Exhibit 10(6)

PFIZER INC NONFUNDED DEFERRED COMPENSATION AND

SUPPLEMENTAL SAVINGS PLAN

 

Amended and Restated as of January 1, 2008

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SECTION 1. CONTINUATION AND PURPOSE OF THE PLAN.

1.1      Continuation. There is hereby continued for the benefit of Members an
unfunded plan of deferred compensation known as the “Pfizer Inc Nonfunded
Deferred Compensation and Supplemental Savings Plan.”

1.2      Purpose. The purpose of this Plan is to provide a means by which an
Eligible Employee may, in certain circumstances, elect to defer receipt of a
portion of his “Regular Earnings,” and such other deferrals as determined by the
Company in accordance with Section 4.2.

1.3      Description of the Plan. The Plan became effective July 1, 1983, was
amended and restated effective February 1, 2002, and was again amended and
restated effective January 1, 2008, except as otherwise provided herein, to
reflect: (i) the merger of Pharmacia Savings Plus Plan into the Plan, and
(ii) the enactment of Code Section 409A and corresponding regulations, and
(iii) certain other administrative design changes. The provisions of this
restated and amended Plan shall govern Accounts on and after January 1, 2008
except with respect to Grandfathered Amounts. Except as specifically otherwise
provided herein, the Grandfathered Amounts for Members who were Participants in
the Pharmacia Savings Plus Plan on December 31, 2004 shall be governed by the
provisions of the Pharmacia Savings Plus Plan as amended and restated effective
July 1, 2002; the Grandfathered Amounts with respect to Members in this Plan on
December 31, 2004, shall be governed by the provisions of this Plan as amended
and restated effective February 1, 2002; and, for the period from January 1,
2005 through December 31, 2007 the provisions of this amended and restated Plan
shall govern, except to the extent the provisions of this Plan are inconsistent
with the administrative practices, policies, election forms and participant
communications designed for reasonable good faith compliance with Code
Section 409A during that interim period, which are incorporated herein by
reference. For purposes of the Employee Retirement Income Security Act of 1974
(“ERISA”), as amended, the Plan shall be treated as two separate, unfunded
plans. One plan shall be an “excess benefit plan” within the meaning of
Section 3(36) of ERISA, and shall be comprised of accruals under the Plan that
are made solely because of the applicable limitations under Section 415 of the
Code, plus earnings thereon. All other accruals under the Plan, plus earnings
thereon, shall be treated as made under a separate “top-hat” plan maintained by
the Company primarily for the purpose of providing deferred compensation to a
select group of management or highly compensated employees, within the meanings
of Sections 201(a)(2), 301(a)(3) and 401(a)(1) of ERISA. The Company shall be
able to separately account for excess benefit plan accruals and earnings
thereon, top-hat plan accruals and earnings thereon, and Special Accruals and
earnings thereon.

 

SECTION 2. DEFINITIONS.

The following words and phrases as used in this Plan have the following means:

2.1      Account. The term “Account” shall mean a Member’s individual
account(s), as described in Section 5.1 of the Plan.

 

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2.2      Annual Enrollment. The term “Annual Enrollment” shall mean the time
period, as determined by the Committee in its sole and absolute discretion,
prior to the beginning of a Plan Year in which Eligible Employees can elect to
enroll or change their deferral elections under the Plan with respect to Regular
Earnings expected to be earned in the next succeeding Plan Year. Notwithstanding
the foregoing, the Annual Enrollment period for any Plan Year shall not extend
beyond December 31st of the Plan Year immediately preceding the Plan Year that
the election is with respect to.

2.3      Beneficiary. The term “Beneficiary” means the beneficiary on file for
this Plan, or if none is on file, the person or entity who is the “Beneficiary”
under the Qualified Plan, and with respect to Grandfathered Amounts under the
Pharmacia Savings Plus Plan, the person or entity who is the “beneficiary” under
the rules of that plan.

2.4      Board of Directors. The term “Board of Directors” means the Board of
Directors of the Company.

2.5      Code. The term “Code” means the Internal Revenue Service Code of 1986,
as amended.

2.6      Committee. The term “Committee” means the Committee, as described in
the Qualified Plan, or any other person or entity that the Committee has
authorized to act on its behalf under the Plan.

2.7      Company. The term “Company” means Pfizer Inc, a Delaware corporation,
and any successor corporation.

2.8      Controlled Group. The term “Controlled Group” means the Company and any
other entity with which the Company would be considered a single employer under
Code section 414 (b) or (c), provided that, in applying Code sections
1563(a)(1), (2) and (3) and for purposes of determining a controlled group of
corporations under section 414(b), “50 percent” shall be used instead of “80
percent”, and in applying Treas. Reg. section 1.414(c)-2 for purposes of
determining trades or businesses that are under common control for purposes of
Code section 414(c), “50 percent” shall be used instead of “80 percent” each
place it appears in Treas. Reg. section 1.414(c)-2. In addition, solely for
purposes of determining a Separation from Service, the foregoing sentence shall
be applied by using 30 percent instead of 50 percent.

2.9      Disability. The term “Disability” means a disability where the Employee
is unable to engage in any substantial gainful activity by reason of any
medically determinable physical or mental impairment that (i) can be expected to
result in death or can be expected to last for a continuous period of not less
than twelve (12) months or is receiving income replacement benefits for a period
of not less than three (3) months under an accident and health plan covering
employees of the Company by reason of any medically determinable physical or
mental impairment that can be expected to result in death or can be expected to
last for a continuous period of not less than 12 months, and (ii) also satisfies
the requirements of a “Disability” as defined under the Qualified Plan.

 

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2.10    Eligible Employee. The term “Eligible Employee” means any “Member” as
defined under the Qualified Plan who:

(i) (a) in the year he or she first becomes eligible to participate in the Plan
(as determined in accordance with consistent rules established by the Committee
in its sole and absolute discretion and in accordance with Section 409A) in any
month of that year: (1) is projected to receive Compensation (as defined in the
Qualified Plan) for that Plan Year in excess of the limitation of
Section 401(a)(17) of the Code or whose account under the Qualified Plan is
projected to be credited during that PlanYear with “annual additions,” as
defined in Section 415(c)(2) of the Code equal to the maximum permitted under
Section 415(c)(1)(A) of the Code; and (2) who is an employee of an Employer who:
(A) has reached the point in time when he or she has been projected to have
Compensation (as defined in the Qualified Plan) in excess of the Limitation
under Section 401(a)(17) of the Code, or (B) has reached the point in time when
he or she has Compensation (as defined in the Qualified Plan) equal to the
amount of Compensation at which point he or she was projected to reach the
Section 415(c)(2) Limitation on annual additions under the Qualified Plan; or
(b) in any subsequent year an Eligible Employee who in any prior year was an
Eligible Employee under the Plan and who the Company determines in an Annual
Enrollment (based on elections in effect and salary projections on the last
business day of the calendar year of the Annual Enrollment (or as otherwise
determined based on consistent rules established by the Committee in its sole
and absolute discretion and in accordance with Section 409A) is expected to have
annualized Compensation for the subsequent Plan Year in excess of the limitation
of Section 401(a)(17) of the Code, or is expected in the next succeeding Plan
Year to have his or her Account under the Qualified Plan credited with annual
additions in excess of the maximum amount permitted under Section 415(c)(1)(A)
of the Code and who is an Employee and has an election to defer Excess Regular
Earnings under the Plan in effect at the time he or she had been projected to
reach the limitation under Section 401(a)(17) or Section 415(c)(1)(A) of the
Code; or,

(ii) any other person who is a member of a select group of management or highly
compensated employees of the Company and who is designated by the Committee or
an authorized officer of the Company (or his or her delegate) as an Eligible
Employee to receive accruals under the Plan in accordance with Article 4.

2.11    ELT. The term “ELT” means the Chief Executive Officer of the Company and
the team composed of his or her direct reports or any of their properly
authorized delegates.

2.12    Employer. The term “Employer” means the Company and any other member of
the Controlled Group which is also an “Associate Company” under the Qualified
Plan.

2.13    Employer Accrual. The term “Employer Accrual” means the amounts
described in Section 4.1.

2.14    Excess Regular Earnings. The term “Excess Regular Earnings” means:

 

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(i) with respect to the first year that an Eligible Employee is eligible to
participate in the Plan (as determined in accordance with consistent rules
established by the Committee in its sole and absolute discretion and in
accordance with Section 409A), (a) the portion of an Eligible Employee’s Regular
Earnings earned after the point in time when the Eligible Employee was projected
to exceed the Limitation on compensation taken into account under
Section 401(a)(17) of the Code, (b) all Regular Earnings that the Eligible
Employee receives after the point in time that the Eligible Employee was
projected to exceed the Limitation on contributions to defined contribution
plans under Section 415(c)(1)(A) of the Code, to the extent not included in
(a) above, (c) any bonus elected to be deferred under the Pfizer Inc Deferred
Compensation Plan, in accordance with the rules under that Plan and
Section 409A, or (d) any other compensation determined by the Committee to be
Excess Regular Earnings for purposes of this Plan; and,

(ii) for an Eligible Employee who was an Eligible Employee in the immediately
preceding prior Plan Year or who is not in his or her first year of eligibility
to participate in the Plan, (a) the portion of Regular Earnings earned during a
Plan Year that based on the Eligible Employee’s Qualified Plan elections and
Compensation (as defined in the Qualified Plan) in effect during the last
business day of the calendar year of the Annual Enrollment (or as otherwise
determined based on consistent rules established by the Committee in its sole
and absolute discretion and in accordance with Section 409A) were projected to
exceed the Limitation on compensation taken into account under
Section 401(a)(17) of the Code, (b) all Regular Earnings that the Member has
received after the point in time that the Member was projected to become subject
to the Limitation on contributions to defined contribution plans under
Section 415(c)(1)(A) of the Code, to the extent not included in (a) above,
(c) any bonus eligible to be deferred under the Pfizer Inc Deferred Compensation
Plan, in accordance with the rules under that Plan and Section 409A, or (d) any
other compensation determined by the Committee to be Excess Regular Earnings for
purposes of this Plan.

2.15    Excess Regular Earnings Deferrals. The term “Excess Regular Earnings
Deferrals” means the portion of a Member’s Excess Regular Earnings that the
Member elects to defer under the terms of the Plan.

2.16    Grandfathered Amounts. The term “Grandfathered Amounts” shall mean the
portion of the Member’s Account that reflects the amount that was earned and
vested (within the meaning of Section 409A of the Code and regulations
thereunder) under the Plan prior to 2005 (and earnings thereon), or with respect
to Accounts transferred from the Pharmacia Savings Plus Plan, the portion of the
Member’s Account that reflects the amount that was earned and vested (within the
meaning of Section 409A of the Code and regulations thereunder) under the
Pharmacia Savings Plus Plan prior to 2005 (and earnings thereon).

2.17    Key Employee. The term “Key Employee” means an Employee treated as a
“specified employee” as of his or her Separation from Service under
Section 409A(a)(2)(B)(i) of the Code, i.e., a key employee (as defined in
Section 416(i) of the

 

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Code without regard to paragraph (5) thereof) of the Company or its affiliates.
Key Employees shall be determined in accordance with Section 409A using a
January 1 identification date. A listing of Key Employees as of an
identification date shall be effective for the 12-month period beginning on the
April 1 following the identification date and ending on March 31 of the next
calendar year.

2.18    Limitation(s). The term “Limitation(s)” means the limitation on
contributions to defined contribution plans under Section 415(c)(1)(A) of the
Code, and on compensation taken into account under Section 401(a)(17) of the
Code, and with respect to Eligible Employees who are a select group of
management or highly compensated employees, within the meanings of Sections
201(a)(2) and 401(a)(1) of ERISA and are eligible to defer their bonuses under
the Pfizer Deferred Compensation Plan, such other Code or Qualified Plan limits
that prevent the deferred bonuses as being recognized as Regular Earnings under
the Qualified Plan.

2.19    Member. The term Member means an Eligible Employee who has Excess
Regular Earnings Deferrals made to the Plan or is otherwise credited with an
Employer Accrual.

2.20    Payment Option. The term “Payment Option” means the following forms of
payment under which an Eligible Employee may elect to receive amounts credited
to his Account upon his Separation from Service with the Controlled Group:
(i) single sum payable in the January following the Member’s Separation from
Service with the Controlled Group, or (ii) substantially equal annual
installment payments over a period of two (2) to twenty (20) years, with the
first installment to be paid the January following the Member’s Separation from
Service. Where payment of the Account is made in installment payments, the first
installment shall be a fraction of the value of the Member’s Account as of the
applicable valuation date, the numerator of which is one (1) and the denominator
of which is the total number of installments remaining to be paid at that time.
Each subsequent installment shall be calculated in the same manner, except that
the denominator shall be reduced by the number of installments that have been
paid previously. Unless otherwise provided under this Plan, including in the
event of death, Disability and or a payment due to Unforeseeable Emergency, if a
payment election is not timely made in accordance with the requirements of
Section 409A the Member shall be deemed to have elected to receive payment of
his or her Account in a single lump sum payment to be paid in the January
following the Member’s Separation from Service. Notwithstanding anything in this
Section 2.20 or the Pharmacia Savings Plus Plan to the contrary, effective
January 1, 2007, the Account of any Member who has Separated from Service and is
no longer living at the time his benefits commence shall be paid in a single
lump sum the January following the Member’s death, provided, however, that
payment of Grandfathered Amounts to Beneficiaries under the Pharmacia Savings
Plus Plan shall be governed under the terms of that plan.

 

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2.21    Pfizer Deferred Compensation Plan. The term “Pfizer Deferred
Compensation Plan” shall mean the Pfizer Inc Deferred Compensation Plan, a bonus
deferral program, or its successor.

2.22    Pfizer Match Fund. The term “Pfizer Match Fund” shall mean the
investment fund known as the Pfizer Match Fund under the Qualified Plan, or its
successor.

