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<SEC-DOCUMENT>0000950123-02-006981.txt : 20020716
<SEC-HEADER>0000950123-02-006981.hdr.sgml : 20020716
<ACCEPTANCE-DATETIME>20020715211958
ACCESSION NUMBER:		0000950123-02-006981
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		5
CONFORMED PERIOD OF REPORT:	20020713
ITEM INFORMATION:		Other events
ITEM INFORMATION:		Financial statements and exhibits
FILED AS OF DATE:		20020716

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			PFIZER INC
		CENTRAL INDEX KEY:			0000078003
		STANDARD INDUSTRIAL CLASSIFICATION:	PHARMACEUTICAL PREPARATIONS [2834]
		IRS NUMBER:				135315170
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		8-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-03619
		FILM NUMBER:		02703485

	BUSINESS ADDRESS:	
		STREET 1:		235 E 42ND ST
		CITY:			NEW YORK
		STATE:			NY
		ZIP:			10017
		BUSINESS PHONE:		2125732323

	MAIL ADDRESS:	
		STREET 1:		235 E 42ND ST
		CITY:			NEW YORK
		STATE:			NY
		ZIP:			10017

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	PFIZER CHARLES & CO INC
		DATE OF NAME CHANGE:	19710908
</SEC-HEADER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>y62256e8vk.txt
<DESCRIPTION>PFIZER INC.
<TEXT>
<PAGE>
                UNITED STATES SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                    FORM 8-K

                                 CURRENT REPORT

     PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

                Date of Report (Date of earliest event reported):
                                  July 13, 2002

                                     ------

                                   PFIZER INC.
             (Exact name of registrant as specified in its charter)

                                    001-03619
                            (Commission File Number)

                DELAWARE                                13-5315170
        (State of Incorporation)           (I.R.S. Employer Identification No.)

                 235 East 42nd Street, New York, New York 10017
                    (Address of principal executive offices)

                                 (212) 573-2323
                         (Registrant's telephone number)
<PAGE>
Item 5.    Other Events.

Pfizer Inc. ("Pfizer") entered into a definitive Agreement and Plan of Merger
(the "Merger Agreement") with Pharmacia Corporation ("Pharmacia") and Pilsner
Acquisition Sub Corp., a direct wholly-owned subsidiary of Pfizer (the "Merger
Sub"), dated as of July 13, 2002. Pursuant to the Merger Agreement, Merger Sub
shall be merged with and into Pharmacia with Pharmacia as the surviving
corporation and wholly-owned subsidiary of Pfizer (the "Merger"). At the
effective time of the Merger, each share of Pharmacia Common Stock issued and
outstanding immediately prior to the effective time of the Merger will be
converted automatically into and become exchangeable for 1.4 shares of Pfizer
Common Stock. The Merger is subject to various conditions, including, among
other things, regulatory approval and approval by Pfizer's and Pharmacia's
stockholders.

Pharmacia and Pfizer have previously entered into various agreements (the
"CELEBREX Agreements") regarding Pharmacia's pain and inflammation drug,
CELEBREX, pursuant to which Pharmacia and Pfizer co-promote Celebrex in most
markets globally. In connection with the signing of the Merger Agreement,
Pharmacia and Pfizer entered into an amendment to the CELEBREX Agreement (the
"Amendment"), a copy of which is attached hereto as Exhibit 99.1 and is
incorporated by reference, which Amendment shall only become effective if
Pharmacia becomes obligated to pay a termination fee to Pfizer under the terms
of the Merger Agreement, and Pharmacia, in addition, consummates the Business
Combination (as defined in the Merger Agreement) transaction that caused such
termination fee to become due and payable. The foregoing description of the
Amendment is qualified in its entirety by reference to the Amendment attached
hereto as Exhibit 99.1.

The foregoing description of the Merger and the Merger Agreement is qualified in
its entirety by reference to the Merger Agreement, a copy of which is filed
herewith as Exhibit 2.1 and such Exhibit is incorporated herein by reference.

Also, attached and incorporated herein by reference as:

      -     Exhibit 99.2 is a copy of the press release of Pfizer Inc. dated
            July 15, 2002, reporting Pfizer's financial results for the second
            quarter 2002; and

      -     Exhibit 99.3 is a copy of the press release of Pfizer Inc. dated
            July 15, 2002, reporting the signing of Merger Agreement to acquire
            Pharmacia.

This Current Report on Form 8-K contains or incorporates by reference
forward-looking statements that involve risks and uncertainties. These
statements may differ materially from actual future events or results. Readers
are referred to the documents filed by Pfizer with the Securities and Exchange
Commission, which identify important risk factors that could cause actual
results to differ from those contained in any forward-looking statements.

Item 7(c).    Exhibits.

<TABLE>
<CAPTION>
Exhibit     Description
- -------     -----------
<S>         <C>
2.1         Agreement and Plan of Merger dated as of July 13, 2002 among Pfizer
            Inc., Pilsner Acquisition Sub Corp. and Pharmacia Corporation.

99.1        Amendment dated as of July 13, 2002 among Pfizer Inc. Pharmacia
            Corporation and G.D. Searle LLC

99.2        Press release of Pfizer Inc. dated July 15, 2002, reporting
            Pfizer's financial results for the second quarter and first
            half of 2002.

99.3        Press release of Pfizer Inc. dated July 15, 2002, reporting
            the signing of a definitive merger agreement to acquire
            Pharmacia.
</TABLE>

                                       2
<PAGE>
                                    SIGNATURE

Under the requirements of the Securities Exchange Act of 1934, the registrant
has caused this report to be signed on its behalf by the authorized undersigned.

<TABLE>
<S>                       <C>
                                             PFIZER INC.
                                            -----------
                                            (Registrant)


Date: July 15, 2002                     /s/ Margaret M. Foran
                                        ---------------------

                                          Margaret M. Foran
                          Title: Vice President - Corporate Governance and
                                              Secretary
</TABLE>


                                       3
<PAGE>
                                  EXHIBIT INDEX

<TABLE>
<S>         <C>
2.1         Agreement and Plan of Merger dated as of July 13, 2002 among Pfizer
            Inc., Pilsner Acquisition Sub Corp. and Pharmacia Corporation.

99.1        Amendment dated as of July 13, 2002 among Pfizer Inc. Pharmacia
            Corporation and G.D. Searle LLC

99.2        Press release of Pfizer Inc. dated July 15, 2002, reporting
            Pfizer's financial results for the second quarter and first
            half of 2002.

99.3        Press release of Pfizer Inc. dated July 15, 2002, reporting
            the signing of a definitive merger agreement to acquire
            Pharmacia.
</TABLE>

                                       4


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-2.1
<SEQUENCE>3
<FILENAME>y62256exv2w1.txt
<DESCRIPTION>AGREEMENT AND PLAN OF MERGER
<TEXT>
<PAGE>
                                                                     Exhibit 2.1









                          AGREEMENT AND PLAN OF MERGER

                            DATED AS OF JULY 13, 2002

                                      AMONG

                                  PFIZER INC.,

                          PILSNER ACQUISITION SUB CORP.

                                       AND

                              PHARMACIA CORPORATION
<PAGE>
                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                 Page
                                                                                 ----
<S>           <C>                                                                <C>
                                    ARTICLE I

                       THE MERGER; CERTAIN RELATED MATTERS

Section 1.1   The Merger....................................................      2
Section 1.2   Closing.......................................................      2
Section 1.3   Effective Time................................................      2
Section 1.4   Effects of the Merger.........................................      2
Section 1.5   Certificate of Incorporation..................................      2
Section 1.6   Bylaws........................................................      2
Section 1.7   Officers and Directors........................................      3
Section 1.8   Effect on Capital Stock.......................................      3
Section 1.9   Company Stock Options and Other Equity-Based Awards...........      4
Section 1.10  Certain Adjustments...........................................      5
Section 1.11  Associated Rights.............................................      6
Section 1.12  Appraisal Rights..............................................      6


                                   ARTICLE II

                            EXCHANGE OF CERTIFICATES

Section 2.1   Exchange Fund.................................................      6
Section 2.2   Exchange Procedures...........................................      6
Section 2.3   Distributions with Respect to Unexchanged Shares; Voting......      7
Section 2.4   No Further Ownership Rights in Company Common Stock...........      8
Section 2.5   No Fractional Shares of Parent Common Stock...................      8
Section 2.6   Termination of Exchange Fund..................................      9
Section 2.7   No Liability..................................................      9
Section 2.8   Investment of the Exchange Fund...............................      9
Section 2.9   Lost Certificates.............................................      9
Section 2.10  Withholding Rights............................................      9
Section 2.11  Further Assurances............................................     10
Section 2.12  Stock Transfer Books..........................................     10
Section 2.13  Affiliates....................................................     10


