|   |   |  | **EXHIBIT 10** |
|--------|--------|--|----------------|

 

AGREEMENT

> 
              THIS AGREEMENT    (this “Agreement”), dated as of December 18, 2006, is by and between    Pfizer Inc., a Delaware corporation (the “Company”), and Henry    A. McKinnell (the “Executive”).              WHEREAS, Executive    serves on the Board of Directors of the Company (“Board”) and    served as Chief Executive Officer of the Company pursuant to an Employment    Agreement by and between the Company and Executive dated as of January 1,    2001 (the “Employment Agreement”);              WHEREAS, in connection    with the succession plan of the Company, Executive has resigned from his position    as Chief Executive Officer of the Company and from all other officer positions,    if any, held by Executive in the Company and each of its subsidiaries and    from his position on the Executive Committee of the Board all effective as    of July 31, 2006 (the “Resignation Date”);              WHEREAS, during    his tenure as Chief Executive Officer, Executive made distinct and valuable    contributions to the Company and the Company wishes to obtain his commitment    to provide his knowledge and experience for its benefit beyond the Resignation    Date;              WHEREAS, Executive    has agreed to continue to serve on the Board until February 28, 2007 and,    by agreement with the Company, to remain as an employee of the Company through    such date (the “Termination Date”); and              WHEREAS, the Company    and Executive desire to set forth the terms and conditions of his continued    employment by the Company from the Resignation Date through the Termination    Date and their respective rights and obligations in respect of Executive’s    resignation, termination of his employment and retirement.              NOW, THEREFORE,    in consideration of the covenants and conditions set forth herein and for    other good and valuable consideration, the receipt and adequacy of which are    hereby acknowledged, the parties, intending to be legally bound, agree as    follows:              1.         Resignations. On the Resignation Date, Executive resigned from his    position as Chief Executive Officer of the Company and from all other officer    positions, if any, held by Executive in the Company and each of its subsidiaries    and from his position on the Executive Committee of the Board. On the Termination    Date, Executive shall step down from his position on the Board and retire    from his employment with the Company and any and all other positions with    the Company, its subsidiaries and any other of its affiliated entities (including,    the Pfizer Foundation) that may be held by Executive. On the date hereof,    Executive has executed and delivered to the Company a letter of resignation    in the form of **Exhibit A** hereto. On the Termination Date,    Executive shall execute and deliver to the Company a letter of resignation    in the form of **Exhibit B** hereto and a release in the form    of **Exhibit C** hereto (the “Release”).              2.         Terms of Continued Employment during Transition Period. During the    period from the Resignation Date through the Termination Date (the “Transition    Period”), Executive shall remain an employee of the Company under the    terms of this Agreement and, in such capacity, shall perform duties during    normal business hours relating reasonably to the transition of his positions,    shall participate in external corporate activities for the benefit of the    Company and shall provide advice on such other matters, commensurate with    Executive’s position and seniority, as reasonably requested by the Chief    Executive Officer and the members of the Board. During the Transition Period,    the Company will (a) continue to pay Executive his regular base salary in    accordance with the Company’s normal payroll practices and (b) Executive    will continue to be eligible to participate in the Company’s employee    benefit plans in which he participated immediately prior to the Resignation    Date (except that Executive shall not receive a bonus in respect of the 2007    calendar year) and to receive the protective services which were provided    immediately prior to the Resignation Date. During the Transition Period, Executive’s    principal office shall be located at a Company facility in New York, New York    and the Company shall provide reasonable secretarial and facilities support.              3.         Continued Service on the Board. Executive shall continue to serve on    the Board, without additional compensation or participation in any Board benefit    or equity plan, until the Termination Date.              4.         Compensation and Benefits payable after the Termination Date. In satisfaction    of the Company’s obligations under the Employment Agreement (other than    with respect to Section 10 thereof), Executive is entitled to the compensation    and benefits set forth in this Section 4, which shall be paid as provided    in this Section 4 and calculated as of the Resignation Date, except as otherwise    indicated. For purposes of this Section 4, the “Termination Payment    Date” shall be March 15, 2007.                      a.    Termination Payments. On the Termination Payment Date, the Company    shall pay to Executive $11,941,000, as a lump sum representing the sum of    two times the sum of his Base Salary on the Resignation Date and his 2005    bonus paid in 2006, as provided for in Section 3(d)(ii) of the Employment    Agreement.                      b.    Incentive Bonus for 2006. In lieu of the bonus provided in Section 3(d)(i)    of the Employment Agreement, on the Termination Payment Date, the Company    will pay Executive a bonus in respect of the 2006 fiscal year equal to $2,158,300,    as a lump sum representing the amount of Executive’s 2005 bonus prorated    through the Resignation Date.                      c.    