. In addition to solicitation by mail, our directors, officers and employees may solicit proxies personally and by telephone, Internet and facsimile, all without extra compensation. We also have retained the services of Georgeson Inc. to aid in the solicitation of proxies at a cost of $13,500, plus reimbursement for reasonable out-of-pocket expenses.

How can I attend the meeting?

        Attendance at the annual meeting is limited to shareholders as of the record date or their proxies. If your shares are registered in your name, the Notice serves as your admission ticket and you must

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present the Notice at the meeting. If your shares are held by a broker, bank or nominee, you must bring to the meeting a brokerage statement showing ownership as of the record date. Directions to the meeting are included on the proxy card. Shareholders will be admitted to the meeting location beginning at 8:30 a.m., Eastern Time.

What is "householding" and how does it work?

        We have adopted "householding," a procedure approved by the SEC under which multiple shareholders of Hospira stock who reside at the same address will receive a single copy of the Notice, or a single set of annual report and other proxy materials, unless the affected shareholder has provided contrary instructions. This procedure reduces printing costs and postage fees. If you reside at the same address as another shareholder of Hospira stock and wish to receive a separate copy of the applicable materials, you may do so by making a written or oral request to: Hospira Investor Relations, 275 North Field Drive, Department 051M, Building H1, Lake Forest, Illinois 60045, 224-212-2711. Upon your request, we will promptly deliver a separate copy to you. The proxy statement and our 2010 Annual Report on Form 10-K are also available at www.hospira.com/2011ProxyMaterials. If you participate in householding and you wish to receive a separate Notice or annual report and other proxy materials, you may also contact Broadridge at any time, either by calling toll free 1-800-542-1061, or by writing to Broadridge, Householding Department, 51 Mercedes Way, Edgewood, New York, 11717. Any shareholders who share the same address and currently receive multiple copies of the Notice, or the annual report and other proxy materials, who wish to receive only one copy in the future may contact their bank, broker, or other holder of record, or Hospira Investor Relations or Broadridge at the contact information listed above, to request information about householding.

OWNERSHIP OF OUR STOCK

        Based on information contained in Schedules 13G filed by Capital World Investors, a division of Capital Research and Management Company, BlackRock, Inc., Harris Associates L.P., and The VanGuard Group, Inc. with the Securities and Exchange Commission, as of December 31, 2010, they owned the following Hospira shares:

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        The following additional table sets forth information regarding ownership of our common stock as of February 28, 2011, by our directors, our chief executive officer, chief financial officer and the three other most highly paid executive officers ("the named officers"), and by all directors and executive officers as a group. Each person named below individually owns less than 1% of our outstanding common stock. Our current directors and executive officers as a group, collectively, own less than 2% of our outstanding common stock.

        Beneficial ownership is determined in accordance with Rule 13d-3 under the Securities Exchange Act of 1934. A person is deemed to be the beneficial owner of any share of common stock if such person has or shares the right to vote or dispose of such common stock, or has the right to acquire beneficial ownership at any time within 60 days of the date of the table. Deferred share units held by directors may not be voted or disposed of by the director until the shares are distributed to the director upon or after termination of the director's service on the board. Therefore, deferred share units are not considered to be beneficially owned and are not considered for purposes of determining the percentage of common stock owned by any person. The number of stock options exercisable within 60 days of the date of the table and the number of deferred share units owned by each person are stated separately and not included in the "Number of Shares" column.

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PROPOSAL 1
ELECTION OF DIRECTORS

        The board is divided into three classes, with one class of directors being elected for a three-year term at each annual meeting. There are three Class I seats, four Class II seats and three Class III seats. Each director generally holds office until the third annual meeting after the meeting at which such director is elected and until his or her successor is duly elected and qualified, or until his or her earlier resignation, removal or death. The Class I directors are being elected at the 2011 annual meeting.

        Upon the recommendation of its governance and public policy committee, the board of directors has nominated Irving W. Bailey, II, F. Michael Ball, and Jacque J. Sokolov, M.D., to be elected as Class I directors to hold office until the 2014 annual meeting. No nominations for directors were received from shareholders and no other candidates are eligible for election.

        If elected, each nominee will serve until the expiration of his or her term and his or her successor is elected and qualified or until his or her earlier resignation, removal or death. Each of the nominees is willing to serve if elected, and the board of directors has no reason to believe that any of the nominees will be unavailable for election, but if such a situation should arise, the proxy will be voted in accordance with the best judgment of the proxy holder for such person or persons as may be designated by the board of directors, unless the shareholder has directed otherwise.

         The board of directors recommends that the shareholders vote FOR the election of Irving W. Bailey, II, F. Michael Ball, and Jacque J. Sokolov, M.D., to the board of directors as Class I directors.

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OUR BOARD OF DIRECTORS

Nominees for Election as Class I Directors at the 2011 Annual Meeting

         Irving W. Bailey, II , age 69, has served as our director since our spin-off from Abbott Laboratories ("Abbott") in 2004 and has served as the lead director since the 2007 annual meeting. Mr. Bailey served as a Managing Director of Chrysalis Ventures, a private equity management firm, from June 2001 to January 2005, and has served as a Senior Advisor to Chrysalis Ventures since January 2005. Mr. Bailey served as President of Bailey Capital Corporation, also a private equity management firm, from January 1998 to June 2001, and as Chief Executive Officer of Providian Corporation, an insurance and diversified financial services company, from 1988 to 1997. Mr. Bailey also serves as Vice Chairman of Aegon, N.V. and as a director of Computer Sciences Corporation.

        Reasons for Nomination:     Mr. Bailey has extensive management experience in the financial services sector as the former chairman and chief executive officer of a major financial services company, and several years of experience in private equity management. Mr. Bailey also has extensive experience serving on the boards of multinational organizations, most notably, as a member of the board at an internationally based company and as a lead director. Mr. Bailey's strong management and lead director experiences provide a valuable source of insight for the board and its committees.

         F. Michael Ball, age 55, joined Hospira as its Chief Executive Officer and as a director, on March 28, 2011. Mr. Ball joins Hospira after a 16-year career at Allergan, Inc., a multi-specialty healthcare company, where he held several senior leadership positions. More recently, from February 2006 until joining Hospira, Mr. Ball served as President of Allergan. From October 2003 to February 2006, Mr. Ball served as Executive Vice President and President, Pharmaceuticals of Allergan. Since 2000, Mr. Ball has served on the board of directors of STEC, Inc., a publicly traded manufacturer and marketer of computer memory and hard drive storage solutions.

        Reasons for Nomination:     Mr. Ball brings more than 25 years of healthcare experience to Hospira, more recently serving in several senior management positions for 16 years at a publicly-traded, multi-specialty healthcare company. As the CEO, Mr. Ball has the primary responsibility for managing the company day to day and its business activities and operations. For these reasons, Mr. Ball is well qualified to serve on Hospira's board.

         Jacque J. Sokolov, M.D. , age 56, has served as our director since our spin-off from Abbott in 2004. Dr. Sokolov has served since 1997 as the Chairman and Managing Partner of SSB Solutions, Inc., a national healthcare management consulting, project development and investment firm. From 1987 to 1992, Dr. Sokolov served as the Vice President of Healthcare for Southern California Edison. In 1992, Dr. Sokolov became CEO of Advanced Health Plans Inc., which was acquired in 1994 by Coastal Physicians Group Inc. From 1994 to 1997, Dr. Sokolov served as Chairman of the Board, Chairman of the Executive Committee, and Chairman of the Management Action Committee of Coastal Physician Group, Inc., which later became PhyAmerica Physician Group, Inc. Dr. Sokolov serves on the board of directors of MedCath. He also serves as a director for the National Health Foundation, Phoenix Children's Hospital, and the White House Health Project.

        Reasons for Nomination:     Dr. Sokolov has strong management experience in the healthcare field as a senior corporate officer and the chairman and managing partner of a national healthcare management, development and investment firm. Over the years, he was worked extensively with physicians, physician organizations, hospitals/health systems, health plans and pharmaceutical and medical device companies. He also has over 17 years of board experience at three public companies, including service as a chairman of the board, chairman of several committees, and as a member of the audit, governance, public policy and compensation committees. This experience and his understanding of the clinical/business models of healthcare make him well qualified to serve on the board and its committees.

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Continuing Directors

Class II Directors whose Terms Expire in 2012

         Christopher B. Begley , age 58, has served as our Chief Executive Officer and director since our spin-off from Abbott in 2004. He became the chairman of the board effective at the 2007 annual meeting. Effective March 28, 2011, Mr. Begley retired from the CEO position, but remains an employee of Hospira as executive chairman of the board. Prior to his becoming the Chief Executive Officer, Mr. Begley provided 18 years of service to Abbott, and was Abbott's Senior Vice President and President, Hospital Products, between 2000 and 2004. Prior to his appointment as Senior Vice President and President, Hospital Products, Mr. Begley served as Abbott's Senior Vice President and President, Chemical and Agricultural Products, from 1999 to 2000, Vice President, Abbott Health Systems, from 1998 to 1999, and Vice President, MediSense Operations, in 1998. Mr. Begley also serves as a director of Sara Lee Corporation, AdvaMed, the Economic Club of Chicago and the National Center for Healthcare Leadership.

        Reasons for Continued Service:     As the CEO of Hospira from 2004 until March 28, 2011, and previously as the Senior Vice President of two Abbott divisions, Mr. Begley has extensive management experience at two multinational, publicly traded companies. As Hospira's previous CEO, Mr. Begley had primary responsibility for managing the company day to day and is in the best position to act as chairman of the board and to ensure that key business issues, risks and other important matters are brought to the board's attention.

         Barbara L. Bowles , age 63, has served as our director since her election to our board in May 2008. She recently founded and serves as president of the Landers Bowles Family Foundation, which is dedicated to providing charitable gifts primarily to educational entities in order to support disadvantaged high school and college students. She served as the Vice Chair of Profit Investment Management, an equity investment advisory firm, from January 2006 until retiring on December 31, 2007. She was the founder and served as Chairman (2000 to 2006) and Chief Executive Officer (1989 to 2005) of the Kenwood Group, Inc., an equity investment firm until The Kenwood Group was acquired by Profit Investment Management. From 1984 to 1989, Ms. Bowles was Corporate Vice President and Director, Investor Relations, for Kraft, Inc., a diversified packaged food and beverage company. Ms. Bowles also serves as a director of Wisconsin Energy Corporation, Children's Memorial Hospital, the Chicago Urban League, the Museum of Science and Industry, Chicago and Hyde Park Bank. She is a trustee of Fisk University and also serves on the University of Chicago Booth School of Business Advisory Council. Within the past five years, Ms. Bowles also has served as a director of Black & Decker Corporation (from 1993 to 2010), Dollar General Corporation (from 2000 to 2007) and Georgia Pacific Corporation (from 2000 to 2005).

        Reasons for Continued Service:     Ms. Bowles has several years of management and investment advisory experience as the founder, chairman and CEO of a Chicago-based investment advisory firm that managed pension funds for corporations, public institutions and endowments. She has also served as the chief investor relations officer at two large public companies. She has extensive experience serving on the boards of other public companies, including as a presiding director. Ms. Bowles' unique and diverse experiences make her well qualified to serve on the board and its committees.

         Roger W. Hale , age 67, has served as our director since his election to our board in October 2006. He has served as Chairman of the Board and Chief Executive Officer of LG&E Energy Corporation, a diversified energy services company, from August 1990 until retiring in April 2001. Prior to joining LG&E Energy Corporation, he was Executive Vice President of BellSouth Corporation, a communications services company. From 1966 to 1986, Mr. Hale held several executive positions with AT&T Co., a communications services company, including Vice President, Southern Region from 1983 to 1986. Mr. Hale is also a director of Ashland, Inc. Within the past five years, Mr. Hale also has served as a director of H&R Block, Inc. (from 1991 to 2008).

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        Reasons for Continued Service:     Mr. Hale has several years of leadership experience and significant experience leading international operations, as the chairman and chief executive officer at a diversified energy services company and as a senior-level executive at two communications services companies. He also has experience with serving on the board of three large multinational companies, including as a presiding director. He also has substantial experience serving on audit, compensation, finance and governance committees. This strong track record of management and leadership experiences provide a valuable source of insight for the board and its committees.

         John C. Staley , age 69, has served as our director since our spin-off from Abbott in 2004. Mr. Staley served as the Managing Partner of the Lake Michigan Area of Ernst & Young LLP, a public accounting firm, a position that he held from 1985 to his retirement in June 2001. Mr. Staley serves as a director of eLoyalty Corporation and Nicor Inc. Mr. Staley is also a member of, and the former Chairman of, the Board of Trustees of DePaul University. Within the past five years, Mr. Staley has also served as a director of Centerpoint Corporation (from 2002 to 2006).

        Reasons for Continued Service:     Mr. Staley worked for Ernst & Young for more than 35 years, including as a tax practice coordinator in the company's European headquarters, and for 16 years, as an Area Managing Partner with overall responsibility for the audit, tax and consulting practices. Based on that experience, Mr. Staley is an expert in the areas of accounting and auditing, and he provides the board and audit committee with a valuable source of accounting insight. His experience serving on other boards and committees also make him well qualified to serve on the board and its committees.

Class III Directors Whose Terms Expire in 2013

         Connie R. Curran, RN, Ed.D. , age 63, has served as our director since our spin-off from Abbott in 2004. Dr. Curran has served as the president of Curran Associates, a healthcare consulting firm, since July 2006. She previously served as the Executive Director of C-Change, formerly the National Dialogue on Cancer, a health advocacy organization, from 2003 to July 2006. From 1995 to 2000, Dr. Curran served as President and Chief Executive Officer of CurranCare, LLC, a healthcare consulting company. Upon the acquisition of CurranCare by Cardinal Health Consulting Services in November 2000, Dr. Curran served as President of Cardinal Health Consulting Services, a consulting company with expertise in surgical services, hospital operations and case management and home care, until February 2002. Dr. Curran has previously served as Vice President of the American Hospital Association and Dean of the College of Nursing at the Medical College of Wisconsin. Dr. Curran also serves as a director of DeVry, Inc. and Volcano Corporation. Within the past 5 years, Dr. Curran also has served as a director of CardioDynamics International Corp. (from 2000 to 2006) and IDX Systems Corporation (from 2002 to 2006).

        Reasons for Continued Service:     As the president or chief executive officer of healthcare consulting firms for several years, Dr. Curran has extensive leadership experience in the medical industry. She has had significant experience as an educator as the Dean of the College of Nursing at the Medical College of Wisconsin. In addition, she received a masters degree in medical surgical nursing from DePaul University. Dr. Curran also has significant experience serving on the boards and committees of other public companies. Dr. Curran's extensive medical background and experience, along with her healthcare consulting and success in executive leadership positions, make her well qualified to serve on Hospira's board, as well as several of its committees.