2.23    Pharmacia Savings Plus Plan. The term Pharmacia Savings Plus Plan means
the Pharmacia Savings Plus + Plan, effective July 1, 1999, as subsequently
amended and restated effective July 1, 2002 which was merged into this Plan
effective January 1, 2008.

2.24    Plan. The term “Plan” means this “Pfizer Inc Nonfunded Deferred
Compensation and Supplemental Savings Plan,” as set forth herein and as amended
from time to time.

2.25    Plan Year. The term “Plan Year” means the calendar year.

2.26    Prior Plan. The term “Prior Plan” means: (i) with respect to
Grandfathered Amounts attributable to the Plan, the Plan as in effect on
October 3, 2004, which has not been materially modified (attached hereto as
Exhibit A), and (ii) with respect to Grandfathered Amounts attributable to the
Pharmacia Savings Plus Plan, the Pharmacia Savings Plus Plan as in effect on
October 3, 2004, which has not been materially modified (attached hereto as
Exhibit B).

2.27    Qualified Plan. The term “Qualified Plan” means the Pfizer Savings Plan,
as amended from time to time.

2.28    Regular Earnings. The term “Regular Earnings” shall have the meaning
given such term under the Qualified Plan. For Eligible Employees who are
eligible to defer their bonus under the Pfizer Deferred Compensation Plan, the
term “Regular Earnings” shall also include such deferred amounts as determined
by the Committee.

2.29    Section 409A. The term “Section 409A” shall mean Section 409A of the
Code and the regulations and other guidance issued thereunder by the U.S.
Treasury or Internal Revenue Service.

2.30    Separation from Service. The term “Separation from Service” or
“Separates from Service” means a “separation from service” within the meaning of
Section 409A.

2.31    Special Accrual. The term “Special Accrual” means a special lump sum
accrual amount made pursuant to a Written Agreement as provided for in
Section 4.2 of the Plan.

 

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2.32    Unforeseeable Emergency. The term “Unforeseeable Emergency” means a
severe financial hardship to the Member resulting from an illness or accident of
the Member, the Member’s spouse, or dependent (as defined in Section 152(a) of
the Code); the Member’s loss of property due to casualty; or other similar
extraordinary and unforeseeable circumstances arising as a result of events
beyond the Member’s control, within the meaning of Section 409A. Withdrawals for
Unforseeable Emergencies are only available to Members who were Participants in,
and with respect to the portion of a Member’s Account that was credited under,
the Pharmacia Savings Plus Plan (as adjusted for earnings and losses) on
December 31, 2007 and other than Grandfathered Amounts that are governed under
the distribution rules of that Prior Plan.

2.33    Written Agreement. The term “Written Agreement” shall have the meaning
ascribed to it in Section 4.2.

 

 

SECTION 3. PARTICIPATION.

3.1      Designation of Eligible Employees. The Committee in its sole and
absolute discretion will designate as Eligible Employees those employees who
satisfy the terms of Section 2.10 and are eligible to participate in the Plan.

3.2      Election to Make Excess Regular Earnings Deferrals.

(a)       Initial Election. An Eligible Employee may elect to begin making
Excess Regular Earnings Deferrals by filing an election with the Committee or
its authorized designee in accordance with this Section 3.2 and the requirements
of Section 409A and any rules established by the Committee. Deferral elections
for Excess Regular Earnings Deferrals in the year in which an employee first
becomes eligible to participate in the Plan (as determined in accordance with
consistent rules established by the Committee in its sole and absolute
discretion and in accordance with Section 409A) may be made within 30 days of
his or her first becoming eligible to participate in the Plan or another account
balance plan required to be aggregated with this Plan under Section 409A,
provided that such elections shall apply only with respect to Regular Earnings
received subsequent to the date of receipt of election by the Committee and with
such paycheck as determined administratively practicable by the Committee. If no
such election is made, an Eligible Employee may not make Excess Regular Earnings
Deferrals to the Plan in the year he or she first becomes eligible to
participate in the Plan (as determined in accordance with consistent rules
established by the Committee in its sole and absolute discretion and in
accordance with Section 409A) but may make Excess Regular Earnings Deferrals in
subsequent Plan Years to the extent he/or she submits a proper and timely
election to do so under the Plan during a subsequent Annual Enrollment and
consistent with rules established by the Committee in its sole and absolute
discretion and in accordance with Section 409A.

 

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(b)       Subsequent Elections. For Plan Years after the first Plan Year in
which the Eligible Employee participates in the Plan, an Eligible Employee may
make Excess Regular Earnings Deferrals to the Plan to the extent he/or she
submits a proper and timely election to do so under the Plan during an Annual
Enrollment ending prior to such Plan Year (or at such other time as the
Committee shall permit for Employees who are treated (and eligible to be
treated) as in their first year of eligibility under uniform rules established
by the Committee in accordance with Section 409A).

3.3      Amendment or Suspension of Election. Except as otherwise provided in
this Section 3.3, once made, a Member may not change his or her existing Excess
Regular Earnings Deferrals election under this Plan during the Plan Year until
the next Annual Enrollment. Notwithstanding the foregoing, if a Member receives
a hardship withdrawal under the Qualified Plan, incurs a Disability or obtains a
distribution under Section 6.4 on account of an Unforeseeable Emergency during a
year, his or her Excess Regular Earnings Deferral election shall be cancelled.

3.4      Amount of Elections. Each election for Excess Regular Earnings
Deferrals to the Plan filed by an Eligible Employee must specify the amount of
Excess Regular Earnings Deferrals in a whole percentage from 1% to 20% of the
Member’s Excess Regular Earnings unless the Committee establishes a lesser
percentage for the Plan Year.

 

 

SECTION 4. EMPLOYER ACCRUALS.

4.1      General Rule. An Employer Accrual will be credited to a Member’s
Account with respect to the eligible portion of Excess Regular Earnings
Deferrals of such Member at the Member’s applicable percentage rate of “Matching
Contributions” with respect to “After-Tax Contributions,” “Before-Tax
Contributions,” and Roth 401(k) Contributions under the Qualified Plan. The
Employer Accrual shall be credited as soon as practicable following the payroll
period for which the Excess Regular Earnings Deferrals are made. An Employer
Accrual (based on the Member’s matching contribution formula under the Qualified
Plan) also will be credited to the Account of a Member who elects to defer a
percent of his or her bonus that otherwise would have been deferred under the
Pfizer Deferred Compensation Plan, subject to the requirements of Section 409A.
Such Employer Accrual shall be credited as soon as practical following the
payroll period in which the bonus is deferred. In no event shall a Special
Accrual be subject to Employer Accruals under this Section 4.1. Notwithstanding
anything in this Section 4.1 to the contrary, for purposes of any distribution
or withdrawal under the Plan, except as otherwise provided under Section 5.4,
the amounts distributed or withdrawn shall be valued as of the last business day
of the calendar quarter preceding the calendar quarter of the distribution or
withdrawal.

 

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4.2      Special Accrual for Recruitment Purposes Effective September 1, 2007,
the Company may, in its sole and absolute discretion, credit an amount to the
Account of an Eligible Employee, provided that a member of the ELT approves such
credit (but such ELT member cannot approve such credit for him or herself).

(a)       This credit to the Eligible Employee’s Account shall be made at the
time, and subject to any restrictions, specified in the written agreement or
agreement that is evidenced in a writing from the ELT member (the “Written
Agreement”), with the Eligible Employee. At such time, the Eligible Employee
shall become a Member if he is not already a Member. Such Written Agreement
cannot include any election on the part of the Eligible Employee unless such
election satisfies the requirements of Code section 409A and the election
provisions have been approved by the ELT member and the Committee.

(b)       Such credit shall be invested as specified in the Written Agreement,
or, if no such investment election is specified, as provided in accordance with
Section 5.4 of the Plan except that no portion of this credit shall be
considered Employer Accruals that are subject to a deemed investment in
the Pfizer Match Fund. No portion of this credit is eligible for an Employer
Accrual under the Plan.

(c)       Such credit, as adjusted for any investment gains or losses, shall be
paid in accordance with Sections 5.2, 6.1 and 6.2 of the Plan or as otherwise
determined under the Written Agreement; provided that nothing herein (other than
if the Written Agreement specifies to the contrary) shall be interpreted so not
as to afford the opportunity for the Member to change his time and form of
payment election in accordance with Section 409A if such right has been so
provided by the ELT member and approved by the Committee.

 

 

SECTION 5. INDIVIDUAL ACCOUNT.

5.1      Creation of Accounts. The Company will maintain an Account under the
Plan in the name of each Member. Each Member’s Account will be credited with the
amount of the Member’s Excess Regular Earnings Deferrals, Employer Accruals,
Special Accruals and will be adjusted for earnings and losses thereon.

5.2      Payment Option Election. Except with respect to a Special Accrual and
to the extent otherwise provided: (a) in a Written Agreement or (b) in this
Section 5.2, at the time a Member is first eligible to elect to make Excess
Regular Earnings Deferrals under the Plan, the Member shall elect the particular
Payment Option that is to apply to amounts credited to the Member’s Account
(other than Grandfathered Amounts). For a Payment Option election to be
effective, it must be made (i) within 30 days of the date the Employee is first
eligible to participate in the Plan (as determined in accordance with consistent
rules established by the Committee in its sole and absolute discretion and in

 

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accordance with Section 409A). Notwithstanding the foregoing: (1) any Member who
has a Special Accrual under the Plan who has a right to elect a form of payment
pursuant to the Written Agreement and as approved by an ELT member and the
Committee shall only have 30 days from the date of initial eligibility (whether
that date is with respect to the Special Accrual or with respect to the Excess
Regular Earnings Deferrals, whichever is earlier) to elect his or her Payment
Option for all non-Grandfathered amounts which he or she has the right to elect
a Payment Option for under the Plan; and (2) any Eligible Employee who becomes
eligible to participate in an account balance plan that must be aggregated with
the Plan under Section 409A of the Code before he or she otherwise would become
eligible to participate in this Plan has 30 days from the date he or she first
becomes eligible to participate in such other plan to elect his or her Payment
Option under the Plan. In the absence of a timely election (except as otherwise
may be required pursuant to a Written Agreement), the Member shall be deemed to
have made a Payment Option to receive his or her Account under the Plan in a
single lump sum payment in the January after his or her Separation from Service
(other than with respect to Grandfathered Amounts). In addition, unless
otherwise provided pursuant to a Written Agreement (and as approved by an ELT
member and the Committee) a Member shall be deemed to have made a Payment Option
election to receive the portion of his or her Account attributable to his or her
Special Accrual under the Plan in a single lump sum payment in the January after
his or her Separation from Service. Except as provided in Section 5.3 below, or
if payment is subsequently re-deferred in accordance with Section 6.8 and
subject to the rules on Key Employee payments as provided in Section 6.5, any
Payment Option election made or deemed made under the Plan shall apply with
respect to a Member’s entire Account under the Plan (except with respect to
Grandfathered Amounts).

5.3      Exceptions to Binding Payment Option Election. Notwithstanding any
Payment Option elected (or deemed elected): (i) if the value of a Member’s
account on the last business day of the calendar year of the Member’s Separation
from Service (excluding Grandfathered Amounts credited to the Member’s Account)
is $10,000 or less the Member’s Payment Option election shall be paid in a lump
sum in the January following the Member’s termination; (ii) if a Member incurs a
Disability, the Member’s Account (except with respect to Grandfathered Amounts
which shall be payable under the terms of that Prior Plan) shall be paid in a
lump sum the January after the Member has been determined to have incurred a
Disability; (iii) if a Member who was a Participant in the Pharmacia Savings
Plus Plan requests a distribution on account of an Unforeseeable Emergency the
portion of the Member’s Account attributable to amounts accrued under the
Pharmacia Savings Plus Plan (as adjusted for earnings and losses and other than
Grandfathered amounts, which shall be paid in accordance with the terms of that
Prior Plan) to the extent requested on account of the Unforeseeable Emergency
shall be paid in a lump sum the next business day after the Unforeseeable
Emergency (in accordance with uniform rules established by the Committee and in
accordance with 409A); (iv) if a Member ceases to be an Eligible Employee and
subsequently becomes eligible to participate in the Plan, he or she may elect a
new Payment Option that shall apply with respect to any amounts credited to his
or her Accounts under the Plan after the date of his or her re-eligibility
(provided the Employee becomes an Eligible Employee in a different

 

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calendar year than the year in which he or she ceased to be an Eligible
Employee), and if no such election the portion of the Account accrued with
respect to the new eligibility period shall be paid in a single lump sum in the
January after Separation from Service (or as otherwise required in this
Section 5.3); (v) if a Member has a Special Accrual under the Plan any Payment
Option election made or deemed made by the Member in accordance with
Section 5.2, the exceptions to the Payment Option elected as provided for in
this Section 5.3 (or Section 6.8) shall not apply to amounts attributable to the
Special Accrual unless otherwise provided in the terms of the Written Agreement
as approved by an ELT member and the Committee; and (vi) if a Member dies before
distribution of his or her entire Account, the Payment Option election shall be
cancelled and the entire account (except with respect to Grandfathered Amounts
under the Pharmacia Savings Plus Plan which shall be paid pursuant to the terms
of that plan) shall be paid in a single lump sum distribution the January
following the Member’s death. Effective January 1, 2007, the immediately
preceding sentence shall also apply with respect to amounts accrued under the
Pharmacia Savings Plus Plan (as adjusted for earnings and losses) other than
Grandfathered Amounts under that plan.