                                   ARTICLE III

                         REPRESENTATIONS AND WARRANTIES

Section 3.1   Representations and Warranties of Parent......................     10
</TABLE>

                                      -i-
<PAGE>
<TABLE>
<S>           <C>                                                                <C>
Section 3.2   Representations and Warranties of the Company.................     20
Section 3.3   Representations and Warranties of Parent and Merger Sub.......     30


                                   ARTICLE IV

                    COVENANTS RELATING TO CONDUCT OF BUSINESS

Section 4.1   Covenants of Parent...........................................     30
Section 4.2   Covenants of the Company......................................     32
Section 4.3   Monsanto Indebtedness.........................................     36
Section 4.4   Governmental Filings..........................................     36
Section 4.5   Control of Other Party's Business.............................     36
Section 4.6   Actions to Company Benefit Plans..............................     37
Section 4.7   Exchange of Preferred Stock...................................     37


                                    ARTICLE V

                              ADDITIONAL AGREEMENTS

Section 5.1   Preparation of Proxy Statement; Stockholders Meetings.........     37
Section 5.2   Access to Information/Employees...............................     40
Section 5.3   Reasonable Best Efforts.......................................     41
Section 5.4   Acquisition Proposals.........................................     43
Section 5.5   Employee Benefits Matters.....................................     44
Section 5.6   Fees and Expenses.............................................     46
Section 5.7   Directors' and Officers' Indemnification and Insurance........     46
Section 5.8   Public Announcements..........................................     47
Section 5.9   Accountant's Letters..........................................     47
Section 5.10  Listing of Shares of Parent Common Stock......................     47
Section 5.11  Dividends.....................................................     48
Section 5.12  Affiliates....................................................     48
Section 5.13  Section 16 Matters............................................     48
Section 5.14  Tax Treatment.................................................     48
Section 5.15  Tax Certificates..............................................     49
Section 5.16  Completion of Spin-off or Sale of Monsanto....................     49
Section 5.17  Restructure of Transaction....................................     49
Section 5.18  Election to Parent's Board of Directors.......................     49


                                   ARTICLE VI

                              CONDITIONS PRECEDENT

Section 6.1   Conditions to Each Party's Obligation to Effect the Merger....     49
Section 6.2   Additional Conditions to Obligations of Parent and Merger Sub.     50
Section 6.3   Additional Conditions to Obligations of the Company...........     51
</TABLE>

                                      -ii-
<PAGE>
                                   ARTICLE VII

                            TERMINATION AND AMENDMENT

<TABLE>
<S>           <C>                                                                <C>
Section 7.1   General.......................................................     52
Section 7.2   Obligations in Event of Termination...........................     54
Section 7.3   Amendment.....................................................     56
Section 7.4   Extension; Waiver.............................................     56
Section 7.5   No Effect on Existing Agreements..............................     56


                                  ARTICLE VIII

                               GENERAL PROVISIONS

Section 8.1   Non-Survival of Representations, Warranties and Agreements....     57
Section 8.2   Notices.......................................................     57
Section 8.3   Interpretation................................................     58
Section 8.4   Counterparts..................................................     58
Section 8.5   Entire Agreement; No Third Party Beneficiaries................     58
Section 8.6   Governing Law.................................................     58
Section 8.7   Severability..................................................     58
Section 8.8   Assignment....................................................     59
Section 8.9   Submission to Jurisdiction; Waivers...........................     59
Section 8.10  Enforcement...................................................     59
Section 8.11  Definitions...................................................     59
</TABLE>


                                     -iii-
<PAGE>
                                LIST OF EXHIBITS

<TABLE>
<CAPTION>
Exhibit     Title
- -------     -----
<S>         <C>
1.8(b)      Certificate of Designations for Parent Convertible Preferred Stock
5.12        Form of Affiliate Letter
5.15        Form of the Company Spin-Off Representations Letter to Cadwalader,
            Wickersham & Taft
6.2(c)(1)   Form of Tax Opinion of Cadwalader, Wickersham & Taft
6.2(c)(2)   Form of Parent Tax Representations Letter
6.2(c)(3)   Form of the Company Tax Representations Letter
6.3(c)(1)   Form of Tax Opinion of Sullivan & Cromwell
</TABLE>
<PAGE>
            AGREEMENT AND PLAN OF MERGER, dated as of July 13, 2002 (this
"Agreement"), among PFIZER INC., a Delaware corporation ("Parent"), PILSNER
ACQUISITION SUB CORP., a Delaware corporation and a direct wholly-owned
subsidiary of Parent ("Merger Sub"), and PHARMACIA CORPORATION, a Delaware
corporation (the "Company" and collectively with Parent and Merger Sub, the
"parties").


                              W I T N E S S E T H:
                              - - - - - - - - - -


            WHEREAS, the respective Boards of Directors of the Company and
Parent deem it advisable and in the best interests of each corporation and its
respective stockholders that the Company and Parent engage in a business
combination in order to advance the long-term strategic business interests of
the Company and Parent;


            WHEREAS, the combination of the Company and Parent shall be effected
by the terms of this Agreement through a merger as outlined below (the
"Merger");


            WHEREAS, in furtherance thereof, the respective Boards of Directors
of the Company and Parent have approved the Merger, upon the terms and subject
to the conditions set forth in this Agreement, pursuant to which each share of
common stock, par value $2.00 per share, of the Company ("Company Common Stock")
issued and outstanding immediately prior to the Effective Time (as defined in
Section 1.3), other than shares owned or held directly or indirectly by Parent
or directly or indirectly by the Company, together with the associated Company
Rights (as defined in Section 3.2(b)) will be converted into the right to
receive shares of common stock, par value $0.05 per share, of Parent ("Parent
Common Stock") as set forth in Section 1.8 and each share of preferred stock
that has been issued (as contemplated and permitted by Sections 4.2(c) and 4.7)
in exchange for the then outstanding shares of Series B Convertible Perpetual
Preferred Stock, par value $0.01 per share, of the Company (the currently
existing preferred stock being the "Series B Preferred Stock" and the newly
issued shares of preferred stock being the "Company Convertible Preferred
Stock") issued and outstanding immediately prior to the Effective Time will be
converted into the right to receive one share of a new series of convertible
preferred stock to be issued by Parent at the Effective Time and to be
designated as Series A Convertible Perpetual Preferred Stock ("Parent
Convertible Preferred Stock") as set forth in Section 1.8;


            WHEREAS, for Federal income tax purposes, it is intended that the
Merger shall qualify as a reorganization within the meaning of Section 368(a) of
the Internal Revenue Code of 1986, as amended (the "Code"), and the regulations
promulgated thereunder; and


            NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth in this
Agreement, and intending to be legally bound hereby, the parties agree as
follows:

                                      -1-
<PAGE>
                                   ARTICLE I

                       THE MERGER; CERTAIN RELATED MATTERS

            Section 1.1 The Merger. Upon the terms and subject to the conditions
set forth in this Agreement, and in accordance with the Delaware General
Corporation Law (the "DGCL"), Merger Sub shall be merged with and into the
Company at the Effective Time. Following the Merger, the separate corporate
existence of Merger Sub shall cease and the Company shall continue as the
surviving corporation (the "Surviving Corporation").

            Section 1.2 Closing. Upon the terms and subject to the conditions
set forth in Article VI, and the termination rights set forth in Article VII,
the closing of the Merger (the "Closing") will take place on the first Business
Day after the satisfaction or waiver (subject to applicable law) of the
conditions (excluding conditions that, by their nature, cannot be satisfied
until the Closing Date, but subject to the fulfillment or waiver of those
conditions) set forth in Article VI, unless this Agreement has been previously
terminated pursuant to its terms or unless another time or date is agreed to in
writing by the parties (the actual time and date of the Closing being referred
to herein as the "Closing Date"). The Closing shall be held at the offices of
Cadwalader, Wickersham & Taft, 100 Maiden Lane, New York, New York, 10038,
unless another place is agreed to in writing by the parties.

            Section 1.3 Effective Time. As soon as practicable following the
satisfaction or waiver (subject to applicable law) of the conditions set forth
in Article VI, at the Closing the parties shall (i) file a certificate of merger
(the "Certificate of Merger") in such form as is required by, and executed in
accordance with, the relevant provisions of the DGCL and (ii) make all other
filings or recordings required under the DGCL. The Merger shall become effective
at such time as the Certificate of Merger is duly filed with the Delaware
Secretary of State or at such subsequent time as Parent and the Company shall
agree and as shall be specified in the Certificate of Merger (the date and time
the Merger becomes effective being the "Effective Time").