Accrued Vacation. On the Termination Payment Date, the Company shall    pay to Executive $305,644 for accrued but unused vacation time through the    Termination Date pursuant to the Company’s policies.                      d.    Employee Benefits.                          i.    Benefits Continuation Amount. The Company shall continue to provide    the benefits provided for in the plans specified on Schedule 4(d)(i) hereto    (the “Plans”), or pay to Executive the nominal value of the benefits    specified on Schedule 4(d)(i) hereto, that Executive would receive if Executive’s    employment continued for two (2) years after the Termination Date, assuming    for this purpose that Executive’s compensation is the aggregate amount    payable pursuant to Section 4(a) above, annualized.                         ii.    Retirement Plan and Related Benefits. Any benefits payable to Executive    under the Company’s tax-qualified and non-qualified retirement plans    shall be paid in accordance with the terms of such plans. The Executive’s    account balance and all other benefits due under the retirement plans will    be reviewed and verified by Executive and the Company as correct, as of the    Termination Date, and are estimated as set forth on the schedule provided    to Executive.                         iii.    Medical and Dental Coverage. Executive shall be eligible to continue    medical and dental coverage after the Termination Date for Executive and his    partner Joanna Slonecka by electing COBRA continuation coverage or enrolling    in the Pfizer retiree plans. Executive will be responsible for paying the    applicable contributions for the coverage elected and will be subject to the    same terms and conditions of such plans as all other participants and retirees.                      e.    Stock Options; Performance-Contingent Share Awards and Other Equity-Based    Awards.                         i.    All unvested options to acquire stock of the Company held by Executive shall    vest on the Termination Date and all options to acquire stock of the Company    held by Executive shall remain exercisable in whole or in part in at all times,    and from time to time, following the Termination Date through the expiration    date of such options in accordance with, but subject to, the terms and conditions    specified in the original grant letter, Points of Interest and other applicable    plan documents (including, without limitation, the restrictions on engaging    in activities in competition with, or inimical, contrary or harmful to the    interests of, the Company specified therein).                         ii.    An award shall be provided to Executive with respect to each outstanding unvested    performance-contingent share award held by Executive in a timely manner following    the completion of the applicable performance period in accordance with, but    subject to, the terms and conditions specified in the original award letter,    Points of Interest and other applicable plan documents (including, without    limitation, the restrictions on engaging in activities in competition with,    or inimical, contrary or harmful to the interests of, the Company specified    therein). The amount of such award shall be calculated based on the Company’s    actual performance relative to the pharmaceutical peer group during the performance    period, assuming for this purpose that Executive remained employed by the    Company through the date of payment, provided that the amount of the award    for the performance periods that commenced on January 1, 2003 and January    1, 2005 and the amount of the award with respect to 198,000 target shares    subject to the award for the performance period that commenced on January    1, 2004 shall be prorated for the number of days during the applicable performance    period Executive was employed by the Company. The remaining shares of the    January 1, 2004 award are not subject to proration.                         iii.    All other unvested equity based awards (including, without limitation, restricted    stock and restricted stock units) held by Executive or for the benefit of    Executive shall vest on the Termination Date and one hundred percent (100%)    of such vested awards shall be settled by delivery of the shares of common    stock or other property represented by such awards to Executive in accordance    with, but subject to, the terms and conditions as specified in the original    award letter, Points of Interest and other applicable plan documents (including,    without limitation, the restrictions on engaging in activities in competition    with, or inimical, contrary or harmful to the interests of, the Company specified    therein).              5.         Termination of All Existing Agreements. All rights and obligations    of the Company and Executive under the Employment Agreement (other than Section    10 thereof), Executive’s Change in Control Severance Agreement with    the Company, as amended, and any other employment, change in control or severance    agreement, arrangement or understanding and any other agreement (including    agreements, arrangements or understandings with respect to benefits and compensation)    between the Company (or its subsidiaries) and Executive are hereby canceled    and terminated as of the Resignation Date without liability of either party    hereunder, except that this Agreement, any applicable Stock Option, Restricted    Stock, Restricted Stock Unit and Performance Share Award documents or materials    evidencing equity-based awards or grants outstanding as of the Resignation    Date, Executive’s Indemnification Agreement with the Company (without    prejudice to any other rights to which Executive is entitled under Section    10 of the Employment Agreement), and the Plans referenced herein and on Schedule    4(d)(i) (collectively, the “Surviving Agreements”) shall continue    in full force and effect, except as otherwise specifically modified by this    Agreement.              