PFIZER INC
SEVERANCE AGREEMENT
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<TYPE>EX-10.5
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<DESCRIPTION>SEVERANCE AGREEMENT
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<P align="right"><FONT size="2">EXHIBIT 10(5)
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<P align="center"><FONT size="2"><B>AGREEMENT
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<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;AGREEMENT dated as of January&nbsp;1, 2002 (the &#147;Agreement&#148;) between PFIZER
INC., a Delaware corporation (the &#147;Company&#148;), and JEFFREY B. KINDLER (the
&#147;Executive&#148;).
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<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS, the Company wishes to employ the Executive as its Senior Vice
President and General Counsel; and
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<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS, the Company wishes to provide the benefits under this Agreement as
an inducement for the Executive to enter into such employment; and
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<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS, the Executive wishes to enter into such employment on the
condition that the Company provide the benefits under this Agreement;
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<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;NOW, THEREFORE, the Company and the Executive hereby agree as follows:
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<P><FONT size="2">1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Benefits Upon a Qualifying Termination. If the Executive&#146;s employment with
the Company is terminated by the Company without Cause (as hereinafter defined)
or by the Executive for Good Reason (as hereinafter defined) at any time prior
to January&nbsp;1, 2005 (a &#147;Qualifying Termination&#148;), the Executive shall be entitled
to payment of the benefits set forth below:
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<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
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        <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="1%" align="left" nowrap><FONT size="2">(i)</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="91%"><FONT size="2">A lump sum amount equal to the sum of (a)&nbsp;his unpaid base salary,
if any, through the Date of Termination (as hereinafter defined) at
the rate in effect on the Date of Termination; plus (b)&nbsp;a prorated
portion, based on the number of calendar months (either whole or
partial) in the year through the Date of Termination divided by 12, of
his Annual Incentive Compensation. For the purpose of this Agreement,
&#147;Annual Incentive Compensation&#148; shall mean the greater of (x)&nbsp;the
amount of the annual incentive award, if any, paid to the Executive in
respect of the year immediately preceding the year in which the Date
of Termination occurs or (y)&nbsp;the target amount of the annual incentive
award for the Executive for the year in which the Date of Termination
occurs; plus</FONT></TD>
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        <TD><FONT size="2">&nbsp;</FONT></TD>
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        <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="1%" align="left" nowrap><FONT size="2">(ii)</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="91%"><FONT size="2">A lump sum amount equal to the sum of (a)&nbsp;one full year&#146;s base
salary at the rate in effect on the Date of Termination; plus (b)&nbsp;his
Annual Incentive Compensation.</FONT></TD>
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<P><FONT size="2">The amount of base salary and target amount of annual incentive award shall be
determined without regard to any reduction described in Section&nbsp;6(ii) below. The
benefits provided under this Agreement shall be in addition to any compensation
and benefits to which the Executive may be
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<P><FONT size="2">entitled under any other agreement, plan or program of the Company, except as
expressly provided in Section&nbsp;8 below.
</FONT>
<P><FONT size="2">2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notice of Termination. The termination by the Company or the Executive of the
Executive&#146;s employment for any reason shall be communicated by a written notice
of termination (a &#147;Notice of Termination&#148;) to the other party in accordance with
Section&nbsp;10 hereof. The Notice of Termination shall set forth in reasonable
detail the facts and circumstances providing a basis for the termination,
including, if applicable, the facts and circumstances supporting a claim of
termination for Cause by the Company or a claim of termination for Good Reason
by the Executive.
</FONT>
<P><FONT size="2">3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Date of Termination. The termination of the Executive&#146;s employment shall be
effective on the date set forth in the Notice of Termination, which date shall
not be later than 30&nbsp;days after the date on which the Notice of Termination is
received or deemed received by the other party in accordance with Section&nbsp;10
hereof, or such other date as the parties hereto may agree upon in writing (the
&#147;Date of Termination&#148;).
</FONT>
<P align="left"><FONT size="2">4.&nbsp;Date of Payment.</FONT>

<P><FONT size="2">(i)&nbsp; The benefits provided for in Section&nbsp;1 hereof in the event of a Qualifying
Termination shall be paid by the Company within 30&nbsp;days following the Date of
Termination, subject to subsection (ii)&nbsp;of this Section&nbsp;4.
</FONT>
<P><FONT size="2">(ii)&nbsp; The party receiving the Notice of Termination shall have the right to
notify the other party in accordance with Section&nbsp;10 hereof, within 5&nbsp;days
following the date on which the Notice of Termination is received or deemed
received, that a dispute exists concerning the grounds for termination. In such
event, the parties shall proceed to resolve the dispute by written agreement, by
binding arbitration or by a final judgment, order or decree of a court of
competent jurisdiction (which is not appealable or the time for appeal therefrom
shall have expired and no appeal shall have been perfected). If such dispute is
resolved with a final determination that the Executive is entitled to the
benefits provided in Section&nbsp;1 hereof, such benefits shall be paid, with
interest accumulating from the Date of Termination at the prime rate as
published in The Wall Street Journal, within 15&nbsp;days following the date on which
such dispute is finally resolved.