         Heino von Prondzynski , age 61, has served as our director since March 2009. Mr. v. Prondzynski served as chief executive officer of Roche Diagnostics and as a member of the executive committee of F. Hoffman-La Roche Ltd., a Swiss-based healthcare company that develops diagnostic and therapeutic products, from early 2000 to 2005, retiring from Roche at the end of 2006. From 1996 to 2000, Mr. v. Prondzynski held several executive positions at Chiron Corporation, a multinational biotechnology firm that develops biopharmaceuticals, vaccines, and blood testing products, and from

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1976 to 1996 at Bayer AG, a German-based maker of healthcare products, specialty materials, and agricultural products. Mr. v. Prondzynski serves as chairman of the board of Nobel Biocare Holding AG, Switzerland. Mr. v. Prondzynski also serves on the board of Qiagen NV and Koninklijke Philips Electronics NV. Within the past five years, Mr. v. Prondzynski also has served as a director of Epigenomics AG (from 2007 to 2010).

        Reasons for Continued Service:     Mr. v. Prondzynski has substantial international leadership experiences at several multinational healthcare companies. In fact, he has over 30 years of leadership and management experiences in the healthcare field. Since those companies were headquartered abroad, his international experience is substantial. In addition, he has significant experience serving on the boards and committees at multinational companies. This substantial history of leadership positions at major international healthcare companies allows him to provide a global business perspective to his service on Hospira's board and its committees.

         Mark F. Wheeler, M.D., M.P.H. , age 61, has served as our director since his election to our board at the 2006 annual meeting. Since September 2010, Dr. Wheeler has served as the System Vice President, CIO and CMIO for PeaceHealth, an integrated delivery network of hospitals in the Pacific Northwest. From January 2007 to September 2010, he served as the Director of Clinical Informatics for PeaceHealth. He previously served as Acting Vice President Engineering, Centricity Enterprise Business Unit of General Electric Company, a diversified technology, media and financial services company, from February 2006 to January 2007. He served as chief technical architect of IDX Systems Corporation, a healthcare information technology services provider, from 1997 until December 2005, when IDX was acquired by General Electric, and served on IDX's board of directors from 1999 through 2005.

        Reasons for Continued Service:     For over 25 years, Dr. Wheeler has been working in the medical research and development field, with a strong emphasis on software development related to medical products. Dr. Wheeler received an M.D. from Yale University and is a former practicing physician. Dr. Wheeler's substantial medical industry experience, particularly related to research and development, along with his medical background, make him well qualified to serve on Hospira's board and its committees.

CORPORATE GOVERNANCE

Board Leadership Structure

        Our board of directors is committed to adopting governance policies and practices that promote the most effective and ethical management of the company. In that regard, the board believes that it is important to retain maximum flexibility to determine the company's optimal leadership structure and to choose the best qualified person to serve in the offices of chief executive officer and chairman of the board. At this point in time, our independent directors have determined that Mr. Begley, our chief executive officer from 2004 to 2011, who has had primary responsibility for managing our company day to day during that time period, is in the best position to act as chairman and to ensure that key business issues, risks and other important matters are brought to the board's attention. Our board believes it has other governance policies and practices in place to provide strong independent oversight of management and the company's operations and strategy. For example, our board includes eight independent directors, and routinely meets in executive session, at which only the independent directors are present. In addition, our board's committee structure also provides strong independent oversight of management.

        In March 2011, the company announced that the board had elected F. Michael Ball as Hospira's CEO, effective March 28, 2011. The board believes that Mr. Begley is in the best position to act as chairman so as to help ensure a seamless transition to the new CEO. Our corporate governance guidelines provide that if the duties of the chairman are vested in someone other than an independent

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director, the independent directors will elect a lead director. The independent directors elected Mr. Bailey as our lead independent director. As our lead director, Mr. Bailey is responsible for the following:

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coordinating the activities of the independent directors and, as appropriate, communicating with the independent directors between meetings;



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presiding at all meetings of the independent directors, and taking the lead role in communicating any feedback to the chief executive officer;



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assisting with the recruitment of board candidates, and with establishing committee memberships and committee chairs;



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working with committee chairs, as necessary, to ensure committee work is conducted at the committee level and appropriately reported to the board;



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recommending consultants and outside advisors to the board, as necessary or appropriate;



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serving as a mentor to the chief executive officer and collaborating with the chairman and chief executive officer on setting board meeting schedules and agendas; and



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assisting with the oversight of the annual performance evaluation of the board and the chief executive officer.

In addition, the lead director will serve as interim chairman in the event of an unforeseen vacancy. Mr. Bailey's term as lead director will end in May 2011. At that time, Mr. Staley will become lead director.

Board's Role in Risk Oversight

        As stated in our corporate governance guidelines, our board is committed to overseeing the conduct of our company's business so that it is managed by its officers, managers and employees in the long term interests of shareholders. As part of that responsibility, our board regularly discusses the processes that are in place to safeguard our company's assets and mitigate the company's risk. The board's role in risk oversight is consistent with the company's leadership structure, with the CEO and other members of senior management having responsibility for assessing and managing the company's risk exposure, and the board and its committees providing oversight in connection with these efforts. For example, our board reviews the company's enterprise risk management process, the major risks identified through that process, and management's related mitigation strategies. Throughout the year, our board and its committees receive updates, as necessary, on the identified risks or mitigation plans. In addition, each year, the board reviews the company's strategic direction and objectives, and reviews key operational issues or risks related to the long-term strategic plan. The board holds extensive meetings with senior management to discuss the company's long-term operating plans, including the issues and opportunities facing our company in light of industry developments. Throughout the year, the board continues to engage in dialogue with management related to the progress of these plans, including any significant operational issues or risks encountered by the company in executing the plans. Each of our board committees (audit, compensation, governance and public policy, and science, technology and quality) regularly meet and review the major risks and mitigation activities relating to their respective areas of responsibility and oversight.

Meetings

        Our board of directors held six meetings during 2010. No director attended fewer than 75% of the total number of meetings of the board of directors and the committees of the board of directors on which such director served. We have no formal policy on director attendance at our annual meetings

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but we encourage all of our directors to attend annual meetings. All of our directors serving at the time attended the 2010 annual meeting.

        Our independent directors generally meet in an executive session without management present at every regularly scheduled board meeting. As lead director, Mr. Bailey presides at these executive sessions.

Independence

        The board annually determines the independence of directors. No director may qualify as independent unless the board of directors affirms that the director has no material relationship with us. As required by our corporate governance guidelines, the board will consider all relevant facts and circumstances in connection with that determination, including the following:

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a director who is, or has been within the last three years, our employee, or whose immediate family member is, or has been within the last three years, our executive officer is not independent;



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a director who receives, or whose immediate family member receives, more than $120,000 from us in direct compensation, other than director and committee fees and pension or other forms of deferred compensation for prior service (provided such compensation is not contingent in any way on continued service), and other than amounts received by an immediate family member for service as a non-executive employee, during any 12-month period in the last three years is not independent;



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a director who, or whose immediate family member, is a current partner of a firm that is our internal or external auditor is not independent;



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a director who is a current employee of a firm that is our internal or external auditor is not independent;



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a director with an immediate family member who is a current employee of a firm that is our internal or external auditor and who personally worked on our (or a subsidiary's) audit is not independent;



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a director who, or whose immediate family member, was within the last three years a partner or employee of a firm that is our internal or external auditor and personally worked on our audit during that time is not independent;



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a director who is employed, or whose immediate family member is employed, or has been employed in the last three years, as an executive officer of another company where any of our present executive officers at the same time serves or served on that company's compensation committee is not independent;



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a director who is a current employee, or whose immediate family member is a current executive officer, of a company that makes payments to, or receives payments from, us for property or services in an amount which, in any of the last three fiscal years, exceeds the greater of $1 million, or 2% of such other company's consolidated gross revenues, is not independent; and



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a director who is an executive officer of a charitable organization that receives charitable contributions (other than matching contributions) from us that are in excess of the greater of $1 million or 2% of such charitable organization's consolidated gross revenues is not independent.

        In February 2011, our board determined that each of Mr. Bailey, Ms. Bowles, Dr. Curran, Mr. Hale, Dr. Sokolov, Mr. Staley, Mr. v. Prondzynski, and Dr. Wheeler is independent within the meaning of our director independence standards and the listing standards of the New York Stock

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Exchange. In making these independence determinations, the board was not aware of any disqualifying relationship under the above criteria and, additionally, was not aware of any other relationship between such director and Hospira that would affect his or her independence. Relationships considered by the board not to impair independence are described below.

        We sell products in the ordinary course of business to hospitals affiliated with PeaceHealth, Dr. Wheeler's current employer. We do not believe that the business relationship is material to either party in amount or significance. Sales to PeaceHealth-affiliated hospitals represented less than 1% of Hospira's and PeaceHealth's net revenues. Dr. Wheeler is not an executive officer of PeaceHealth or the affiliated hospitals and is not compensated by us or PeaceHealth directly or indirectly as a result of such business. Accordingly, the board determined that he did not have a material interest in such business relationship and that such business relationship is not a material relationship with Dr. Wheeler.

        Our director independence standards are included in our corporate governance guidelines, which are available in the investor relations section of our Web site at www.hospira.com .

Committees of the Board of Directors

        Our board of directors has the following committees:

Audit Committee

        Ms. Bowles (chair), Dr. Curran, Mr. Staley and Dr. Wheeler serve on the audit committee. During 2010, the audit committee met 11 times. All members of the committee must be independent and must satisfy the audit committee member eligibility requirements of the New York Stock Exchange and the SEC. Our board determined that Ms. Bowles, Dr. Curran, Mr. Staley and Dr. Wheeler are financially literate and eligible to serve on the committee.

        Our board has designated Ms. Bowles and Mr. Staley as "audit committee financial experts," within the meaning of the rules of the SEC.

        The primary functions of the committee include:

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meeting periodically with our management, internal auditors and independent registered public accounting firm regarding our internal controls, accounting and financial reporting;



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appointing and evaluating the independent registered public accounting firm;



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reviewing and discussing our financial statements and financial press releases with our management and independent registered public accounting firm;



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reviewing and discussing our major financial risk exposures and the steps management has taken to monitor and control those exposures with our management, internal auditors, and independent registered public accounting firm; and



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establishing procedures for the receipt, retention and treatment of complaints received by our company regarding accounting matters, and the confidential, anonymous submission by our employees of concerns regarding questionable accounting matters.

        Both the independent registered public accounting firm and the internal auditors regularly meet privately with the audit committee and have unrestricted access to the audit committee.

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        The audit committee is governed by a written charter, which is available on our Web site at www.hospira.com . The eligibility criteria for committee members are included in the charter. A copy of the report of the audit committee is on pages 54-55.

Compensation Committee

        Mr. Hale (chair), Dr. Sokolov, and Mr. v. Prondzynski serve on the compensation committee. During 2010, the compensation committee met seven times. All members of the compensation committee must be independent and must be "non-employee directors" for purposes of Rule 16b-3 under the Securities Exchange Act of 1934 and "outside directors" for purposes of Section 162(m) of the Internal Revenue Code. Our board determined that Mr. Hale, Dr. Sokolov, and Mr. v. Prondzynski are eligible to serve on the committee.

        The primary functions of the committee include:

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reviewing and determining the executive officers' compensation;



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reviewing and, as it deems appropriate or as required by regulations, recommending to the board of directors, policies, practices and procedures relating to the compensation of our officers, other managerial employees and non-employee directors and the establishment and administration of our employee benefit plans; and



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exercising authority under our employee equity incentive plan and management incentive plans. (The committee may delegate the responsibility to administer and make grants under these plans to management except to the extent such delegation would be inconsistent with applicable laws or regulations.)

        For a description of how the compensation committee administers our executive compensation program, please see "2010 Compensation Discussion and Analysis—General Administration" later in this proxy statement. The compensation committee has engaged Towers Watson (formerly known as Watson Wyatt) as its independent compensation consultant. Towers Watson provides counsel and advice on executive and non-employee director compensation matters, including providing information regarding the peer groups against which performance and pay should be examined. For a further description of the services provided by Towers Watson, please see "2010 Compensation Discussion and Analysis—General Administration" later in this proxy statement.

        In 2007, the compensation committee adopted a policy that prohibits Towers Watson from performing any other services to the company other than the duties Towers Watson performs as the committee's independent consultant. This is intended to strengthen the independence of Towers Watson and avoid any future conflicts of interest. However, as certain activities were underway already and the committee felt that terminating such activities mid-term would be detrimental to the company, Towers Watson was permitted to perform certain grandfathered services, upon the recommendation of management and as approved by the compensation committee. Those other grandfathered services ended as of March 31, 2010. Hospira paid approximately $46,000 for these grandfathered services in 2010. For services rendered to the committee related to executive compensation, in 2010, the committee authorized payment to Towers Watson of approximately $225,000.

        The compensation committee is governed by a written charter, which is available on our Web site at www.hospira.com . The eligibility standards for committee members are included in the charter. A copy of the report of the compensation committee is on page 39.

Governance and Public Policy Committee

        Dr. Curran (chair), Mr. Bailey, Ms. Bowles and Mr. Hale serve on the governance and public policy committee. During 2010, the governance and public policy committee met seven times. All

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members of the governance and public policy committee must be independent. Our board determined that Dr. Curran, Mr. Bailey, Ms. Bowles and Mr. Hale are eligible to serve on the committee.

        The functions of the committee include:

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developing the general criteria for selecting members of the board of directors and assisting the board in identifying and attracting qualified candidates;



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recommending to the board of directors the nominees for election as directors, considering the criteria described herein and any potential nominees recommended by our shareholders;



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recommending to the board of directors persons to be elected as executive officers;



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reviewing and assessing the adequacy of our corporate governance guidelines;



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providing general oversight over certain compliance programs, policies and procedures; and



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providing general oversight over certain company political and charitable activities.

