Securities Law & Instruments

Headnote

MRRS - Relief from the registration requirementsand prospectus requirements for issuance of securities by foreignissuer to Canadian employees and former employees pursuant toequity investment plan - Relief from issuer bid requirementsfor acquisition by foreign issuer of securities in connectionwith exercise mechanism under equity incentive plan - Issuerwith de minimis Canadian presence.

Applicable Ontario Statutory Provisions

Securities Act, R.S.O. 1990, c. S.5, as am.,ss. 25(1), 35(1)12(iii), 35(1)(17), 53(1), 72(1)(f)(iii), 72(1)(k),74(1), 93(3)(d) and 104(2)(c).

Applicable Ontario Rules

Rule 45-503 - Trades to Employees, Executivesand Consultants - ss. 2.2, 2.4, 3.3 and 3.5.

Applicable Instrument

Multilateral Instrument 45-501 - Resale of Securities- s. 2.14(1).

IN THE MATTER OF
THE SECURITIES LEGISLATION OF
NOVA SCOTIA, BRITISH COLUMBIA,
ALBERTA, SASKATCHEWAN,
MANITOBA AND ONTARIO

AND

IN THE MATTER OF
THE MUTUAL RELIANCE REVIEW SYSTEM
FOR EXEMPTIVE RELIEF APPLICATIONS

AND

IN THE MATTER OF
PFIZER INC.

MRRS DECISION DOCUMENT

WHEREAS the local securities regulatoryauthority or regulator (the "Decision Maker") in eachof Nova Scotia, British Columbia, Alberta, Saskatchewan, Manitobaand Ontario (the "Jurisdictions") has received anapplication from Pfizer Inc. ("Pfizer" or the "Company")for a decision pursuant to the securities legislation of theJurisdictions (the "Legislation") that (i) the requirementscontained in the Legislation to be registered to trade in asecurity (the "Registration Requirements") and tofile and obtain a receipt for a preliminary prospectus and aprospectus (the "Prospectus Requirements") (collectively,the "Registration and Prospectus Requirements") shallnot apply to certain trades in securities of Pfizer made inconnection with the Pfizer Inc. 2001 Stock and Incentive Plan(the "Plan"); (ii) the Registration Requirements shallnot apply to first trades of shares of common stock of Pfizer("Shares") acquired under the Plan made through theAgent (defined below) on an exchange or market outside of Canada;and (iii) the requirements contained in the Legislation relatingto the delivery of an offer and issuer bid circular and anynotices of change or variation thereto, minimum deposit periodsand withdrawal rights, take-up and payment for securities tenderedto an issuer bid, disclosure, restrictions upon purchases ofsecurities, bid financing, identical consideration, collateralbenefits, and the requirement to file a reporting form withinten days of an exempt issuer bid and pay a related fee (the"Issuer Bid Requirements") shall not apply to certainacquisitions by the Company of Shares pursuant to the Plan ineach of the Jurisdictions;

AND WHEREAS pursuant to the Mutual RelianceReview System for Exemptive Relief Applications (the "System"),the Nova Scotia Securities Commission is the principal regulatorfor this application;

AND WHEREAS Pfizer has represented tothe Decision Makers as follows:

1. Pfizer is presently a corporation incorporatedunder the laws of the State of Delaware. Pfizer's executiveoffices are located in New York, New York.

2. Pfizer is registered with the Securitiesand Exchange Commission (the "SEC") in the UnitedStates under the United States Securities Exchange Act of 1934(the "Exchange Act") and is not exempt from the reportingrequirements of the Exchange Act pursuant to Rule 12g3-2 madethereunder.

3. The authorized share capital of Pfizer consistsof 9 billon Shares of par value US$.05 per Share and 12 millionshares of preferred stock ("Preferred Stock"), ofwhich as of March 6, 2002, there were 6,265,230,721 Shares and0 shares of Preferred Stock issued and outstanding.

4. The Shares are traded in the United Stateson the New York Stock Exchange (the "NYSE") and inEurope on the London, Euronext and Swiss stock exchanges (collectively,the "Exchanges").

5. Pfizer is not a reporting issuer or the equivalentin any jurisdiction in Canada and has no present intention ofbecoming a reporting issuer or the equivalent in any jurisdictionin Canada. The majority of Pfizer's directors reside outsideof Canada.

6. The purpose of the Plan is to provide a materialincentive to employees of Pfizer and its affiliates ("Employees")by making available to them the benefits of a larger Share ownershipin the Company through stock options, stock awards or otherwise.

