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                                                                  EXHIBIT 10(26)

        PHARMACIA

Pharmacia Corporation
Long-Term Performance Share Unit
Incentive Plan





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                              Pharmacia Corporation
                 Long-Term Performance Share Unit Incentive Plan

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1.    Plan Objective

      The Pharmacia Corporation Long-Term Performance Share Unit Incentive Plan
(referred to as the "Plan") is designed to encourage results-oriented actions on
the part of elected officers and certain other key executives of Pharmacia
Corporation (the "Company") that will drive the achievement of specific business
objectives.

2.    Eligibility

      Management employees of the Company and its subsidiaries who are elected
officers of the Company or other key executives are eligible to participate in
the Plan. The Administrator (as defined in Section 3 below) shall select the
elected officers and other key executives who shall participate in the Plan (the
"Participants").

3.    Administration

      (a) The Plan shall be administered by the Compensation Committee of the
Board of Directors with respect to employees who are elected officers of the
Company ("Elected Officers"), and the Plan shall be administered by the Chief
Executive Officer of the Company ("CEO") with respect to all other employees.
The CEO may delegate his authority to administer the Plan to an individual or
committee. The term "Administrator" shall mean the Compensation Committee, as
applied to Elected Officers, and the CEO or such individual or committee to
which authority has been delegated, as applied to all other employees.

      (b) The Administrator shall have full power, discretion and authority to
establish the rules and regulations relating to the Plan, to interpret the Plan
and those rules and regulations, to select Participants for the Plan, to
determine each Participant's target award, performance goals and final award, to
make all factual and other determinations in connection with the Plan, and to
take all other actions necessary or appropriate for the proper administration of
the Plan, including the delegation of such authority, discretion or power, where
appropriate.

      (c) All powers of the Administrator shall be executed in its sole
discretion, in the best interest of the Company, not as a fiduciary, and in
keeping with the objectives of the Plan and need not be uniform as to similarly
situated individuals. The Administrator's administration of the Plan, including
all such rules and regulations, interpretations, selections, determinations,
approvals, decisions, delegations, amendments, terminations and other actions,
shall be final and binding on the Company and all employees of the Company and
its subsidiaries, including the Participants and their respective beneficiaries.

4.    Target Awards and Performance Goals

      (a) The Administrator shall establish for each Participant a target award,
which shall be expressed as phantom stock units and shall be payable if and to
the extent that the Company attains the performance goals for the performance
period as described below. The target award shall be equal to three times the
annual incentive target amount in effect for the Participant at the beginning of
the performance period under the Company's annual incentive plan applicable to
the Participant, or such other amount as the Administrator determines, divided
by the Company's stock price on January 2, 2002. The Company's stock price shall
be determined by averaging the high and low sales prices of the Company's common
stock on January 2, 2002 as reported on the New York Stock Exchange. The target
award shall be expressed as

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           Pharmacia Corporation Long-Term Performance Share Unit Incentive Plan

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phantom stock units, each of which shall represent one hypothetical share of
common stock of the Company.

      (b) The performance period is the three-year period beginning January 1,
2002 and ending December 31, 2004. The Administrator shall establish the
performance goals for the performance period. Unless the Administrator
determines otherwise, the performance goals shall be based on (i) the Company's
total earnings per share growth ranking as compared to its peer group and (ii)
the Company's achievement of its targeted earnings per share growth, all as set
forth on Exhibit A. The Administrator may adjust the performance goals as it
deems appropriate to take into account corporate transactions or other
extraordinary events that occur during the performance period.

      (c) The peer group consists of the following companies:

                           American Home Products Corporation
                           Bristol-Myers Squibb Company
                           Eli Lilly and Company
                           Johnson & Johnson
                           Merck & Company, Inc.
                           Pfizer, Inc.
                           Schering-Plough Corporation

The Administrator may adjust the peer group from time to time as it deems
appropriate, including the addition, deletion or replacement of companies, to
take into account mergers and other changes in the companies comprising the peer
group.