        The process used by the committee to identify a nominee to our board of directors depends on the qualities being sought. Board members should have backgrounds that, when combined, provide a portfolio of experience and knowledge that will serve our governance and strategic needs. Candidates will be considered on the basis of a range of criteria, including broad-based business knowledge and relationships, and prominence and excellent reputations in their primary fields of endeavor, as well as a global business perspective and commitment to good corporate citizenship. Directors should have demonstrated experience and ability that is relevant to the board of directors' oversight role with respect to our business and affairs. The committee's criteria for the selection of, and qualifications desirable in, members of the board, are included in an outline for directorship qualifications, which is an exhibit to the company's corporate governance guidelines, which can be found on our Web site, as described below. As stated in that outline, among other attributes, our directors should have strong management experience, experience with multinational operations, or other desirable experience, such as experience with hospital products, hospital administration, medical or pharmaceutical products, medical research and development, finance or international business. It is also the committee's desire for the board to include a range of ages and a diversity of ethnicity, gender, experience, knowledge and geography. The committee defines diversity broadly and evaluates candidates not only on the attributes described above, but also considers whether the candidate enhances the current diversity of the board. The committee uses a skills and qualifications matrix, which includes several diversity characteristics, to ensure that the overall Board membership supports this diversity policy. In addition, as part of the yearly self-evaluation process, the board and all of the committees assess whether or not the board and the committees have the appropriate diversity, as well as the appropriate experience, education and skills for the current issues facing the company.

        Director candidates can be referred to the committee from a variety of sources, including by our officers, directors and shareholders. The committee has from time to time enlisted a third-party search firm to assist it in identifying and evaluating qualified candidates. The committee has the sole authority to engage director candidate search firms.

        If the board determines to seek a new member and a candidate is referred to the committee, the committee will review the candidate's qualifications in light of the attributes being sought by the board. If the committee determines that a candidate's qualifications are potentially suitable for service on the board, the committee will conduct an investigation of the candidate's background. Typically, candidates are interviewed by one or more members of the committee, the lead director and our chairman before being nominated for election to the board.

        A shareholder may recommend persons as potential nominees for director by submitting the names of such persons in writing to the chairman of the governance and public policy committee or to our

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secretary. Recommendations should be accompanied by a statement of qualifications and confirmation of the person's willingness to serve. A nominee who is recommended by a shareholder following these procedures will receive the same consideration as other comparably qualified nominees. The committee will consider potential nominees recommended by shareholders, but has no obligation to recommend such candidates. The evaluation criteria are the same for each person considered for nomination to the board.

        The governance and public policy committee is governed by a written charter, which is available on our Web site at www.hospira.com . The eligibility standards for committee members are included in the charter.

Science, Technology and Quality Committee

        Dr. Wheeler (chair), Mr. Bailey, Mr. Begley, Ms. Bowles, Dr. Curran, Mr. Hale, Dr. Sokolov, Mr. Staley, and Mr. v. Prondzynski serve on the science, technology and quality committee. On March 28, 2011, Mr. Ball became a member of this committee. The committee provides general oversight, and advises our board, as to the strategic goals, objectives, and the direction of our research and development programs, including our product pipeline, and certain other matters as delegated to it by the board. The committee also oversees the company's product quality and safety initiatives. The committee met five times during 2010.

        The science, technology and quality committee is governed by a written charter, which is available on our Web site at www.hospira.com .

Special Search Committee

        In addition to the standing committees listed above, a search committee was formed in 2010 to assist with the oversight of the search for a new chief executive officer following the announcement of the proposed retirement for Mr. Begley. The committee was comprised of Dr. Curran (chair), Mr. Hale, Dr. Sokolov, Mr. Staley and Dr. Wheeler. The committee assisted the governance and public policy committee and board in narrowing down the candidates for the CEO search. In addition, a third-party search firm, Egon Zehnder, was enlisted to assist in the identification and evaluation of qualified candidates.

Director Share Ownership Guidelines

        Within five years after joining the board, each non-employee director is required to own and retain a minimum number of shares of Hospira common stock whose aggregate value is equal to the lesser of 7,500 shares of Hospira common stock and the number that is five times such director's annual retainer fees (currently $325,000). The director must maintain that minimum throughout his or her service on the board. For purposes of the ownership guidelines, common stock includes restricted stock, restricted stock units and deferred stock units awarded to non-employee directors. All non-employee directors have attained such minimum, except Mr. v. Prondzynski who was added to the Board in March 2009. We believe that he is making adequate progress toward achieving this minimum requirement on time.

Communicating with the Board of Directors

        You may communicate with our board of directors by writing a letter to our chairman. You may contact our independent directors by writing a letter to the chairman of our audit committee (for accounting or disclosure matters), our lead director or any of our other independent directors.

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        The letter should be addressed to:

Director Communications
Hospira General Counsel and Secretary
Hospira, Inc.
275 North Field Drive
Department NLEG, Building H1
Lake Forest, Illinois 60045

        Our general counsel and secretary will review the communication and forward the communication to the addressee or, in the absence of an addressee, to the director or directors he believes to be most appropriate.

        In addition, you may contact the chairman of our audit committee through the Helpline of our Office of Ethics and Compliance by calling 1-866-311-4632. You will have the option to directly refer matters to the audit committee. Our vice president, global ethics and compliance, will be notified in such cases.

Corporate Governance Materials

        Our corporate governance guidelines, our code of business conduct and ethics, and the charters of our audit committee, compensation committee, governance and public policy committee, and science, technology and quality committee are available in the investor relations section of our Web site at www.hospira.com . We will provide a copy of any of these materials to any shareholder free of charge upon written request to:

Corporate Governance Material Request
Hospira General Counsel and Secretary
Hospira, Inc.
275 North Field Drive
Department NLEG, Building H1
Lake Forest, Illinois 60045

Compensation Risk Assessment

        Our management and compensation committee have evaluated our compensation policies and practices for all of our employees, including our executive and non-executive officers, to determine whether they create risks that are reasonably likely to have a material adverse effect on the company. We believe that our compensation programs do not encourage excessive risk taking and, thus, do not create risks that are reasonably likely to have a material adverse effect on the company for several reasons, including the following:

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Fixed vs. Variable Pay.   The balance between fixed and variable pay varies by job level. Corporate officers have a larger portion of their compensation in variable vehicles (such as performance-based annual bonuses, performance share units and stock options that vest over a three- or four-year period). These are designed to motivate performance and provide strong shareholder returns over the long term. Officers, more than other employees, have a greater opportunity to influence long-term performance. Accordingly, at the general employee level, the greatest portion of compensation is fixed. The fixed component of compensation does not encourage risk taking because it is a fixed amount. The variable portion does not encourage excessive risk taking since that portion is based on multiple indicators of performance, thus diversifying the risk associated with any single performance indicator. Overall, the compensation mix for all of our employees is competitive to the market and provides a balanced mix between our fixed components, annual incentive, and equity awards.

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Short vs. Long-Term Variable Incentive Pay.   Again, the mix of short- and long-term incentives is driven by the employee's role in the organization. Greater long-term incentives are provided to those roles that most directly impact the long-term strategy of the company, i.e., senior executives and officers. Our short-term incentive pay for all employees is based on the annual goal process, which is administered to motivate the results needed to achieve the approved business plan. In this process, the balance between risk and reward, both to participants and shareholders, is considered. Both top and bottom-line growth are considered as well as the necessity of achieving strategic objectives that contribute to the long-term success of the company and to shareholder value creation. Moreover, within the company, certain checks and balances exist in the conduct of the business, including audit, quality and financial approval processes, that assist in managing business risk. Our long-term incentive pay for our officers and senior executives includes performance share units, which are earned based on a total shareholder return (TSR) measure over a three-year performance period relative to a peer group comprised of the companies making up the S&P 500 Healthcare Index, with the removal of those companies classified as managed care companies. This supports a longer-term orientation. Moreover, since the performance cycles overlap, one year's actions may impact three performance cycles, which further encourages a long-term focus.



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Retirement Programs.   Our pension plan and supplemental pension plan were frozen as of December 31, 2004. Of the current named officer group, only two have frozen benefits under this legacy program. Our other retirement programs are structured to be competitive with local practice, and provide a reasonable benefit which is comparable to the benefits provided to all other employees. Thus, we do not believe that our active retirement programs promote risky behaviors or strategies.



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Recoupment Policy.   Our corporate officers are subject to a recovery policy, as described in the section captioned "2010 Compensation Discussion and Analysis—Executive Compensation Recovery Policy."



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Stock Ownership Guidelines.   In order to further align the interests of management with our shareholders, we have share retention and ownership guidelines for our senior management. These ownership guidelines are available in the investor relations section of our Web site at www.hospira.com .

        Based on our analysis, we believe our compensation policies enhance our company's business interests by encouraging innovation and appropriate levels of risk taking. Additional information about our executive officer compensation practices and policies is included in the section captioned "2010 Compensation Discussion and Analysis."

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PROPOSALS 2 - 4
AMENDMENTS TO RESTATED CERTIFICATE OF INCORPORATION

        In furtherance of the company's ongoing corporate governance initiatives and based upon the recommendation of the governance and public policy committee, the board has approved, and recommends that the shareholders approve, three amendments to Hospira's Restated Certificate of Incorporation ("Certificate"). These proposed amendments eliminate the super-majority provisions contained in our Certificate. The super-majority provisions are found in the following three places in our Certificate:

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Removal of Directors for Cause.   The board of directors or any individual director may be removed from office at any time with cause by the affirmative vote of the holders of at least sixty-six and two-thirds (66- ² / 3 %) of the voting power of all the then-outstanding shares of voting stock of the company entitled to vote at an election of directors (hereinafter "Voting Stock").



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Bylaw Adoption, Amendment and Repeal.   The bylaws may be altered or amended, or new bylaws adopted, by the affirmative vote of at least sixty-six and two-thirds (66- ² / 3 %) of the outstanding shares of Voting Stock.



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Alteration, Amendment, or Repeal of Certain Certificate Provisions.   The affirmative vote of the holders of at least sixty-six and two-thirds (66- ² / 3 %) of the outstanding shares of Voting Stock.

Since the super-majority provisions are found in three distinct places in our Certificate, there are three proposals for consideration by the shareholders, each of which will be separately voted upon. None of these amendments to the Certificate are conditioned upon approval of any of the other amendments to the Certificate and shareholders may vote differently on each such proposal if they so choose.

        The board believes that presenting shareholders with the ability to remove each super-majority provision in our Certificate is in the best interests of the company and its shareholders. In making this determination, the board balanced the intent of these super-majority voting provisions, which was to facilitate governance stability, against the limits that the provisions place on the shareholders' ability to participate in important decisions. Although under certain circumstances super-majority voting provisions can provide benefits to a company and its shareholders, the board recognizes that shareholders now view such super-majority provisions as a burdensome limitation on the ability of a majority of shareholders to effect certain corporate actions. The board also recognized the importance of maintaining shareholder confidence by demonstrating that it is responsive and accountable to shareholders and is committed to good corporate governance. The board also considered the practices of other companies in this regard. Based on all of these factors, the board has determined that the super-majority provisions in the Certificate should be replaced with a "majority of outstanding shares" standard.

        A summary related to each of these proposals is included below. This summary does not include all of the information that is important to you. The text of the Certificate, as it is proposed to be amended, but without exhibits, is included in Appendix A to this proxy statement. You are urged to read this Appendix in its entirety. We did not include the Form of Certificate of Designations of Series A Junior Participating Preferred Stock, which is Exhibit A to the Certificate, as part of the Appendix because it is not being changed in any way. That Form of Certificate of Designations is on file with the Secretary of State of Delaware and was attached as Exhibit A to the Rights Agreement filed as Exhibit 4.1 to our Quarterly Report on Form 10-Q for the quarter ended March 31, 2004, which can be found at http://www.sec.gov/Archives/edgar/data/1274057/000110465904015693/a04-6330_1ex4d1.htm#ExhibitA.

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PROPOSAL 2
AMENDMENT TO RESTATED CERTIFICATE OF INCORPORATION TO ELIMINATE
THE SUPER-MAJORITY VOTING REQUIREMENT FOR REMOVAL OF DIRECTORS FOR CAUSE

        Article V.A (3) of our Certificate requires the affirmative vote of the holders of at least 66- ² / 3 % of the outstanding shares of Voting Stock to remove a director for cause. The proposal, if approved by the shareholders, would decrease this vote requirement to a "majority of outstanding shares" standard.

        Please read the complete text of the proposed amendment in Appendix A. An affirmative vote of 66- ² / 3 % of the outstanding shares of Voting Stock will be required to amend this provision in the Certificate. If approved by the shareholders, this amendment will become effective upon the filing of a restated certificate of incorporation, including this amendment with the Secretary of State of the State of Delaware, which would be filed promptly after the annual meeting. The board would also make conforming amendments to the corresponding bylaw provision so that if the shareholders approve this amendment, the Certificate and bylaws would include the same "majority of outstanding shares" standard. If the proposal is not approved by shareholders, this shareholder voting requirement would not change.

PROPOSAL 3
AMENDMENT TO RESTATED CERTIFICATE OF INCORPORATION TO ELIMINATE
THE SUPER-MAJORITY VOTING REQUIREMENT FOR BYLAW ADOPTION,
AMENDMENT OR REPEAL

        Article V.B (1) of our Certificate requires the affirmative vote of the holders of at least 66- ² / 3 % of the outstanding shares of Voting Stock to adopt, amend or repeal the bylaws. The proposal, if approved by the shareholders, would decrease this vote requirement to a "majority of outstanding shares" standard.

        An affirmative vote of 66- ² / 3 % of the outstanding shares of Voting Stock will be required to amend this provision in the Certificate. If approved by the shareholders, this amendment will become effective upon the filing of a restated certificate of incorporation, including this amendment with the Secretary of State of the State of Delaware, which would be filed promptly after the annual meeting. The board would also make conforming amendments to the corresponding bylaw provision so that if the shareholders approve this amendment, the Certificate and bylaws would include the same "majority of outstanding shares" standard. If the proposal is not approved by shareholders, this shareholder voting requirement would not change.

PROPOSAL 4
AMENDMENT TO RESTATED CERTIFICATE OF INCORPORATION TO ELIMINATE
THE SUPER-MAJORITY VOTING REQUIREMENT FOR ALTERATION, AMENDMENT OR
REPEAL OF CERTAIN CERTIFICATE PROVISIONS

        Article VII.B of our Certificate requires the affirmative vote of at least 66- ² / 3 % of the outstanding shares of Voting Stock to alter, amend or repeal certain articles in the Certificate (specifically, Articles V, VI, and VII). The proposal, if approved by the shareholders, would decrease this vote requirement to a "majority of outstanding shares" standard.

        An affirmative vote of 66- ² / 3 % of the outstanding shares of Voting Stock will be required to amend this provision in the Certificate. If approved by the shareholders, this amendment will become effective upon the filing of a restated certificate of incorporation, including this amendment with the Secretary of State of the State of Delaware, which would be filed promptly after the annual meeting. If the proposal is not approved by shareholders, this shareholder voting requirement would not change.