            Section 1.4 Effects of the Merger. At and after the Effective Time,
the Merger will have the effects set forth in the DGCL. Without limiting the
generality of the foregoing, and subject thereto, at the Effective Time all the
property, rights, privileges, powers and franchises of the Company and Merger
Sub shall be vested in the Surviving Corporation, and all debts, liabilities and
duties of the Company and Merger Sub shall become the debts, liabilities and
duties of the Surviving Corporation.

            Section 1.5 Certificate of Incorporation. The certificate of
incorporation of the Company, as in effect immediately prior to the Effective
Time, shall be the certificate of incorporation of the Surviving Corporation,
until thereafter changed or amended as provided therein or by applicable law.

            Section 1.6 Bylaws. The bylaws of Merger Sub, as in effect
immediately prior to the Effective Time, shall be the bylaws of the Surviving
Corporation until thereafter changed or amended as provided therein or by
applicable law.


                                      -2-
<PAGE>
            Section 1.7 Officers and Directors. From and after the Effective
Time, until successors are duly elected or appointed and qualified in accordance
with applicable law, (i) the directors of Merger Sub at the Effective Time shall
be the directors of the Surviving Corporation and (ii) the officers of the
Company at the Effective Time shall be the officers of the Surviving
Corporation.

            Section 1.8 Effect on Capital Stock.

            (a) At the Effective Time, by virtue of the Merger and without any
action on the part of the holder thereof, each share of Company Common Stock
issued and outstanding immediately prior to the Effective Time (other than
shares of Company Common Stock owned by Parent or Merger Sub or held by the
Company, all of which shall be canceled as provided in Section 1.8(d)), together
with the associated Company Rights (as defined in Section 3.2(b)), shall be
converted into 1.4 validly issued, fully paid and non-assessable shares of
Parent Common Stock (the "Exchange Ratio") and the associated Parent Rights (as
defined in Section 3.1(b)) (together with any cash in lieu of fractional shares
of Parent Common Stock to be paid pursuant to Section 2.5, the "Common Stock
Merger Consideration").

            (b) At the Effective Time, by virtue of the Merger and without any
action on the part of the holder thereof, each share of Company Convertible
Preferred Stock issued and outstanding immediately prior to the Effective Time
shall, except as provided in Section 1.12 with respect to the shares of Company
Convertible Preferred Stock as to which appraisal rights have been exercised, be
converted into the right to receive one share of Parent Convertible Preferred
Stock (the "Preferred Merger Consideration" and together with the Common Stock
Merger Consideration, the "Merger Consideration") having terms substantially as
set forth in the form of the Series A Convertible Perpetual Preferred Stock
Certificate of Designations attached as Exhibit 1.8(b) hereto. Prior to the
Closing, Parent shall take all corporate action necessary to reserve for
issuance a sufficient number of shares of Parent Common Stock for delivery upon
conversion of the Parent Convertible Preferred Stock.

            (c) As a result of the Merger and without any action on the part of
the holders thereof, at the Effective Time, all shares of Company Common Stock
(together with the associated Company Rights) and Company Convertible Preferred
Stock shall cease to be outstanding and shall be canceled and retired and shall
cease to exist, and each holder of a certificate or certificates which
immediately prior to the Effective Time represented any such shares of Company
Common Stock ("Common Certificates") or of Company Convertible Preferred Stock
("Preferred Certificates" and together with the Common Certificates, the
"Certificates") shall thereafter cease to have any rights with respect to such
shares of Company Common Stock (together with the associated Company Rights) or
Company Convertible Preferred Stock, respectively, except as provided herein or
by law.

            (d) Each share of Company Common Stock and Company Convertible
Preferred Stock owned by Parent, Merger Sub or any other wholly-owned Subsidiary
of Parent or held by the Company at the Effective Time shall, by virtue of the
Merger, cease to be outstanding and shall be canceled and retired and no stock
of Parent or other consideration shall be delivered in exchange therefor.


                                      -3-
<PAGE>
            (e) At the Effective Time, by virtue of the Merger and without any
action on the part of the holder thereof, each share of common stock, par value
$0.01 per share, of Merger Sub issued and outstanding immediately prior to the
Effective Time, shall be converted into one validly issued, fully paid and
non-assessable share of common stock, par value $2.00 per share, of the
Surviving Corporation.

            Section 1.9 Company Stock Options and Other Equity-Based Awards.

            (a) Each Company Stock Option (as defined in Section 3.2(b)) that
was granted pursuant to the Company Stock Option Plans (as defined in Section
3.2(b)) prior to the Effective Time and which remains outstanding immediately
prior to the Effective Time shall cease to represent a right to acquire shares
of Company Common Stock and shall be converted, at the Effective Time, into an
option to acquire, on the same terms and conditions as were applicable under the
Company Stock Option (but taking into account any changes thereto provided for
in the Company Stock Option Plans or in such option by reason of this Agreement
or the transactions contemplated hereby), that number of shares of Parent Common
Stock determined by multiplying the number of shares of Company Common Stock
subject to such Company Stock Option by the Exchange Ratio, rounded, if
necessary, to the nearest whole share of Parent Common Stock, at a price per
share (rounded to the nearest one-hundredth of a cent) equal to the per share
exercise price specified in such Company Stock Option divided by the Exchange
Ratio; provided, however, that in the case of any Company Stock Option to which
Section 421 of the Code applies by reason of its qualification under Section 422
of the Code, the option price, the number of shares subject to such option and
the terms and conditions of exercise of such option shall be determined in a
manner consistent with the requirements of Section 424(a) of the Code. On or
prior to the Effective Time, the Company will take all actions necessary such
that all Company Stock Options outstanding prior to the Effective Time under the
Company Stock Option Plans are treated in accordance with the immediately
preceding sentences, including, but not limited to, precluding the holder of
each Company Stock Option from receiving any cash payments in respect of such
Option in connection with the Merger.

            (b) Effective at the Effective Time, Parent shall assume each
Company Stock Option in accordance with the terms of the Company Stock Option
Plan under which it was issued and the stock option agreement by which it is
evidenced. As soon as practicable after the Effective Time, but no later than
five (5) Business Days after the Effective Time, Parent shall deliver to the
holders of Company Stock Options appropriate notices setting forth such holders'
rights pursuant to the Company Stock Option Plans (including that, in connection
with the Merger and pursuant to the terms of the Company Stock Option Plans, the
Company Stock Options of such holders have become fully vested and exercisable)
and the agreements evidencing the grants of such Company Stock Options shall
continue in effect on the same terms and conditions. To the extent permitted by
law, Parent shall comply with the terms of the Company Stock Option Plans and
shall take such reasonable steps as are necessary or required by, and subject to
the provisions of, such Company Stock Option Plans, to have the Company Stock
Options which qualified as incentive stock options prior to the Effective Time
continue to qualify as incentive stock options of Parent after the Effective
Time.

            (c) Prior to the Closing, Parent shall take all corporate action
necessary to reserve for issuance a sufficient number of shares of Parent Common
Stock for delivery upon


                                      -4-
<PAGE>
exercise of Company Stock Options or in connection with restricted shares or in
connection with the settlement of stock accounts in accordance with this Section
1.9 or in connection with any other Company Benefit Plan for which shares of
Parent Common Stock are required to be reserved for issuance. Promptly after the
Effective Time, but no later than five (5) Business Days after the Effective
Time, Parent shall file a registration statement on Form S-3 or Form S-8, as the
case may be (or any successor or other appropriate forms), with respect to the
shares of Parent Common Stock subject to such options or restricted shares or
stock accounts or Company Benefit Plans for which registration of shares of
Parent Common Stock is required and shall use commercially reasonable efforts to
maintain the effectiveness of such registration statement or registration
statements (and maintain the current status of the prospectus or prospectuses
contained therein) for so long as such options, restricted shares or stock
accounts remain outstanding or for so long as such registration statement is
required with respect to any other Company Benefit Plan. With respect to those
individuals who subsequent to the Merger will be subject to the reporting
requirements under Section 16(a) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), where applicable, Parent shall administer the
Company Stock Option Plans in a manner consistent with the exemptions provided
by Rule 16b-3 promulgated under the Exchange Act.

            (d) Each restricted share of Company Common Stock, and other Company
stock awards granted pursuant to the Company Stock Option Plans or Company
Benefit Plans which are outstanding immediately prior to the Effective Time
shall be converted, as of the Effective Time, into a number of shares of Parent
Common Stock equal to the product of (1) the number of shares subject to the
award and (2) the Exchange Ratio; and the number of shares of Parent Common
Stock as so determined shall be delivered to the holder of each such award as
soon as practicable following the Effective Time. Such converted awards shall
otherwise be subject to the same terms, conditions and restrictions, if any, as
were applicable to such awards under the relevant Company Stock Option Plan or
Company Benefit Plan. Similarly, all Company Stock Option Plans and Company
Benefit Plans (and awards thereunder, including stock appreciation rights)
providing for cash payments measured by the value of Company Common Stock shall
be deemed to refer to the number of shares of Parent Common Stock equal to the
result of multiplying such number of shares of Company Common Stock by the
Exchange Ratio, and such cash payments shall otherwise be made on the same
terms, conditions and restrictions, if any, as were applicable under the
relevant Company Stock Option Plan or Company Benefit Plan.