5.4      Investments. All Excess Regular Earnings Deferrals will be credited
with an amount equal to the amount which would have been earned had such amounts
been actually invested in one or more of the “Funds” (other than the Pfizer
Match Fund available for investment under the Qualified Plan, as the Member may
be defaulted into or elect from time to time, in one percent (1%) increments. To
the extent no investment election is provided with respect to a Special Accrual
when such Special Accrual is credited to the Plan or otherwise, the Special
Accrual shall be deemed to be invested in the default fund under the Plan. The
portion of the Member’s Account attributable to Employer Accruals shall be
deemed to be invested in the Pfizer Match Fund. Rules similar to those which
govern the Qualified Plan shall apply for purposes of determining the value of
the deemed investments (but based on this Plan’s valuation dates) and the
timing, frequency and permissibility of investment transfers. No provision of
this Plan shall require the Company or any other Employer to actually invest any
amount in any “Fund” or in any other investment vehicle. The Plan is an unfunded
plan that is not subject to the funding requirements of ERISA, meaning that
there are no actual investments held in a trust. The Accounts represent
unsecured obligations of the Company, and no funds are set aside from the
Company’s general assets to cover such Accounts. The Plan is subject to the full
faith and credit of the Company, and Members would be general creditors in the
event of the Company’s insolvency. Except as otherwise provided in this Section,
distributions and withdrawals from the Plan are valued as of the last business
day of the calendar quarter preceding the calendar quarter of the distribution.
Withdrawals on account of an Unforeseeable Emergency are valued as of the last
business day of the month preceding the day that the withdrawal request is
received. Payments that would otherwise be made but are delayed on account of a
Member being a Key Employee are valued on the distribution date.

With respect to a Member subject to Section 16 of the Securities Exchange Act of
1934, an election to transfer a portion of his Account into, or out of, the
Pfizer company

 

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stock funds, shall be permitted only if the Member has not elected during the
immediately preceding six (6) months to transfer out of, or into, such funds
within this Plan, any Pfizer company stock funds under the Qualified Plan or the
unit account within the Pfizer Inc Nonfunded Deferred Compensation and Unit
Award Plan for Non-Employee Directors, the Pfizer Inc Retainer Units Award Plan
for Non-Employee Directors, or the Pfizer Deferred Compensation Plan.

 

SECTION 6. DISTRIBUTION OF ACCOUNTS.

6.1      Distribution of Benefits. Unless otherwise specifically provided for in
the Plan, distribution of a Member’s Grandfathered Amounts shall be paid in
accordance with the distribution provisions of the Prior Plans. Except as
otherwise provided in this Section and the Plan, a Member shall be paid the
balance of his Account following his or her Separation of Service in accordance
with the Payment Option or Payment Options elected (or deemed elected by the
Member) by the Member as permitted under the Plan. A Member may have different
Payment Option elections with respect to the portions of his or her Account, for
example, for a Special Accrual or for a Member who was ineligible or a period of
time and subsequently became eligible and was permitted or deemed to have made a
new Payment Option election under the Plan with respect to future accruals under
the Plan and in accordance with Section 409A.

6.2.      Benefits Subject to Withholding. The benefits payable under this Plan
shall be subject to the deduction of any federal, state, or local income taxes,
employment taxes or other taxes which are required to be withheld from such
payments by applicable laws and regulations. Any employment taxes owed by the
Member with respect to any deferral, accrual or benefit payable under this Plan
may be withheld from other compensation of the Member in the year in which such
tax liability accrues.

6.3      Disability. Notwithstanding any elected Payment Option or deemed
elected Payment Option (made or deemed made), if the Member incurs a Disability
under the Plan, the balance of the Member’s Account shall be paid in a single
lump sum the January following the Disability, except with respect to
Grandfathered Amounts shall be payable in accordance with the terms of that
Prior Plan.

6.4      Distributions on Account of Unforeseeable Emergency. Notwithstanding
any elected Payment Option or deemed elected Payment Option made (or deemed
made) by a Member who was a Participant in the Pharmacia Savings Plus Plan, upon
the occurrence of an Unforeseeable Emergency, a Member may withdraw all or any
portion of his or her Account balance attributable to amounts accrued under the
Pharmacia Savings Plus Plan (as adjusted for earnings and losses) provided that
the amounts distributed with respect to an Unforeseeable Emergency (including
any Grandfathered Amounts distributed under the rules of the Pharmacia Savings
Plus Plan) may not exceed the amounts necessary to satisfy such Unforeseeable
Emergency plus amounts necessary to pay taxes reasonably anticipated as a result
of the distribution, after taking into account the extent to which such hardship
is or may be relieved through reimbursement or compensation by insurance or

 

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otherwise or by liquidation of the Member’s assets (to the extent the
liquidation of such assets would not itself cause severe financial hardship) or
by cessation of deferrals under the Plan. Distributions of Grandfathered Amounts
for a hardship or unforeseeable emergency shall be governed by the terms of the
Prior Plan.

6.5      Delay for Key Employees. Notwithstanding anything in the Plan to the
contrary, distributions (other than distributions of Grandfathered Amounts) may
not be made to a Key Employee upon a Separation from Service before the date
which is six (6) months after the date of the Key Employee’s Separation from
Service (or, if earlier, the date of death of the Key Employee). Any payments
that would otherwise be made during this period of delay shall be accumulated
and paid on the day that is six (6) months following the Member’s Separation
from Service (or, if earlier, the January following the Member’s death).

6.6      Distributions upon Death. Notwithstanding any elected Payment Option or
deemed elected Payment Option made (or deemed made) by the Member, if a Member
dies before distribution of his or her Account balance has begun any remaining
balance shall be distributed in a lump sum payment to the Member’s Beneficiary
the January following the calendar year in which the Member’s death occurs.
Effective January 1, 2007, the immediately preceding sentence also applies with
respect to amounts accrued under the Pharmacia Savings Plus Plan (as adjusted
for earnings and losses) other than Grandfathered Amounts under that plan.

6.7      Change in Control. Notwithstanding any provision in the Plan or the
Pharmacia Savings Plus Plan to the contrary, a Member’s Payment Option election
or a Member’s deemed Payment Option election, for Member’s who were Participants
in the Pharmacia Savings Plus Plan and with respect to amounts accrued under the
Pharmacia Savings Plus Plan on or after January 1, 2005 (as adjusted for
earnings and losses) only, such portion of the Member’s Account under the Plan
shall be distributed in an immediate lump sum payment upon the occurrence of a
Change in Control that is a “Change in Control Event.” For these amounts a
“Change in Control Event” means an event described in Code section
409A(a)(2)(A)(v) or otherwise under Section 409A. With respect to Grandfathered
amounts under the Pharmacia Savings Plus Plan, Change in Control shall have the
meaning defined in that Prior Plan and such Grandfathered Amounts distributed in
accordance with the terms of that Prior Plan.

6.8      Redeferrals. Notwithstanding any elected Payment Option or deemed
elected Payment Option made (or deemed made), except with respect to Special
Accruals for which the Member was not provided with a redeferral option under
the Written Agreement, a Member may make one or more subsequent elections to
change form of a distribution for a deferred amount, provided that such an
election shall be effective only if the following conditions are satisfied:

  (a)       The election may not take effect for at least twelve (12) months;

 

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  (b)       The election must be made at least twelve (12) months before
payments would have otherwise begun; and

  (c)       In the case of an election to change the form of a distribution upon
a Member’s Separation from Service, a distribution may not be made earlier than
at least five (5) years from the date the distribution (or, with respect to
installments, the first scheduled installment) would have otherwise been made.

Members who have elected to receive their distribution (or portion thereof) in
installments may not change the corresponding election once their installment
distributions have begun.

Members who pursuant to a Written Agreement are permitted to specify a Payment
Option with respect to a Special Accrual shall also have the redeferral rights
provided in this Section 6.8 except as otherwise provided in the Written
Agreement.

6.9      Effect of Taxation. If a portion of the Member’s Account balance is
includible in income under Section 409A, such portion shall be distributed
immediately to the Member.

6.10    Permitted Delays. Notwithstanding the foregoing, any payment on account
of a Member under the Plan shall be delayed upon the Committee’s reasonable
anticipation of one or more of the following events:

  (a)       The Company’s deduction with respect to such payment would be
eliminated by application of Code section 162(m); or

  (b)       The making of the payment would violate federal securities laws or
other applicable law;

provided, that any payment delayed pursuant to this Section 6.10 shall be paid
in accordance with Section 409A.

 

SECTION 7. NATURE OF INTEREST OF MEMBER.

Participation in this Plan will not create, in favor of any Member, any rights
or lien in or against any of the assets of the Company or any Employer, and all
amounts of Excess Regular Earnings, Special Accruals and Employer Accruals
deferred hereunder shall at all times remain an unrestricted asset of the
Company or the Employer. A Member’s rights to benefits payable under the Plan
are not subject in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, or encumbrance. Nothing contained in this Plan, and no
action taken pursuant to its provisions, shall create or be construed to create
a trust of any

 

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kind, or a fiduciary relationship, between any Employer and a Member or any
person, and the Company’s and each Employer’s promise to pay benefits hereunder
shall at all times remain unfunded as to the Member.

 

SECTION 8. BENEFICIARY DESIGNATION.

A Member’s beneficiary under this Plan will automatically be the same as such
Member’s beneficiary under the Qualified Plan unless a separate designation of
beneficiary form for this Plan has been properly filed with the Committee or its
authorized designee in accordance with any rule established by the Committee and
received prior to the death of the Member. In the absence of a designation of
specific beneficiary under either the Qualified Plan or this Plan, which
beneficiary survives the Member, upon the Member’s death, except to the extent
as may otherwise be provided with respect to amounts attributable to accruals
made under the Pharmacia Savings Plus Plan prior to January 1, 2007 (including
Grandfathered Amounts) which shall be governed by the terms of that Plan,
payment of his Account shall be made to the Member’s estate in a lump sum in the
January following the Member’s death.

 

SECTION 9. ADMINISTRATION.

9.1      Committee. This Plan will be administered by the Committee.

9.2      Powers of the Committee. The Committee’s powers under this Plan are the
same as are described in the Qualified Plan and include, but are not limited to,
the power:

  (a)       to determine who are Eligible Employees for purposes of
participation in the Plan;

  (b)       to interpret the terms and provisions of the Plan and the Prior
Plans and to determine any and all questions arising under the Plan or Prior
Plans, including without limitation, the right to remedy possible ambiguities,
inconsistencies, or omissions by a general rule or particular decision; and

  (c)       to adopt rules consistent with the Plan or Prior Plans.

9.3      Claims Procedure. Effective January 1, 2008, this Section 9.3 and
Section 9.4 shall apply with respect to a Member’s entire Account under the Plan
including Grandfathered Amounts under this Plan and the Pharmacia Savings Plus
Plan. Any request by a Member or any other person for any benefit alleged to be
due under the Plan shall be known as a “Claim” and the Member or other person
making a Claim, or the authorized representative of either, shall be known as a
“Claimant.” The Committee has sole discretion to determine whether a
communication from an individual shall be a Claim for purposes of this
Section 9.3 and Section 9.4. To the extent of their responsibility to review
benefit claims or to review the denial of benefit claims, the Committee and the
reviewer shall have full authority to interpret and apply, in their discretion,
the provisions of the Plan. The decisions of the Committee and reviewer shall be
final and binding upon any

 

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and all Claimants, including, but not limited to, Members and their
Beneficiaries, and any other individuals making a Claim or requesting review of
a Claim through or under them, and shall be afforded the maximum deference
permitted by law. A Member may not maintain a court action over a disputed claim
until he or she has exhausted the Plan’s claims procedures.

Claimant may submit a written application to the Committee for payment of any
benefit that he believes may be due him under the Plan, in accordance with Plan
procedures. Such application shall include a general description of the benefit
which the Claimant believes is due, the reasons the Claimant believes such
benefit is due and any information as the Committee may reasonably request. The
Committee will process the Claimant’s application within ninety (90) days of the
receipt of the Claim by the Committee unless special circumstances require an
extension of time for processing the Claim. In such event, written notice of the
extension shall be furnished to the Claimant prior to the termination of the
initial ninety (90) day period but in no event shall the extension exceed a
period of ninety (90) days from the end of such initial period. The notice shall
indicate the special circumstances requiring an extension of time and the date
by which the Plan expects to render the final decision. If the Committee has not
determined the Claimant’s eligibility for a Plan benefit within this ninety
(90) day period (one hundred eighty (180) day period if circumstances require an
extension of time), the Claim is deemed denied. A Claim is considered approved
only if such approval is memorialized by the Committee in writing.

If a Claim is denied in whole or in part, the notice of denial shall set forth
(i) the specific reason or reasons for the denial, (ii) specific reference to
the pertinent Plan provisions on which the denial is based, (iii) a description
of any additional material or information necessary for the Claimant to perfect
the Claim and an explanation of why such material or information is necessary,
(iv) an explanation of the Plan’s claim review procedure, and (v) an explanation
that, if an adverse determination is made on review, the Claimant may have a
right to bring civil action under Section 502(a) of ERISA. Within sixty
(60) days of the receipt of a notice of denial of a Claim in whole or in part or
a deemed denial, a Claimant (i) may request a review upon written application to
the Committee, (ii) may review documents pertinent to the Claim, and (iii) may
submit issues and comments in writing to the Committee. The Claimant shall be
provided upon request and free of charge, reasonable access to all documents,
records and other information relevant to the Claimant’s Claim for benefits.

 

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The Committee will review a Claim for which a request for review has been made
and render a decision not later than sixty (60) days after receipt of a request
for review; provided, however, that if special circumstances require extension
of a time for processing, a decision shall be rendered no later than one hundred
and twenty (120) days after receipt of the request for review. Written notice of
any such extension shall be furnished to the Claimant within sixty (60) days
after receipt of request for review. The Committee’s decision shall be in
writing and shall set forth (i) the specific reason or reasons for the denial on
review, (ii) specific reference to the pertinent Plan provisions on which the
denial on review is based, (iii) an explanation that the Claimant is entitled to
receive, upon request and free of charge, reasonable access to, and copies of,
all documents, records, and other information relevant to the Claimant’s Claim
for benefits, and (iv) an explanation that if an adverse determination is made
on review, the Claimant may have the right to bring a civil action under
Section 502(a) of ERISA. If the decision on review is not furnished within the
applicable time, the Claim shall be deemed denied on review.