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DIRECTOR COMPENSATION

        Director compensation is reviewed and approved annually by the board, on the recommendation of the compensation committee. The compensation committee has engaged an independent consultant, Towers Watson, to assist it in the performance of these duties. The committee aims to provide a compensation program for the directors that is competitive and works to attract and retain high quality directors. Consistent with this desire, the compensation committee, in consultation with the consultant, has determined that it is appropriate to target total director compensation at the market median of the company's peer group. The peer group for the committee's analysis in 2010 included the companies listed in the section captioned "2010 Compensation Discussion and Analysis—Market Data Used to Benchmark Pay."

2010 Compensation Changes

        The company had not adjusted its director pay program since 2007. In June 2010, the committee reviewed with the compensation consultant the prevalent and best practices concerning director compensation. The committee also considered the historical compensation received by the directors as compared to the peer group, as well as the current economic and health care industry pressures. Upon a review of all of these factors, it was determined to restructure the director compensation program, moving from a retainer-plus-meeting-fee approach to a retainer-only program.

        A key objective in making this change was to curb future increases in board compensation. Many publicly traded U.S. companies have made such a change in structure during the past several years. This is, in part, due to the fact that the number of board and committee meetings required to effectively conduct company business in the current environment has increased, and continues to do so. Replacing the retainer-plus-meeting-fee approach with a retainer-only program allowed the company to better align its director compensation practices with industry standards.

        As the board contemplated the change in the structure of the director pay program, it was mindful of the directors' historical compensation, and its desire to target total director compensation at the peer group market median. In addition, the board recognized that, beginning in 2010, many directors experienced an increase in the number of committees on which they served. For example, in 2010, all board members became members of the science, technology and quality committee. In light of these considerations, the median total pay for all current directors increased approximately 8% in 2010. Given the increasing responsibilities placed on the directors, the company's track record of strong corporate performance and the factors outlined above, it was determined that this level of increase was reasonable and appropriate.

Cash Compensation

        Under the revised director pay program, our non-employee directors receive an annual cash retainer in the amount of $65,000 per year. The lead director receives an additional retainer of $50,000 per year. Each director who serves on a committee created by the board receives an annual committee retainer fee of: (1) $5,000 for the science, technology, and quality committee, the governance and public policy committee, and any other permanent or temporary committee established by the board; (2) $10,000 for the compensation committee; and (3) $17,500 for the audit committee. Each director who serves in the role of chairman of any committee receives an annual retainer fee of: (1) $12,500 for the science, technology, and quality committee, governance and public policy committee, and any other permanent or temporary committee established by the board; (2) $20,000 for the compensation committee; and (3) $25,000 for the audit committee. The differences in pay for the various committees were based upon the perceived differences in workload between the committees as well as the peer group compensation data provided by the consultant.

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        The board has also established a global travel allowance fee, which is paid to compensate a director for international travel to attend a board or committee meeting. This travel allowance fee is currently set at $2,000 for each meeting that requires international travel.

Stock Compensation

        In addition to cash compensation, the company's director compensation program also utilizes equity awards to further align the interests of directors with the company's shareholders. On the last day of the calendar quarter in which our annual meeting is held, each non-employee director receives an annual grant of restricted stock, which will generally vest as of the first regularly scheduled annual meeting of shareholders following the date of grant. For each such grant, the number of shares of restricted stock granted to each director equals that number of shares equal in value to $150,000 as of the date of grant. In accordance with IRS regulations, each director is given the option of converting the restricted shares into restricted stock units. While serving on the board, directors may dispose of stock received from the vesting of restricted stock grants if they have met the minimum holding requirements under the company's share ownership guidelines for directors. The directors' ownership guidelines are included in the section captioned "Corporate Governance—Director Share Ownership Guidelines."

Deferral Program

        Non-employee directors may elect to defer all or a portion of their fees and restricted stock awards. The cash-based fees will be deferred into a stock unit account. Restricted stock may, based on an election by the director, be deferred and granted as restricted stock units and recorded in the director's stock unit account. The stock unit account will be paid out in the form of company stock, at the director's prior election, in a lump sum on the first business day after the calendar quarter in which the director's service terminates or in up to 10 annual installments from and after that date.

2010 Director Compensation

        The following table shows the amount and form of compensation paid to each of our non-employee directors during 2010. Compensation includes annual retainer fees, committee and committee chairman retainer fees, and restricted stock awards.

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2010 COMPENSATION DISCUSSION AND ANALYSIS

        This compensation discussion and analysis explains how our executive compensation program is administered and provides a general discussion of the philosophy underlying our executive compensation program, the elements of our executive compensation program, the compensation paid to the named officers (or "NEOs") during 2010, and other relevant matters involving our executive compensation program. Please read this compensation discussion and analysis in conjunction with the information contained in the executive compensation tables immediately following this section.

Executive Summary

        The goal of our executive compensation program is to align the interests of our shareholders for long-term growth with our ability to attract, retain and motivate the best people from the industries where we compete for talent. For that reason, pay for performance is the most significant factor in Hospira's compensation program. The following table illustrates that pay for performance compensation comprises over 80% of our named officers' total direct compensation (the sum of salary, annual cash incentive and long-term incentives).

Executive compensation in 2010 aligned with our program objectives and the company's performance. For 2010, growth in adjusted net income and significant progress with Project Fuel (the company-wide optimization initiative) were offset by lower than anticipated adjusted net sales and "free" cash flow, which resulted in annual cash incentive payouts below target at 87.6% of the target level. An explanation of how the financial metrics were adjusted is included under the section captioned "Annual Cash Incentive Award" below. Based on the company's inability to achieve its publicly announced

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adjusted earnings and cash flow projections for 2010, and the delay in approval of two significant generic intravenous drugs, the compensation committee approved management's recommendation that there be no 2011 salary increases for the named officers. Likewise, the committee decided to leave the target bonus levels unchanged for 2011.

        During 2010, the company and the compensation committee considered ways to further enhance the alignment between our executive compensation program, company performance and the long-term interests of shareholders and in furtherance of that review, the following decisions were made:

•

Performance Share Unit Program.   Beginning with the 2010-2012 performance share unit award cycle, participants no longer have the ability to earn interim awards. Awards will only be made at the end of the three-year performance cycle based on the full three-year total shareholder return percentile ranking as measured against the peer group.



•

Change of Control Agreements.   The change of control agreements with our officers, including our named officers, were not automatically renewed for a three-year term, as had been the historical practice. Accordingly, the current change of control agreements will expire pursuant to their terms as of December 31, 2012. The committee will review best practices to determine the appropriate terms of any change of control agreements entered into after that date.



•

Perquisites.   Consistent with historical practice, the named officers were not provided with perquisites, such as cars or car allowances, club memberships, financial planning, tax preparation assistance or supplemental insurance benefits.



•

Annual Cash Incentive Program.   The 2010 annual incentive program was changed to further align the compensation program with the company's business plan by adding "adjusted net sales" as a performance measure to the 2010 annual incentive program. An explanation of how this financial metric has been adjusted is included under the section captioned "Annual Cash Incentive Award" below. This measure was included to appropriately reflect the importance of sales growth to our shareholders.



•

Risk and Clawback.   The compensation committee reviewed the connection between compensation and risk, and the company's compensation programs and policies for features that may encourage excessive risk taking. The committee believes that the executive compensation program does not encourage executives to take unnecessary or excessive risks that could threaten the value of the company. However, as a matter of best practice, the committee continues to have a recoupment or "clawback" policy for current or former corporate officers, as described later in this section under the caption "Executive Compensation Recovery Policy."

In addition, over the past few years, the company has taken a number of actions consistent with the interests of our shareholders and principles of good governance. Such actions are further described in the section below captioned "Proposal 5—Advisory Vote on Named Officer Compensation."

General Administration

        The compensation committee of our board oversees our executive compensation program. The committee consists entirely of independent directors and makes compensation decisions involving our named officers. The independent members of our board further review and approve all components of compensation decisions involving our chief executive officer, including his base salary, annual cash incentive and long-term incentives. The committee has engaged an independent consultant, Towers Watson, to assist it in the performance of its duties. The consultant regularly provides the committee with analyses of competitive practice and compensation relevant to the company's executive jobs and industry. In addition, the committee routinely requests and receives information from the consultant with regard to executive officer pay, long-term incentive award levels and other executive compensation

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matters of concern to the committee. The consultant reports directly to the committee. The committee has the sole authority to retain or terminate the consultant.

Executive Compensation Recovery Policy

        In December 2009, the board adopted an executive compensation recovery policy, which relates to the recoupment of any bonus, equity-based award or other compensation given to a current or former corporate officer, as defined in the policy, in the event of a restatement of the company's published financial results. The named officers are included within this policy. Under the policy, if the compensation committee determines that any compensation was made to one of the covered officers based on those published financial statements, the committee may adjust such compensation within 60 months of the restatement, and may seek to recover the part of any compensation that was paid based upon the financial performance in the published financial statements that were subsequently restated. If the individual fails to repay any amount required under this policy, the committee may pursue appropriate legal remedies to recoup such amount. The committee may set-off the amount owed against any amount or award that would otherwise be granted to the individual or reduce any future compensation or benefit to such individual. The compensation committee will re-evaluate this policy for potential revisions when the final regulations under the Dodd-Frank Wall Street Reform and Consumer Protection Act ("Dodd-Frank Act") related to clawbacks are adopted.

Role of Management in Compensation Decisions

        Our senior vice president, organizational transformation and people development ("chief human resources officer"), works with our chairman and chief executive officer to develop recommendations on matters of compensation philosophy, plan design and specific awards for executive officers. In conjunction with our chief human resources officer, our chairman and chief executive officer assesses performance and makes pay recommendations to the committee for each executive officer other than himself. Towers Watson provides competitive data and makes independent recommendations on competitive pay for our chairman and chief executive officer to the committee. The committee considers all of these recommendations and makes decisions as it deems appropriate. In making these decisions, the committee considers multiple factors, including individual performance, achievement of goals, desired versus actual competitive compensation position and retention importance. Compensation recommendations for our chairman and chief executive officer are reviewed by the chair of our compensation committee in executive session with the independent members of our board prior to final approval. Our chief human resources officer generally attends, and our chairman and chief executive officer and senior vice president, general counsel and secretary, occasionally attend committee meetings but are not present for any discussion of their own compensation.

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Market Data Used to Benchmark Pay

        With the assistance of our compensation consultant, the committee benchmarks elements of our executive compensation. Our executive's pay elements are benchmarked against a peer group of public companies that are selected annually from the health care industry and reflect Hospira's size, technologies, product markets and the talent pool from which we recruit. Based on such criteria, the committee included the following companies in the peer group for the competitive analyses for 2010 compensation:

Peer Group Market Data

        Towers Watson's competitive analyses also include relevant published survey benchmark data from the healthcare and general industries which the committee uses as secondary sources of information to support the peer group analysis. The sources used included general industry and pharma/biotech information from Towers Watson. The peer group and published surveys together were used to determine market median pay opportunities for salary, annual and long-term incentives, and total direct compensation (the sum of salary, annual cash incentive and long-term incentives).

        When making executive compensation decisions, the committee also reviews executive tally sheets that reflect the total compensation opportunity, realizable compensation, and the aggregate value of all long-term incentive grants.

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Discussion of Compensation Program

Principles

        At Hospira, we recognize that all employees affect the performance of our business. Accordingly, we have designed our pay programs to help reinforce our key strategies and reward the successful execution of those strategies. We view total direct compensation as comprising three elements: base salary, an annual cash incentive award and a long-term equity incentive award. We favor variable pay opportunities based on performance over fixed pay. We intend for our program to reflect competitive market practice and to provide an appropriate mix of short and long-term rewards to motivate and reward the achievement of both short-term goals and our long-term strategies in a way that does not encourage unnecessary or excessive risk-taking. We target total direct compensation at the market median, based on an analysis of the compensation practices of the competitive market, as described above. Based on our market data, the committee believes that our total direct compensation mix, as explained below, is generally consistent with market. Long-term incentives represent the highest percentage of total direct compensation, comprising over 65% of the total mix for the named officers. This is to ensure executives are closely aligned with our shareholders and create long-term value. Base salary represents the lowest percentage of total direct compensation for the named officers, generally in a range of 15% to 19% of total direct compensation. We adjust the various elements of compensation to provide each executive the opportunity to earn market median total direct compensation when targeted performance is achieved.

        For 2010, the pay mix for our CEO and our other named officers was as follows:

Hospira Compensation Elements

Base Salary

        Hospira targets its base salaries at the market median, based on an analysis of the competitive peer group. The salaries for the named officers are approved by the committee based on the CEO's recommendation and review of each officer's performance during the previous year. The CEO's base salary is approved by the independent members of the board based on Towers Watson's recommendations and the board's review of the CEO's performance during the previous year.

        We determine and adjust an executive's base salary by assessing sustained performance against individual job responsibilities including, where appropriate, the impact of performance on our business results, current salary in relation to the competitive market for the job, experience and potential for advancement. We administer the same standards for base salary increases for Hospira's executives as for other salaried employees.

        Based on an analysis of our competitive peer group in 2009, base salaries for our named officers were 5% to 15% below the competitive market median. As a result, in 2010, in order to recognize performance and remain market competitive, the annual salaries for the named executive officers increased, on average, approximately 3%. The committee approved the following annual salaries, effective in April 2010: Mr. Begley, $1,100,000; Mr. Kearney, $645,000; Dr. Ramachandra, $489,500;

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Mr. Squarer, $400,000; and Mr. Werner, $445,000. Based upon the company's inability to achieve its publicly announced adjusted earnings and cash flow projections for 2010, and the delay in approval of two significant generic intravenous drugs, the compensation committee approved management's recommendation that there be no 2011 merit increases for the named officers.

Annual Cash Incentive Award

        Executives have an opportunity to earn an annual cash incentive award. When added to the executive base salary (total cash compensation), the committee targets the median of the competitive market. The goal of our annual incentive plan for the named officers is to establish a significant link between the award and our success by rewarding participants when we achieve or exceed established financial goals and business objectives. Target opportunities are set at the market median with an opportunity to achieve at or above 75 ^th  percentile annual incentive for excellent performance.

        Our named officers generally participate in the 2004 Hospira, Inc. Performance Incentive Plan, as amended. The committee determines the participants in the Performance Incentive Plan for each year. The named officers were participants in the plan for 2010.

        The plan was approved by our shareholders in 2005, and allows for awards to be tax deductible under the requirements of Section 162(m) of the Internal Revenue Code. The plan provides for a base award equal to 2.0% of our earnings before interest, taxes, depreciation and amortization (EBITDA) for our chief executive officer, 1.5% for our chief operating officer and 1.0% for each other named officer. In determining actual awards under the Performance Incentive Plan, the committee has the discretion to reduce, but not increase, actual awards from the base awards.