            Section 1.10 Certain Adjustments. If, between the date of this
Agreement and the Effective Time, the outstanding Parent Common Stock or Company
Common Stock shall have been changed into a different number of shares or
different class by reason of any reclassification, recapitalization, stock
split, split-up, combination or exchange of shares or a stock dividend or
dividend payable in any other securities shall be declared with a record date
within such period, or any similar event shall have occurred, the Exchange Ratio
shall be appropriately adjusted to provide to the holders of Company Common
Stock the same economic effect as contemplated by this Agreement prior to such
event; provided, however, that there shall be no adjustment as a result of any
dividend or distribution to the Company's stockholders of the stock of Monsanto
Company ("Monsanto") pursuant to the spin-off of Monsanto as described in the
Company's Annual Report on Form 10-K for the year ended December 31, 2001 (the
"Monsanto Spin-Off").

                                       -5-
<PAGE>
            Section 1.11 Associated Rights. References in Article I and Article
II of this Agreement to Company Common Stock shall include, unless the context
requires otherwise, the associated Company Rights and references in Article I
and Article II of this Agreement to Parent Common Stock shall include, unless
the context requires otherwise, the associated Parent Rights.

            Section 1.12 Appraisal Rights.

            (a) Notwithstanding Section 1.8, shares of Company Convertible
Preferred Stock outstanding immediately prior to the Effective Time and held by
a holder who has not voted in favor of the Merger or consented thereto in
writing and who has demanded appraisal for such shares of Company Convertible
Preferred Stock in accordance with the DGCL shall not be converted into a right
to receive the Preferred Merger Consideration, unless such holder fails to
perfect or withdraws or otherwise loses his right to appraisal in accordance
with the DGCL. If, after the Effective Time, such holder fails to perfect or
withdraws or loses his right to appraisal, such shares of Company Convertible
Preferred Stock shall be treated as if they had been converted as of the
Effective Time into a right to receive the Preferred Merger Consideration.

            (b) The Company shall give Parent (i) prompt notice of any demands
for appraisal received by the Company, withdrawals of such demands, and any
other instruments served pursuant to the DGCL and received by the Company and
(ii) the opportunity to direct all negotiations and proceedings with respect to
demands for appraisal under the DGCL. The Company shall not, except with the
prior written consent of Parent, make any payment with respect to any demands
for appraisal or offer to settle or settle any such demands.

                                   ARTICLE II

                            EXCHANGE OF CERTIFICATES

            Section 2.1 Exchange Fund. Prior to the Effective Time, Parent shall
appoint a commercial bank or trust company to act as exchange agent hereunder
(which entity shall be reasonably acceptable to the Company) for the purpose of
exchanging Certificates for the Merger Consideration (the "Exchange Agent"). At
or prior to the Effective Time, Parent shall deposit with the Exchange Agent, in
trust for the benefit of holders of shares of Company Common Stock and Company
Convertible Preferred Stock, certificates representing the Parent Common Stock
issuable pursuant to Section 1.8 in exchange for outstanding shares of Company
Common Stock and certificates representing the Parent Convertible Preferred
Stock issuable pursuant to Section 1.8 in exchange for outstanding shares of
Company Convertible Preferred Stock. Parent agrees to make available directly or
indirectly to the Exchange Agent from time to time as needed, cash sufficient to
pay cash in lieu of fractional shares pursuant to Section 2.5 and any dividends
and other distributions pursuant to Section 2.3. Any cash and certificates of
Parent Common Stock and Parent Convertible Preferred Stock deposited with the
Exchange Agent shall hereinafter be referred to as the "Exchange Fund."

            Section 2.2 Exchange Procedures. Promptly after the Effective Time,
the Surviving Corporation shall cause the Exchange Agent to mail to each holder
of record of a Certificate (i) a letter of transmittal which shall specify that
delivery shall be effected, and risk of loss and title to the Certificates shall
pass, only upon proper delivery of the Certificates to the


                                      -6-
<PAGE>
Exchange Agent, and which letter shall be in customary form and have such other
provisions as Parent may reasonably specify (such letter to be reasonably
acceptable to the Company prior to the Effective Time) and (ii) instructions for
effecting the surrender of such Certificates in exchange for the applicable
Merger Consideration. Upon surrender of a Certificate to the Exchange Agent
together with such letter of transmittal, duly executed and completed in
accordance with the instructions thereto, and such other documents as may
reasonably be required by the Exchange Agent, the holder of such Certificate
shall be entitled to receive in exchange therefor (i) in the case of holders of
Common Certificates (A) one or more shares of Parent Common Stock (which shall
be in uncertificated book-entry form unless a physical certificate is requested)
representing, in the aggregate, the whole number of shares that such holder has
the right to receive pursuant to Section 1.8 (after taking into account all
shares of Company Common Stock then held by such holder) and (B) a check in the
amount equal to the cash that such holder has the right to receive pursuant to
the provisions of this Article II, consisting of cash in lieu of any fractional
shares of Parent Common Stock pursuant to Section 2.5 and dividends and other
distributions pursuant to Section 2.3 and (ii) in the case of holders of
Preferred Certificates (A) one or more shares of Parent Convertible Preferred
Stock (which shall be in uncertificated book-entry form unless a physical
certificate is requested) representing, in the aggregate, the number of shares
that such holder has the right to receive pursuant to Section 1.8 and (B) a
check in the amount equal to the cash that such holder has the right to receive
pursuant to the provisions of this Article II, consisting of dividends and other
distributions pursuant to Section 2.3. No interest will be paid or will accrue
on any cash payable pursuant to Section 2.3 or Section 2.5. In the event of a
transfer of ownership of Company Common Stock or Company Convertible Preferred
Stock which is not registered in the transfer records of the Company, one or
more shares of Parent Common Stock or Parent Convertible Preferred Stock
evidencing, in the aggregate, the proper number of shares of Parent Common Stock
or Parent Convertible Preferred Stock, a check in the proper amount of cash in
lieu of any fractional shares of Parent Common Stock pursuant to Section 2.5 and
any dividends or other distributions to which such holder is entitled pursuant
to Section 2.3, may be issued with respect to such Company Common Stock or
Company Convertible Preferred Stock to such a transferee if the Certificate
representing such shares of Company Common Stock is presented to the Exchange
Agent, accompanied by all documents required to evidence and effect such
transfer and to evidence that any applicable stock transfer taxes have been
paid.

            Section 2.3 Distributions with Respect to Unexchanged Shares;
Voting.

            (a) All shares of Parent Common Stock and Parent Convertible
Preferred Stock to be issued pursuant to the Merger shall be deemed issued and
outstanding as of the Effective Time and whenever a dividend or other
distribution is declared by Parent in respect of the Parent Common Stock or
Parent Convertible Preferred Stock, as the case may be, the record date for
which is at or after the Effective Time, that declaration shall include
dividends or other distributions in respect of all shares issuable pursuant to
this Agreement; provided that no dividends or other distributions declared or
made in respect of the Parent Common Stock or Parent Convertible Preferred
Stock, as the case may be, with a record date that is 180 days or more after the
Effective Time shall be paid to the holder of any unsurrendered Certificate
until the holder of such Certificate shall surrender such Certificate in
accordance with this Article II. Subject to the effect of applicable laws,
following surrender of any such Certificate, there shall be paid to such holder
of shares of Parent Common Stock or Parent Convertible Preferred Stock


                                      -7-
<PAGE>
issuable in exchange therefor, without interest, (a) promptly after the time of
such surrender, the amount of any cash payable in lieu of fractional shares of
Parent Common Stock to which such holder is entitled pursuant to Section 2.5 and
the amount of dividends or other distributions with a record date after the
Effective Time theretofore paid with respect to such whole shares of Parent
Common Stock, and (b) at the appropriate payment date, the amount of dividends
or other distributions with a record date after the Effective Time but prior to
such surrender and a payment date subsequent to such surrender payable with
respect to such shares of Parent Common Stock. (b) For a period of one year
following the Closing, holders of unsurrendered Certificates shall be entitled
to vote at any meeting of Parent stockholders the number of whole shares of
Parent Common Stock and Parent Convertible Preferred Stock represented by such
Certificates, regardless of whether such holders have exchanged their
Certificates.