6.         Restrictions and Obligations of Executive.                      a.    Consideration for Restrictions and Covenants. The parties hereto acknowledge    and agree that the principal consideration for the agreement to make the payments    provided in Section 2 hereof from the Company to Executive, in addition to    Executive’s willingness to provide services and advice beyond the Resignation    Date, is Executive’s compliance with the undertakings set forth in this    Section 6, which the parties acknowledge extend beyond the scope of the related    covenants in the Employment Agreement.                      b.    Confidentiality. Executive shall hold all secret or confidential information,    knowledge or data relating to the Company or any of its affiliated companies    and their respective businesses that Executive obtained during or after Executive’s    employment by the Company or any of its affiliated companies and that is not    public knowledge (“Confidential Information”) in strict confidence.    Executive shall not communicate, divulge or disseminate Confidential Information    at any time during or after Executive’s employment by the Company or    any of its affiliated companies, except with the prior written consent of    the Company or as otherwise required by law, regulation or legal process.    If Executive is requested pursuant to, or required by, applicable law or regulation    or by legal process to disclose any Confidential Information, Executive will    use his reasonable best efforts to provide the Company, as promptly as the    circumstances reasonably permit, with notice of such request or requirement    and, unless a protective order or other appropriate relief is previously obtained,    the Confidential Information, subject to such request, may be disclosed pursuant    to and in accordance with the terms of such request or requirement, provided    that Executive shall use his best efforts to limit any such disclosure to    the precise terms of such request or requirement.                      c.    Non-Compete. Executive agrees, for the benefit of the Company, that    he will not, from the date hereof through December 31, 2009 (the “Restricted    Period”), engage, directly or indirectly, whether as principal, agent,    distributor, representative, consultant, employee, partner, stockholder, limited    partner or other investor (other than an investment of not more than (i) five    percent (5%) of the stock or equity of any corporation the capital stock of    which is publicly traded or (ii) five percent (5%) of the ownership interest    of any limited partnership or other entity) or otherwise, in any business    which is competitive with the business now, or at any time during the Restricted    Period, conducted by the Company or its subsidiaries. Without limiting the    foregoing, during the Restricted Period, Executive shall not serve on the    board of directors (or similar governing body), or accept a nomination therefor,    of any pharmaceutical, bio-technology or technology company without the prior    approval of the Governance Committee of the Board, which approval shall not    be unreasonably withheld with respect to any company that is not a significant    competitor of the Company or its subsidiaries. If, during the Restricted Period,    Executive becomes a member or employee of, or advisor to any private equity    fund, prior to such fund making an offer to acquire an interest in any pharmaceutical    bio-technology or technology company (a “target”) where Executive    has been involved in the evaluation or approval process on behalf of the fund,    Executive shall cause the fund to inquire of the target whether or not it    is in bona-fide negotiations with the Company for the Company to acquire a    controlling interest therein and if so, shall cause the fund to suspend discussions    with the target until confirmation in writing from either the Company or the    target that the negotiations with the Company have concluded.                      d.    Litigation Assistance. Executive agrees to provide reasonable assistance    to and cooperate with the Company and its counsel in regard to any litigation    presently pending or subsequently initiated involving matters of which Executive    has particular knowledge as a result of Executive’s employment with    the Company. Such assistance and cooperation shall consist of Executive making    himself available at reasonable times for consultation with officers of the    Company and its counsel and for depositions or other similar activity should    the occasion arise. Executive shall not receive any additional compensation    for rendering such assistance. In the event that travel or other expenses    are incurred by Executive in connection with such assistance or in the event    his testimony is required, the reasonable travel costs and out-of-pocket expenses    in connection therewith shall be reimbursed by the Company. With respect to    pending or subsequent litigation in which Executive is a defendant as a result    of his employment or other service on behalf of the Company, Executive hereby    consents to his representation by Company counsel where Executive is indemnified    under the Surviving Agreements.                      e.    Relief. The parties hereto hereby acknowledge that the provisions of    Sections 6(b) and (c) are reasonable and necessary for the protection of the    Company and its subsidiaries. In addition, Executive further acknowledges    that the Company and its subsidiaries will be irrevocably damaged if such    covenants are not specifically enforced. Accordingly, Executive agrees that,    in addition to any other relief to which the Company may be entitled, the    Company will be entitled to seek and obtain injunctive relief (without the    requirement of any bond) from a court of competent jurisdiction for the purposes    of restraining Executive from any actual or threatened breach of such covenants.              