        In practice, taking into account the base awards could be higher than intended, the committee uses its discretion to substantially reduce the actual awards from the base awards each year. In exercising this discretion and determining actual awards, at the first meeting during the performance period, the committee establishes goals for that performance period and, at the first meeting after completion of the performance period, measures performance against those goals. The committee has generally established the same corporate goals and goal weightings as those used for determining awards payable to Hospira's non-executive managers under Hospira's management incentive plan. As a result, Hospira's entire management team has the same opportunity to earn above and below target awards. While the committee consults with management in connection with the establishment of these goals, the committee has the sole discretion to set, and measure performance against, these goals.

        Using the structure of our cash incentive program, the committee establishes a target award for each officer determined as a percentage of the officer's base salary, which is earned based on performance against the goals set by the committee. Officers may earn more than the target award (up to a maximum set by the committee of two times the target award) if goals are exceeded, or less than the target award if goals are not achieved at the target level but achieved above a threshold level set by the committee (payment at the threshold level is one-half of the target award). No award is earned if performance fails to meet the threshold level of performance. For purposes of determining the annual incentive award, the base salary was the actual base salary received.

        The target incentive award percentages for each named officer, except Mr. Begley, did not change from 2009 to 2010. Mr. Begley's annual incentive target increased from 100% to 125%. This changed target reflects competitive market practice and is consistent with the committee's intent to provide greater emphasis on variable performance-based compensation than on base salary compensation. Based on the company's 2010 performance as outlined above, the committee decided to leave the target bonus levels unchanged for 2011.

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        For purposes of determining the 2010 cash incentive award paid to each named officer, in March 2010, the committee selected the following measures on which to assess the company's performance:

        The relative weight assigned to each of these measures was 35%, 25%, 15% and 25%, respectively. The 2010 financial goals were established to focus executive attention and action on financial and business performance that the committee believed would deliver shareholder return and long-term growth. In establishing these goals, the committee consulted with management, reviewed the company's 2010 business plan and set goals that were attainable based upon the execution of the business plan. In placing the greatest weight on adjusted net income and adjusted net sales, the committee intended to emphasize annual growth of our base business at a level that the committee believed would establish positive shareholder return, balanced with emphasizing our strategy to invest for long-term growth of our business. The committee placed emphasis on generating cash as a measure of our ability to invest for growth. Finally, the committee continued to focus on the corporate well-being goal related to Project Fuel, the company's multi-phased initiative to improve the company's margins and fuel its growth.

        For each measure, the committee established a threshold, target and maximum level of performance. Maximum levels and potential payouts were established to encourage above-goal performance and results that exceed expectations. Similarly, we believe that if we do not meet our target goals that are established to generate shareholder return and long-term growth, management incentive payments should be reduced accordingly. If the company does not achieve 85% of the target level for adjusted net income and free cash flow, or 97% of the target level for adjusted net sales, then no payout is made for the respective goal.

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        The following table lists the performance measures, weightings, and related target goals for 2010, as well as actual results.

Hospira Performance Incentive Plan (PIP) Measures

        At its February 2011 meeting, the committee measured performance against the goals and approved the following 2010 incentive awards at 87.6% of target.

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Long-Term Equity Compensation

        The mix of vehicles used as our long-term incentive grants has changed in recent years. To enhance its ability to pay for performance and to motivate management to achieve long-term goals, the committee splits the long-term incentive award to executive officers into two components: stock options and performance share units. For our chief executive officer, performance share units represent approximately 60% of the annual long-term incentive award and stock options represent approximately 40% of the award. The mix for the other executives covered under the plan is approximately 50% in performance share units and 50% in stock options. These allocations are intended to provide at least half of all equity in vehicles with pre-established performance conditions to ensure closer pay for performance alignment. Under our pay philosophy, the committee may provide grants of time-vested restricted stock/restricted stock units, stock options or performance share units to address retention or significant market compensation shortfalls.

        Only the committee may award stock options and performance share units to the named officers. The committee receives the approval of the independent board members for awards to the chief executive officer.

        Timing of Awards.     The committee has determined that the grant date for the long-term incentive award shall be made on the later of: (i) the fifth business day following the year-end earnings release or (ii) two business days after the February compensation committee meeting. The timing of awards is not otherwise coordinated with the release of material non-public information. The timing of awards is included in a policy approved by the committee. For employees hired or promoted after the date of the annual meeting, any awards made because of the hiring or promotion of such employee are generally awarded on the final New York Stock Exchange trading day of the quarter in which the hire or promotion occurs.

        Performance Share Units.     The performance share units are earned based on the achievement of total shareholder return over a three-year performance period relative to the performance of a pre-established peer group. The peer group consists of the companies included in the S&P 500 Health Care index as of December 31, excluding those companies classified as Managed Care Providers, which the committee feels represent a substantively different industry segment. For the 2010 grant, the peer group includes all of the companies listed under "Market Data Used to Benchmark Pay" above, except Covidien plc. In addition, the peer group includes the following companies:

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        The committee selected total shareholder return as the sole performance measure because it believes that this measure best represents the ultimate performance of the company and the desired outcome for its shareholders. Under the performance share unit program, participants receive target awards based on the competitive market and the committee's assessment of the total compensation opportunity it wants to afford the participant. The target award will be paid out if, at the end of the performance period, Hospira's total shareholder return for the three-year period is at the median of the peer group. Participants may receive up to two times the target award if Hospira's total shareholder return reaches or exceeds the 75 ^th  percentile of the peer group. Correspondingly, if Hospira's total shareholder return is below median, participants may receive a lesser award. No award will be paid out if Hospira's total shareholder return falls below the threshold established by the committee, which is the 25 ^th  percentile.

        The payment levels at various percentile rankings against the peer companies are shown in the following table:

        Prior to the 2010-2012 performance award cycle, participants could earn a portion of the performance share units at the end of each year (interim measurement periods) based on Hospira's total shareholder return for those years and Hospira's percentile ranking for these interim measurement periods. The maximum interim amount that may be earned for each of the two interim measurement periods is one-quarter of the performance share units originally granted. This interim amount is earned but still has a one- or two-year time-vesting period. This interim earn-out was provided because these were the first few years of the program and the committee wanted to provide an incentive for motivating performance during the beginning of the program. From the performance

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award cycles listed below, the named officers were awarded the following performance share units in February 2011:

Awards beginning with the 2010-2012 performance award cycle will only be made at the end of the three-year performance cycle based on the three-year total shareholder return percentile ranking as measured against the peer group, and as a result, interim awards will not be earned.

        If a participant's employment with Hospira is involuntarily terminated with severance benefits, or if the participant dies, becomes disabled or retires at age 55 or later with at least 10 years of service during the performance period, the number of performance share units earned at the time will be paid within 90 days after the end of the performance period. Payments are not available if termination is due to performance, illegal activity, failure to abide by our code of conduct, or other good cause. For awards made in 2008, if there is a change of control of Hospira during the performance period, the participant will be determined to have earned the maximum award that will be paid within 90 days after such change. For awards made in 2009 and after, the participant will be deemed to have earned the target award following a change of control. This program uses the same definition for change of control as described later in this proxy statement under "Potential Payments upon Change of Control—Change of Control." All performance share units are forfeited if the participant's termination of employment during the performance period is for reasons other than death, disability, retirement or involuntary termination (with severance benefits) of employment. Although payments are generally made within 90 days following the performance period, participants may elect to defer payment for up to 10 years following the end of the performance period. None of our named officers have elected to defer payment of the performance share units.

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        During 2010, the committee awarded performance share units to the named officers as follows:

        Stock Options.     In determining the number of option shares granted to each executive, the committee reviewed analyses provided by Towers Watson. The committee targeted overall award levels at the median of competitive practice for the previously discussed peer group and published survey data. In addition, the committee considered prior award levels and its intent to focus on variable compensation in making these grants. The stock options permit the holder to buy our stock for a price equal to the stock's value when the options were awarded. One-third of the stock options vests each year, but vest immediately upon a change of control. The stock options granted in 2011 will vest equally over a four-year period, and have a seven-year term.

        We view stock options as an important tool in aligning the long-term interests of our stockholders and employees, as recipients only benefit if the stock price appreciates over the long-term. The committee evaluates the structure of long-term equity compensation annually to assure that its reward strategies are aligned with our strategies. Stock options are awarded annually to all eligible employees, including named officers. During 2010, the committee awarded stock options to the named officers as follows:

        The exercise price of stock options is the average of the high and low trading prices of Hospira common stock on the date of the award, which we believe is an appropriate measure of the market price of Hospira common stock. The determination of exercise prices is included in a policy approved by the committee.

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        Our long-term incentive award agreements also contain provisions under which we may cancel all unexercised stock options and rescind any exercise or payment of stock options during a "recapture period" if:

•

For a one-year period after leaving Hospira, a person engages in business that is competitive with Hospira or solicits Hospira's customers and suppliers; or



•

For a one-year period following the termination of employment, such person solicits or employs Hospira's employees.

        The recapture period is the 12-month period before or following the date the participant's employment terminates.

        If such stock options are rescinded, the grantee is required to pay to Hospira the amount of any gain realized or payment received and forfeit to Hospira any shares received upon the exercise of such stock options during the recapture period. Performance share units are also subject to similar provisions that allow Hospira to terminate unearned awards and seek the return of any gains the participant makes after the awards are vested.

Other

Change of Control Agreements and Severance Pay

        We have in place change of control agreements with the named officers. These agreements are described later in this proxy statement under "Potential Payments upon Change of Control." Payouts under those agreements are conditioned upon a change of control and either:

•

the executive officer terminating for good reason or being terminated other than for cause during a specified time; or



•

for those agreements entered into prior to 2008, the executive officer terminating for any reason during a one-month period that begins six months after the change of control. (This provision has not been, and will not be, included in agreements entered into in 2008 and after.)

        The agreements are designed to retain the named officers and provide continuity of management if there is an actual or threatened change of control and ensure that their compensation and benefit expectations would be satisfied in that event. The agreements with former Abbott officers were entered into at the spin-off and are similar in substance to the agreements that they had with Abbott.

        Our Hospira Corporate Officer Severance Plan provides severance pay and benefits to our corporate officers. The plan covers all our named officers, except our chairman and chief executive officer. This severance plan is described later in this proxy statement under "Potential Payments Upon Involuntary Severance." Payouts under this plan are made to a participant whose employment with us terminates involuntarily but will not be made if better benefits are available under a change of control agreement. Payments are also not available if termination is due to performance, illegal activity, failure to abide by our code of conduct, or other good cause. Consistent with our principles, we believe that this offers us a tool to attract, retain and motivate talent through a competitive severance plan that is transparent and consistent among the named officers.

        Upon consultation with the consultant, the committee believes that overall, the agreements and plan are consistent with competitive market practice in both form and value. We do not have employment agreements or other severance agreements in place with the named officers.

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Non-Qualified Deferred Compensation Plan

        The Hospira Non-Qualified Savings and Investment Plan, a non-qualified deferred compensation plan, went into effect on January 1, 2008. The plan is not funded. All of our named officers and other highly compensated employees under ERISA are eligible to participate in this plan. The plan allows the participants to defer amounts in excess of the limits imposed on 401(k) plans by the Internal Revenue Code. For each payroll period beginning on and after January 1, 2010, a participant who defers the following percentages receives the following employer contributions (both stated as a percentage of the employee's compensation):

        This plan's definition of compensation is the same as our qualified 401(k) plan, which includes regular base pay, sales commissions, overtime, shift differentials and paid absences, but excludes discretionary bonuses. It also includes compensation deferred under this plan. Our contributions under this plan are identical to the contributions under our 401(k) plan. Participants are always vested in the amounts they defer under the plan. Our contributions vest after 3 or more years of qualified plan service, the date the participant attains age 55, or upon termination of the plan following a change of control, whichever occurs first. Under these conditions, Mr. Begley, Mr. Kearney, Mr. Squarer and Mr. Werner are fully vested in our contributions under this plan.

        The participant will receive payment of the participant's vested account balance on retirement, death or other termination of employment. Payments are made in a lump sum or, if chosen by the participant, in annual installments not exceeding 10 years. The participant may choose an earlier distribution by specifying a specific date for benefit payments to begin. Within certain limits, the participant may also request an emergency payment in the case of an unforeseeable emergency such as a sudden and unexpected illness or accident or the loss of property that results in severe financial hardship. Amounts deferred under the plan are credited with investment returns based on investment alternatives chosen by the participant, and the participant's account reflects the investment returns of the chosen investment alternatives. The alternatives are similar to those offered under our qualified 401(k) plan. However, the participants have no ownership interest in any of the investment alternatives.

        We adopted this plan to allow our executive officers and other highly compensated employees to save for retirement, which we believe is consistent with competitive market practice.

        Other than the Hospira Non-Qualified Savings and Investment Plan, we do not currently offer a deferred compensation plan, except the Hospira 401(k) Retirement Savings Plan, which allows Hospira executives to participate up to the annual IRS limits on the same terms as all other employees. We offer other benefit plans, such as health, life and disability insurance, to our officers on the same basis as to all other employees.

Executive Share Retention and Ownership Guidelines

        In order to promote equity ownership and further align the interests of management with Hospira's shareholders, we have share retention and ownership guidelines for senior management. Under these guidelines, officers are encouraged to make a substantial investment in stock of the company. Previously, these guidelines specified a minimum number of shares for each officer. In June 2010, as part of the annual review, the guidelines were modified in order to moderate the impact of

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market volatility on the ability of our officers to comply with the guidelines. The new requirements for our officers, based on the officer's position at Hospira, are as follows:

        The determination of the aggregate value of Hospira common stock under these guidelines is based on a 200-day average price of Hospira common stock. These share ownership requirements are reviewed periodically. The officers are expected to meet their ownership requirement within five years of becoming a corporate officer. The target number of shares can be satisfied with stock held through the Hospira 401(k) Retirement Savings Plan, restricted stock, and earned or vested performance share units. If the guideline is not met within the required time frame, the officer will be required to hold all stock from stock option exercises and restricted share vestings (in both cases, less shares withheld to pay taxes, or the cost of exercise) until the guideline is met. Hospira's named officers have met their minimum ownership guidelines.