            Section 2.4 No Further Ownership Rights in Company Common Stock. All
shares of Parent Common Stock and Parent Convertible Preferred Stock issued and
cash paid upon conversion of shares of Company Common Stock or Company
Convertible Preferred Stock in accordance with the terms of Article I and this
Article II (including any cash paid pursuant to Section 2.3 or 2.5) shall be
deemed to have been issued or paid in full satisfaction of all rights pertaining
to the shares of Company Common Stock and Company Convertible Preferred Stock,
as the case may be.

            Section 2.5 No Fractional Shares of Parent Common Stock.

            (a) No certificates or scrip or shares of Parent Common Stock
representing fractional shares of Parent Common Stock or book-entry credit of
the same shall be issued upon the surrender for exchange of Certificates and
such fractional share interests will not entitle the owner thereof to vote or to
have any rights of a stockholder of Parent or a holder of shares of Parent
Common Stock.

            (b) Notwithstanding any other provision of this Agreement, each
holder of shares of Company Common Stock exchanged pursuant to the Merger who
would otherwise have been entitled to receive a fraction of a share of Parent
Common Stock (after taking into account all Certificates delivered by such
holder) shall receive, in lieu thereof, cash (without interest) in an amount
equal to the product of (i) such fractional part of a share of Parent Common
Stock multiplied by (ii) the closing price for a share of Parent Common Stock on
the New York Stock Exchange, Inc. ("NYSE") Composite Transactions Tape on the
date of the Effective Time or, if such date is not a Business Day, the Business
Day immediately following the date on which the Effective Time occurs. Such
payment of cash consideration in lieu of fractional shares of Parent Common
Stock is not expected to exceed, in the aggregate, 1% of the total Merger
Consideration.

            (c) As promptly as practicable after the determination of the amount
of cash, if any, to be paid to holders of fractional interests, the Exchange
Agent shall so notify Parent, and Parent shall deposit or cause the Surviving
Corporation to deposit such amount with the Exchange Agent and shall cause the
Exchange Agent to forward payments to such holders of fractional interests
subject to and in accordance with the terms hereof.


                                      -8-
<PAGE>
            Section 2.6 Termination of Exchange Fund. Any portion of the
Exchange Fund which remains undistributed to the holders of Certificates for six
months after the Effective Time shall be delivered to Parent or otherwise on the
instruction of Parent, and any holders of the Certificates who have not
theretofore complied with this Article II shall thereafter look only to Parent
for the Merger Consideration with respect to the shares of Company Common Stock
or Company Convertible Preferred Stock, as the case may be, formerly represented
thereby to which such holders are entitled pursuant to Section 1.8 and Section
2.2, any cash in lieu of fractional shares of Parent Common Stock to which such
holders are entitled pursuant to Section 2.5 and any dividends or distributions
with respect to shares of Parent Common Stock or Parent Convertible Preferred
Stock to which such holders are entitled pursuant to Section 2.3. Any such
portion of the Exchange Fund remaining unclaimed by holders of shares of Company
Common Stock or Company Convertible Preferred Stock five years after the
Effective Time (or such earlier date immediately prior to such time as such
amounts would otherwise escheat to or become property of any Governmental Entity
(as defined in Section 3.1(c)(iii)) shall, to the extent permitted by law,
become the property of the Surviving Corporation free and clear of any claims or
interest of any Person previously entitled thereto.

            Section 2.7 No Liability. None of Parent, Merger Sub, the Company,
the Surviving Corporation or the Exchange Agent shall be liable to any Person in
respect of any Merger Consideration from the Exchange Fund delivered to a public
official pursuant to any applicable abandoned property, escheat or similar law.

            Section 2.8 Investment of the Exchange Fund. The Exchange Agent
shall invest any cash included in the Exchange Fund as directed by Parent on a
daily basis; provided, that no such gain or loss thereon shall affect the
amounts payable to the Company stockholders pursuant to Article I and the other
provisions of this Article II. Any interest and other income resulting from such
investments shall promptly be paid to Parent.

            Section 2.9 Lost Certificates. If any Certificate shall have been
lost, stolen or destroyed, upon the making of an affidavit of that fact by the
Person claiming such Certificate to be lost, stolen or destroyed and, if
required by the Surviving Corporation, the posting by such Person of a bond in
such reasonable amount as the Surviving Corporation may direct as indemnity
against any claim that may be made against it with respect to such Certificate,
the Exchange Agent will deliver in exchange for such lost, stolen or destroyed
Certificate the applicable Merger Consideration with respect to the shares of
Company Common Stock or Company Convertible Preferred Stock, as the case may be,
formerly represented thereby, any cash in lieu of fractional shares of Parent
Common Stock to which such holders are entitled pursuant to Section 2.5, and
unpaid dividends and distributions on shares of Parent Common Stock or Parent
Convertible Preferred Stock to which such holders are entitled pursuant to
Section 2.3, as the case may be, deliverable in respect thereof, pursuant to
this Agreement.

            Section 2.10 Withholding Rights. Each of the Surviving Corporation
and Parent shall be entitled to deduct and withhold from the consideration
otherwise payable pursuant to this Agreement to any holder of shares of Company
Common Stock, Company Convertible Preferred Stock, Company Stock Options or any
other equity rights in the Company such amounts as it is required to deduct and
withhold with respect to the making of such payment under the Code and the rules
and regulations promulgated thereunder, or any provision of state, local or
foreign tax


                                      -9-
<PAGE>
law. To the extent that amounts are so withheld by the Surviving Corporation or
Parent, as the case may be, such withheld amounts shall be treated for all
purposes of this Agreement as having been paid to the holder of the shares of
Company Common Stock or Company Convertible Preferred Stock, as the case may be,
in respect of which such deduction and withholding was made by the Surviving
Corporation or Parent, as the case may be.

            Section 2.11 Further Assurances. After the Effective Time, the
officers and directors of the Surviving Corporation will be authorized to
execute and deliver, in the name and on behalf of the Company or Merger Sub, any
deeds, bills of sale, assignments or assurances and to take and do, in the name
and on behalf of the Company or Merger Sub, any other actions and things to
vest, perfect or confirm of record or otherwise in the Surviving Corporation any
and all right, title and interest in, to and under any of the rights, properties
or assets acquired or to be acquired by the Surviving Corporation as a result
of, or in connection with, the Merger.

            Section 2.12 Stock Transfer Books. The stock transfer books of the
Company shall be closed immediately upon the Effective Time and there shall be
no further registration of transfers of shares of Company Common Stock or
Company Convertible Preferred Stock thereafter on the records of the Company. On
or after the Effective Time, any Certificates presented to the Exchange Agent or
Parent for any reason shall be converted into the Merger Consideration with
respect to the shares of Company Common Stock or Company Convertible Preferred
Stock, as the case may be, formerly represented thereby (including any cash in
lieu of fractional shares of Parent Common Stock to which the holders thereof
are entitled pursuant to Section 2.5) and any dividends or other distributions
to which the holders thereof are entitled pursuant to Section 2.3.

            Section 2.13 Affiliates. Notwithstanding anything to the contrary
herein, to the fullest extent permitted by law, no certificates representing
shares of Parent Common Stock or cash shall be delivered to a Person who may be
deemed an "affiliate" of the Company in accordance with Section 5.12 hereof for
purposes of Rule 145 under the Securities Act of 1933, as amended (the
"Securities Act"), and applicable rules and regulations of the Securities and
Exchange Commission (the "SEC") until such Person has executed and delivered an
Affiliate Agreement (as defined in Section 5.12) to Parent.

                                   ARTICLE III

                         REPRESENTATIONS AND WARRANTIES

            Section 3.1 Representations and Warranties of Parent. Except as set
forth in the Parent disclosure schedule delivered by Parent to the Company prior
to the execution of this Agreement (the "Parent Disclosure Schedule") (each
section of which qualifies the correspondingly numbered representation and
warranty or covenant and any other representation or warranty, if the disclosure
set forth in the Parent Disclosure Schedule is readily applicable to such other
representation or warranty), Parent represents and warrants to the Company as
follows:

            (a) Organization, Standing and Power; Subsidiaries.


                                      -10-
<PAGE>
      (i) Each of Parent and each of its Subsidiaries (as defined in Section
8.11) is duly organized, validly existing and in good standing under the laws of
its jurisdiction of incorporation or organization, has the requisite corporate
(or similar) power and authority to own, lease and operate its properties and to
carry on its business as now being conducted, except where the failures to be so
organized, existing and in good standing or to have such power and authority, in
the aggregate, would not reasonably be expected to have a Material Adverse
Effect (as defined in Section 8.11) on Parent, and is duly qualified and in good
standing to do business in each jurisdiction in which the nature of its business
or the ownership or leasing of its properties makes such qualification necessary
other than in such jurisdictions where the failures so to qualify or to be in
good standing, in the aggregate, would not reasonably be expected to have a
Material Adverse Effect on Parent. The copies of the certificate of
incorporation and bylaws of Parent which were previously furnished or made
available to the Company are true, complete and correct copies of such documents
as in effect on the date of this Agreement.

