IN THE MATTER OF THE SECURITIES LEGISLATION OF
NOVA SCOTIA, BRITISH COLUMBIA, ALBERTA, SASKATCHEWAN,
MANITOBA AND ONTARIO
AND
IN THE MATTER OF THE MUTUAL RELIANCE REVIEW SYSTEM
FOR EXEMPTIVE RELIEF APPLICATIONS
AND
IN THE MATTER OF PFIZER INC.
MRRS DECISION DOCUMENT
WHEREAS the local securities regulatory authority
or regulator
(the "Decision Maker") in each of Nova Scotia, British Columbia, Alberta,
Saskatchewan, Manitoba and Ontario (the "Jurisdictions") has received an
application from Pfizer Inc. ("Pfizer" or the "Company") for a
decision pursuant to the securities legislation of the Jurisdictions (the
"Legislation") that (i) the requirements contained in the Legislation to be
registered to trade in a security (the "Registration Requirements") and to file
and obtain a receipt for a preliminary prospectus and a prospectus (the "Prospectus
Requirements") (collectively, the "Registration and Prospectus
Requirements") shall not apply to certain trades in securities of Pfizer made in
connection with the Pfizer Inc. 2001 Stock and Incentive Plan (the "Plan"); (ii)
the Registration Requirements shall not apply to first trades of shares of common stock of
Pfizer ("Shares") acquired under the Plan made through the Agent (defined below)
on an exchange or market outside of Canada; and (iii) the requirements contained in the
Legislation relating to the delivery of an offer and issuer bid circular and any notices
of change or variation thereto, minimum deposit periods and withdrawal rights, take-up and
payment for securities tendered to an issuer bid, disclosure, restrictions upon purchases
of securities, bid financing, identical consideration, collateral benefits, and the
requirement to file a reporting form within ten days of an exempt issuer bid and pay a
related fee (the "Issuer Bid Requirements") shall not apply to certain
acquisitions by the Company of Shares pursuant to the Plan in each of the Jurisdictions;
AND WHEREAS pursuant to the Mutual Reliance Review System for
Exemptive Relief Applications (the "System"), the Nova Scotia Securities
Commission is the principal regulator for this application;
AND WHEREAS Pfizer has represented to the Decision Makers as
follows:
1. Pfizer is presently a corporation incorporated under the laws of the
State of Delaware. Pfizer's executive offices are located in New York, New York.
2. Pfizer is registered with the Securities and Exchange Commission (the "SEC")
in the United States under the United States Securities Exchange Act of 1934
(the "Exchange Act") and is not exempt from the reporting requirements
of
the Exchange Act pursuant to Rule 12g3-2 made thereunder.
3. The authorized share capital of Pfizer consists of 9 billon Shares of
par value US$.05 per Share and 12 million shares of preferred stock ("Preferred
Stock"), of which as of March 6, 2002, there were 6,265,230,721 Shares and
0 shares
of Preferred Stock issued and outstanding.
4. The Shares are traded in the United States on the New York Stock
Exchange (the "NYSE") and in Europe on the London, Euronext and Swiss
stock
exchanges (collectively, the "Exchanges").
5. Pfizer is not a reporting issuer or the equivalent in any
jurisdiction in Canada and has no present intention of becoming a reporting issuer
or the equivalent in any jurisdiction in Canada. The majority of Pfizer's directors
reside
outside of Canada.
6. The purpose of the Plan is to provide a material incentive to
employees of Pfizer and its affiliates ("Employees") by making available
to them the benefits of a larger Share ownership in the Company through stock
options, stock
awards or otherwise.
7. Subject to adjustment as described in the Plan, the maximum number of
Shares that may be issued under the Plan is 250 million.
8. Shares offered under the Plan are registered with the SEC under the Securities
Act of 1933, as amended, of the United States. All necessary securities filings
have been made in the United States in order to offer the Plan to the Employees.
The Plan was
approved by the shareholders of Pfizer on April 26, 2001.
9. Under the Plan, options over Shares ("Options") and stock
awards ("Stock Awards") consisting of Shares may be issued to those
Employees
selected by Pfizer's executive compensation committee (the "Committee").