9.4      Limitation on Period for Filing Claims. No claim for benefits based
upon a claim that contributions were not properly made under this Plan shall be
approved under this Plan, and no action may be brought for benefits under this
Plan pursuant to the denial of such a claim pursuant to Section 9.3 of this
Plan, unless such claim for benefits is duly filed under Section 9.3 of this
Plan no later than the last day of the second Plan Year beginning after the Plan
Year in which the claim alleges that the contributions should have been
credited.

 

SECTION 10. NO EMPLOYMENT RIGHTS.

No provisions of the Plan or any action taken by the Company, the Board of
Directors, the Committee, or any of their properly authorized representatives
shall give any person any right to be retained in the employ of any Employer,
and the right and power of the Company or any Employer to dismiss or discharge
any Member is specifically reserved.

 

SECTION 11. AMENDMENT, SUSPENSION, AND TERMINATION.

The Board of Directors or its authorized designee shall have the rights to
amend, suspend, or terminate the Plan at any time, except that the Committee may
make non-substantive administrative changes to this Plan so as to conform with
or take advantage of governmental requirements, statutes or regulations. Except
as provided in the next sentence, no amendment, modification or termination
shall, without the consent of a Member, adversely affect the amount of the
Member’s benefits in his or her Account as of the date of such amendment,
modification or termination. Upon termination of the Plan, distribution of the
balances in Accounts shall be made to Members and Beneficiaries in the manner
and at the time described in the Plan (or the Prior Plan) unless the Board of
Directors of the Company or its designee determines in its sole and absolute
discretion that all such amounts shall be distributed upon termination and in
accordance with the requirements under Section 409A. Upon termination of the
Plan, no further deferrals of

 

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eligible compensation shall be permitted; however, earnings, gains and losses
shall continue to be credited to Account balances in accordance with the Plan
until the Account balances are fully distributed.

In the event the Plan is terminated, the Committee shall continue to administer
the Plan in accordance with the relevant provisions thereof until the Member’s
benefits have been paid hereunder. Notwithstanding the foregoing, no amendment
of the Plan shall apply to Grandfathered Amounts, unless the amendment
specifically provides that it applies to such amounts. The purpose of this
restriction is to prevent a Plan amendment from resulting in an inadvertent
“material modification” to Grandfathered Amounts.

 

SECTION 12. PROVISIONS GOVERNED BY CODE SECTION 409A.

Notwithstanding anything herein to the contrary, the terms of the Plan are
intended to, and shall be interpreted and applied so as to, comply in all
respects with the provisions of Section 409A. Any provision of this Plan
governing the timing or form of payment of benefits hereunder may be modified by
the Plan Administrator if, and to the extent deemed necessary or advisable, to
comply with Section 409A including, but not limited to, a 6-month delay in
payment to a Key Employee, which shall be paid as provided in Section 6.5.
Nothing in this Section shall be construed as an admission that any of the
benefits payable under this Plan (or any predecessor Plan) constitutes “deferred
compensation” subject to the provisions of Section 409A.

 

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Appendix A –Pfizer Supplemental Savings Plan as in effect on 12/31/04. Except as
otherwise specifically provided for in the Plan, the provisions of this Plan
shall apply to Grandfathered Amounts covered under the Pfizer Supplemental
Savings Plan on 12/31/2004.

PFIZER INC

NONFUNDED DEFERRED COMPENSATION AND

SUPPLEMENTAL SAVINGS PLAN

 

 

 

 

 

 

 

 

 

 

 

1

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SECTION 1. CONTINUATION AND PURPOSE OF THE PLAN.

1.1      Continuation. There is hereby continued for the benefit of Members an
unfunded plan of deferred compensation known as the “Pfizer Inc Nonfunded
Deferred Compensation and Supplemental Savings Plan.”

1.2      Purpose. The purpose of this Plan is to provide a means by which an
Eligible Employee may, in certain circumstances, elect to defer receipt of a
portion of his “Regular Earnings.” The Plan also provides that the Company will,
in certain instances, credit the Account of a Member with Employer Accruals.

1.3      Description of the Plan. The Plan became effective July 1, 1983 and is
amended and restated effective February 1, 2002, except as otherwise provided
herein. For purposes of the Employee Retirement Income Security Act of 1974
(“ERISA”), as amended, the Plan shall be treated as two separate, unfunded
plans. One plan shall be an “excess benefit plan” within the meaning of
Section 3(36) of ERISA, and shall be comprised of accruals under the Plan that
are made solely because of the applicable limitations under Section 415 of the
Code, plus earnings thereon. All other accruals under the Plan, plus earnings
thereon, shall be treated as made under a separate “top-hat” plan maintained by
the Company primarily for the purpose of providing deferred compensation to a
select group of management or highly compensated employees, within the meanings
of Sections 201(a)(2) and 401(a)(1) of ERISA. Separate accounts shall be
maintained under the Plan for each Member, as applicable, to account for excess
benefit plan accruals and earnings, and top-hat plan accruals and earnings.

 

SECTION 2. DEFINITIONS.

The following words and phrases as used in this Plan have the following means:

2.1      Account. The term “Account” shall mean a Member’s individual
account(s), as described in Section 5 of the Plan.

2.2      Board of Directors. The term “Board of Directors” means the Board of
Directors of the Company.

2.3      Code. The term “Code” means the Internal Revenue Service Code of 1986,
as amended.

2.4      Committee. The term “Committee” means the Committee, as described in
the Qualified Plan, or any other person or entity that the Committee has
authorized to act on its behalf under the Plan.

2.5      Company. The term “Company” means Pfizer Inc, a Delaware corporation,
and any successor corporation.

2.6      Controlled Group. The term “Controlled Group” means the Company and any
other entity in which the Company owns directly or indirectly 30 percent or more
of the value or voting power.

 

 

 

 

2

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2.7      Eligible Employee. The term “Eligible Employee” means any “Member”
under the Qualified Plan (i) who receives Regular Earnings for any Plan Year in
excess of the limitation of Section 401(a)(17) of the Code, (ii) whose account
under the Qualified Plan is credited with “annual additions,” as defined in
Section 415(c)(2) of the Code, during any Plan Year equal to the maximum
permitted under Section 415(c)(1)(A) of the Code, (iii) who is otherwise
credited with Employer Accruals, or (iv) who is a member of a select group of
management or highly compensated employees and is designated as an Eligible
Employee by the Committee.

2.8      Employer. The term “Employer” means the Company and any other member of
the Controlled Group which is also an “Associate Company” under the Qualified
Plan.

2.9      Employer Accrual. The term “Employer Accrual” means the amounts
described in Section 4.

2.10    Excess Regular Earnings. The term “Excess Regular Earnings” means
(i) the portion of a Member’s Regular Earnings earned during a Plan Year that
exceeds the Limitation on compensation taken into account under
Section 401(a)(17) of the Code, (ii) all Regular Earnings earned after the
Member becomes subject to the Limitation on contributions to defined
contribution plans under Section 415(c)(1)(A) of the Code, to the extent not
included in (i) above, (iii) a bonus deferred under the Pfizer Inc Deferred
Compensation Plan, or (iv) any other compensation determined by the Committee to
be compensation for purposes of this Plan .

2.11    Excess Regular Earnings Deferrals. The term “Excess Regular Earnings
Deferrals” means the portion of a Member’s Excess Regular Earnings that the
Member elects to defer under the terms of the Plan.

2.12    Limitation(s). The term “Limitation(s)” means the limitation on
contributions to defined contribution plans under Section 415(c)(1)(A) of the
Code, and on compensation taken into account under Section 401(a)(17) of the
Code.

2.13    Member. The term Member means an Eligible Employee who elects to have
Excess Regular Earnings Deferrals made to the Plan or is otherwise credited with
an Employer Accrual.

2.14    Payment Options. The term “Payment Option” means the following forms of
payment under which a Member may elect to receive amounts credited to his
Account upon his termination of employment with the Controlled Group: (i) single
sum payable as soon as practicable following the end of the Plan Year in which
the Member terminates employment with the Controlled Group, or
(ii) substantially equal annual installment payments over a period of two to
twenty years commencing as soon as practicable following the end of the Plan
Year in which the Member terminates employment with the Controlled Group. Where
payment of the Account is made in installment payments, the first installment
shall be a fraction of the value of the Member’s Account as of the applicable
valuation date, the numerator of which is one (1) and the denominator of which
is the total number of installments remaining to be paid at that time. Each
subsequent installment shall be calculated in the same manner, except that the
denominator shall be reduced by the number of installments that have been paid
previously.

 

3

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2.15    Plan. The term “Plan” means the “Pfizer Inc Nonfunded Deferred
Compensation and Supplemental Savings Plan,” as set forth herein and as amended
from time to time.

2.16    Plan Year. The term “Plan Year” means the calendar year.

2.17    Qualified Plan. The term “Qualified Plan” means the Pfizer Savings Plan,
as amended from time to time.

2.18    Regular Earnings. The term “Regular Earnings” shall have the meaning
given such term under the Qualified Plan.

 

SECTION 3. PARTICIPATION.

3.1      Designation of Eligible Employees. The Committee in its sole and
absolute discretion will designate as Eligible Employees those employees who
satisfy the terms of Section 2.7 and are eligible to participate in the Plan.
The Committee in its sole and absolute discretion may terminate the designation
of an employee as an Eligible Employee at any time.

3.2      Election to Make Excess Regular Earnings Deferrals. An Eligible
Employee may elect at any time after becoming eligible to begin making Excess
Regular Earnings Deferrals by filing an election with the Committee or its
authorized designee in accordance with this Section 3 and any rules established
by the Committee. Such election will be effective on a prospective basis
beginning with the payroll period that occurs as soon as administratively
practicable following receipt of the election by the Committee or its authorized
designee.

3.3      Amendment or Suspension of Election. Members may change (including,
suspend) their existing Excess Regular Earnings Deferrals election under this
Plan during the Plan Year by filing a new election in accordance with the
prescribed administrative guidelines. Such new election will be effective on a
prospective basis beginning with the payroll period that occurs as soon as
administratively practicable following receipt of the election by the Committee
or its authorized designee. A Member shall not be permitted to make up suspended
Excess Regular Earnings Deferrals, and during any period in which a Member’s
Excess Regular Earnings Deferrals are suspended, the Employer Accruals under the
Plan with respect to Excess Regular Earnings Deferrals shall also be suspended.
A Member who receives a hardship withdrawal under the Qualified Plan shall be
suspended from making Excess Regular Earnings Deferrals hereunder for a period
of six (6) months from the date of such withdrawal.

3.4      Amount of Elections. Each election filed by an Eligible Employee must
specify the amount of Excess Regular Earnings Deferrals in a whole percentage
from 1% to 20% of the Member’s Excess Regular Earnings unless the Committee
establishes a lesser percentage for the Plan Year; provided, however, that, with
respect to an Eligible Employee who is also eligible to participate in the
Qualified Plan, the rate of Excess Regular Earnings Deferrals hereunder for any
payroll period shall not exceed the rate at which the Member was contributing to
the Qualified Plan on a combined pre-tax and post-tax basis for the current
year.

 

4

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SECTION 4. EMPLOYER ACCRUALS.

4.1      General Rule.

An Employer Accrual will be credited to a Member’s Account with respect to the
eligible portion of Excess Regular Earnings Deferrals of such Member at the
applicable rate of “Matching Contributions” with respect to “After-Tax
Contributions” and “Before-Tax Contributions” under the Qualified Plan. The
Employer Accrual shall be credited as soon as practicable following the payroll
period for which the Excess Regular Earnings Deferrals are made. The eligible
portion of a Member’s Excess Regular Earnings Deferrals shall be limited to six
percent (6%) of such Excess Regular Earnings for each payroll period. In
addition, an Employer Accrual will be credited as of the end of each Plan Year
to a Member’s Account equal to the difference between (i) the amount that would
have been credited to the Member’s account under the Qualified Plan as a
“Matching Contribution,” including Additional Contribution, if any, if the
Limitations were not applicable to the Member under the Qualified Plan during
such Plan Year and (ii) the “Matching Contributions,” including Additional
Contributions, if any, actually credited to the Member’s account under the
Qualified Plan during such Plan Year. Lastly, an Employer Accrual will be
credited to the Account of a Member who elects to defer his bonus under the
Warner-Lambert Company Incentive Compensation Plan (“ICP”). The amount of such
Employer Accrual will be equal to the product of: (i) six percent (6%) of the
bonus deferred under the ICP, and (ii) the applicable rate of “Matching
Contributions” with respect to “After-Tax Contributions” and “Before-Tax
Contributions” under the Qualified Plan. The Employer Accrual shall be credited
as soon as practical following the payroll period in which the bonus is
deferred.

4.2      Special Employer Accrual for Certain Former Warner-Lambert Employees.

In the case of any Eligible Employee who (i) was an “Eligible Participant” under
the Warner-Lambert Savings and Stock Plan as in effect on January 31, 2002 (the
“Warner-Lambert Plan”), (ii) is a participant under the Warner-Lambert Enhanced
Severance Plan on May 15, 2003, (iii) has completed at least three years of Plan
membership (including Warner-Lambert Plan membership) under the Qualified Plan
as of May 15, 2003, and (iv) was an Eligible Employee on May 15, 2003, an
Employer Accrual shall be credited to such Eligible Employee’s Account in an
amount equal to the difference between (a) and (b) below:

(a)       the “Matching Contribution” which would have been made to the Eligible
Employee’s account under the Qualified Plan with respect to the period June 1,
2002 through May 15, 2003 if such “Matching Contribution” had been based on the
terms of Article 5 of the Warner-Lambert Plan, assuming an additional matching
contribution rate of 65%; and

(b)       the “Matching Contribution” actually made to the Eligible Employee’s
account under the Qualified Plan with respect to the period June 1, 2002 through
May 15, 2003.

 

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This Employer Accrual shall be credited as soon as practicable following the
payroll period which includes May 15, 2003.