      (ii) Exhibit 21 to Parent's Annual Report on Form 10K for the year ended
December 31, 2001 ("Parent Exhibit 21") includes all the Subsidiaries of Parent
which as of the date of this Agreement are Significant Subsidiaries (as defined
in Rule 1-02 of Regulation S-X of the SEC). All the outstanding shares of
capital stock of, or other equity interests in, each such Significant Subsidiary
have been validly issued and are fully paid and non-assessable and are, except
as set forth in Parent Exhibit 21, owned directly or indirectly by Parent, free
and clear of all pledges, claims, liens, charges, encumbrances and security
interests of any kind or nature whatsoever (collectively "Liens") and free of
any other restriction (including any restriction on the right to vote, sell or
otherwise dispose of such capital stock or other ownership interests), except
for restrictions imposed by applicable securities laws. Except as set forth in
the Parent SEC Reports (as defined in Section 3.1(d)) filed prior to the date
hereof, neither Parent nor any of its Subsidiaries directly or indirectly owns
any equity or similar interest in, or any interest convertible into or
exchangeable or exercisable for, any corporation, partnership, joint venture or
other business association or entity (other than Subsidiaries), that is or would
reasonably be expected to be material to Parent and its Subsidiaries taken as a
whole.

      (b) Capital Structure.

            (i) As of March 31, 2002, the authorized capital stock of Parent
      consisted of (A) 9,000,000,000 shares of Parent Common Stock of which
      6,254,532,591 shares were outstanding and 539,225,789 shares were held in
      the treasury of Parent and (B) 12,000,000 shares of Preferred Stock, no
      par value, of which 3,000,000 shares have been designated Series A Junior
      Preferred Stock and reserved for issuance upon exercise of the rights (the
      "Parent Rights") distributed to the holders of Parent Common Stock
      pursuant to the Rights Agreement, dated as of October 6, 1997 between
      Parent and ChaseMellon Shareholder Services, L.L.C. (the "Parent Rights
      Agreement"). Since March 31, 2002 to the date of this Agreement, there
      have been no issuances of shares of the capital stock of Parent or any
      other securities of Parent other than issuances of shares of Parent Common
      Stock pursuant to options or rights outstanding as of March 31, 2002 under
      the Benefit Plans (as defined in Section 8.11) of Parent. All issued and
      outstanding


                                      -11-
<PAGE>
      shares of the capital stock of Parent are, and when shares of Parent
      Common Stock and Parent Convertible Preferred Stock are issued in the
      Merger or upon exercise of stock options converted in the Merger pursuant
      to Section 1.9, such shares will be, duly authorized, validly issued,
      fully paid and non-assessable and free of any preemptive rights. There
      were outstanding as of March 31, 2002 no options, warrants or other rights
      to acquire capital stock from Parent other than (x) the Parent Rights and
      (y) options, restricted stock and other rights to acquire capital stock
      from Parent representing in the aggregate the right to purchase
      approximately 475,613,737 shares of Parent Common Stock (collectively, the
      "Parent Stock Options") under Parent's Stock and Incentive Plan, Parent's
      Performance-Contingent Share Award Program, Parent's 2001
      Performance-Contingent Share Award Plan, Parent's Annual Retainer Unit
      Award Plan (for non-employee Directors), Parent's Nonfunded Deferred
      Compensation and Unit Award Plan for Non-Employee Directors and Parent's
      Restricted Stock Plan for Non-Employee Directors, the Company 1996 Stock
      Plan (collectively, the "Parent Stock Option Plans"). Section 3.1(b) of
      the Parent Disclosure Schedule sets forth a complete and correct list, as
      of March 31, 2002, of the number of shares of Parent Common Stock subject
      to Parent Stock Options or other rights to purchase or receive Parent
      Common Stock granted under the Parent Benefit Plans or otherwise, the
      dates of grant and the exercise prices thereof. No options or warrants or
      other rights to acquire capital stock from Parent have been issued or
      granted since March 31, 2002 to the date of this Agreement.

            (ii) No bonds, debentures, notes or other indebtedness of Parent
      having the right to vote (or convertible into or exercisable for
      securities having the right to vote) on any matters on which holders of
      capital stock of Parent may vote ("Parent Voting Debt") are issued or
      outstanding.

            (iii) Except as otherwise set forth in this Section 3.1(b) and as
      contemplated by Section 1.8 and Section 1.9, as of the date of this
      Agreement, there are no securities, options, warrants, calls, rights,
      commitments, agreements, arrangements or undertakings of any kind to which
      Parent or any of its Subsidiaries is a party or by which any of them is
      bound obligating Parent or any of its Subsidiaries to issue, deliver or
      sell, or cause to be issued, delivered or sold, additional shares of
      capital stock or other voting securities of Parent or any of its
      Subsidiaries or obligating Parent or any of its Subsidiaries to issue,
      grant, extend or enter into any such security, option, warrant, call,
      right, commitment, agreement, arrangement or undertaking. As of the date
      of this Agreement, there are no outstanding obligations of Parent or any
      of its Subsidiaries to repurchase, redeem or otherwise acquire any shares
      of capital stock of Parent or any of its Subsidiaries. There are not
      outstanding any stock-appreciation rights, security-based performance
      units, "phantom" stock or other security rights or other agreements,
      arrangements or commitments of any character (contingent or otherwise)
      pursuant to which any Person is or may be entitled to receive any payment
      or other value based on the revenues, earnings or financial performance,
      stock price performance or other attribute of Parent or any of its
      Subsidiaries or assets or calculated in accordance therewith (other than
      ordinary course payments or commissions to sales representatives of Parent
      based upon revenues generated by them without augmentation as a result of
      the transactions contemplated hereby) or to cause Parent or any of its
      Subsidiaries to file a registration statement under


                                      -12-
<PAGE>
      the Securities Act or which otherwise relate to the registration of any
      securities of Parents or its Subsidiaries.

            (c) Authority; No Conflicts.

            (i) Parent has all requisite corporate power and authority to enter
      into this Agreement and to consummate the transactions contemplated
      hereby, subject to obtaining the requisite stockholder approval of the
      issuance of the shares of Parent Common Stock to be issued in the Merger
      (the "Share Issuance") and the amendment to the Parent Restated
      Certificate of Incorporation to increase the authorized share capital (the
      "Certificate Amendment"), in each case, by the votes set forth in Section
      3.1(g) hereof (such votes as set forth in such Section 3.1(g) collectively
      being the "Parent Stockholder Approval"). The execution and delivery of
      this Agreement and the consummation of the transactions contemplated
      hereby have been duly authorized by all necessary corporate action on the
      part of Parent, subject to obtaining the Parent Stockholder Approval. This
      Agreement has been duly executed and delivered by Parent and constitutes a
      valid and binding agreement of Parent, enforceable against it in
      accordance with its terms, except as such enforceability may be limited by
      bankruptcy, insolvency, reorganization, moratorium and similar laws
      relating to or affecting creditors generally or by general equity
      principles (regardless of whether such enforceability is considered in a
      proceeding in equity or at law).

            (ii) The execution and delivery of this Agreement by Parent does not
      or will not, as the case may be, and the consummation by Parent of the
      Merger and the other transactions contemplated hereby will not, conflict
      with, or result in any violation of, or constitute a default (with or
      without notice or lapse of time, or both) under, or give rise to a right
      of, or result by its terms in the, termination, amendment, cancellation or
      acceleration of any obligation or the loss of a material benefit under, or
      the creation of a lien, pledge, security interest, charge or other
      encumbrance on, or the loss of, any assets, including Intellectual
      Property (as defined in Section 3.1(p)) (any such conflict, violation,
      default, right of termination, amendment, cancellation or acceleration,
      loss or creation, a "Violation") pursuant to: (A) any provision of the
      certificate of incorporation or bylaws of Parent or any Significant
      Subsidiary (as defined in Rule 1-02 of Regulation S-X of the SEC) of
      Parent, or (B) except as, in the aggregate, would not reasonably be
      expected to have a Material Adverse Effect on Parent, or subject to
      obtaining or making the consents, approvals, orders, authorizations,
      registrations, declarations and filings referred to in paragraph (iii)
      below, any loan or credit agreement, note, mortgage, bond, indenture,
      lease, benefit plan or other agreement, obligation, instrument, permit,
      concession, franchise, license, judgment, order, decree, statute, law,
      ordinance, rule or regulation applicable to Parent or any Subsidiary of
      Parent or their respective properties or assets.