10. As of February 28, 2002, there were 5 Employees in Nova Scotia, 8
Employees in British Columbia, 12 Employees in Alberta, 2 Employees in Saskatchewan,
4 Employees in Manitoba and 137 Employees in Ontario eligible to participate
in the Plan.
11. Pfizer uses the services of agents for the Plan (each an "Agent").
Merrill Lynch & Co., Inc. and Merrill Lynch Pierce Fenner &
Smith, Inc. (together "Merrill Lynch") have been appointed as the initial
Agents for the Plan. Merrill Lynch through its affiliate Merrill Lynch Pierce
Fenner & Smith,
Inc. is, and any Agent appointed in addition to or in replacement of Merrill
Lynch is expected to be a corporation registered under applicable U.S. securities
or banking
legislation to trade in securities and has been, or will be, authorized by Pfizer
to provide services as an agent under the Plan. Merrill Lynch and any replacement
or
additional Agent, is not and is not expected to be registered in any of the Jurisdictions
to effect retail trades.
12. The role of the Agent may include: (a) assisting with the general
administration of the Plan and providing various record keeping services; (b)
holding Stock Awards on behalf of participants; (c) facilitating Option exercises
(including
cashless exercises) under the Plan; (d) maintaining limited purpose broker accounts
on behalf of participants under the Plan; (e) holding Shares acquired under the
Plan on
behalf of participants in limited purpose broker accounts; (f) facilitating the
cancellation and surrender of Stock Awards as permitted under the Plan; (g) facilitating
the payment of withholding taxes; and (h) facilitating the resale of Shares acquired
under the Plan through the NYSE or such other stock exchange or market upon which
the Shares may
be listed.
13. Employees are not induced to participate in the Plan or to exercise
their Options by expectation of employment or continued employment with Pfizer
or its
affiliates.
14. Options or Stock Awards granted under the Plan are not transferable
other than by will or the laws of intestacy and shall be exercisable, during
the optionee's or grantee's lifetime, only by the optionee or grantee. Notwithstanding
the
foregoing, the Committee may grant Options which may be transferred by the optionee,
solely as gifts during the optionee's lifetime, to any member of the optionee's
immediate family or to a trust established for the exclusive benefit of one or
more members of the
optionee's immediate family ("Permitted Transferee"). For purposes
of the Plan,
"immediate family" means any spouse, child, stepchild or grandchild
of an
optionee.
15. The Committee shall establish procedures governing the exercise of
Options. Generally, in order to exercise an Option, the holder of an Option must
submit to Pfizer or the Agent a written notice of exercise identifying the Option
and the number of
Shares being exercised, and deliver full payment for the Shares underlying the
Options to Pfizer or the Agent. The Option exercise price may be paid in cash
or where permitted by
the Committee by way of cashless exercise or by such other method permitted by
the
Committee from time to time.
16. Under the Plan, the Committee may grant Stock Awards to any
Employee. Each Stock Award shall provide that the Shares subject to such Stock
Award may not be transferred or otherwise disposed of by the participant prior
to the expiration of
the period or periods specified therein, which, generally, shall not occur earlier
than
one (1) year following the date of the grant of such Stock Award.
17. Pfizer shall have the right to reacquire Shares underlying Stock
Awards upon the termination of an Employee's employment with Pfizer or its affiliates
while such restriction is in effect, such reacquisition to be upon the terms
and
conditions provided in the agreement relating to the Stock Award ("Repurchase
Rights"). Generally, if an Employee's employment terminates, other than
in the case of death, disability or retirement, prior to the end of the restriction
period, the Shares
underlying the Stock Award will automatically revert to Pfizer without any payment
to the
Employee.
18. Pfizer shall have the right to deduct applicable taxes from any
Option or Stock Award payment and to withhold at the time of delivery or vesting
of cash or Shares under the Plan, an appropriate amount of cash or Shares or
a combination thereof
for a payment of taxes required by law or to take such other action as may be
necessary in the opinion of Pfizer or the Committee to satisfy all obligations
for the withholding of
such taxes. If Shares are used to satisfy the withholding of tax, the Shares
will be valued based on the Shares' fair market value (determined in accordance
with the rules of
the Plan) when the tax withholding is required to be made.