</FONT>
<P><FONT size="2">5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Definition of Cause. For purposes of this Agreement, &#147;Cause&#148; shall mean the
Executive&#146;s willful breach of duty in the course of his employment or his
willful habitual neglect of his employment duties. For purposes of this Section
5, no act, or failure to act, on the Executive&#146;s part shall be deemed &#147;willful&#148;
unless done, or omitted to be done, by the Executive not in good faith and
without reasonable belief that his action or omission was in the best interests
of the Company. Notwithstanding the
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<P><FONT size="2">foregoing, the Executive shall not be deemed to have been terminated for Cause
unless and until there shall have been delivered to the Executive a copy of a
resolution adopted by the affirmative vote of not less than three-fourths of the
entire membership of the Board of Directors of the Company at a meeting of the
Board called and held for such purpose (after reasonable notice to the Executive
and an opportunity for him, together with his counsel, to be heard before the
Board), finding that in the good faith opinion of the Board the Executive had
committed the breach or neglect of duty described above in this Section&nbsp;5 and
specifying the particulars thereof in detail.
</FONT>
<P><FONT size="2">6.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Definition of Good Reason. For purposes of this Agreement, &#147;Good Reason&#148;
shall mean the occurrence, without the Executive&#146;s written consent, of any of
the following circumstances unless, in the case of subsections (i), (iii), (iv),
and (v)&nbsp;of this Section&nbsp;6, such circumstances are fully corrected within ten
(10)&nbsp;business days after written notice thereof to the Company from the
Executive:
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        <TD width="1%" align="left" nowrap><FONT size="2">(i)</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="96%"><FONT size="2">the assignment to the Executive of any duties inconsistent with his
status as Senior Vice President and General Counsel of the Company, his
removal from that position or a substantial diminution in the nature or
status of his responsibilities;</FONT></TD>
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        <TD><FONT size="2">&nbsp;</FONT></TD>
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        <TD width="1%" align="left" nowrap><FONT size="2">(ii)</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="96%"><FONT size="2">a reduction by the Company of the Executive&#146;s target total annual
compensation (sum of annual base salary plus target annual incentive
award) as in effect on the date hereof or as the same may be increased
from time to time;</FONT></TD>
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        <TD><FONT size="2">&nbsp;</FONT></TD>
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        <TD width="1%" align="left" nowrap><FONT size="2">(iii)</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="96%"><FONT size="2">the failure by the Company to pay or provide to the Executive any
compensation when due;</FONT></TD>
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        <TD><FONT size="2">&nbsp;</FONT></TD>
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        <TD width="1%" align="left" nowrap><FONT size="2">(iv)</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="96%"><FONT size="2">the failure by the Company to continue in effect any incentive
compensation plan in which the Executive participates on the date hereof
or hereafter, unless an equitable alternative compensation arrangement
(embodied in an ongoing substitute or alternative plan) has been provided
for the Executive; or the failure by the Company to continue the
Executive&#146;s participation in any such incentive plan on the same basis,
both in terms of the amount of benefits provided (except if the
Executive&#146;s benefits are reduced as a result of the Company&#146;s reduction
of benefits provided to all participants covered by such plan) and the
level of the Executive&#146;s participation relative to other participants, as
existed immediately prior to such failure;</FONT></TD>
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        <TD><FONT size="2">&nbsp;</FONT></TD>
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        <TD width="1%" align="left" nowrap><FONT size="2">(v)</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="96%"><FONT size="2">except as required by law, the failure by the Company to continue to
provide the Executive with benefits at least as favorable as those
enjoyed by the Executive immediately prior to such failure under the
employee benefit and welfare plans of the Company, including, without
limitation, the pension, life insurance, medical, dental, health and
accident, disability, deferred compensation retirement and savings plans,
in which the Executive was participating immediately prior to such
failure (except if the Executive&#146;s benefits</FONT></TD>
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<P align="center"><FONT size="2">3</FONT>

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        <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
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        <TD width="96%"><FONT size="2">are reduced as a result of the Company&#146;s reduction of benefits provided
to all participants covered by such plan or plans); the taking of any
action by the Company which would directly or indirectly materially
reduce any of such benefits or deprive the Executive of any material
fringe benefit enjoyed by the Executive immediately prior to the taking
of such action (except if the Executive&#146;s benefits or fringe benefits are
reduced as a result of the Company&#146;s reduction of benefits or fringe
benefits to all employees who receive them); or the failure by the
Company to provide the Executive with the number of paid vacation days to
which he was entitled immediately prior to such failure; or</FONT></TD>
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        <TD><FONT size="2">&nbsp;</FONT></TD>
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        <TD width="1%" align="left" nowrap><FONT size="2">(vi)</FONT></TD>
        <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
        <TD width="96%"><FONT size="2">the purported termination of the Executive&#146;s employment which is not
effected pursuant to a Notice of Termination satisfying the requirements
of Section&nbsp;2 above, and for purposes of this Agreement, no such purported
termination shall be effective.</FONT></TD>
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<P><FONT size="2">The Executive&#146;s continued employment shall not constitute consent to, or a
waiver of rights with respect to, any circumstances constituting &#147;Good Reason&#148;
hereunder.