4.3      Special Employer Accrual for Certain Former Agouron Employees. In the
case of any Eligible Employee who (i) was an “Eligible Employee” under the
Agouron Pharmaceuticals, Inc. 401(k) Plan as in effect on January 31, 2002 (the
“Agouron Plan”), (ii) was a participant under the Warner-Lambert Enhanced
Severance Plan on May 15, 2003, and (iii) was an Eligible Employee on May 15,
2003, an Employer Accrual shall be credited to such Eligible Employee’s Account
in an amount equal to the difference between (a) and (b) below:

(a)       the “Matching Contribution” which would have been made to the Eligible
Employee’s account under the Qualified Plan with respect to the period June 1,
2002 through May 15, 2003 if such “Matching Contribution” had been based on the
terms of Article 6.4 of the Agouron Plan, assuming an additional matching
contribution rate of 35%; and

(b)       the “Matching Contribution” actually made to the Eligible Employee’s
Account under the Qualified Plan with respect to the period June 1, 2002 through
May 15, 2003.

This Employer Accrual shall be credited as soon as practicable following the
payroll period which includes May 15, 2003.

 

SECTION 5. INDIVIDUAL ACCOUNT.

5.1      Creation of Accounts. The Company will maintain an Account under the
Plan in the name of each Member. Each Member’s Account will be credited with the
amount of the Member’s Excess Regular Earnings Deferrals, Employer Accruals, and
will be adjusted for earnings and losses thereon. In the case of Members covered
under both the “excess benefit” and “top-hat” portions of the Plan, separate
accounts will be maintained to reflect the Members’ interest in each such
portion of the Plan.

5.2      Payment Account Option Election. Each Member shall elect the particular
Payment Option that is to apply to amounts credited to the Member’s Account. In
order for a Payment Option election to be effective, it must be made (i) no
later than ninety (90) days (one hundred and eighty (180) days for employment
terminations on or after January 1, 2003) prior to the date the Member
terminates employment with the Controlled Group, and (ii) in a taxable year
preceding the taxable year in which payment would otherwise be made or commence.
In the absence of a timely election, payment of the Member’s Account will be
made in accordance with the most recent Payment Option election which satisfies
the requirements of the immediately preceding sentence or, in the absence of any
such Payment Option election, in five (5) substantially equal annual
installments commencing as soon as practicable following the end of the Plan
Year in which the Member terminates employment with the Controlled Group. The
foregoing notwithstanding, in any case where the value of the Member’s Plan
Account is less than ten percent (10%) of the value of the Member’s interest in
both the Plan and the Qualified Plan, payment of the Member’s Account shall be
made in a lump sum as soon as practicable following the end of the Plan Year in
which the Member terminates

 

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employment with the Controlled Group. Upon a Member becoming “Disabled,” as
determined under the Qualified Plan, the balance of the Member’s Account shall
be paid in a lump sum as soon as practicable after such determination is made.

5.3      Investments. All Excess Regular Earnings Deferrals will be credited
with an amount equal to the amount which would have been earned had such amounts
been actually invested in one or more of the “Funds” (other than the Pfizer
Match Fund) available for investment under the Qualified Plan, as the Member may
elect from time to time, in one percent (1%) increments. The portion of the
Member’s Account attributable to Employer Accruals shall be deemed to be
invested in the Pfizer Match Fund. Rules similar to those which govern the
Qualified Plan shall apply for purposes of determining the value of the deemed
investments and the timing, frequency and permissibility of investment
transfers, except that no diversification of Employer Accruals which are deemed
to be invested in the Pfizer Match Fund shall be permitted. No provision of this
Plan shall require the Company or any other Employer to actually invest any
amount in any “Fund” or in any other investment vehicle. The Plan is an unfunded
plan that is not subject to the funding requirements of ERISA, meaning that
there are no actual investments held in a trust. The Accounts represent
unsecured obligations of the Company, and no funds are set aside from the
Company’s general assets to cover such Accounts. The Plan is subject to the full
faith and credit of the Company, and Members would be general creditors in the
event of the Company’s insolvency.

With respect to a Member subject to Section 16 of the Securities Exchange Act of
1934, an election to transfer a portion of his Account into, or out of, the
“Pfizer Company Stock Fund” shall be permitted only if the Member has not
elected during the immediately preceding six months to transfer out of, or into,
such Fund within this Plan, the Pfizer Company Stock Fund under the Qualified
Plan or the unit account within the Pfizer Inc Nonfunded Deferred Compensation
and Unit Award Plan for Non-Employee Directors, the Pfizer Inc Retainer Units
Award Plan for Non-Employee Directors, or the Pfizer Inc Deferred Compensation
Plan.

 

SECTION 6. PAYMENT.

6.1      Payment of Benefits. A Member shall be paid the balance of his Account
following termination of employment in accordance with the Payment Option
elected by the Member. Upon the death of a Member, the Member’s beneficiary
shall be paid the balance of the Member’s Account in a lump sum as soon as
practicable after the death of the Member.

6.2.      Benefits Subject to Withholding. The benefits payable under this Plan
shall be subject to the deduction of any federal, state, or local income taxes,
employment taxes or other taxes which are required to be withheld from such
payments by applicable laws and regulations. Any employment taxes owed by the
Member with respect to any deferral, accrual or benefit payable under this Plan
may be withheld from other compensation of the Member in the year in which such
tax liability accrues.

 

SECTION 7. NATURE OF INTEREST OF MEMBER.

Participation in this Plan will not create, in favor of any Member, any rights
in or lien against any of the assets of the Company or any Employer, and all
amounts of

 

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Excess Regular Earnings deferred hereunder shall at all times remain an
unrestricted asset of the Company or the Employer. A Member’s rights to benefits
payable under the Plan are not subject in any manner to anticipation,
alienation, sale, transfer, assignment, pledge, or encumbrance. Nothing
contained in this Plan, and no action taken pursuant to its provisions, shall
create or be construed to create a trust of any kind, or a fiduciary
relationship, between any Employer and a Member or any person, and the Company’s
and each Employer’s promise to pay benefits hereunder shall at all times remain
unfunded as to the Member.

 

SECTION 8. BENEFICIARY DESIGNATION.

A Member’s beneficiary under this Plan will automatically be the same as such
Member’s beneficiary under the Qualified Plan unless a separate designation of
beneficiary form for this Plan has been properly filed with the Committee or its
authorized designee in accordance with any rule established by the Committee. In
the absence of a designation of specific beneficiary under either the Qualified
Plan or this Plan, which beneficiary survives the Member, upon the Member’s
death, payment of his Account shall be made to his estate in a lump sum as soon
as practicable.

 

SECTION 9. ADMINISTRATION.

9.1      Committee. This Plan will be administered by the Committee.

9.2      Powers of the Committee. The Committee’s powers under this Plan are the
same as are described in the Qualified Plan and include, but are not limited to,
the power:

 

   (i) to determine who are Eligible Employees for purposes of participation in
the Plan;

 

   (ii) to interpret the terms and provisions of the Plan and to determine any
and all questions arising under the Plan, including without limitation, the
right to remedy possible ambiguities, inconsistencies, or omissions by a general
rule or particular decision; and

 

   (iii) to adopt rules consistent with the Plan.

9.3      Claims Procedure. The Committee shall make, in its sole discretion, all
determinations arising in the administration, construction or interpretation of
the Plan including the right to construe disputed or doubtful Plan terms and
provisions, and any such determination shall be conclusive and binding on all
persons, except as otherwise provided by law. Any claim by a Member or any other
person for any benefit alleged to be due under the Plan shall be made in writing
to the Committee. Within 90 days of the filing of such claim, unless special
circumstances require an extension of such period, such person will be given
notice in writing of the approval or denial of the claims. If the claim is
denied, the notice will set forth the reason for the denial, the Plan provisions
on which the denial is based, an explanation of what other material or
information, if any, is needed to perfect the claim, and an explanation of the
claims review procedure. The claimant may request a review of such denial within
60 days of the date of receipt of such

 

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denial by filing notice in writing with the Committee. The claimant will have
the right to review pertinent Plan documents and to submit issues and comments
in writing. The Committee will respond in writing to a request for review within
60 days of receiving it, unless special circumstances require an extension of
such period. The Committee, in its discretion, may request a meeting to clarify
any matters deemed appropriate.

9.4      Limitation on Period for Filing Claims. No claim for benefits based
upon a claim that contributions were not properly made under this Plan shall be
approved under this Plan, and no action may be brought for benefits under this
Plan pursuant to the denial of such a claim pursuant to Section 9.3 of this
Plan, unless such claim for benefits is duly filed under Section 9.3 of this
Plan no later than the last day of the second Plan Year beginning after the Plan
Year in which the claim alleges that the contributions should have been
credited.

 

SECTION  10. NO EMPLOYMENT RIGHTS.

No provisions of the Plan or any action taken by the Company, the Board of
Directors, the Committee, or any of their properly authorized representatives
shall give any person any right to be retained in the employ of any Employer,
and the right and power of the Company or any Employer to dismiss or discharge
any Member is specifically reserved.

 

SECTION 11. AMENDMENT, SUSPENSION, AND TERMINATION.

The Board of Directors or its authorized designee shall have the rights to
amend, suspend, or terminate the Plan at any time, except that the Committee may
make non-substantive administrative changes to this Plan so as to conform with
or take advantage of governmental requirements, statutes or regulations. No
amendment, modification or termination shall, without the consent of a Member,
adversely affect the amount of the Member’s benefits in his or her Account as of
the date of such amendment, modification or termination. Any modification,
amendment or termination may accelerate the time at which any Member is entitled
to a distribution. In the event the Plan is terminated, the Committee shall
continue to administer the Plan in accordance with the relevant provisions
thereof until the Member’s benefits have been paid hereunder.

 

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Appendix B – Pharmacia Savings Plus Plan as in effect on 12/31/04. Except as
otherwise specifically provided for in the Plan, the provisions of this Plan
shall apply to Grandfathered Amounts transferred from the Pharmacia Savings Plus
Plan

Pharmacia

Savings Plus+Plan

Amended & Restated Effective as of July 1, 2002

 

 

 

 

 

 

 

 

 

 

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PURPOSE

In recognition of the services provided by certain key employees, the Board of
Directors of Pharmacia & Upjohn, Inc. (“P&U”) adopted a deferred compensation
plan (the “Plan”) to make additional retirement benefits and increased financial
security, on a tax-deferred basis, available to those individuals, effective
July 1, 1999. Under the Plan, P&U provided a vehicle that will allow additional
future compensation to be paid to key employees so that such employees may be
retained and their productive efforts encouraged.

Effective September 22, 1999, the Board of Directors of P&U amended and restated
the Plan to permit a new Affiliate, Sugen, Inc., to join the Plan as a “Company”
and permit its Eligible Employees, as defined below, to make an Incentive
Deferral, as defined below, as well as other forms of Compensation Deferrals, as
defined below, when and if eligible.

On March 31, 2000, the Board of Directors of P&U amended and restated the Plan
to reflect the transaction by which P&U became a wholly-owned subsidiary of
Pharmacia Corporation (“Pharmacia”). On December 7, 2000, the Board of Directors
of Pharmacia amended the Plan to (i) require deferral under this Plan of any
incentive compensation earned under the Pharmacia Corporation Cash Long-Term
Incentive Plan and (ii) permit deferral under this Plan of benefits payable
under the Pharmacia Corporation Key Executive Pension Plan or payment under any
other individual contractual pension arrangements for key executives at the
Participant’s election. The Plan was subsequently amended to reflect the
Company’s adoption of the Pharmacia Corporation Long-Term Performance Share Unit
Incentive Plan, effective January 1, 2002.

Effective July 1, 2002, the Plan was amended to conform to Pharmacia’s
Retirement Choice Program by including a “restoration” arrangement and a “bonus
deferral” arrangement. Also effective July 1, 2002, the Plan was amended to
assume the obligations of the Pharmacia Corporation ERISA Parity Savings and
Investment Plan and to make certain other changes relating to a Change in
Control of Pharmacia. Accordingly, the Plan, as amended and restated as of the
Amendment Effective Date, as defined below, now reads as follows:

DEFINITIONS

Account. “Account” means, with respect to a Participant, the account established
on the books of the Company pursuant to Section 5.1 and recording the benefit
due to the Participant under the Plan.

Affiliate. “Affiliate” means any firm, partnership, or corporation that directly
or indirectly through one or more intermediaries, controls, is controlled by, or
is under common control with Pharmacia. “Affiliate” also includes any other
organization similarly related to Pharmacia that is designated as such by the
Board.

--------------------------------------------------------------------------------

Base Salary. “Base Salary” means the sum of an Eligible Employee’s W-2
compensation paid by the Company to the Eligible Employee including any pre-tax
deferrals and benefits deducted from gross income including, but not limited to,
any amounts that are excluded from gross income under section 125, 402(e)(3), or
132(f) of the Code and any deferrals under this Plan. “Base Salary” shall
exclude any one-time or other special bonuses, moving and relocation expenses,
stock options, or severance payments.

Base Salary Deferral. “Base Salary Deferral” means the portion of a
Participant’s Base Salary that the Participant has elected to defer pursuant to
Article 4.

Bonus. “Bonus” means any bonus or other incentive compensation awarded by the
Company to the Eligible Employee under such plans as specifically refer to this
Plan and under such other plans as Pharmacia’s Senior Vice President Human
Resources may from time to time designate.

Bonus Deferral. “Bonus Deferral” means the portion of a Participant’s Bonus that
the Participant has elected to defer pursuant to Article 4.

Beneficiary. “Beneficiary” means the person or persons designated as such in
accordance with Section 10.3.

Board. “Board” means the Board of Directors of Pharmacia.