7. Subject to adjustment as described in thePlan, the maximum number of Shares that may be issued underthe Plan is 250 million.

8. Shares offered under the Plan are registeredwith the SEC under the Securities Act of 1933, as amended, ofthe United States. All necessary securities filings have beenmade in the United States in order to offer the Plan to theEmployees. The Plan was approved by the shareholders of Pfizeron April 26, 2001.

9. Under the Plan, options over Shares ("Options")and stock awards ("Stock Awards") consisting of Sharesmay be issued to those Employees selected by Pfizer's executivecompensation committee (the "Committee").

10. As of February 28, 2002, there were 5 Employeesin Nova Scotia, 8 Employees in British Columbia, 12 Employeesin Alberta, 2 Employees in Saskatchewan, 4 Employees in Manitobaand 137 Employees in Ontario eligible to participate in thePlan.

11. Pfizer uses the services of agents for thePlan (each an "Agent"). Merrill Lynch & Co., Inc.and Merrill Lynch Pierce Fenner & Smith, Inc. (together"Merrill Lynch") have been appointed as the initialAgents for the Plan. Merrill Lynch through its affiliate MerrillLynch Pierce Fenner & Smith, Inc. is, and any Agent appointedin addition to or in replacement of Merrill Lynch is expectedto be a corporation registered under applicable U.S. securitiesor banking legislation to trade in securities and has been,or will be, authorized by Pfizer to provide services as an agentunder the Plan. Merrill Lynch and any replacement or additionalAgent, is not and is not expected to be registered in any ofthe Jurisdictions to effect retail trades.

12. The role of the Agent may include: (a) assistingwith the general administration of the Plan and providing variousrecord keeping services; (b) holding Stock Awards on behalfof participants; (c) facilitating Option exercises (includingcashless exercises) under the Plan; (d) maintaining limitedpurpose broker accounts on behalf of participants under thePlan; (e) holding Shares acquired under the Plan on behalf ofparticipants in limited purpose broker accounts; (f) facilitatingthe cancellation and surrender of Stock Awards as permittedunder the Plan; (g) facilitating the payment of withholdingtaxes; and (h) facilitating the resale of Shares acquired underthe Plan through the NYSE or such other stock exchange or marketupon which the Shares may be listed.

13. Employees are not induced to participatein the Plan or to exercise their Options by expectation of employmentor continued employment with Pfizer or its affiliates.
14. Options or Stock Awards granted under the Plan are not transferableother than by will or the laws of intestacy and shall be exercisable,during the optionee's or grantee's lifetime, only by the optioneeor grantee. Notwithstanding the foregoing, the Committee maygrant Options which may be transferred by the optionee, solelyas gifts during the optionee's lifetime, to any member of theoptionee's immediate family or to a trust established for theexclusive benefit of one or more members of the optionee's immediatefamily ("Permitted Transferee"). For purposes of thePlan, "immediate family" means any spouse, child,stepchild or grandchild of an optionee.

15. The Committee shall establish proceduresgoverning the exercise of Options. Generally, in order to exercisean Option, the holder of an Option must submit to Pfizer orthe Agent a written notice of exercise identifying the Optionand the number of Shares being exercised, and deliver full paymentfor the Shares underlying the Options to Pfizer or the Agent.The Option exercise price may be paid in cash or where permittedby the Committee by way of cashless exercise or by such othermethod permitted by the Committee from time to time.

16. Under the Plan, the Committee may grantStock Awards to any Employee. Each Stock Award shall providethat the Shares subject to such Stock Award may not be transferredor otherwise disposed of by the participant prior to the expirationof the period or periods specified therein, which, generally,shall not occur earlier than one (1) year following the dateof the grant of such Stock Award.

17. Pfizer shall have the right to reacquireShares underlying Stock Awards upon the termination of an Employee'semployment with Pfizer or its affiliates while such restrictionis in effect, such reacquisition to be upon the terms and conditionsprovided in the agreement relating to the Stock Award ("RepurchaseRights"). Generally, if an Employee's employment terminates,other than in the case of death, disability or retirement, priorto the end of the restriction period, the Shares underlyingthe Stock Award will automatically revert to Pfizer withoutany payment to the Employee.

18. Pfizer shall have the right to deduct applicabletaxes from any Option or Stock Award payment and to withholdat the time of delivery or vesting of cash or Shares under thePlan, an appropriate amount of cash or Shares or a combinationthereof for a payment of taxes required by law or to take suchother action as may be necessary in the opinion of Pfizer orthe Committee to satisfy all obligations for the withholdingof such taxes. If Shares are used to satisfy the withholdingof tax, the Shares will be valued based on the Shares' fairmarket value (determined in accordance with the rules of thePlan) when the tax withholding is required to be made.