7.         Full Settlement; Payment in the Event of Death or Incapacity.                      a.    No Obligation to Mitigate. In no event shall Executive be obligated    to seek other employment or take any other action by way of mitigation of    the amounts payable to Executive under any of the provisions of this Agreement,    and, except as specifically provided in this Agreement, such amounts shall    not be reduced whether or not Executive obtains other employment.                      b.    Payment in the Event of Death or Incapacity. All amounts payable to    Executive pursuant to this Agreement shall be payable without regard to the    death or incapacity of Executive. Except as otherwise provided pursuant to    terms of an employee benefit plan or a beneficiary designation thereunder    pursuant to which any such amounts are payable, in the event of Executive’s    death all such payments shall be paid to his estate and in the event of Executive’s    incapacity all such payments shall be made to his legal representative.                      c.    Expenses of Contests. The Company agrees to pay all reasonable legal    and professional fees and expenses that Executive may reasonably incur as    a result of any contest by Executive, by the Company or others of the validity    or enforceability of, or liability under, any provision of this Agreement    (including as a result of any contest by Executive about the amount of any    payment pursuant to this Agreement), plus in each case interest on any delayed    payment at the applicable Federal rate provided for in Section 7872(f)(2)(A)    of the Code or any successor Section of the Code.              8.         Retained Property. No later than the Termination Date, Executive shall    return all property of the Company in his possession or control, including,    but not limited to, Company keys, credit cards, security key cards, telephone    cards, cell phone, car service cards, computer software or hardware and peripherals,    Company identification cards, Company records and copies of records, correspondence    and copies of correspondence and other books or manuals issued by the Company,    that have been marked “Confidential” or that otherwise contain    confidential or proprietary information of the Company or its subsidiaries.    Executive and the Company each represents to the other that Executive is not    indebted in any manner to the Company.              9.         No Inducements. Executive warrants that he is entering into this Agreement    voluntarily, and that, except as set forth herein and in the Surviving Agreements,    no promises or inducements for this Agreement have been made, and he is entering    into this Agreement without reliance upon any other statement or representation    by any of the Company and its affiliates, and its and their present and former    stockholders, directors, officers, employees, agents, attorneys, successors    and assigns or any other person, concerning any fact material hereto.              10.         Entire Agreement. This Agreement, the Release and the Surviving Agreements    constitute the entire agreement between the parties with respect to the subject    matter hereof, and supersede any and all prior agreements or understandings    between the parties arising out of or relating to Executive’s employment    and the cessation thereof. This Agreement, the Release and the Surviving Agreements    may only be changed by written agreement executed by the parties.              11.         Governing Law. This Agreement shall be governed by the laws of the    State of New York, without giving effect to the conflicts of law principles    thereof.              12.         Representations and Warranties. Each party represents and warrants    to the other party that (i) the execution and delivery of this Agreement has    been duly authorized and all actions necessary for the due execution of this    Agreement have been taken, (ii) this Agreement constitutes the legal, valid    and binding obligation of the party, and (iii) this Agreement has been executed    and delivered as its own free act and deed and not as the result of duress    by the other party hereto. Executive specifically acknowledges that he has    been advised to consult legal counsel prior to executing this Agreement, and    has been afforded the opportunity of at least twenty-one (21) days to consider    this Agreement.               13.         Non-Disparagement. Executive covenants and agrees not to engage in    any act or say anything that is intended, or may reasonably be expected, to    harm the reputation, business, prospects or operations of the Company, its    officers, directors, stockholders or employees. The Company agrees that it    will engage in no act or say anything publicly which is intended, or may reasonably    be expected, to harm the reputation, business or prospects of Executive.              14.         Public Announcement. Except as required by law, Executive agrees not    to make any public disclosure or communication with respect to the circumstances    surrounding the termination of his employment with the Company, this Agreement,    the events leading up to this Agreement, and the transactions contemplated    by this Agreement.              15.         No Admissions. Nothing contained in this Agreement shall be considered    an admission by either party of any wrongdoing or liability under any Federal,    state or local statute, public policy, tort law, contract law, common law    or otherwise.              16.         Limitation on Future Activities. From and after the Termination Date,    Executive covenants and agrees that he will not to engage in any activities    on behalf of the Company or any if its affiliates, or represent to any person    that he has authority to do so, without the prior written approval of the    Chief Executive Officer of the Company, which approval may be withheld for    any or no reason.              