Cause. “Cause” means, if applicable to the Participant, the definition of that
term used in the written employment agreement between the Participant and the
Company or an Affiliate as in effect on the date of the Participant’s
termination of employment or in the Company’s Change in Control Severance
Benefit Plan. Otherwise, the term “Cause” shall mean (i) a material breach by
the Participant of the Participant’s duties and responsibilities (other than as
a result of incapacity due to physical or mental illness) which is demonstrably
willful and deliberate on the part of the Participant, which is committed in bad
faith or without reasonable belief that such breach is in the best interests of
the Company or an Affiliate, and which is not remedied within 30 days after
receipt of written notice from the Company or an Affiliate specifying such
breach; or (ii) the Participant’s conviction of a felony which is materially and
demonstrably injurious to the Company or an Affiliate.

Change in Control. “Change in Control” means:

(1)      the acquisition by any individual, entity, or group (a “Person”),
including any “person” within the meaning of Section 13(d)(3) or 14(d)(2) of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”), of beneficiary
ownership within the meaning of Rule 13d-3 promulgated under the Exchange Act,
of 33% or more of either (i) the then outstanding shares of Common Stock of
Pharmacia (the “Outstanding Company Common Stock”) or (ii) the combined voting
power of the then outstanding securities of Pharmacia entitled to vote generally
in the election of directors (the “Outstanding Company Voting Securities”):
provided, however, that the following acquisitions of Outstanding Company Common
Stock or Outstanding Company Voting Securities shall not constitute a Change in
Control: (A) any acquisition by Pharmacia, (B)

 

2

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any acquisition by an employee benefit plan (or related trust) sponsored or
maintained by Pharmacia or any corporation controlled by Pharmacia, or (C) any
acquisition by any corporation pursuant to a reorganization, merger, or
consolidation involving Pharmacia, if, immediately after such reorganization,
merger, or consolidation, each of the conditions described in clauses (i), (ii),
and (iii) of subsection (3) of this Section shall be satisfied; and provided
further that, for purposes of clause (A), if any Person (other than Pharmacia or
any employee benefit plan (or related trust) sponsored or maintained by
Pharmacia or any corporation controlled by Pharmacia) shall become the
beneficial owner of 33% or more of the Outstanding Company Common Stock or 33%
or more of the Outstanding Company Voting Securities by reason of any
acquisition of Outstanding Company Common Stock or Outstanding Company Voting
Securities by Pharmacia and such Person shall, after such acquisition by
Pharmacia, becomes the beneficial owner of any additional shares of the
Outstanding Company Stock or any additional Outstanding Voting Securities and
such beneficial ownership is publicly announced, such additional beneficial
ownership shall constitute Change in Control;

(2)      individuals who, as of the date hereof, constitute the Board (the
“Incumbent Board”) cease for any reason to constitute at least a majority of
such Board; provided, however, that any individual who becomes a director of
Pharmacia subsequent to the date hereof whose election, or nomination for
election by Pharmacia’s stockholders, was approved by the vote of at least
three-quarters of the directors then comprising the Incumbent Board (either by a
specific vote or by approval of the proxy statement of Pharmacia in which such
person is named as a nominee for director, without objection to such nomination)
shall be deemed to have been a member of the Incumbent Board; and provided
further, that no individual who was initially elected as a director of Pharmacia
as a result of an actual or threatened election contest, as such terms are used
in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act, or any
other actual or threatened solicitation of proxies or consents by or on behalf
of any Person other than the Board shall be deemed to have been a member of the
Incumbent Board;

(3)      approval by the stockholders of Pharmacia of a reorganization, merger,
or consolidation involving Pharmacia unless, in any such case, immediately after
such reorganization, merger, or consolidation, (i) more than 50% of the then
outstanding shares of common stock of the corporation resulting from such
reorganization, merger, or consolidation and more than 50% of the combined
voting power of the then outstanding securities of such corporation entitled to
vote generally in the election of directors is then beneficially owned, directly
or indirectly, by all or substantially all of the individuals or entities who
were the beneficial owners, respectively, of the Outstanding Company Common
Stock and the Outstanding Company Voting Securities immediately prior to such
reorganization, merger, or consolidation and in substantially the same
proportions relative to each other as their ownership, immediately prior to such
reorganization, merger, or consolidation, of the Outstanding Company Common
Stock and the Outstanding Company Voting Securities, as the case may be, (ii) no
Person (other than Pharmacia, any employee benefit plan (or related trust)
sponsored or maintained by Pharmacia or the corporation resulting from such
reorganization, merger, or consolidation (or any corporation controlled by
Pharmacia), or any Person which beneficially owned, immediately prior to such
reorganization, merger, or consolidation, directly or indirectly, 33% or more of
the

 

3

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Outstanding Company Common Stock or the Outstanding Company Voting Securities,
as the case may be) beneficially owns, directly or indirectly, 33% or more of
the then outstanding shares of common stock of such corporation or 33% or more
of the combined voting power of the then outstanding securities of such
corporation entitled to vote generally in the election of directors, and
(iii) at least a majority of the members of the board of directors of the
corporation resulting from such reorganization, merger, or consolidation were
members of the Incumbent Board at the time of the execution of the initial
agreement or action of the Board providing for such reorganization, merger, or
consolidation; or

(4)      (i) approval by the stockholders of Pharmacia of a plan of complete
liquidation or dissolution of Pharmacia or (ii) the sale or other disposition of
all or substantially all of the assets of Pharmacia other than to a corporation
with respect to which, immediately after such sale or other disposition,
(A) more than 50% of the then outstanding shares of common stock thereof and
more than 50% of the combined voting power of the then outstanding securities
thereof entitled to vote generally in the election of directors is then
beneficially owned, directly or indirectly, by all or substantially all of the
individuals and entities who were the beneficial owners, respectively, of the
Outstanding Company Common Stock and the Outstanding Company Voting Securities
immediately prior to such sale or other disposition and in substantially the
same proportions relative to each other as their ownership, immediately prior to
such sale or other disposition, of the Outstanding Company Common Stock and the
Outstanding Company Voting Securities, as the case may be, (B) no Person (other
than Pharmacia, any employee benefit plan (or related trust) sponsored or
maintained by Pharmacia or such corporation (or any corporation controlled by
Pharmacia), or any Person which beneficially owned, immediately prior to such
sale or other disposition, directly or indirectly, 33% or more of the
Outstanding Company Common Stock or the Outstanding Company Voting Securities,
as the case may be) beneficially owns, directly or indirectly, 33% or more of
the then outstanding shares of common stock thereof entitled to vote generally
in the election of directors, and (C) at least a majority of the members of the
board of directors thereof were members of the Incumbent Board at the time of
the execution of the initial agreement or action of the Board providing for such
sale or other disposition (or were approved directly or indirectly by the
Incumbent Board).

CIC Consummation. “CIC Consummation” means the consummation of a transaction
approved by stockholders as described in paragraphs (3) or (4) of the definition
of Change in Control.

Code. “Code” means the Internal Revenue Code of 1986, as amended from time to
time.

Committee. “Committee” means the Compensation Committee appointed by the Board
which shall administer the Plan and which also may act for the Company or the
Board in making decisions and performing specified duties under the Plan. The
Committee may delegate any or all of its duties under the Plan in which case the
term “Committee” shall apply to the Committee’s delegate to the same extent as
it would have applied to the Committee.

 

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Company. “Company” means Pharmacia and any Affiliate that is authorized by the
Board to adopt the Plan and to cover its Eligible Employees and whose
designation as such has become effective upon acceptance of such status by the
board of directors of the Affiliate. An Affiliate may revoke its acceptance of
such designation at any time, but until such acceptance has been revoked, all
the provisions of the Plan and amendments thereto shall apply to the Eligible
Employees of the Affiliate. In the event the designation is revoked by the board
of directors of an Affiliate, the Plan shall be deemed terminated only with
respect to such Affiliate.

Company Contributions. “Company Contributions” means those matching
contributions credited to the Participant’s Account by the Company at a rate
equal to the matching contribution rate under the Savings Plan applicable to the
Participant. “Company Contributions” shall be deemed to have been made in
phantom shares of the Voting Securities valued on the basis of the closing price
of the Voting Securities on the principal exchange on which the Voting
Securities are traded on the day the Company Contribution is credited to the
Participant’s Account.

Compensation Deferral. “Compensation Deferral” means that portion of Base Salary
and/or Bonus as to which a Participant has made an irrevocable election to defer
receipt until the Plan Year following the Participant’s Termination Date, except
as otherwise specifically provided herein.

Disabled. “Disabled” means a mental or physical condition that qualifies a
Participant for total and permanent disability benefits under a Company
sponsored long term disability plan.

Earnings Crediting Options. “Earnings Crediting Options” means the deemed
investment options selected by the Participant from time to time pursuant to
which deemed earnings are credited to the Participant’s Account.

Effective Date. “Effective Date” means the effective date of the Plan which is
July 1, 1999. “Amendment Effective Date” means July 1, 2002.

Eligible Employee. “Eligible Employee” means, with respect to the “bonus
deferral” portion of the Plan, an Employee who is eligible to participate in the
Savings Plan and whose annualized rate of Base Salary, determined at the time of
enrollment, exceeds the compensation limit of section 401(a)(17) of the Code, as
in effect from time to time. “Eligible Employee” means, with respect to the
“restoration” portion of the Plan, either an Employee who meets the definition
of Eligible Employee in the preceding sentence or an Employee whose annualized
rate of Base Salary, determined at the time of enrollment, exceeds the
compensation limit of section 401(a)(17) of the Code, as in effect from time to
time, when combined with the Employee’s most recently paid Bonus. “Eligible
Employee” means with respect to the “rollover” portion of the Plan, an Employee
who meets the definition in the preceding sentence and who is eligible for a
rollover as described in Section 6.3.

 

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Employee. “Employee” means any individual employed by the Company on a regular,
full-time basis (in accordance with the personnel policies and practices of the
Employer), including citizens of the United States employed outside of their
home country and resident aliens employed in the United States; provided,
however, that to qualify as an “Employee” for purposes of the Plan, the
individual must be a member of a group of “key management or other highly
compensated employees” within the meaning of Sections 201, 301, and 401 of the
Employee Retirement Income Security Act of 1974, as amended.

Enrollment Agreement. “Enrollment Agreement” means the authorization form, which
an Eligible Employee files with the Committee to participate under Article 4 of
the Plan.

Participant. “Participant” means an Eligible Employee who has filed a completed
and executed Enrollment Agreement with the Committee or its designee or is
otherwise automatically participating in the Plan in accordance with the
provisions of Article 4 or by reason of a “rollover” pursuant to Section 6.3. In
the event of the death or incompetency of a Participant, the term shall mean his
personal representative or guardian. An individual shall remain a Participant
until that individual has received full distribution of all amounts credited to
the Participant’s Account.

Pharmacia. “Pharmacia” means Pharmacia Corporation and any successor by merger
or otherwise.

Plan. “Plan” means this plan, called the Pharmacia Savings Plus+Plan, as amended
from time to time.

Plan Year. “Plan Year” means the 12 month period beginning on each January 1 and
ending on the following December 31 except that the first Plan Year of this
amended and restated Plan shall begin on the Amended Effective Date and end on
the following December 31.

Retirement Date. “Retirement Date” means the date that the Participant attains
age 50.

Rollover Deferral. “Rollover Deferral” means the amount credited to the
Participant under this Plan pursuant to Section 6.3.

Savings Plan. “Savings Plan” means the Pharmacia Savings Plan, as it may be
amended from time to time, and any successor thereof.

Termination Date. “Termination Date” means the date of termination of a
Participant’s service with the Company and its Affiliates and shall be
determined without reference to any compensation continuation arrangement or
severance benefit arrangement that may be applicable.

Voting Securities. “Voting Securities” means the common securities of Pharmacia,
which carry the right to vote generally in the election of directors.

 

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ADMINISTRATION OF THE PLAN AND DISCRETION

3.1      Subject to the terms of the Plan, the Committee shall have full power
and authority to interpret the Plan, to prescribe, amend, and rescind any rules,
forms, and procedures as it deems necessary or appropriate for the proper
administration of the Plan and to make any other determinations and to take any
other such actions as it deems necessary or advisable in carrying out its duties
under the Plan. All action taken by the Committee arising out of, or in
connection with, the administration of the Plan or any rules adopted thereunder,
shall, in each case, lie within its sole discretion, and shall be final,
conclusive, and binding upon the Company, the Board, all Employees, all
Beneficiaries of Employees, and all persons and entities having an interest
therein.

3.2      The Committee may adjust the phantom shares of Voting Securities to
reflect a change in corporate capitalization (such as a stock split or stock
dividend), or a corporate transaction (such as a merger, consolidation,
separation, reorganization, or partial or complete liquidation), or to reflect
equitably the occurrence of any extraordinary event, any change in applicable
accounting rules or principles, any change in Pharmacia’s method of accounting,
any change in applicable law, any change due to a merger, consolidation,
acquisition, reorganization, combination of shares, or other changes in
Pharmacia’s corporate structure or share, or any other change of similar nature.

3.3      The Company shall indemnify and hold harmless each member of the
Committee from any and all claims, losses, damages, expenses (including counsel
fees), and liability (including any amounts paid in settlement of any claim or
any other matter with the consent of the Board) arising from any act or omission
of such member, except when the same is due to gross negligence or willful
misconduct.

3.4      Any decisions, actions, or interpretations to be made under the Plan by
the Company, the Board, or the Committee shall be made in its respective sole
discretion, not as a fiduciary and need not be uniformly applied to similarly
situated individuals and shall be final, binding, and conclusive on all persons
interested in the Plan.

 

PARTICIPATION

4.1      Election to Participate. Each Eligible Employee shall be offered the
opportunity to participate in the portion or portions of the Plan for which he
is eligible on an annual basis or as otherwise determined by the Committee. An
Eligible Employee may enroll in the Plan for a Plan Year by filing a completed
and fully executed Enrollment Agreement with the Committee or its designee by
the last day of November of the preceding year for which the election is to be
effective or such other time as the Committee determines (for the Plan Year
beginning on the Amendment Effective Date, the executed Enrollment Agreement
shall be due no later than June 20, 2002 or such other time as the Committee
determines). For an Eligible Employee who begins employment with the Company
after the end of the enrollment period, such Eligible Employee shall have 31

 

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days after being hired to file a completed and fully executed Enrollment
Agreement with the Committee or its designee. Participation in this Plan shall
be automatic for any Eligible Employee with a Rollover Deferral.