2011 Management Changes

        As previously announced on March 7, 2011, F. Michael Ball was elected as Hospira's chief executive officer and as a director on March 28, 2011. Also on March 28, 2011, Mr. Begley retired as chief executive officer, but remains an employee and serves as executive chairman of the board. The board has approved Mr. Ball's new compensation package, effective March 28, 2011, as detailed below:

•

An annual base salary of $975,000;



•

An annual incentive award under the Company's performance incentive plan, which for fiscal year 2011, will be a target award of 120% of his full year base salary;



•

the following long-term incentive awards on March 31, 2011 (the last trading day of the quarter that includes his start date):



•

A one-time special hiring incentive stock option award valued at $500,000;



•

An initial normal annual long-term incentive award consisting of stock options valued at $1,950,000 and performance share units valued at $2,925,000;



•

A restricted stock grant valued at $3,394,208 to compensate Mr. Ball for the loss of unvested options from his previous employer;



•

A restricted stock grant valued at $710,000 to compensate Mr. Ball for the loss of unvested restricted stock from his previous employer; and



•

A restricted stock grant valued at $1,929,621 to compensate Mr. Ball for the loss of retirement benefits from his previous employer;



•

Eligibility for severance benefits under the Company's Corporate Officer Severance Plan, as amended (which will be amended with respect to Mr. Ball, only, to change the definition of termination for cause in that plan); and

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•

Eligibility for benefits following a change in control, in accordance with the change in control agreement that will expire by its terms as of December 31, 2012.

The stock option and restricted stock grants vest equally over three years, but are subject to immediate vesting upon termination by the Company without cause or his resignation with good reason. The letter to Mr. Ball detailing his compensation package was filed as Exhibit 10.1 to the Form 8-K on March 8, 2011.

        Based on the Hospira pay philosophy and data provided by our external compensation consultant, Towers Watson, the board believes Mr. Ball's ongoing annual compensation opportunity, including his base salary, target annual incentive opportunity and the initial normal long-term incentive award, is appropriately positioned among his peers when taking into consideration multiple factors such as his role and experience.

Internal Revenue Code Section 162(m)

        Under Section 162(m) of the Internal Revenue Code, Hospira may not take a federal income tax deduction for compensation paid in excess of $1 million to its chief executive officer or any of its four other highest paid executive officers. This limitation does not apply, however, to "performance-based" compensation, as defined under the Federal tax laws, under a plan approved by shareholders. Stock options, performance share units and Hospira's annual incentive awards generally qualify as "performance-based" compensation, as these awards are made under plans approved by shareholders and are, therefore, fully deductible.

        The committee considers the anticipated tax treatment to Hospira and its executive officers when reviewing executive compensation. The deductibility of some types of compensation payments can depend upon the timing of an executive's vesting or exercise of previously granted rights. Interpretations of and changes in applicable tax laws and regulations, as well as other factors beyond the committee's control, also can affect deductibility of compensation.

        The committee will continue to assess alternatives for preserving the deductibility of compensation payments and benefits. However, the committee will not necessarily seek to limit executive compensation to amounts deductible under Section 162(m), since the committee wishes to maintain the flexibility to structure compensation programs in ways that best promote the interests of Hospira and its shareholders.

COMPENSATION COMMITTEE REPORT

        The compensation committee has reviewed and discussed the 2010 Compensation Discussion and Analysis included in this proxy statement with Hospira\'s management. Based on such review and discussions, the committee recommended to Hospira's board of directors that the 2010 Compensation Discussion and Analysis be included in this proxy statement.

COMPENSATION COMMITTEE
    Roger W. Hale, Chair
    Jacque J. Sokolov, M.D.
    Heino von Prondzynski

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EXECUTIVE COMPENSATION
Summary Compensation Table

        The following table presents information on the compensation awarded to, earned by or paid to the named officers.

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Grants of Plan-Based Awards During 2010

        The following table provides information regarding each plan-based award made to our named officers during 2010.

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Outstanding Equity Awards at December 31, 2010

        The following table provides information regarding outstanding equity awards held by each named officer as of December 31, 2010, including the number of exercisable and unexercisable stock options held at that time. All awards described below are awarded under the Hospira 2004 Long-Term Stock Incentive Plan, as amended. The market value of the awards listed below is based on the closing market price for Hospira common stock on the New York Stock Exchange on December 31, 2010, which was $55.69.

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Option Exercises and Stock Vested During 2010

        The following table shows for each named officer the number of shares acquired on the exercise of Hospira stock options during 2010 and the value realized on exercise.

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2010 Pension Benefits

        The following table shows the number of years of credited service and the present value of the accumulated benefit obligation for Mr. Begley and Mr. Kearney for each applicable plan. Dr. Ramachandra, Mr. Squarer, and Mr. Werner are not entitled to any pension benefits since they joined Hospira in 2008, 2007, and 2006, respectively. The assumptions used to calculate the accumulated benefit obligation are described in Note 15 to the consolidated audited financial statements contained in Hospira's Annual Report to Shareholders. No payments under any plan were made to the named officers.

        Before our spin-off from Abbott, Mr. Begley and Mr. Kearney were participants in Abbott's defined benefit pension plans. Effective as of the time of the spin-off, we adopted a qualified pension plan, the Abbott/Hospira Transitional Annuity Retirement Plan, which replicated, in all material respects, the benefit formulas under Abbott's plan.

        Description of Plans.     The qualified pension plan's benefits are determined through stated formulas, which are based on an employee's benefit service years and final earnings. Our employees received credit under our plan for qualifying service years and earnings with Abbott. Earnings include base salary and bonus payments under our annual cash incentive plan. An employee's final earnings under the plan are calculated as the average of the employee's earnings for the highest five of the last 10 years of service through December 31, 2004.

        The plan's normal retirement date is the last day of the month after the employee reaches age 65. However, an employee hired before January 1, 2004, may choose to retire as early as the last day of any month after he reaches age 50 and has at least 10 years of service, or after he reaches age 55 and his age plus years of service total 70 or more. Any such employee may also retire early on the last day of any month after he reaches age 55 if, by age 65, his age plus years of service would total 94 or more. Employees hired after January 1, 2004, may retire early on the last day of the month after they reach age 55 and have at least 10 years of service.

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        In all cases, for service from January 1, 2004, through December 31, 2004, if the employee retires before age 55, the plan benefit is actuarially reduced for each year that payments are made before age 65. This means that the benefit payments are reduced proportionally so that employees receiving benefits before age 65 receive roughly the same value as those who begin receiving benefits at age 65. This is a complex calculation that is based on mortality and interest rate assumptions.

        Mr. Begley is eligible for our qualified plan benefits and is currently eligible for early retirement. Mr. Kearney retired in January 2011, and at that time, he was retirement eligible. Dr. Ramachandra, Mr. Squarer and Mr. Werner do not qualify as eligible participants under the plan and are not entitled to receive any of its benefits.

        The Internal Revenue Code and qualified plan documents place limits on the amount and types of earnings that can be considered as compensation under the plan. The Internal Revenue Code also places a dollar limit on the annual payments that may be paid from the plan. At the time of the spin-off, we also adopted a non-qualified supplemental pension plan, the Hospira Supplemental Pension Plan. The plan replicates, in all material respects, the plan provisions under Abbott's non-qualified supplemental pension plan. The plan generally provides benefits to those individuals who participate in our pension plan and whose earnings exceed limits imposed by the Internal Revenue Code or, in certain cases, the qualified plan's definition of compensation. Mr. Begley and Mr. Kearney were participants in the non-qualified plan.

        The non-qualified pension plan also provides an additional benefit, which is a monthly pension commencing on the officer's normal retirement date under the qualified plan and payable as a life annuity equal to 0.006% of the officer's earnings for each of the first 20 years of benefit service occurring after age 35. Additionally, the non-qualified pension plan allows such officers to retire at age 60 without early benefit reductions that would have applied under the qualified plan for early retirements.

        Freezing of Plans.     As a result of our evaluation of our benefit programs, effective December 31, 2004, benefits under the qualified and non-qualified pension plans were frozen. Eligible employees continued to earn benefits based on pay and years of service earned through December 31, 2004, and are entitled to all vested benefits earned when they retire. As a result of the freezing of the benefits, our employees, including the named officers, will not accrue additional years of benefit service after 2004 and their compensation earned after 2004 will not be taken into account for purposes of calculating the benefits. However, service earned after December 31, 2004, is counted toward vesting and for determining eligibility for retirement.

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2010 Non-Qualified Deferred Compensation

        The following table provides certain information regarding compensation paid by us and deferred by our named officers under the Hospira Non-Qualified Savings and Investment Plan, our non-qualified deferred compensation plan, which went into effect on January 1, 2008. No payments were made to the named officers from this plan.

        See "Other—Non-qualified Deferred Compensation Plan" above for a description of our non-qualified deferred compensation plan.

Stock Option Provisions Regarding Termination of Employment

        Our stock options generally expire three months after an employee's termination of employment. However, the stock options will remain in force for their term if the holder dies during employment or retirement, retires, or becomes disabled during employment. During that period, the options continue to vest and may be exercised. For options granted before 2005, an individual is considered to have retired if his employment terminates at or after the time he reaches age 55 and has 10 years of service or if he retires under a Hospira-sponsored defined benefit retirement plan (which generally requires that the participant be 50 years old with at least 10 years of service). For options granted in and after 2005, an individual is considered to have retired if his employment terminates at or after he reaches age 55 and has 10 years of service. Mr. Begley is currently eligible for retirement under these conditions. Mr. Kearney retired in January 2011, and at that time, he was retirement eligible. Dr. Ramachandra, Mr. Squarer and Mr. Werner are not currently eligible for retirement under any of the option awards.

Potential Payments upon Change of Control

        We have change of control agreements with the named officers. The terms of those agreements are summarized below.

        Term.     The agreements with our officers, including our named officers, were not automatically renewed for a three-year term, as had been the historical practice. Accordingly, the current change of control agreements will expire pursuant to their terms as of December 31, 2012. If a change of control occurs, the agreements will extend for two years following the change of control.

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        Triggering Events.     During the term of the agreement, each named officer is entitled to receive benefits as described below if a change of control occurs and:

•

the officer is terminated by us for any reason other than cause or permanent disability;



•

the officer terminates for good reason, which includes, among other things, reduction in responsibility, reduction in salary, bonus or other compensation or benefits, or relocation of the officer; or



•

for those agreements entered into prior to 2008, the officer terminates for any reason during the one-month period following the date that is six months after the change of control. (This provision has not been, and will not be, included in agreements entered into in 2008 and after.)

        An officer is also entitled to those benefits if we terminate the officer's employment if a potential change of control is pending for any reason other than cause or permanent disability. We have made changes to these agreements in order to comply with Section 409A of the Internal Revenue Code and its regulations which affect severance arrangements such as the change of control agreements. Under the changes, payments under the agreements are delayed for 6 months after the officer becomes entitled to them, except for certain welfare benefits.

        Benefits.     In the circumstances described above under "Triggering Events," the officers are entitled to receive:

•

2.99 times the officer's annual salary and incentive plan award, with the annual incentive plan award being the highest of:



•

the amount that would be paid during the period of termination of employment if the target levels of performance were achieved; and



•

the average annual incentive award for the three annual performance periods before the period that includes the termination of employment;



•

the prorated annual incentive plan award for the period of termination of employment (calculated as described in the bullet point above);



•

for a termination that occurs after the end of a performance period, the unpaid annual incentive plan award for the completed performance period for which the award has not been paid, calculated as the highest of:



•

the amount that would be paid during the period of termination of employment if the target levels of performance were achieved;



•

the actual amount that would have been paid for the completed period as determined under the terms of the annual incentive plan; and



•

the average annual incentive award for the three annual performance periods before the period of termination of employment;



•

an extra three years addition to actual age on the date of termination for purposes of determining the eligibility for subsidized early retirement benefits;



•

up to three years of additional employee benefits, including medical, dental, health and accident, prescription, disability and life insurance coverage, as received by the officer before the change of control;



•

up to three years of outplacement services;



•

full vesting under applicable agreements of stock awards and options; and

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•

payment of excise taxes, and taxes and other payment obligations as a result of having those excise taxes reimbursed. (This provision has not been, and will not be, included in agreements entered into in 2009 and after.)

For Mr. Squarer, the amount of benefits described above are determined by replacing "2.99" with "2.00" and "three years" with "two years" wherever they appear above.

        Change of Control.     Under the agreements, a change of control occurs on any date on which:

•

any person or group that does not already have 30% of voting power acquires or has acquired during the 12 month period preceding the most recent acquisition ownership of our stock possessing 30% or more of the total voting power of our stock;



•

the majority of our board is replaced during any 12 month period by directors whose appointment or election is not endorsed by a majority of the board members before the date of the appointment or election;



•

any person or group that does not already have more than 50% stock ownership acquires stock ownership that, together with stock already owned by the person or group, constitutes more than 50% of the total fair market value or total voting power of our stock; or



•

any person or group acquires or has acquired during the 12 month period ending on the date of the most recent acquisition our assets with a total gross fair market value of 40% or more of the total gross fair market value of our assets immediately before such acquisition or acquisitions.

        If each named officer had his employment terminated on December 31, 2010 (the last business day of the year), under the circumstances described above under "Triggering Events," we estimate that the officer would receive the benefits described below. These disclosed amounts are estimates only and do not necessarily reflect the actual amounts that would be paid, which would only be known at the time that they become eligible for payment and would only be payable if a change of control were to occur. The table reflects the amount that could be payable under the arrangements assuming that the change of control occurred at December 31, 2010, including a gross-up for certain taxes in the event that any payments made in connection with a change of control would be subject to the excise tax imposed by the Internal Revenue Code.

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Potential Payments Upon Involuntary Severance

        The Hospira Corporate Officer Severance Plan provides severance pay and benefits to our officers who are elected by our board or designated by the compensation committee. Our chairman and chief executive officer is not eligible for pay or benefits under this plan. The terms of this plan are summarized below.

        Triggering Events.     An officer becomes eligible to receive severance pay if we terminate his or her employment for any of the following reasons:

•

the officer's position is eliminated due to a reduction in force or other restructuring; or



•

the officer's employment is involuntarily terminated for reasons that are not related to performance, illegal activity, failure to abide by our code of conduct, or other good cause.

        Conditions.     An officer receiving benefits under our long-term disability will not be entitled to severance pay. To receive benefits, the officer must meet these additional requirements:

•

not be eligible for transfer to another position with us;



•

sign a two-year non-compete and confidentiality agreement;



•

return all our property and information;



•

agree to pay all outstanding amounts owed to us and authorize us to withhold any outstanding amounts from his or her final paycheck and/or severance pay; and



•

if the officer is receiving benefits under our short-term disability plan, then the officer will be entitled to severance pay at the end of the period of payment of short-term disability only if the officer is not then eligible for benefits under our long-term disability plan and we do not offer the officer employment with us that is comparable to what he held at the time the short-term disability commenced.