17.         Expenses. The Company shall pay Executive’s reasonable costs    incident to the negotiation, preparation and execution of this Agreement.              18.         No Third Party Claims. Executive represents and warrants that no other    person or entity has, or to the best knowledge of Executive, claims, any interest    in any potential claims, demands, causes of action, obligations, damages or    suits pursuant to this Agreement; that he is the owner of all other claims,    demands, causes of action, obligations, damages or suits pursuant to this    Agreement; that he has full and complete authority to execute this Agreement;    and that he has not sold, assigned, transferred, conveyed or otherwise disposed    of any claim, demand, cause of action, obligation or liability subject to    this Agreement.              19.         No Third Party Beneficiaries. Except as expressly stated herein, the    parties do not intend to make any person or entity who is not a party to this    Agreement a beneficiary hereof, and this Agreement should not be construed    as being made for the benefit of any person or entity not expressly provided    for herein.              20.         Counterparts. This Agreement may be executed in one or more counterparts,    each of which shall be deemed an original and all of which together shall    be one and the same instrument.              21.         Severability of Provisions. Each of the sections contained in this    Agreement shall be enforceable independently of every other section in this    Agreement, and the invalidity or nonenforceability of any section shall not    invalidate or render unenforceable any other section contained in this Agreement.    Executive acknowledges that the restrictive covenants contained in Section    6(c) are a condition of this Agreement. If any court or arbitrator determines    that any of the covenants in Section 6(c), or any part of any of them, is    invalid or unenforceable, the remainder of such covenants and parts thereof    shall not thereby be affected and shall be given fill effect, without regard    to the invalid portion. If any court or arbitrator determines that any of    such covenants, or part thereof, is invalid or unenforceable because of the    geographic or temporal scope of such provision, such court or arbitrator shall    reduce such scope to the minimum extent necessary to make such covenants,    or part thereof, valid and enforceable.              22.         Acceptance and Revocation. Executive shall have a period of twenty-one    (21) days from the date of receipt of this Agreement to review and accept    the Release. Executive shall have seven (7) days following his execution of    the Release during which time he may revoke the Release by providing the Company    with written notice of the revocation. The Release shall become effective    and enforceable after the expiration of seven (7) days following Executive’s    execution of the Release, and is not enforceable until after the seven-day    revocation period expires.              23.         Tax Withholding. All payments and benefits provided to Executive under    this Agreement will be less applicable withholdings for federal, state and    local taxes.              24.         Arbitration. Except as otherwise provided for herein, any controversy    arising under, out of, in connection with, or relating to, this Agreement,    and any amendment hereof, or the breach hereof or thereof, shall be determined    and settled by arbitration in New York, New York, by a single person mutually    agreed upon, or in the event of a disagreement as to the selection of arbitrator,    in accordance with the Employment Dispute Resolution Rules of the American    Arbitration Association. Any award rendered therein shall specify the findings    of fact of the arbitrator or arbitrators and the reasons of such award, with    references to and reliance on relevant law. Any such award shall be final    and binding on each and all of the parties thereto and their personal representatives,    and judgment may be entered thereon in any court having jurisdiction thereof.                  25.         Section 409A. It is the intent of the parties that all payments and    benefits to Executive pursuant to this Agreement shall be made in full compliance    with Section 409A of the Code, if and to the extent applicable to such payments    and benefits, and this Agreement shall be interpreted in accordance therewith,    and modified accordingly if necessary. Notwithstanding anything else herein    to the contrary, if any payment or benefit required hereunder cannot be provided    or made at the time specified herein without incurring sanctions under Section    409A of the Code, then such benefit or payment shall be provided in full at    the earliest time thereafter when such sanctions will not be imposed and,    with respect to payments pursuant to Section 4(a), (b) or (c), shall be provided    with the interest (“Interest”) that would have accrued thereon    from the Termination Payment Date until the date such payment is made, using    the rate applicable to accruals under the Company’s deferred compensation    plan; provided that under no circumstances shall Executive be entitled to    receive Interest under this provision with respect to any amount that would    constitute payment under a nonqualified deferred compensation plan that is    separate from this Agreement.

            IN WITNESS WHEREOF,  the parties hereto have executed this Agreement as of the day and year first  above written.

 

|   | PFIZER INC.            |
|--------|------------------------|
|   | By: /s/ Dana G. Mead   |
|   |                   |
|   |                   |
|   | EXECUTIVE              |
|   | /s/ Henry A. McKinnell |
|   | Henry A. McKinnell     |

>  

  Original Document issued to Henry A. McKinnell on December 18, 2006

 

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