      (d) The Administrator may establish appropriate terms and conditions to
accommodate newly hired and transferred employees. Unless otherwise determined
by the Administrator, the target award for a newly hired or transferred employee
shall be prorated based on a fraction, the numerator of which is the number of
months such Participant will participate in the Plan during the performance
period (rounded to the nearest whole month) and the denominator of which is 36.
The target award shall be equal to three times the annual incentive target
amount in effect for the Participant on his or her first date of employment with
the Company or on the date of transfer, as applicable, or such other amount as
the Administrator determines, divided by the Company's stock price on the first
date of employment with the Company or the date of transfer, as applicable. The
Company's stock price shall be determined by averaging the high and low sales
prices of the Company's common stock on the applicable date, as reported on the
New York Stock Exchange.

5.    Calculation of Incentive Awards

      (a) At the end of the performance period, the Administrator shall compute
each Participant's incentive award for the performance period, which shall be
the greater of the award calculated pursuant to subsection (i) or (ii) below:

            (i) The Administrator shall determine whether and to what extent the
performance goals have been met for each fiscal year of the performance period,
based on the Company's performance for each fiscal year, and the applicable
percentage for each year, according to the matrix described on Exhibit A. The
Administrator shall compute an award for each year of the performance period
equal to one-third of the Participant's target award multiplied by the
applicable percentage for the year according to Exhibit A. The Participant's
incentive award earned for the performance period shall equal the sum of the
awards earned for each of the three fiscal years of the performance period.

            (ii) The Administrator shall determine whether and to what extent
the performance goals have been met for the entire three-year performance
period, based on the Company's cumulative

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           Pharmacia Corporation Long-Term Performance Share Unit Incentive Plan

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performance for the performance period. The Administrator shall then determine
the percentage of the target award that is earned for the performance period
based on such cumulative performance according to the matrix described on
Exhibit A. For purposes of this subsection (ii), the Company's performance and
the performance goals on Exhibit A shall be determined on a compounded basis for
the three-year performance period.

      (b) The Administrator shall rely on the audited financial statements of
the Company and its subsidiaries to determine whether and to what extent the
performance goals are met.

      (c) Each Participant's incentive award will be subject to vesting as
described in Section 6 below. On or around March 15, 2005, the Company shall
credit each Participant's incentive award to a book account established for the
Participant under the Pharmacia & Upjohn, Inc. Savings Plus Plan (the "Savings
Plus Plan"). The incentive award shall be credited to the Savings Plus Plan in
the form of stock units equal to the phantom stock units earned pursuant to
Section 5(a) above. All amounts credited to a Participant's book account under
the Savings Plus Plan shall be administered according to the vesting provisions
of Section 6 and the terms and conditions of the Savings Plus Plan.
Distributions from the Participant's vested book account will be made according
to the terms and conditions of the Savings Plus Plan.

      (d) Participants must be employed on December 31, 2004 in order to be
eligible for an incentive award under the Plan, except as described below or
except as the Administrator may otherwise determine. Unless the Administrator
determines otherwise:

            (i) Participants who die during the performance period will receive
a pro-rated award, which will be calculated at the end of the performance period
and will be based on the Company's performance during the entire performance
period as described in subsection (a)(i) or (a)(ii) above, whichever is
applicable. The pro-rated award will be the award calculated for the entire
performance period, multiplied by a fraction, the numerator of which is the
number of months during which the Participant participated in the Plan during
the performance period before the Participant's death (rounded to the nearest
whole month) and the denominator of which is 36. The Company will credit the
pro-rated award to a book account established for the Participant under the
Savings Plus Plan on or around March 15, 2005.

            (ii) Participants who retire after their normal retirement age (as
defined below) during the performance period will receive a pro-rated award,
which will be calculated at the end of the performance period and will be based
on the Company's performance during the entire performance period as described
in subsection (a)(i) or (a)(ii) above, whichever is applicable. Normal
retirement age is age 55, or, if the Participant has at least ten years of
service, age 50. The pro-rated award will be the award calculated for the entire
performance period, multiplied by a fraction, the numerator of which is the
number of months during which the Participant participated in the Plan during
the performance period before the Participant's retirement (rounded to the
nearest whole month) and the denominator of which is 36. The Company will credit
the pro-rated award to a book account established for the Participant under the
Savings Plus Plan on or around March 15, 2005.

            (iii) Participants who leave the Company under a Company-sponsored
disability program during the performance period will receive a pro-rated award,
which will be calculated at the end of the performance period and will be based
on the Company's performance during the entire performance period as described
in subsection (a)(i) or (a)(ii) above, whichever is applicable. The pro-rated
award will be the award calculated for the entire performance period, multiplied
by a fraction, the numerator of which is the number of months during which the
Participant participated in the Plan during the performance period before the
Participant's termination date (rounded to the nearest whole month) and the
denominator of which is 36. The Company will credit the pro-rated award to a
book account established for the Participant under the Savings Plus Plan on or
around March 15, 2005.