  (a)      Restoration Portion. With respect to the “restoration” portion of the
Plan, each active Participant shall irrevocably elect on an Enrollment Agreement
(i) whether to convert his or her pre-tax deferrals under the Savings Plan to
after-tax deferrals under the Savings Plan upon reaching the annual elective
deferral limit under section 402(g) of the Code; (ii) if the Participant does
elect to convert pre-tax deferrals under the Savings Plan to after-tax deferrals
under the Savings Plan, whether to convert the after-tax deferrals under the
Savings Plan to pre-tax deferrals under the Plan upon reaching either the annual
addition limit under section 415 of the Code or the annual compensation limit
under section 401(a)(17) of the Code; and (iii) if the Participant has otherwise
elected to make after-tax deferrals under the Savings Plan, whether to convert
these after-tax deferrals to pre-tax deferrals under the Plan upon reaching
either the annual elective deferral limit under section 402(g) of the Code, the
annual addition limit under section 415 of the Code, or the annual compensation
limit under section 401(a)(17) of the Code.

  (b)      Bonus Deferral Portion. With respect to the “bonus deferral” portion
of the Plan, an active Participant shall irrevocably elect on an Enrollment
Agreement (i) whether to defer all or a percentage of his or her Bonus under the
Plan, and (ii) whether to defer an additional percentage of his or her Base
Salary under the Plan over and above the amount deferred under the “restoration”
portion of the Plan. Any amount elected to be deferred under the Plan shall be
made in whole percentages.

  (c)      Rollover Portion. With respect to the “rollover” portion of the Plan
each Participant shall elect on an Enrollment Agreement the Earnings Crediting
Options for his or her Account if the Participant does not already have an
election in effect. Until such election is provided, the Committee shall
determine the Earnings Crediting Options applicable to the Participant’s
Account.

The Committee may establish minimum or maximum amounts that may be deferred
under this Section and may change such standards from time to time. Any such
limits shall be communicated by the Committee to the Participants prior to the
commencement of a Plan Year. Each Eligible Employee shall also provide in the
Enrollment Agreement such other information as the Committee shall require.

4.2      Company Contributions. The Company shall credit to each Participant’s
Account a Company Contribution based upon the amount of the Participant’s Base
Salary Deferral and/or Bonus Deferral. Company Contributions shall be credited
as frequently as determined by the Committee acting on behalf of the Company.
Unless otherwise determined by the Committee, Participants who participate in
Option 1 under Pharmacia’s Retirement Choice Program shall receive a dollar for
dollar matching contribution on a payroll period basis for each dollar that they
defer under the Plan up to 5% of their Compensation and Participants who
participate in Option 2 under Pharmacia’s Retirement Choice Program shall
receive an age-weighted matching contribution identical to the matching
contribution offered under the Savings Plan up to 5% of their Compensation.

 

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ACCOUNTS

5.1      Creation of Accounts. The Committee shall establish and maintain
separate Accounts with respect to each Participant. The amount of the
Participant’s Compensation Deferral and Rollover Deferral shall be credited by
the Company to the Participant’s Account no later than the first day of the
month following the month in which such Compensation would otherwise have been
paid and immediately upon rollover pursuant to Section 6.3. The Participant’s
Account shall be reduced by the amount of payments made by the Company to the
Participant or the Participant’s Beneficiary pursuant to this Plan.

5.2      Compensation Deferrals. A Participant’s Account shall be credited with
Compensation Deferrals in the following amount and manner:

  (a)       Restoration Portion. If a Participant elects to convert his or her
pre-tax deferrals under the Savings Plan directly to pre-tax deferrals under the
Plan upon reaching the annual elective deferral limit under section 402(g) of
the Code, the Participant’s Base Salary Deferrals shall commence on the date on
which the attainment of the annual elective deferral limit under section 402(g)
of the Code would have been reached if the Participant’s before-tax contribution
rate under the Savings Plan that was in effect on the last day of the applicable
enrollment period remained in effect throughout the remainder of the Plan Year.
The amount of such Base Salary Deferrals shall be equal to the total percentage
of Compensation that the Participant has elected to defer as pre-tax and
after-tax deferrals under the Savings Plan. If a Participant elects to convert
his or her pre-tax deferrals under the Savings Plan to after-tax deferrals under
the Savings Plan upon reaching the annual elective deferral limit under section
402(g) of the Code, the Participant’s Base Salary Deferrals shall commence on
the date on which the attainment of the annual addition limit under section 415
of the Code or the annual compensation limit under section 401(a)(17) of the
Code would have been reached if the Participant’s before and after-tax
contribution rates under the Savings Plan that were in effect on the last day of
the applicable enrollment period remained in effect throughout the remainder of
the Plan Year. The amount of such Base Salary Deferrals shall be equal to the
percentage that the Participant has elected to defer as before-tax and after-tax
deferrals under the Savings Plan.

  (b)       Bonus Deferral Portion. If a Participant has elected to defer all or
a portion of his or her Bonus, the Participant’s Bonus Deferral shall commence
on the date that the Participant would otherwise have received such Bonus in an
amount equal to the percentage elected by the Participant. If a Participant has
elected to make additional Base Salary Deferrals under the “bonus deferral”
portion of the Plan, the Participant’s additional Base Salary Deferrals shall
commence on the date on which the attainment of the annual elective deferral
limit under section 402(g) of the Code, the annual addition limit under section
415 of the Code, or the annual compensation limit under section 401(a)(17) of
the Code would have been reached if the Participant’s before and after-tax
contribution rates under the Savings Plan that were in effect on the last day of
the applicable enrollment period remained in effect throughout the remainder of
the Plan Year in an amount equal to the percentage that the Participant has
elected to defer under the “bonus deferral” portion of the Plan. The combined
maximum amount that a Participant may defer under the Plan and the Savings Plan
shall be 80% of the Participant’s Base Salary.

 

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5.3      Earnings on Accounts. A Participant’s Account shall be credited with
earnings in accordance with the Earnings Crediting Options elected by the
Participant from time to time. Participants may allocate the sums credited to
their Account among the Earnings Crediting Options available under the Plan only
in whole percentages; provided, however, that the Company Contribution shall be
deemed to be invested, and shall remain, in phantom shares of Voting Securities
until the Participant reaches age 50. No Rollover Deferral shall be required to
be deemed invested in phantom shares of Voting Securities. The deemed rate of
return, positive or negative, credited under each Earnings Crediting Option is
based upon the actual investment performance of the corresponding investment
portfolios of the Savings Plan, or such other investment fund(s) as the
Committee may designate from time to time, and shall equal the total return of
such investment fund net of asset based charges, including, without limitation,
money management fees, fund expenses, mortality and expense risk insurance
contract charges, and such other administrative expenses as the Committee
determines should be charged to the Participants’ Accounts. The Committee
reserves the right, on a prospective basis, to add or delete Earnings Crediting
Options; provided, however, that, following a CIC Consummation, the Committee
(a) may not alter the Earnings Crediting Options (except to the extent that a
change is made to the corresponding investment portfolios of the Savings Plan
or, if such Plan is terminated, the comparable plan in which Employees of the
Company are eligible to participate) and (b) may not increase any of the
expenses charged to a Participant’s Account except to the extent such expenses
apply to the corresponding investment portfolio maintained under the Savings
Plan and are charged to Participants in that plan.

5.4      Earnings Crediting Options. Notwithstanding that the rates of return
credited to Participants’ Account under the Earnings Crediting Options are based
upon the actual performance of the corresponding portfolios of Savings Plan, or
such other investment funds as the Committee may designate, the Company shall
not be obligated to invest any Compensation deferred by Participants under this
Plan, Company Contributions, or any other amounts, in such portfolios or in any
other investment funds.

5.5      Changes in Earnings Crediting Options. A Participant may change the
Earnings Crediting Options to which the Participant’s Account is deemed to be
allocated with whatever frequency is determined by the Committee which shall not
be less than four times per Plan Year. Each such change may include
(a) reallocation of the Participant’s existing Account in whole percentages
and/or (b) change in investment allocation of amounts to be credited to the
Participant’s Account in the future, as the Participant may elect. Following a
CIC Consummation, the Committee shall not reduce the frequency of permitted
changes.

5.6      Valuation of Accounts. The value of a Participant’s Account as of any
date shall equal the amounts theretofore credited to such Account, including any
earnings (positive or negative) deemed to be earned on such Account in
accordance with Section 5.3 through the day preceding such date, less the
amounts deducted from such Account.

 

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5.7      Statement of Account. The Committee shall provide to each Participant,
not less frequently than quarterly, a statement setting forth in reasonable
detail the balance standing to the credit of each Participant in the
Participant’s Account and the amount credited to and debited from such Account
since the prior statement.

 

DISTRIBUTION OF ACCOUNTS

6.1      Distribution. Benefits shall be distributed in the Plan Year following
(i) the Participant’s Retirement or (ii) the Plan Year in which occurs the
Participant’s Termination Date, other than on account of death or becoming
Disabled, as follows:

  (a)       Benefits Upon Retirement. In the case of a Participant whose Service
with the Employer terminates on or after his Retirement Date, the Participant’s
Account shall be distributed in one of the following methods, as elected by the
Participant in writing either in the Enrollment Agreement or in a separate
election made at least three months prior to the beginning of the Plan Year in
which distribution is to occur: (i) in a lump sum; or (ii) in annual
installments not in excess of 15, as elected by the Participant. Any lump-sum
benefit payable in accordance with this paragraph shall be paid in, but not
later than January 31 of the Plan Year following the Plan Year in which occurs
the Participant’s Retirement Date valued as of the last business day of the Plan
Year preceding the date of payment. Annual installment payments, if any, shall
commence not later than January 31 of the Plan Year following the Plan Year in
which occurs the Participant’s Retirement and each remaining installment shall
be paid no later than each January 31 thereafter. Each such installment shall be
in an amount equal to (i) the value of the Participant’s Account as of the last
business day of the Plan Year preceding the date of payment, divided by (ii) the
number of annual installment payments elected by the Participant in the
Enrollment Agreement or election form that remain to be paid. A Participant may
change the election regarding the manner of payment of the Participant’s Account
at any time prior to the October 1 preceding the Plan Year in which occurs the
later of the Participant’s Retirement Date and his or her Termination Date. If a
Participant has made a timely election but his Termination Date occurs prior to
the end of the Plan Year in which the election was made, then payment will be
made pursuant to his or her prior election unless the Participant’s Termination
Date is after a CIC Consummation (in which case the Participant’s most recent
election shall be given effect). Such election may also specify that payment
shall be made or commence as of the beginning of any later Plan Year (but not
beyond the Plan Year in which the Participant attains age 65) in the event of a
CIC Consummation prior to the Participant’s Termination Date.

    (b)       Benefits Upon Termination of Employment. In the case of a
Participant whose Termination Date occurs prior to the Participant’s Retirement
Date, other than on account of becoming Disabled or by reason of death, the
Participant’s Account shall be distributed in a lump sum by January 31 of the
Plan Year following the Participant’s Termination Date valued as of the last
business day of the Plan Year preceding the date of payment; provided, however,
that, following a CIC Consummation, if the Participant’s termination is not for
Cause the Participant’s Account shall be

 

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distributed in (i) a lump sum or (ii) annual installments not in excess of 15,
as elected by the Participant and such lump sum shall be paid or such
installments shall commence as of the beginning of any later Plan Year (but not
later than January 31 of such year) selected by the Participant (but not beyond
the Plan Year in which the Participant attains age 65). Any such election as to
method and timing of payments following a CIC Consummation shall be made at
least twelve (12) months prior to the date payment is to be made or commence,
otherwise payments shall be made in one lump sum as specified in the first
sentence of this paragraph (b); provided, however, that any such election made
before October 1, 2002, shall be given effect if the Participant’s Termination
Date is after a CIC Consummation.

  (c)       Benefits Upon Change in Control. Within six months after a Change in
Control, or if the Committee determines that a Change in Control is imminent,
but in no event after a CIC Consummation, the Committee may determine to
distribute a Participant’s Account in a lump sum by January 31 of the Plan Year
following the Change in Control or the date of the Committee’s decision
regarding the imminency of the Change in Control valued as of the last business
day of the Plan Year preceding the date of payment.

  (d)       Post Change in Control Elections. Any election as to the time of
payment made by a Participant pursuant to paragraphs 6.3(a) or (b) above that
would take effect after a CIC Consummation may be changed by the Participant
subject to the following limitations: (1) the election must be made at least
twelve (12) months prior to the date that payment was scheduled to be made,
(2) the election can be made only to further defer payment to the beginning of a
Plan Year that is at least two (2) years later. After a Participant’s
Termination Date, he shall be entitled to no more than three (3) such elections
to defer payment.

6.2      Form of Distributions. Any distribution made to or on behalf of a
Participant from the Participant’s Account shall be in cash except that, to the
extent the Account is deemed invested in phantom shares of Voting Securities, a
Participant may elect, in the manner prescribed by the Committee, to receive
Voting Securities. Where a distribution will be in an amount that is less than
the entire balance of any such Account, the distribution shall be made pro rata
from each of the Earnings Crediting Options to which such Account is then
allocated.

6.3      Rollovers. Any distribution that is payable from or amount credited to
any Eligible Employee under the Pharmacia Supplemental Pension Plan, the
Pharmacia Key Executive Pension Plan, the Pharmacia Annual Incentive Plan, the
Pharmacia Cash Long-Term Incentive Plan, the Pharmacia Long-Term Performance
Share Unit Incentive Plan, any individual contractual pension arrangements, any
arrangement or plans that expressly provide for deferral pursuant to this Plan
and such other plans as may be from time to time designated by Pharmacia’s
Senior Vice President Human Resources may be or shall be further deferred under
this Plan in the manner set forth in such plans and in accordance with
procedures established from time to time by the Committee or its delegate. All
such amounts shall be credited to the Participant’s Account as Rollover
Deferrals.