19. Generally, following the termination ofa participant's relationship with Pfizer or an affiliate ofPfizer for reasons of death, disability, retirement or any otherreason, a former participant in the Plan ("Former Participant"),and on the death of a participant, where the Option or StockAward has been transferred by will or pursuant to the laws ofintestacy or otherwise, or such Option or Stock Award is transferredas permitted by the Committee to a Permitted Transferee, theFormer Participant or Permitted Transferee may continue to haverights in respect of the Plan ("Post-Termination Rights").Post-Termination Rights may include, among other things, theright to exercise an Option or receive Shares underlying a StockAward for a period determined in accordance with the Plan followingtermination and the right to sell Shares acquired under thePlan through an Agent. Post-Termination Rights are only availableif the right was earned by the Employee while the Employee stillhad a relationship with Pfizer or its affiliates.

20. A prospectus prepared in accordance withU.S. securities laws describing the terms and conditions ofthe Plan will be delivered to each Employee who is granted anOption or Stock Award under the Plan. The annual report, proxymaterials and other materials which Pfizer is required to filewith the SEC will be provided or made available to Canadianresident participants in the Plan at the same time and in thesame manner as the documents are provided or made availableto U.S. resident participants in the Plan.

21. Canadian resident shareholders of Pfizerdo not own, directly or indirectly, more than 10% of the issuedand outstanding Shares and do not represent in number more than10% of the total number of shareholders of Pfizer.

22. Employees, Former Participants or PermittedTransferees may exercise Options and sell Shares acquired underthe Plan through an Agent.

23. Because there is no market for the Sharesin Canada and none is expected to develop, any resale of theShares acquired under the Plan will be effected through thefacilities of, and in accordance with the rules and laws applicableto, a stock exchange or organized market outside of Canada onwhich the Shares may be listed or quoted for trading.

24. The Legislation of certain of the Jurisdictionsdoes not contain exemptions from the Registration and ProspectusRequirements for Option exercises by Employees, Former Participantsor Permitted Transferees through the Agent where the Agent isnot a registrant.

25. Where the Agent sells Shares on behalf ofEmployees, Former Participants or Permitted Transferees, theEmployees, Former Participants, Permitted Transferees or theAgent may not be able to rely on the exemptions from the RegistrationRequirements contained in the Legislation.

26. The acquisition by Pfizer of Shares pursuantto the Repurchase Rights or for the withholding of tax may bean issuer bid as defined in the Legislation. The exemptionsin the Legislation from the Issuer Bid Requirements are notavailable for these acquisitions by the Company of its Sharesfrom Employees, Former Participants or Permitted Transfereesin accordance with the terms of the Plan, since these acquisitionsmay occur at a price that is not calculated in accordance withthe "market price," as that term is defined in theLegislation and may be made from persons other than employeesor former employees.

AND WHEREAS pursuant to the System,this MRRS Decision Document evidences the decision of each DecisionMaker (collectively, the "Decision");

AND WHEREAS each of the Decision Makersis satisfied that the test contained in the Legislation thatprovides the Decision Maker with the jurisdiction to make theDecision has been met;

THE DECISION of the Decision Makerspursuant to the Legislation is that:

(a) the Registration and Prospectus Requirementsshall not apply to any trade or distribution of Options, Sharesor Stock Awards made in connection with the Plan, includingtrades or distributions involving Pfizer or its affiliates,the Agent, Employees, Former Participants or Permitted Transferees,provided that the first trade in Shares acquired under the Planpursuant to this Decision, including Shares underlying a StockAward, shall be deemed a distribution or primary distributionto the public under the Legislation unless the conditions insubsection 2.14(1) of Multilateral Instrument 45-102 Resaleof Securities are satisfied;

(b) the first trade by Employees, Former Participantsor Permitted Transferees in Shares acquired pursuant to thePlan, including Shares underlying a Stock Award, effected throughan Agent shall not be subject to the Registration Requirementsprovided that the conditions in subsection 2.14(1) of MultilateralInstrument 45-102 Resale of Securities are satisfied; and

(c) the Issuer Bid Requirements shall not applyto the acquisition by Pfizer of Shares, including Shares underlyinga Stock Award, from Employees, Former Participants and PermittedTransferees provided the acquisitions are made in accordancewith the terms of the Plan.

May 10, 2002.

"H. Leslie O'Brien"