</FONT>
<P><FONT size="2">7.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Limited Circumstances in Which Benefits are Payable Hereunder. No benefits
shall be payable under this Agreement in the event that the Executive&#146;s
employment with the Company ceases for any reason other than termination by the
Company without Cause or by the Executive for Good Reason. Without limiting the
generality of the foregoing, no benefits shall be payable hereunder in the event
that the Executive&#146;s employment with the Company ceases as the result of
termination by the Company for Cause, termination by the Executive other than
for Good Reason, or the death or disability of the Executive. In the case of
termination of the Executive&#146;s employment as a result of the death or disability
of the Executive, benefits will be provided in accordance with the Company&#146;s
compensation and benefit plans in which the Executive participated immediately
prior to his termination of employment.
</FONT>
<P><FONT size="2">8.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Benefits in Event of a Change in Control. The benefits provided under this
Agreement will be reduced by any benefits that may be paid under other
agreements or arrangements as a result of termination of the Executive&#146;s
employment following a change in control of the Company that occurs during the
term of this Agreement.
</FONT>
<P><FONT size="2">9.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Legal Fees and Expenses. The Company promptly shall reimburse the Executive
for all legal fees and expenses reasonably incurred by him in contesting or
disputing the nature of any termination of employment for purposes of this
Agreement or in seeking to obtain or enforce any right or benefit provided by
this Agreement.
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<P><FONT size="2">10.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notices. All notices, requests, demands and other communications hereunder
shall be in writing and shall be deemed to have been duly given by the party
giving such notice or other communication and to have been duly received by the
other party (i)&nbsp;on the date on which such notice or other communication shall be
delivered by hand to and receipted for by such other party, or (ii)&nbsp;three New
York business days after the date on which such notice or other communication
shall be mailed by registered or certified mail with postage prepaid:
</FONT>
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        <TD><FONT size="2">&nbsp;</FONT></TD>
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(i)
</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">If to the Executive, to:
</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">Jeffrey B. Kindler,
Senior Vice President and General
Counsel,
Pfizer Inc.,
235 East 42nd Street,
New York, NY 10017</FONT></TD>
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        <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
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        <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">
(ii)
</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">If to the Company, to:
</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">Pfizer Inc.,
235 East 42nd Street,
New York, NY 10017,
Attention: Corporate Secretary</FONT></TD>
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<P><FONT size="2">or such other address as may have been furnished to the Company by the Executive
or to the Executive by the Company, as the case may be.
</FONT>
<P align="left"><FONT size="2">11.&nbsp;Successors.</FONT>

<P><FONT size="2">(i)&nbsp; The Company shall require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of the
business and/or assets of the Company to agree in writing to assume the
Company&#146;s obligations under this Agreement and to perform such obligations in
the same manner and to the same extent that the Company is required to perform
them. As used in this Agreement, &#147;Company&#148; shall mean the Company as hereinabove
defined and any successor to its business and/or assets as aforesaid which
assumes and agrees to perform the Company&#146;s obligations under this Agreement by
operation of law or otherwise.
</FONT>
<P><FONT size="2">(ii)&nbsp; This Agreement shall inure to the benefit of and be enforceable by the
Executive&#146;s personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees. If the Executive shall
die while any amounts would still be payable to him in accordance with the terms
of this Agreement if he had continued to live, all such amounts shall be paid to
his devisee, legatee or other designee or, if there is no such designee, to his
estate.
</FONT>
<P><FONT size="2">12.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
</FONT>
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<P><FONT size="2">13.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Modification and Waiver. No provision of this Agreement may be amended,
modified, waived or discharged except pursuant to a written agreement signed by
the Company and the Executive.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
</FONT>
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        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">
PFIZER INC.</FONT></TD>
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        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">
By&nbsp;/s/&nbsp;Henry A. McKinnell<BR>
<HR size="1" noshade>
Henry A. McKinnell<BR>
Chairman and Chief Executive Officer</FONT></TD>
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        <TD align="left" valign="top"><FONT size="2">
EXECUTIVE</FONT></TD>
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        <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
        <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="left" valign="top"><FONT size="2">
/s/&nbsp;Jeffrey B. Kindler<BR>
<HR size="1" noshade>
Jeffrey B. Kindler</FONT></TD>
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