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           Pharmacia Corporation Long-Term Performance Share Unit Incentive Plan

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            (iv) If a Change in Control (as defined below) of the Company occurs
during the performance period, the following provisions shall apply:

                  (A) Participants who are then employed by the Company or an
Affiliate (as defined below) will receive a pro-rated award. The award will
first be calculated as of the date of the Change in Control based on the greater
of (i) the Participant's target award or (ii) an award calculated by the
Administrator based on period-to-date performance by the Company as of the date
of the Change in Control. The pro-rated award will be the award computed
pursuant to the preceding sentence multiplied by a fraction, the numerator of
which is the number of months during which the Participant participated in the
Plan during the performance period before the effective date of the Change in
Control (rounded to the nearest whole month), and the denominator of which is
36. Participants who retired, died or were disabled during the performance
period as described above shall receive pro-rated incentive awards as described
in subsections (i), (ii) and (iii) above but based on the Company's performance
to the date of the Change in Control. The Company will credit the pro-rated
award to a book account established for the Participant under the Savings Plus
Plan immediately upon the effective date of the Change in Control.

                  (B) If a Participant remains employed by the Company or an
Affiliate for a period of two years following the Change in Control or is
involuntarily terminated, other than for cause (as defined below), within two
years after the Change in Control, the Participant's award for the performance
period will be increased to 200% of the Participant's target award for the
performance period, if such amount is greater than the award previously
calculated for the performance period pursuant to paragraph (A) above. The
Company will credit any additional award amount to the book account established
for the Participant under the Savings Plus Plan immediately upon the earlier of
(i) the second anniversary of the Change in Control or (ii) the date the
Participant's employment is involuntarily terminated without cause. Any earnings
or other amounts previously credited to the Participant's account under the
Savings Plus Plan with respect to the previously calculated award will remain in
the Participant's account.

            (v) For purposes of this Plan, the term "Change in Control" shall
have the meaning given that term under the Pharmacia Corporation 2001 Long Term
Incentive Plan. The term "Affiliate" shall have the meaning given that term in
the Savings Plus Plan. The term "cause" shall have the meaning given that term
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. If no such employment agreement is in effect, the term "cause" shall
mean (i) a material breach by a 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 as determined in the sole discretion of the Board of Directors of the
Company.

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           Pharmacia Corporation Long-Term Performance Share Unit Incentive Plan

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6.    Vesting of Incentive Awards

      (a) If a Participant earns an incentive award as described in Section 5
for the performance period, 25% of the incentive award will be vested as of the
end of the performance period. The remaining portion of the Participant's
incentive award will vest over a two-year period, as follows, if the Participant
continues to be employed by the Company or an Affiliate through the applicable
vesting date:

<TABLE>
<CAPTION>
                  Vesting Date              Portion of the Incentive Award that Vests
                  ------------              -----------------------------------------

<S>                                                  <C>
                  December 31, 2005                  50%

                  December 31, 2006                  25%
</TABLE>

      (b) If a Participant retires at or after his or her normal retirement age
(as described in Section 5(d)(ii)), leaves the Company under a Company-sponsored
disability program or dies while employed by the Company or an Affiliate, the
Participant's incentive award shall be fully vested at the end of the
performance period or at the time such event occurs, whichever is later. If a
Participant's employment with the Company and its Affiliates terminates for any
other reason, any unvested incentive award, including all unvested earnings or
other amounts credited with respect to the incentive award, shall be forfeited
to the Company as of his or her termination date. A transfer of employment among
the Company and its Affiliates shall not be considered a termination of
employment for purposes of the Plan.

      (c) Earnings or other amounts credited with respect to a Participant's
incentive award will vest pro-rata as the underlying incentive award vests. The
Administrator reserves the right to accelerate vesting on a pro-rata basis or in
full whenever the Administrator deems such action appropriate.

      (d) Notwithstanding the foregoing, the incentive award of each Participant
who is employed by the Company or an Affiliate at the time of a Change in
Control, or who retired at or after normal retirement age, died or left the
Company under a Company-sponsored disability program on or before the date of
the Change in Control, shall become fully vested upon a Change in Control.