            (iii) No consent, approval, order or authorization of, clearance by,
      or registration, declaration or filing with, any supranational, national,
      state, municipal, local or foreign government, any instrumentality,
      subdivision, court, administrative agency or commission or other authority
      thereof, or any quasi-governmental or private body exercising any
      regulatory, taxing, importing or other governmental or quasi-governmental
      authority (a "Governmental Entity"), is required by or with respect to


                                      -13-
<PAGE>
      Parent or any Subsidiary of Parent in connection with the execution and
      delivery of this Agreement by Parent or Merger Sub or the consummation of
      the Merger and the other transactions contemplated hereby, except for
      those required under or in relation to (A) the Hart-Scott-Rodino Antitrust
      Improvements Act of 1976, as amended (the "HSR Act"), (B) state securities
      or "blue sky" laws (the "Blue Sky Laws"), (C) the Securities Act, (D) the
      Exchange Act, (E) the DGCL with respect to the filing of the Certificate
      of Merger, (F) rules and regulations of the NYSE, (G) antitrust or other
      competition laws, of the European Union or other jurisdictions, and (H)
      such other consents, approvals, orders, authorizations, registrations,
      declarations and filings the failures of which to make or obtain, in the
      aggregate, would not reasonably be expected to have a Material Adverse
      Effect on Parent. Consents, approvals, orders, authorizations,
      registrations, declarations and filings required under or in relation to
      any of the foregoing clauses (A) through (G) are hereinafter referred to
      as "Necessary Consents."

            (d) Reports and Financial Statements.

            (i) Parent has filed all required registration statements,
      prospectuses, reports, schedules, forms, statements and other documents
      required to be filed by it with the SEC since January 1, 2000
      (collectively, including all exhibits thereto, the "Parent SEC Reports").
      No Subsidiary of Parent is required to file any form, report, registration
      statement, prospectus or other document with the SEC. None of the Parent
      SEC Reports, as of their respective dates (and, if amended or superseded
      by a filing prior to the date of this Agreement or the Closing Date, then
      on the date of such filing), contained or will contain any untrue
      statement of a material fact or omitted or will omit to state a material
      fact required to be stated therein or necessary to make the statements
      therein, in light of the circumstances under which they were made, not
      misleading. Each of the financial statements (including the related notes
      and schedules) included or incorporated by reference in the Parent SEC
      Reports presents fairly, or will present fairly, in all material respects,
      the consolidated financial position and consolidated results of
      operations, retained earnings and cash flows of Parent and its
      consolidated Subsidiaries as of the respective dates or for the respective
      periods set forth therein, all in conformity with generally accepted
      accounting principles ("GAAP") consistently applied during the periods
      involved except as otherwise noted therein, and subject, in the case of
      the unaudited interim financial statements, to the absence of notes and
      normal year-end adjustments that have not been and are not expected to be
      material in amount. All of such Parent SEC Reports, as of their respective
      dates (and as of the date of any amendment to the respective Parent SEC
      Report), complied as to form in all material respects with the applicable
      requirements of the Securities Act and the Exchange Act and the rules and
      regulations promulgated thereunder.

            (ii) Except as disclosed in the Parent SEC Reports filed prior to
      the date hereof, Parent and its Subsidiaries have not incurred any
      liabilities that are of a nature that would be required to be disclosed on
      a balance sheet of Parent and its Subsidiaries or the footnotes thereto
      prepared in conformity with GAAP, other than (A) liabilities incurred in
      the ordinary course of business or (B) liabilities that, in the aggregate,
      would not reasonably be expected to have a Material Adverse Effect on
      Parent.


                                      -14-
<PAGE>
            (e) Information Supplied.

            (i) None of the information supplied or to be supplied by Parent for
      inclusion or incorporation by reference in (A) the Form S-4 (as defined in
      Section 5.1) will, at the time the Form S-4 is filed with the SEC, at any
      time it is amended or supplemented or at the time it becomes effective
      under the Securities Act, contain any untrue statement of a material fact
      or omit to state any material fact required to be stated therein or
      necessary to make the statements therein not misleading and (B) the Joint
      Proxy Statement/Prospectus (as defined in Section 5.1) will, on the date
      it is first mailed to the Company stockholders or Parent stockholders or
      at the time of the Company Stockholders Meeting or the Parent Stockholders
      Meeting (each as defined in Section 5.1), contain any untrue statement of
      a material fact or omit to state any material fact required to be stated
      therein or necessary in order to make the statements therein, in light of
      the circumstances under which they were made, not misleading. The Form S-4
      and the Joint Proxy Statement/Prospectus will comply as to form in all
      material respects with the requirements of the Exchange Act and the
      Securities Act and the rules and regulations of the SEC thereunder.

            (ii) Notwithstanding the foregoing provisions of this Section
      3.1(e), no representation or warranty is made by Parent with respect to
      statements made or incorporated by reference in the Form S-4 or the Joint
      Proxy Statement/Prospectus based on information supplied by the Company
      for inclusion or incorporation by reference therein.

            (f) Board Approval. The Board of Directors of Parent, by resolutions
duly adopted by unanimous vote at a meeting duly called and held and not
subsequently rescinded or modified in any way (the "Parent Board Approval"), has
duly (i) determined that this Agreement and the Merger are advisable and are
fair to and in the best interests of Parent and its stockholders, (ii) approved
this Agreement, the Merger, the Certificate Amendment and the Share Issuance and
(iii) recommended that the stockholders of Parent approve the Share Issuance and
Certificate Amendment and directed that the Share Issuance and the Certificate
Amendment be submitted for consideration by Parent's stockholders at the Parent
Stockholders Meeting.

            (g) Vote Required. The affirmative vote of a majority of the votes
cast by the holders of Parent Common Stock, provided that the total votes cast
represents a majority of the outstanding shares of Parent Common Stock, is the
only vote of the holders of any class or series of Parent capital stock
necessary to consummate the Share Issuance. The affirmative vote of a majority
of the outstanding shares of Parent Common Stock is the only vote of the holders
of any class or series of Parent capital stock necessary to consummate the
Certificate Amendment. Other than the votes set forth in this Section 3.1(g),
there are no votes of the holders of any class or series of Parent capital stock
necessary to consummate any of the transactions contemplated hereby.

            (h) Litigation; Compliance with Laws.

            (i) Except as disclosed in the Parent SEC Reports filed prior to the
      date of this Agreement, there are no suits, actions or proceedings
      (collectively "Actions") pending or, to the knowledge of Parent,
      threatened, against or affecting Parent or any


                                      -15-
<PAGE>
      Subsidiary of Parent which, in the aggregate, would reasonably be expected
      to have a Material Adverse Effect on Parent, nor are there any judgments,
      decrees, injunctions, rules or orders of any Governmental Entity or
      arbitrator outstanding against Parent or any Subsidiary of Parent which,
      in the aggregate, would reasonably be expected to have a Material Adverse
      Effect on Parent.

            (ii) Except as disclosed in the Parent SEC Reports filed prior to
      the date of this Agreement and except as, in the aggregate, would not
      reasonably be expected to have a Material Adverse Effect on Parent, Parent
      and its Subsidiaries hold all permits, licenses, variances, exemptions,
      orders and approvals of all Governmental Entities which are necessary for
      the operation of the businesses of Parent and its Subsidiaries, taken as a
      whole (the "Parent Permits"). Parent and its Subsidiaries are in
      compliance with the terms of the Parent Permits, except where the failures
      to so comply, in the aggregate, would not reasonably be expected to have a
      Material Adverse Effect on Parent. Except as disclosed in the Parent SEC
      Reports filed prior to the date of this Agreement, neither Parent nor any
      of its Subsidiaries is in violation of, and Parent and its Subsidiaries
      have not received any notices of violations with respect to, any laws,
      ordinances or regulations of any Governmental Entity, except for
      violations which, in the aggregate, would not reasonably be expected to
      have a Material Adverse Effect on Parent.

            (i) Absence of Certain Changes or Events. Except for liabilities
incurred in connection with this Agreement or the transactions contemplated
hereby, except as disclosed in the Parent SEC Reports filed prior to the date of
this Agreement, and except as permitted by Section 4.1, since March 31, 2002,
(i) Parent and its Subsidiaries have conducted their business only in the
ordinary course; (ii) through the date hereof, there has not been any
declaration, setting aside or payment of any dividend or other distribution in
cash, stock or property in respect of Parent's capital stock, except for
dividends or other distributions on its capital stock publicly announced prior
to the date hereof; (iii) there has not been any action taken by Parent or any
of its Subsidiaries during the period from March 31, 2002 through the date of
this Agreement that, if taken during the period from the date of this Agreement
through the Effective Time would constitute a breach of Section 4.1; and (iv)
except as required by GAAP, there has not been any change by Parent in
accounting principles, practices or methods. Except as disclosed in the Parent
SEC Reports filed prior to the date of this Agreement, since March 31, 2002,
there have not been any changes, circumstances or events (including changes,
circumstances or events involving, impacting or related to development stage
products of Parent) which, in the aggregate, have had, or would reasonably be
expected to have, a Material Adverse Effect on Parent.