        Benefits.     If the officer satisfies the conditions described above under "Triggering Events" and "Conditions," the officer is entitled to receive:

•

a lump sum payment in cash, after deduction of federal, state and local income taxes, of:



•

2 years of the officer's base salary at the rate in effect on the date of termination;

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•

if the officer's date of termination occurs after the end of the performance period of an annual incentive bonus award in which the officer participates, and before the award has been paid, a lump sum payment in cash for such prior performance period, as determined under the terms of that incentive award arrangement; and



•

for the year of termination, the officer's pro rata annual incentive bonus award through the date of termination, with the determination of the amount of such award based on the terms of our performance incentive plan for those who participate in that plan and, for all others, based on an assumption that the target level of performance has been achieved;



•

a lump sum payment equivalent to 130% of the cost of 72 weeks of COBRA continuation coverage in lieu of any continued medical, dental, vision, and other welfare benefits we offer; and



•

up to 12 months of outplacement services.

If each named officer, except the CEO, had his employment terminated on December 31, 2010 (the last business day of the year), under the circumstances described above under "Triggering Events" and "Conditions," we estimate that the officer would receive the benefits described below. These disclosed amounts are estimates only and do not necessarily reflect the actual amounts that would be paid, which would only be known at the time that they become eligible for payment.

Other Termination Events

        A named officer's service may terminate for reasons other than a change of control or the reasons described in Hospira's severance plan, such as death, disability, resignation or retirement. Upon one of those termination events, a named officer would not be entitled to any special benefits which are not generally available to all our employees. As is the case with any other employee in a similar circumstance, the named officer would only be entitled to receive the benefits he earned at the time of termination, which could include the following:

•

any earned performance share units—the named officers' earned units as of December 31, 2010, are included in the table captioned "Outstanding Equity Awards at December 31, 2010";



•

any vested options—the named officers' vested options as of December 31, 2010, are included in the table captioned "Outstanding Equity Awards at December 31, 2010"; and



•

any earned incentive award for the year—the named officers' incentive awards for 2010 are included under "2010 Compensation Discussion and Analysis—Discussion of Compensation Program—Annual Cash Incentive Award".

        As is the case for any retirement-eligible employee, the named officer who is retirement eligible (Chris Begley) would also get the full term of their options, during which unvested options would continue to vest. At his retirement in January 2011, Mr. Kearney was retirement eligible. Their unvested options are included in the table captioned "Outstanding Equity Awards at December 31, 2010."

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SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

        Executive officers, directors and certain shareholders who own more than 10 percent of our common stock are required by Section 16(a) of the Securities Exchange Act of 1934 to file reports of their ownership of the common stock with the SEC. Based on our review of the reports and representations made to us by our officers and directors, we believe that all required Section 16(a) reports were timely filed in 2010.

PROPOSAL 5
ADVISORY VOTE ON NAMED OFFICER COMPENSATION

        Under the Dodd-Frank Act, the company's shareholders are entitled to vote on the compensation of the company's named officers. Pursuant to that rule, we are requesting shareholder approval of the compensation of our named officers as disclosed in this proxy statement in accordance with Item 402 of Regulation S-K, which is the SEC's rule setting forth executive compensation disclosure requirements (which disclosure includes the 2010 Compensation Discussion and Analysis, the executive compensation tables, and the accompanying narrative disclosure).

        This proposal, which is commonly known as say on pay, is an advisory vote. As such, this proposal is not binding upon the company. However, the board values the opinions expressed by shareholders on executive compensation matters, and will take the outcome of this vote into consideration when making future compensation decisions for its named officers.

        We describe our executive compensation program in detail in the section captioned "2010 Compensation Discussion and Analysis." As highlighted in that section, the goal of our executive compensation program is to align the interests of our shareholders for long-term growth with our ability to attract, retain and motivate the best people from the industries where we compete for talent. For the reasons stated in the "2010 Compensation Discussion and Analysis," we believe that our compensation policies and procedures are successful in encouraging a culture of pay for performance and in aligning compensation with the long-term interests of shareholders.

        Over the last several years, the Compensation Committee has adopted practices or enhanced its executive compensation program to align executive compensation with the long-term interests of shareholders. These actions include:

•

Annual Cash Incentive Award.   As described in the section captioned "2010 Compensation Discussion and Analyis—Executive Summary," we continued to revise, and adjust as needed, the performance metrics used in our annual cash incentive program to ensure the program and incentives align with our business plan and strategies.



•

Long-Term Incentive Pay.   We modified our long-term incentive approach in 2008 to move from the use of stock options only to a program that consists of two components: stock options and performance share units tied to total shareholder return. We made that change to enhance our ability to pay for performance and to motivate management to achieve long-term value creation for shareholders. In 2010, performance share units represented 60% of the annual long-term incentive award for our chief executive officer, and 50% for our other named officers.



•

Performance Share Unit Program.   Beginning with the 2010 performance share unit award, we no longer allow participants to earn interim awards. Awards will only be made at the end of the three-year performance cycle based on the three-year total shareholder return percentile ranking as measured against the peer group.



•

Clawback.   In 2009, we adopted an executive compensation recovery policy, which relates to the recoupment of any bonus, equity-based award or other compensation given to a current or

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former corporate officer in the event of a restatement of the company's published financial results.

•

Change of Control.   Beginning in 2008, we determined that we would no longer allow change of control benefits if an officer terminates for any reason during the one-month period following the date that is six months after the change of control (sometimes referred to as "modified single trigger"). Beginning in 2009, we determined that we would no longer include excise tax gross-up payment provisions in new and materially amended change of control agreements with our named officers. Also in 2009, we amended our stock incentive plan to provide, among other things, that if there is a change of control, performance measures for awards will be deemed to have been achieved at the target level of performance, rather than at the maximum level of performance. In 2010, the compensation committee determined that the change of control agreements with our officers, including our named officers, would not be automatically renewed for a three-year term, as had been the historical practice. Accordingly, the change of control agreements will expire pursuant to their terms as of December 31, 2012. The committee will review best practices to determine the appropriate terms of any change of control agreements entered into after that date.



•

Hospira 2004 Long-Term Stock Incentive Plan.   This plan, under which equity awards are made, is designed to prohibit the repricing of the exercise price of stock options, which are always granted at "fair market value." In addition, the plan is administered by independent directors, which allows for performance-based awards to enhance the deductibility of compensation, and places a limit on the number of awards that may be made under it.



•

Retirement Programs.   We froze our pension plan and supplemental pension plan as of December 31, 2004. Of our named officers, only two have frozen benefits under this legacy program (one of whom retired in early 2011).

For the reasons described herein, the board of directors recommends that shareholders vote FOR the following resolution:

"RESOLVED, that the compensation paid to the company's named executive officers, as disclosed pursuant to Item 402 of Regulation S-K, including the 2010 Compensation Discussion and Analysis, compensation tables and narrative discussion is hereby APPROVED."

PROPOSAL 6
ADVISORY VOTE ON FREQUENCY OF SAY ON PAY VOTE

        We are asking shareholders to determine how often we should conduct a shareholder advisory vote on executive compensation. More specifically, we are asking the shareholders to determine whether the say on pay vote should occur every one, two or three years. The Dodd-Frank Act requires the company to hold this advisory vote on the frequency of the say on pay vote at least once every six years.

        As an advisory vote, this proposal is not binding on the company. However, the board values the opinions expressed by shareholders on executive compensation matters and acknowledges that there are a number of points of view regarding the relative benefits of annual or less frequent say on pay votes. Our current intent is to implement the option that receives the most votes from shareholders.

        The board recommends that the say on pay vote occur annually. Although the board believes that the company's compensation programs are sound and appropriately encourage a culture of pay for performance, the board recognizes that some of the company's shareholders would appreciate an opportunity to communicate annually to the board regarding the company's pay practices. Some shareholders believe an annual vote would encourage a higher level of accountability and communication by enabling the say on pay vote to correspond to the information presented in the proxy statement for the applicable shareholders' meeting. The board recognizes the importance of

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receiving regular input from our shareholders on important issues, such as our compensation policies and procedures, and at this point in time, has determined that an annual vote would best fulfill its commitment to take steps to align the compensation of its named officers with the interests of the company's shareholders.

         The board of directors recommends that the say on pay vote occur annually. Note that shareholders are not voting to approve or disapprove the recommendation of the board with respect to the proposal. Instead, the proxy card provides four choices with respect to this proposal: one year, two years, three years or abstention.

PROPOSAL 7
RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS

        The audit committee of our board of directors is empowered to annually appoint a firm of independent registered public accountants to serve as our auditors. The audit committee appointed Deloitte & Touche LLP to serve as our auditors for 2011. Deloitte & Touche LLP has served as our auditors since 2004.

        Although the audit committee has sole authority to appoint auditors, it is seeking the opinion of the shareholders regarding its appointment of Deloitte & Touche LLP as auditors for 2011. For this reason, shareholders are being asked to ratify this appointment. If the shareholders do not ratify the appointment of Deloitte & Touche LLP as auditors for 2011, the audit committee will take that fact into consideration, but may, nevertheless, continue to retain Deloitte & Touche LLP.

        Representatives of Deloitte & Touche LLP are expected to be present at the annual meeting and will be given the opportunity to make a statement if they desire to do so. They also will be available to respond to appropriate questions.

         The board of directors recommends a vote FOR ratification of the appointment of Deloitte & Touche LLP as independent registered public accountants for 2011.

ACCOUNTING MATTERS

Fees to Independent Registered Public Accountants

        We incurred the following fees for services performed by Deloitte & Touche LLP for 2009 and 2010.

Audit Fees

        Aggregate fees billed or expected to be billed by Deloitte & Touche LLP for professional services rendered for the integrated audit of our 2009 and 2010 consolidated annual financial statements and internal control over financial reporting, the review of the financial statements included in our Quarterly Reports on Form 10-Q and statutory and regulatory filings, acquisition-related procedures, review of documents filed with the SEC and certain accounting consultations in connection with the audits were $4,238,000 for 2009 and $4,603,135 for 2010.

Audit-Related Fees

        Aggregate fees billed or expected to be billed by Deloitte & Touche LLP for assurance and related services reasonably related to the performance of the audit or review of our financial statements, including due diligence services, accounting consultations and reviews, and other assurance services and not included in the audit fees listed above under "Audit Fees" were $0 for 2009 and $18,820 for 2010.

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Tax Fees

        The audit committee of our board of directors has determined that our auditor can provide certain tax services without impairing its independence. Aggregate fees billed or expected to be billed by Deloitte & Touche LLP for tax compliance, tax advice, and tax planning were $201,000 for 2009 and $213,000 for 2010.

All Other Fees

        The audit committee of our board of directors may approve permissible non-audit services classified as "all other services" that it believes are routine and recurring services, and would not impair the independence of the auditor. Deloitte & Touche LLP did not perform services that would be characterized as "all other services" for 2009 or 2010.

Pre-Approval Policy

        The audit committee pre-approves all audit and permissible non-audit services to be provided to us by our independent auditor prior to commencement of services. Prior to engagement of the independent registered public accounting firm for the next year's audit, management will submit a schedule of all proposed services expected to be rendered during that year for each of four categories of services to the audit committee for approval. Prior to engagement, the audit committee pre-approves these services by category of service. The fees are budgeted and the audit committee requires the independent registered public accounting firm and management to report actual fees versus the budget periodically by category of service. During the year, circumstances may arise when it may become necessary to engage the independent registered public accounting firm for additional services not contemplated in the original pre-approval. In those instances, the audit committee requires specific pre-approval before engaging the independent registered public accounting firm. Ms. Bowles, the audit committee chair, has been delegated authority to pre-approve such services up to a specified aggregate fee amount and these pre-approval decisions are presented to the full audit committee at its next scheduled meeting.

REPORT OF THE AUDIT COMMITTEE

        Management is responsible for Hospira's internal controls and the financial reporting process. The independent registered public accounting firm has the responsibility for performing an audit of our financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States) and for expressing an opinion on those financial statements based on its audit as well as expressing an opinion on (1) management's assessment of the effectiveness of internal control over financial reporting and (2) the effectiveness of internal control over financial reporting. The audit committee reviews these processes on behalf of the board of directors. In this context, the committee has reviewed and discussed the audited financial statements contained in the 2010 Annual Report on Form 10-K with Hospira's management and Deloitte & Touche LLP.

        The committee has discussed and reviewed with the company's independent registered public accounting firm, Deloitte & Touche LLP, the matters required to be discussed by Statement on Auditing Standards No. 114, as amended. The committee has discussed and reviewed the results of Deloitte & Touche LLP's examination of the financial statements with and without management present.

        The committee has received the written disclosures and the letter from the independent registered public accounting firm required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent auditor's communications with the committee concerning independence, and has discussed with the independent auditors their independence. The committee has also considered whether the provision of the services described above under the captions "Audit Fees,"

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"Audit Related Fees," "Tax Fees" and "All Other Fees" is compatible with maintaining the independence of the independent auditors.

        During 2010, management completed its documentation, testing and evaluation of the adequacy of Hospira's system of internal control over financial reporting, as required by Section 404 of the Sarbanes-Oxley Act of 2002 and related rules and regulations. The committee was apprised of the progress of the evaluation by both management and the independent registered accounting firm, and provided oversight and advice to management during this process. At the conclusion of this process, management reviewed with the committee its report on the effectiveness of Hospira's internal control over financial reporting. The committee also received the report from the independent registered accounting firm on management's assessment of Hospira's internal control over financial reporting.

        Based on the reviews and discussions referred to above, the committee recommended to the board of directors that the audited financial statements be included in Hospira's Annual Report on Form 10-K for the year ended December 31, 2010 filed with the Securities and Exchange Commission.

AUDIT COMMITTEE
    Barbara L. Bowles, Chair
    Connie R. Curran
    John C. Staley
    Mark F. Wheeler

OTHER INFORMATION

        Hospira has been named as a defendant in a lawsuit alleging generally that the spin-off of Hospira from Abbott Laboratories resulted in a mass termination of employees so as to interfere with the future attainment of benefits in violation of the Employee Retirement Security Act of 1974 ("ERISA"). The lawsuit was filed on November 8, 2004, in the United States District Court for the Northern District of Illinois, and is captioned: Myla Nauman, Jane Roller and Michael Loughery v. Abbott Laboratories and Hospira, Inc. Plaintiffs generally seek reinstatement in Abbott benefit plans, disgorgement of profits and attorneys fees. By Order dated December 30, 2005, the Court granted class action status to the lawsuit. As to the sole claim against Hospira, the court certified a class defined as: "all employees of Abbott who were participants in the Abbott Benefit Plans and whose employment with Abbott was terminated between August 22, 2003 and April 30, 2004, as a result of the spin-off of the HPD [Hospital Products Division]/creation of Hospira announced by Abbott on August 22, 2003, and who were eligible for retirement under the Abbott Benefit Plans on the date of their terminations." Solely as a result of the court's ruling and not as a result of any action taken by them, Mr. Begley and Mr. Brian J. Smith, Senior Vice President, General Counsel and Secretary, each of whom were eligible to retire from Abbott as of the time of the spin-off, are members of the class certified by the court against Hospira. Trial of this matter concluded in 2010, and the court issued a ruling in favor of Hospira and Abbott on all counts. Plaintiffs have appealed that verdict.