7.    Changes to Performance Goals and Target Awards

      At any time prior to the final determination of awards, the Administrator
may adjust the performance goals and target awards 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 the Company's method of accounting, any change in
applicable law, any change due to any merger, consolidation, acquisition,
reorganization, stock split, stock dividend, combination of shares or other
changes in the Company's corporate structure or shares, or any other change of a
similar nature.

8.    Amendments and Termination

      The Company may at any time amend or terminate the Plan by action of the
Compensation Committee; provided that no amendment or termination may be made
after a Change in Control that adversely affects Participants' benefits computed
under Section 5(d) for the performance period. The Administrator shall have the
right to modify the terms of the Plan as may be necessary or desirable to comply
with the laws or local customs of countries in which the Company operates or has
employees.

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           Pharmacia Corporation Long-Term Performance Share Unit Incentive Plan

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9.    Miscellaneous Provisions

      (a) This Plan is not a contract between the Company and the Participants.
Neither the establishment of this Plan, nor any action taken hereunder, shall be
construed as giving any Participant any right to be retained in the employ of
the Company or any of its subsidiaries. Nothing in the Plan, and no action taken
pursuant to the Plan, shall affect the right of the Company or a subsidiary to
terminate a Participant's employment at any time and for any or no reason. The
Company is under no obligation to continue the Plan.

      (b) A Participant's right and interest under the Plan may not be assigned
or transferred, except as provided in Section 5(d) of the Plan upon death, and
any attempted assignment or transfer shall be null and void and shall
extinguish, in the Company's sole discretion, the Company's obligation under the
Plan to pay awards with respect to the Participant. The Company's obligations
under the Plan may be assigned to any corporation which acquires all or
substantially all of the Company's assets or any corporation into which the
Company may be merged or consolidated.

      (c) The Plan shall be unfunded. The Company shall not be required to
establish any special or separate fund, or to make any other segregation of
assets, to assure payment of awards. The Company's obligations hereunder shall
constitute a general, unsecured obligation, awards shall be paid solely out of
the Company's general assets, and no Participant shall have any right to any
specific assets of the Company.

      (d) All claims for benefits under this Plan shall be reviewed pursuant to
the claims procedures contained in the Savings Plus Plan.

      (e) The Company shall have the right to deduct from awards any and all
federal, state and local taxes or other amounts required by law to be withheld.

      (f) The Company's obligation to pay compensation as herein provided is
subject to any applicable orders, rules or regulations of any government agency
or office having authority to regulate the payment of wages, salaries, and other
forms of compensation.

      (g) A Participant's acceptance of benefits under the Plan shall constitute
the Participant's acceptance of all terms of the Plan, including the
discretionary authority of the Administrator.

      (h) The validity, construction, interpretation and effect of the Plan
shall exclusively be governed by and determined in accordance with the laws of
the State of Delaware.

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           Pharmacia Corporation Long-Term Performance Share Unit Incentive Plan

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                                    Exhibit A
                                    ---------

           Pharmacia Corporation Performance Share Unit Incentive Plan
                                1/1/02 - 12/31/04
                           Payout as Percent of Target

<TABLE>
<S>             <C>     <C>       <C>        <C>        <C>        <C>        <C>        <C>
Quartile        Q1      75.0%     100.0%     110.0%     125.0%     150.0%     175.0%     200.0%
Ranking       ------------------------------------------------------------------------------------
EPS Growth      Q2      25.0%      50.0%      75.0%     100.0%     125.0%     150.0%     175.0%
vs.           ------------------------------------------------------------------------------------
Peer Group      Q3       0.0%       0.0%      35.0%      50.0%      80.0%     100.0%     125.0%

              ------------------------------------------------------------------------------------
                Q4       0.0%       0.0%      20.0%      35.0%      50.0%      70.0%      90.0%
              ------------------------------------------------------------------------------------
                     5% or less      6%         7%         8%         9%        10%        11%+
              ------------------------------------------------------------------------------------
                                             Growth in Earnings Per Share
</TABLE>


(a) Target award is number of stock units based on 3x the annual incentive
    target amount at the beginning of the performance period.

(b) When computing the performance goals on a cumulative basis for the
    three-year period, compounded growth in EPS shall be used.

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      Pharmacia Corporation Long-Term Performance Share Unit Incentive Plan