19. Generally, following the termination of a participant's relationship
with Pfizer or an affiliate of Pfizer for reasons of death, disability, retirement
or any
other reason, a former participant in the Plan ("Former Participant"),
and on the death of a participant, where the Option or Stock Award has been transferred
by will
or pursuant to the laws of intestacy or otherwise, or such Option or Stock Award
is transferred as permitted by the Committee to a Permitted Transferee, the Former
Participant or Permitted Transferee may continue to have rights in respect of
the Plan
("Post-Termination Rights"). Post-Termination Rights may include, among
other things, the right to exercise an Option or receive Shares underlying a
Stock Award for a
period determined in accordance with the Plan following termination and the right
to sell Shares acquired under the Plan through an Agent. Post-Termination Rights
are only
available if the right was earned by the Employee while the Employee still had
a
relationship with Pfizer or its affiliates.
20. A prospectus prepared in accordance with U.S. securities laws
describing the terms and conditions of the Plan will be delivered to each Employee
who is granted an Option or Stock Award under the Plan. The annual report, proxy
materials and
other materials which Pfizer is required to file with the SEC will be provided
or made available to Canadian resident participants in the Plan at the same time
and in the same
manner as the documents are provided or made available to U.S. resident participants
in
the Plan.
21. Canadian resident shareholders of Pfizer do not own, directly or
indirectly, more than 10% of the issued and outstanding Shares and do not represent
in
number more than 10% of the total number of shareholders of Pfizer.
22. Employees, Former Participants or Permitted Transferees may exercise
Options and sell Shares acquired under the Plan through an Agent.
23. Because there is no market for the Shares in Canada and none is
expected to develop, any resale of the Shares acquired under the Plan will be
effected through the facilities of, and in accordance with the rules and laws
applicable to, a
stock exchange or organized market outside of Canada on which the Shares may
be listed or
quoted for trading.
24. The Legislation of certain of the Jurisdictions does not contain
exemptions from the Registration and Prospectus Requirements for Option exercises
by Employees, Former Participants or Permitted Transferees through the Agent
where the Agent
is not a registrant.
25. Where the Agent sells Shares on behalf of Employees, Former
Participants or Permitted Transferees, the Employees, Former Participants, Permitted
Transferees or the Agent may not be able to rely on the exemptions from the Registration
Requirements contained in the Legislation.
26. The acquisition by Pfizer of Shares pursuant to the Repurchase
Rights or for the withholding of tax may be an issuer bid as defined in the Legislation.
The exemptions in the Legislation from the Issuer Bid Requirements are not available
for these acquisitions by the Company of its Shares from Employees, Former Participants
or
Permitted Transferees in accordance with the terms of the Plan, since these acquisitions
may occur at a price that is not calculated in accordance with the "market
price," as that term is defined in the Legislation and may be made from
persons other
than employees or former employees.
AND WHEREAS pursuant to the System, this MRRS Decision
Document evidences the decision of each Decision Maker (collectively, the
"Decision");
AND WHEREAS each of the Decision Makers is satisfied that the
test contained in the Legislation that provides the Decision Maker with the jurisdiction
to make the Decision has been met;
THE DECISION of the Decision Makers pursuant to the Legislation
is that:
(a) the Registration and Prospectus Requirements shall not apply to any trade or distribution of Options, Shares or Stock Awards made in connection with the Plan, including trades or distributions involving Pfizer or its affiliates, the Agent, Employees, Former Participants or Permitted Transferees, provided that the first trade in Shares acquired under the Plan pursuant to this Decision, including Shares underlying a Stock Award, shall be deemed a distribution or primary distribution to the public under the Legislation unless the conditions in subsection 2.14(1) of Multilateral Instrument 45-102 Resale of Securities are satisfied;
(b) the first trade by Employees, Former Participants or Permitted Transferees in Shares acquired pursuant to the Plan, including Shares underlying a Stock Award, effected through an Agent shall not be subject to the Registration Requirements provided that the conditions in subsection 2.14(1) of Multilateral Instrument 45-102 Resale of Securities are satisfied; and
(c) the Issuer Bid Requirements shall not apply to the acquisition by Pfizer of Shares, including Shares underlying a Stock Award, from Employees, Former Participants and Permitted Transferees provided the acquisitions are made in accordance with the terms of the Plan.
DATED this 10th day of May, 2002.
H. Leslie O'Brien