 

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6.4      Pharmacia Corporation ERISA Parity Savings and Investment Plan.
Effective July 1, 2002, this Plan shall assume all rights and obligations of the
Pharmacia Corporation ERISA Parity Savings and Investment Plan (the “Parity
Plan”). Any amount accrued under the Parity Plan shall be payable exclusively
under this Plan in accordance with this Plan’s terms and provisions. The amount
credited to a Participant’s account under the Parity Plan as of July 1, 2002
shall be the opening balance of a Participant’s Account under this Plan on such
date. Any participants under the Parity Plan who have commenced receiving
distributions under the Parity Plan prior to July 1, 2002 shall be entitled to
continue receiving the same form of distribution that they have been receiving
under the Parity Plan.

 

DISABILITY

In the event a Participant becomes Disabled, the Participant’s right to make any
further deferrals under this Plan shall terminate as of the date for which the
Participant first receives long-term disability benefits from the Company. A
Participant who becomes Disabled shall be entitled to elect, within 90 days
after receiving the first long-term disability benefit, but in any event prior
to the end of the current Plan Year, to be treated as a Participant who has
attained his or her Retirement Date, in which case the provisions of
Section 6.1(a) shall be applicable, or else shall be treated as not having
incurred a Termination Date until the Participant would otherwise have attained
his or her Retirement Date in which case the provisions of Section 6.1(a) shall
be applicable when the Participant would otherwise have actually been eligible
under that provision. The Participant’s Account shall continue to be credited
with earnings in accordance with Section 5.3 until such Account is fully
distributed.

 

OTHER WITHDRAWALS

A Participant may, by written request on a form provided by the Committee,
withdraw all or any portion of any of his Accounts as of the end of any calendar
quarter, provided that the Participant shall forfeit 10% of the amount withdrawn
as a penalty. Such penalty shall not apply if (a) the Participant provides the
Company with written notice of withdrawal (which shall be irrevocable) at least
one year prior to the year in which payment to the Participant is to be made,
(b) such payment is for the Participant’s entire Account and (c) the
Participant’s Base Salary Deferrals and Bonus Deferrals shall be suspended for
one calendar year.

 

SURVIVOR BENEFITS

9.1      Death of Participant Prior to the Commencement of Benefits. In the
event of a Participant’s death prior to the commencement of benefits in
accordance with Article 6, benefits shall be paid to the Participant’s
Beneficiary, as determined under Section 10.3, as provided in Section 8.2 in
lieu of any benefits otherwise payable under the Plan to or on behalf of such
Participant.

 

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9.2      Survivor Benefits. In the case of a Participant who dies prior to the
commencement of benefits pursuant to Section 6.1, distribution of such Account
shall be made, as elected by the Participant in the Enrollment Agreement or as
may have been changed by the Participant, (a) in a lump sum as soon as
practicable following the Participant’s death (subject to the Beneficiary’s
rights to obtain payment in accordance with Articles 8 and 10), or (b) in the
manner and at such time as such Account would otherwise have been distributed in
accordance with Section 6.1(a) had the Participant lived and retired on the
earliest possible date. The amount of any lump sum benefit payable in accordance
with this Section shall equal the value of such Account as of the last business
day of the calendar month immediately preceding the date on which such benefit
is paid. The amount of any annual installment benefit payable in accordance with
this Section shall equal (a) the value of such Account as of the last business
day of the calendar month immediately preceding the date on which such
installment is paid, divided by (b) the number of annual installments remaining
to be paid pursuant to the election of the Participant in the Enrollment
Agreement or as may have been changed by the Participant.

9.3      Death of Participant After Benefits Have Commenced. In the event a
Participant dies after annual installment benefits payable under Section 6.1
from the Participant’s Account has commenced, but before the entire balance of
such Account has been paid, any remaining installments shall continue to be paid
to the Participant’s Beneficiary, as determined under Section 10.3, at such
times and in such amounts as they would have been paid to the Participant had he
survived, subject to such Beneficiary’s rights to obtain payment in accordance
with Articles 8 and 10.

 

EMERGENCY BENEFIT

In the event that the Committee, upon written request of a Participant,
determines that the Participant has suffered an “unforeseeable emergency” (or
any similar circumstance under which a payment would be permitted, without
causing the imposition of federal income taxes on Participant Accounts that have
not been paid, pursuant to Revenue Procedure 92-65 or any successor Revenue
Procedure, Revenue Ruling, regulation or other applicable administrative
determination issued by the Internal Revenue Service), the Company shall pay to
the Participant from the Participant’s Account, as soon as practicable following
such determination, an amount necessary to meet the emergency, after deduction
of any and all taxes as may be required pursuant to Section 11.8 (the “Emergency
Benefit”), based on the value of the Participant’s Account as of the last
business day of the month preceding the date of the distribution.

 

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MISCELLANEOUS

11.1      Amendment and Termination. The Plan may be amended, suspended,
discontinued, or terminated at any time by action of the Board or its delegate;
provided, however, that no such amendment, suspension, discontinuance, or
termination shall reduce or in any manner adversely affect the rights of any
Participant or Beneficiary with respect to benefits that are payable or may
become payable under the Plan based upon the balance of the Participant’s
Accounts as of the effective date of such amendment, suspension, discontinuance,
or termination. After a CIC Consummation, no amendment to the Plan may be made
to this Section, Sections 5.3, 5.5, 5.7, 6.1, 6.2, 6.3 or 11.11, or Articles 8,
9 or 10; provided, however, that changes may be made to Section 6.1 but only to
the extent such changes are necessary, in the Committee’s reasonable judgment,
upon the advice of nationally recognized legal counsel, to fulfill the intent of
this Plan to defer federal income taxation of Participants with respect to their
Accounts until such Accounts are paid in accordance with the terms of the Plan.

11.2      Claims Procedure.

     (a)      Claim. A person who believes that he is being denied a benefit to
which he is entitled under the Plan (hereinafter referred to as a “Claimant”)
may file a written request for such benefit with the Committee, setting forth
the claim.

     (b)      Claim Decision. Upon receipt of a claim, the Committee shall
advise the Claimant that a reply will be forthcoming within ninety days and
shall, in fact, deliver such reply within such period. The Committee may,
however, extend the reply period for an additional ninety days for reasonable
cause.

If the claim is denied in whole or in part, the Claimant shall be provided a
written opinion, using language calculated to be understood by the Claimant,
setting forth:

(i)      The specific reason or reasons for such denial;

(ii)     The specific reference to pertinent provisions of this Agreement on
which such denial is based;

(iii)    A description of any additional material or information necessary for
the Claimant to perfect his claim and an explanation why such material or such
information is necessary;

(iv)    Appropriate information as to the steps to be taken if the Claimant
wishes to submit the claim for review; and

(v)    The time limits for requesting a review under subsection (c) and for
review under subsection (d) hereof, including a statement of the Claimant’s
right to bring a civil action under section 502(a) of the Employee Retirement
Income Security Act of 1974, as amended (“ERISA”) following an adverse benefit
determination on review.

 

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     (c)      Request for Review. Within sixty days after the receipt by the
Claimant of the written opinion described above, the Claimant may request in
writing that the Committee review the determination of the Committee. The
Claimant or his duly authorized representative may, but need not, review the
pertinent documents and submit written documents, records, comments and other
information related to the claim for consideration by the Committee and shall be
entitled to review, upon request without charge, copies of documents, records
and all other information relevant to his claim. If the Claimant does not
request a review of the initial determination within such sixty-day period, the
Claimant shall be barred and estopped from challenging the determination.

     (d)      Review of Decision. Within sixty days after the Committee’s
receipt of a request for review, the Committee shall review the initial
determination. After considering all materials presented by the Claimant, the
Committee shall render a written opinion, written in a manner calculated to be
understood by the Claimant, setting forth the specific reasons for the decision,
specific references to the pertinent provisions of this Agreement on which the
decision is based, informing the Claimant of his right to receive, upon request
and free of charge, reasonable access to and copies of all documents, records,
and other information relevant to his benefits, and informing the Claimant of
his right to bring a civil action under section 502(a) of ERISA. If special
circumstances require that the sixty day time period be extended, the Committee
shall so notify the Claimant and shall render the decision as soon as possible,
but no later than one hundred twenty days after receipt of the request for
review.

11.3      Designation of Beneficiary. Each Participant may designate a
Beneficiary or Beneficiaries (which Beneficiary may be an entity other than a
natural person) to receive any payments which may be made following the
Participant’s death. Such designation may be changed or canceled at any time
without the consent of any such Beneficiary. Any such designation, change or
cancellation must be made in a form approved by the Committee and shall not be
effective until received by the Committee, or its designee. If no Beneficiary
has been named, or the designated Beneficiary or Beneficiaries shall have
predeceased the Participant, the Beneficiary shall be the Participant’s estate.
If a Participant designates more than one Beneficiary, the interests of such
Beneficiaries shall be paid in equal shares, unless the Participant has
specifically designated otherwise.

11.4      Limitation of Participant’s Right. Nothing in this Plan shall be
construed as conferring upon any Participant any right to continue in the
employment of the Company, nor shall it interfere with the rights of the Company
to terminate the employment of any Participant and/or to take any personnel
action affecting any Participant without regard to the effect which such action
may have upon such Participant as a recipient or prospective recipient of
benefits under the Plan. Any amounts payable hereunder shall not be deemed
salary or other compensation to a Participant for the purposes of computing
benefits to which the Participant may be entitled under any other arrangement
established by the Employer for the benefit of its employees.

11.5      Obligations to Company. If a Participant becomes entitled to a
distribution of benefits under the Plan, and if at such time the Participant has
outstanding any debt, obligation, or other liability representing an amount
owing to the Employer, then the Employer may offset such amount owed to it
against the amount of benefits otherwise distributable. Such determination shall
be made by the Committee.

 

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11.6      Nonalienation of Benefits. Except as expressly provided herein, no
Participant or Beneficiary shall have the power or right to transfer (otherwise
than by will or the laws of descent and distribution), alienate, or otherwise
encumber the Participant’s interest under the Plan. The Company’s obligations
under this Plan are not assignable or transferable except to (a) any corporation
or partnership which acquires all or substantially all of the Company’s assets
or (b) any corporation or partnership into which the Company may be merged or
consolidated. The provisions of the Plan shall inure to the benefit of each
Participant and the Participant’s Beneficiaries, heirs, executors,
administrators, or successors in interest.

11.7      Protective Provisions. Each Participant shall cooperate with the
Employer by furnishing any and all information reasonably requested by the
Employer in order to facilitate the payment of benefits hereunder. If a
Participant refuses to cooperate, the Employer shall have no further obligation
to the Participant under the Plan, other than payment to such Participant of the
then current balance of the Participant’s Account in accordance with his prior
elections.

11.8      Withholding Taxes. The Company may make such provisions and take such
action as it may deem necessary or appropriate for the withholding of any taxes
which the Company is required by any law or regulation of any governmental
authority, whether federal, state or local, to withhold in connection with any
benefits under the Plan, including, but not limited to, the withholding of
appropriate sums from any amount otherwise payable to the Participant (or his
Beneficiary). Each Participant, however, shall be responsible for the payment of
all individual tax liabilities relating to any such benefits.

11.9      Unfunded Status of Plan. The Plan is intended to constitute an
“unfunded” plan of deferred compensation for Participants. Benefits payable
hereunder shall be payable out of the general assets of the Company, and no
segregation of any assets whatsoever for such benefits shall be made.
Notwithstanding any segregation of assets or transfer to a grantor trust, with
respect to any payments not yet made to a Participant, nothing contained herein
shall give any such Participant any rights to assets that are greater than those
of a general creditor of the Company. In the event that the Committee determines
that a Change in Control is imminent, the Committee shall cause the Company to
create and fund a grantor trust of the Company that shall serve as the vehicle
for paying all benefits due under the Plan and the amount contributed by the
Company shall be the amount the Committee determines would then be due if the
Plan were to terminate and all benefits were then to be paid in lump sum. If a
Change in Control shall not have occurred within six months of such contribution
by the Company, the Board may adopt a resolution to the effect that a Change in
Control is not imminent and, in that event, up to all amounts contributed to the
Trust and all earnings thereon, shall be repaid to the Company at the direction
of the Board.

11.10    Severability. If any provision of this Plan is held unenforceable, the
remainder of the Plan shall continue in full force and effect without regard to
such unenforceable provision and shall be applied as though the unenforceable
provision were not contained in the Plan.

 

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11.11    Governing Law. The Plan shall be construed in accordance with and
governed by the laws of the state of New Jersey, without reference to the
principles of conflict of laws, to the extent not preempted by ERISA; provided,
however, that upon a CIC Consummation any court or tribunal that adjudicates any
dispute, controversy or claim arising between a Participant and the Committee,
its delegate, the Company or an Affiliate (or any successor to either), relating
to or concerning the provisions of this Plan, will apply a de novo standard of
review to any determinations made by such person. Such de novo standard shall
apply notwithstanding the grant of full discretion hereunder to any such person
or characterization of any decision as final, binding or conclusive on any
party.

11.12    Headings. Headings are inserted in this Plan for convenience of
reference only and are to be ignored in the construction of the provisions of
the Plan.

11.13    Gender, Singular, and Plural. All pronouns and any variations thereof
shall be deemed to refer to the masculine, feminine, or neuter, as the identity
of the person or persons may require. As the context may require, the singular
may read as the plural and the plural as the singular.

11.14    Notice. Any notice or filing required or permitted to be given to the
Committee under the Plan shall be sufficient if in writing and hand delivered,
or sent by registered or certified mail, to the Human Resources Department, or
to such other entity as the Committee may designate from time to time. Such
notice shall be deemed given as to the date of delivery, or, if delivery is made
by mail, as of the date shown on the postmark on the receipt for registration or
certification.

 

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