OTHER BUSINESS

        The board of directors is not aware of any business or matter other than those indicated above which may properly be presented at the meeting. If, however, any other matter properly comes before the meeting, the proxy holders will, in their discretion, vote on the matter in accordance with their best judgment.

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POLICY REGARDING APPROVAL OF RELATED PERSON TRANSACTIONS

        Our corporate governance guidelines require board review prior to entering into related person transactions. The board has adopted written policies and procedures with respect to its review of related person transactions. Those procedures are described below.

        The board must approve any transaction over $120,000 in which the company is a participant and a related person has a direct or indirect material interest. Related persons include directors, executive officers, significant shareholders, their immediate family members and associated entities of these persons.

        If, at any time, we or any of our executive officers or directors become aware of any relationship or potential relationship with a related person, we notify the board and review the facts of that relationship at the next meeting. We annually conduct a review with our executive officers and directors to determine if there are any such relationships, and our executive officers and directors are required to disclose any such relationships to us on an ongoing basis.

        We monitor any known relationships with related persons for changes in facts and circumstances to determine if any such relationships should be re-submitted to the board. Any interested director, including a director whose immediate family member is involved in the transaction, may not participate in the review of any such transaction. The board may delegate the authority to approve related person transactions to any of its independent committees. Hospira did not have any related person transactions in 2010 requiring board approval under this policy.

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OTHER SHAREHOLDER INFORMATION

Shareholder Proposals for the 2012 Annual Meeting

        Under the rules of the SEC, if a shareholder would like to submit a proposal for possible inclusion in the proxy materials for our 2012 annual meeting, the proposal must be received by our corporate secretary on or prior to November 25, 2011. The inclusion of any proposal in the proxy statement and form of proxy for such meeting will be subject to applicable SEC rules.

        Our bylaws set forth certain procedures that shareholders must follow in order to nominate a person for election as a director at an annual meeting or to bring an item of business before an annual meeting. The bylaws require that notice of an intention to nominate a person for director or to bring an item of business before an annual meeting must be received in writing by our corporate secretary not less than 90 days and not more than 120 days prior to the anniversary date of the preceding annual meeting. Accordingly, a shareholder nomination or proposal intended to be considered at the 2012 annual meeting must be received by our corporate secretary no earlier than January 5, 2012 and no later than February 10, 2012. The notice must contain the information required by our bylaws, including information about the shareholder making the proposal or nomination, certain persons associated with such shareholder, and the nominee and/or the item of business.

        We will provide a copy of our bylaws to any shareholder free of charge upon written request to our corporate secretary. All submissions to, or requests from, our corporate secretary must be in writing and should be addressed to:

Hospira General Counsel and Secretary
Hospira, Inc.
275 North Field Drive
Department NLEG, Building H1
Lake Forest, Illinois 60045

General

        Shareholders are urged, regardless of the number of shares owned, to vote their shares. Most of our shareholders may vote their shares by telephone or the Internet. Shareholders should follow the instructions provided in the Notice, or if you request printed copies of the materials by mail, complete and return the proxy card in the envelope provided to you. Shareholders who vote by telephone or the Internet do not need to return a proxy card.

By order of the board of directors.

Brian J. Smith
Secretary

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Appendix A

RESTATED CERTIFICATE OF INCORPORATION

OF

HOSPIRA, INC.

        Hospira, Inc., a corporation organized and existing under the laws of the State of Delaware, hereby certifies as follows:

        The corporation was originally incorporated under the name ABC 2003 Newco, Inc. and the original Certificate of Incorporation was filed with the Secretary of State of the State of Delaware on September 16, 2003. A Certificate of Amendment to the original Certificate of Incorporation, changing the name of the corporation from ABC 2003 Newco, Inc. to Hospira, Inc., was filed with the Secretary of State of the State of Delaware on December 12, 2003.

        This Restated Certificate of Incorporation has been duly adopted in accordance with Sections 228, 242 and 245 of the General Corporation Law of the State of Delaware by the Board of Directors and the stockholders of the corporation.

        This Restated Certificate of Incorporation restates, integrates and amends the Certificate of Incorporation of this Corporation such that the text of the Certificate of Incorporation shall , effective as of 11:59 p.m. Eastern Time on April 30, 2004, read in its entirety as follows:

I.

        The name of this corporation is Hospira, Inc.

II.

        The address of the registered office of the corporation in the State of Delaware is Corporation Trust Center, 1209 Orange Street, in the City of Wilmington, County of New Castle, and the name of the registered agent of the corporation in the State of Delaware at such address is The Corporation Trust Company.

III.

        The purpose of this corporation is to engage in any lawful act or activity for which a corporation may be organized under the General Corporation Law of the State of Delaware.

IV.

        A.    This corporation is authorized to issue two classes of stock to be designated, respectively, "Common Stock" and "Preferred Stock." The total number of shares which the corporation is authorized to issue is four hundred fifty million (450,000,000) shares. Four hundred million (400,000,000) shares shall be Common Stock, each having a par value of one cent ($0.01). Fifty million (50,000,000) shares shall be Preferred Stock, each having a par value of one cent ($0.01).

        B.    The Preferred Stock may be issued from time to time in one or more series. The Board of Directors is hereby authorized, by filing a certificate (a "Preferred Stock Designation") pursuant to the Delaware General Corporation Law, to fix or alter from time to time the designation, powers, preferences and rights of the shares of each such series and the qualifications, limitations or restrictions of any wholly unissued series of Preferred Stock, and to establish from time to time the number of shares constituting any such series or any of them; and to increase or decrease the number of shares of any series subsequent to the issuance of shares of that series, but not below the number of shares of such series then outstanding. In case the number of shares of any series shall be decreased in

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accordance with the foregoing sentence, the shares constituting such decrease shall resume the status that they had prior to the adoption of the resolution originally fixing the number of shares of such series.

V.

        For the management of the business and for the conduct of the affairs of the corporation, and in further definition, limitation and regulation of the powers of the corporation, of its directors and of its stockholders or any class thereof, as the case may be, it is further provided that:

        A.    

        (1)   The management of the business and the conduct of the affairs of the corporation shall be vested in its Board of Directors. The number of directors which shall constitute the whole Board of Directors shall be fixed exclusively by one or more resolutions adopted by the Board of Directors.

        (2)   Subject to the rights of the holders of any series of Preferred Stock to elect additional directors under specified circumstances, the directors shall be divided into three classes designated as Class I, Class II and Class III, respectively. Directors shall be assigned to each class in accordance with a resolution or resolutions adopted by the Board of Directors. To the extent possible, the Board of Directors shall assign an equal number of directors to Class I, Class II and Class III. At the first annual meeting of stockholders following the adoption and filing of this Certificate of Incorporation, the term of office of the Class I directors shall expire and Class I directors shall be elected for a full term of three years. At the second annual meeting of stockholders following the adoption and filing of this Certificate of Incorporation, the term of office of the Class II directors shall expire and Class II directors shall be elected for a full term of three years. At the third annual meeting of stockholders following the adoption and filing of this Certificate of Incorporation, the term of office of the Class III directors shall expire and Class III directors shall be elected for a full term of three years. At each succeeding annual meeting of stockholders, directors shall be elected for a full term of three years to succeed the directors of the class whose terms expire at such annual meeting.

        Notwithstanding the foregoing provisions of this Article, each director shall serve until his or her successor is duly elected and qualified or until his or her death, resignation or removal. No decrease in the number of directors constituting the Board of Directors shall shorten the term of any incumbent director.

        (3)   Subject to the rights of the holders of any series of Preferred Stock, no director shall be removed without cause. Subject to any limitations imposed by law, the Board of Directors or any individual director may be removed from office at any time with cause by the affirmative vote of the holders of at least sixty-six and two-thirds percent (66 ² / 3 %) a majority of the voting power of all the then-outstanding shares of voting stock of the corporation entitled to vote at an election of directors (the "Voting Stock").

        (4)   Subject to the rights of the holders of any series of Preferred Stock, any vacancies on the Board of Directors resulting from death, resignation, disqualification, removal or other causes and any newly created directorships resulting from any increase in the number of directors, shall, unless the Board of Directors determines by resolution that any such vacancies or newly created directorships shall be filled by the stockholders, except as otherwise provided by law, be filled only by the affirmative vote of a majority of the directors then in office, even though less than a quorum of the Board of Directors, and not by the stockholders. Any director elected in accordance with the preceding sentence shall hold office for the remainder of the full term of the director for

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which the vacancy was created or occurred and until such director's successor shall have been elected and qualified.

        B.    

        (1)   Subject to paragraph (g) of Section 42 of the Bylaws, the Bylaws may be altered or amended or new Bylaws adopted by the affirmative vote of at least sixty-six and two-thirds percent (66 ² / 3 %) a majority of the voting power of all of the then-outstanding shares of the Voting Stock. The Board of Directors shall also have the power to adopt, amend, or repeal the Bylaws.

        (2)   The directors of the corporation need not be elected by written ballot unless the Bylaws so provide.

        (3)   No action shall be taken by the stockholders of the corporation except at an annual or special meeting of stockholders called in accordance with the Bylaws. No action shall be taken by the stockholders by written consent.

        (4)   Special meetings of the stockholders of the corporation may be called, for any purpose or purposes, by (i) the Chairman of the Board of Directors, (ii) the Chief Executive Officer, (iii) the President, or (iv) the Board of Directors pursuant to a resolution adopted by a majority of the total number of authorized directors (whether or not there exist any vacancies in previously authorized directorships at the time any such resolution is presented to the Board of Directors for adoption), and shall be held at such place, on such date, and at such time as the Board of Directors shall fix.

        (5)   Advance notice of stockholder nominations for the election of directors and of business to be brought by stockholders before any meeting of the stockholders of the corporation shall be given in the manner provided in the Bylaws of the corporation.

VI.

        A.    A director of the corporation shall not be personally liable to the corporation or its stockholders for monetary damages for any breach of fiduciary duty as a director, except for liability (i) for any breach of the director's duty of loyalty to the corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the Delaware General Corporation Law, or (iv) for any transaction from which the director derived an improper personal benefit. If the Delaware General Corporation Law is amended after approval by the stockholders of this Article to authorize corporate action further eliminating or limiting the personal liability of directors, then the liability of a director shall be eliminated or limited to the fullest extent permitted by the Delaware General Corporation Law, as so amended.

        B.    Any repeal or modification of this Article VI shall be prospective and shall not affect the rights under this Article VI in effect at the time of the alleged occurrence of any act or omission to act giving rise to liability or indemnification.

VII.

        A.    The corporation reserves the right to amend, alter, change or repeal any provision contained in this Certificate of Incorporation, in the manner now or hereafter prescribed by statute, except as provided in paragraph B of this Article VII, and all rights conferred upon the stockholders herein are granted subject to this reservation.

        B.    Notwithstanding any other provisions of this Certificate of Incorporation or any provision of law which might otherwise permit a lesser vote or no vote, but in addition to any affirmative vote of the holders of any particular class or series of the Voting Stock required by law, this Certificate of

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Incorporation or any Preferred Stock Designation, the affirmative vote of the holders of at least sixty-six and two-thirds percent (66 ² / 3 %) a majority of the voting power of all of the then-outstanding shares of the Voting Stock, voting together as a single class, shall be required to alter, amend or repeal Articles V, VI, and VII.

         The Form of Certificate of Designations of Series A Junior Participating Preferred Stock which the corporation filed with the Secretary of State of the State of Delaware on April 30, 2004, as set forth on Exhibit A attached hereto, is incorporated into this Restated Certificate of Incorporation.

        In Witness Whereof, this Restated Certificate of Incorporation has been executed by an authorized officer of the corporation on this [      ] 30 ^th day of [      ] April , 2004 2011 .

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QuickLinks

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS To Be Held on May 10, 2011
OWNERSHIP OF OUR STOCK
PROPOSAL 1 ELECTION OF DIRECTORS
OUR BOARD OF DIRECTORS
CORPORATE GOVERNANCE
PROPOSALS 2 - 4 AMENDMENTS TO RESTATED CERTIFICATE OF INCORPORATION
PROPOSAL 2 AMENDMENT TO RESTATED CERTIFICATE OF INCORPORATION TO ELIMINATE THE SUPER-MAJORITY VOTING REQUIREMENT FOR REMOVAL OF DIRECTORS FOR CAUSE
PROPOSAL 3 AMENDMENT TO RESTATED CERTIFICATE OF INCORPORATION TO ELIMINATE THE SUPER-MAJORITY VOTING REQUIREMENT FOR BYLAW ADOPTION, AMENDMENT OR REPEAL
PROPOSAL 4 AMENDMENT TO RESTATED CERTIFICATE OF INCORPORATION TO ELIMINATE THE SUPER-MAJORITY VOTING REQUIREMENT FOR ALTERATION, AMENDMENT OR REPEAL OF CERTAIN CERTIFICATE PROVISIONS
DIRECTOR COMPENSATION
2010 COMPENSATION DISCUSSION AND ANALYSIS
Hospira Performance Incentive Plan (PIP) Measures
EXECUTIVE COMPENSATION Summary Compensation Table
Grants of Plan-Based Awards During 2010
Outstanding Equity Awards at December 31, 2010
Option Exercises and Stock Vested During 2010
2010 Pension Benefits
2010 Non-Qualified Deferred Compensation
PROPOSAL 5 ADVISORY VOTE ON NAMED OFFICER COMPENSATION
PROPOSAL 6 ADVISORY VOTE ON FREQUENCY OF SAY ON PAY VOTE
PROPOSAL 7 RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS
ACCOUNTING MATTERS
REPORT OF THE AUDIT COMMITTEE
OTHER INFORMATION
OTHER BUSINESS
POLICY REGARDING APPROVAL OF RELATED PERSON TRANSACTIONS
OTHER SHAREHOLDER INFORMATION

Appendix A

RESTATED CERTIFICATE OF INCORPORATION OF HOSPIRA, INC.