            (j) Brokers or Finders. No agent, broker, investment banker,
financial advisor or other firm or Person is or will be entitled to any broker's
or finder's fee or any other similar commission or fee in connection with any of
the transactions contemplated by this Agreement, based upon arrangements made by
or on behalf of Parent, except Lazard Freres & Co. LLC and Bear, Stearns & Co.
Inc., whose fees and expenses will be paid by Parent.

            (k) Opinions of Parent Financial Advisors. Parent has received the
opinions of Lazard Freres & Co. LLC and Bear, Stearns & Co. Inc., each dated the
date of this Agreement, to the effect that, as of such date, the Exchange Ratio
is fair to Parent, from a


                                      -16-
<PAGE>
financial point of view, copies of which opinions will be promptly delivered to
the Company in connection with the preparation of the necessary regulatory
filings.

            (l) Employee Benefit Plans. Except as disclosed in the Parent SEC
Reports, there are no Benefit Plans maintained by Parent covering only Parent
executive officers. Each Benefit Plan maintained by Parent has been operated and
administered in accordance with its terms and applicable law, except where
failure to do so would not reasonably be expected to have a Material Adverse
Effect on Parent. The execution of this Agreement and the consummation of the
Merger will not constitute an event under any Benefit Plan maintained by Parent
that will or may result in any payment, acceleration, forgiveness of
indebtedness, vesting, distribution, increase in compensation or benefits or
obligation to fund benefits with respect to any Parent employee which, in the
aggregate, have had, or would reasonably be expected to have, a Material Adverse
Effect on Parent.

            (m) Foreign Corrupt Practices and International Trade Sanctions. To
Parent's knowledge, neither Parent, nor any of its Subsidiaries, nor any of
their respective directors, officers, agents, employees or any other Persons
acting on their behalf has, in connection with the operation of their respective
businesses, (i) used any corporate or other funds for unlawful contributions,
payments, gifts or entertainment, or made any unlawful expenditures relating to
political activity to government officials, candidates or members of political
parties or organizations, or established or maintained any unlawful or
unrecorded funds in violation of Section 104 of the Foreign Corrupt Practices
Act of 1977, as amended, (the "FCPA") or any other similar applicable foreign,
Federal or state law, (ii) paid, accepted or received any unlawful
contributions, payments, expenditures or gifts, or (iii) violated or operated in
noncompliance with any export restrictions, anti-boycott regulations, embargo
regulations or other applicable domestic or foreign laws and regulations,
except, in each case, which will not have a Material Adverse Effect on Parent.

            (n) No Restrictions on the Merger; Takeover Statutes. The Board of
Directors of Parent has taken all necessary action to render Section 203 of the
DGCL, and any other potentially applicable anti-takeover or similar statute or
regulation or provision of the certificate of incorporation or by-laws, or other
organizational or constitutive document or governing instruments of Parent or
any of its Subsidiaries, inapplicable to this Agreement and the transactions
contemplated hereby.

            (o) Environmental Matters.

            (i) Except as, in the aggregate, would not reasonably be expected to
      have a Material Adverse Effect on Parent and except as disclosed in the
      Parent SEC Reports filed prior to the date of this Agreement, (i) the
      operations of Parent and its Subsidiaries have been and are in compliance
      with all Environmental Laws and with all licenses required by
      Environmental Laws, (ii) there are no pending or, to the knowledge of
      Parent, threatened, Environmental Claims under or pursuant to
      Environmental Laws against Parent or its Subsidiaries or involving any
      real property currently or, to the knowledge of Parent, formerly owned,
      operated or leased by Parent or its Subsidiaries, (iii) to the knowledge
      of Parent, Parent and its Subsidiaries have not incurred any Environmental
      Liabilities and no facts, circumstances or conditions relating to, arising
      from, associated


                                      -17-
<PAGE>
      with or attributable to any real property currently or, to the knowledge
      of Parent, formerly owned, operated or leased by Parent or its
      Subsidiaries or operations thereon would reasonably be expected to result
      in Environmental Liabilities, (iv) all real property owned and, to the
      knowledge of Parent, all real property operated or leased by Parent or its
      Subsidiaries is free of contamination from Hazardous Material that would
      have an adverse effect on human health or the environment and (v) other
      than in compliance with any Environmental Laws, there is not now, nor, to
      the knowledge of Parent, has there been in the past, on, in or under any
      real property owned, leased or operated by Parent or any of its
      predecessors (A) any underground storage tanks, regulated pursuant to 40
      C.F.R. Part 280 or delegated state programs, dikes or impoundments
      containing more than a reportable quantity of Hazardous Materials, (B) any
      friable asbestos-containing materials or (c) any polychlorinated
      biphenyls.

            (ii) For purposes of this Section 3.1(o) and Section 3.2(j) the
      following terms shall have the following meanings:

            "Environmental Claim" shall mean any and all administrative,
      regulatory or judicial actions, suits, demands, demand letters,
      directives, orders, claims, liens, investigations, requests for
      information, proceedings, or notices of noncompliance or violation
      (written or oral) by any person (including, without limitation, any
      governmental authority) alleging liability or potential liability arising
      out of, based on or resulting from (A) the presence release or disposal or
      threatened release or disposal, of any Hazardous Materials at any
      location, or (B) circumstances forming the basis of any violation or
      alleged violation of any Environmental Law or permit thereunder, or (C)
      any and all claims by any third party seeking damages, contribution,
      indemnification, cost recovery, compensation or injunctive relief
      resulting from exposure to or the presence, release, or disposal or threat
      thereof of any Hazardous Materials.

            "Environmental Law" means any applicable law, regulation, code,
      license, permit, order, judgment, decree or injunction promulgated by any
      Governmental Entity, (A) for the protection of the environment (including
      air, water, soil and natural resources) or (B) regulating the use,
      storage, handling, release or disposal of any chemical, material, waste or
      hazardous substance.

            "Hazardous Material" means any substance listed, defined, designated
      or regulated pursuant to any applicable Environmental Law including
      petroleum products and byproducts, asbestos and polychlorinated biphenyls.

            "Environmental Liabilities" means all liabilities, actions, remedial
      obligations, losses, damages, fines, penalties and sanctions arising under
      any Environmental Law.

            (p) Intellectual Property. Except as, in the aggregate, would not
reasonably be expected to have a Material Adverse Effect on Parent and except as
disclosed in the Parent SEC Reports filed prior to the date of this Agreement,
(i) Parent and each of its Subsidiaries owns, or is licensed to use (in each
case, free and clear of any Liens), all Intellectual Property used in or
necessary for the conduct of its business as currently conducted; (ii) to the
knowledge of Parent, the use of any Intellectual Property by Parent and its
Subsidiaries does not infringe on or


                                      -18-
<PAGE>
otherwise violate the rights of any Person and is in accordance with any
applicable license pursuant to which Parent or any Subsidiary acquired the right
to use any Intellectual Property; (iii) to the knowledge of Parent, no Person is
challenging, infringing on or otherwise violating any right of Parent or any of
its Subsidiaries with respect to any Intellectual Property owned by and/or
licensed to Parent or its Subsidiaries; and (iv) neither Parent nor any of its
Subsidiaries has received any written notice or otherwise has knowledge of any
pending claim, order or proceeding with respect to any Intellectual Property
used by Parent and its Subsidiaries and to its knowledge no Intellectual
Property owned and/or licensed by Parent or its Subsidiaries is being used or
enforced in a manner that would reasonably be expected to result in the
abandonment, cancellation or unenforceability of such Intellectual Property. For
purposes of this Agreement, "Intellectual Property" shall mean trademarks,
service marks, brand names, certification marks, trade dress and other
indications of origin, the goodwill associated with the foregoing and
registrations in any domestic or foreign jurisdiction of, and applications in
any such jurisdiction to register, the foregoing, including any extension,
modification or renewal of any such registration or application; inventions,
discoveries and ideas, whether patentable or not, in any domestic or foreign
jurisdiction; patents, applications for patents (including, without limitation,
divisions, continuations, continuations in part and renewal applications), and
any renewals, extensions or reissues thereof, in any such jurisdiction;
nonpublic information, trade secrets and confidential information and rights in
any domestic or foreign jurisdiction to limit the use or disclosure thereof by
any person; writings and other works, whether copyrightable or not, in any such
jurisdiction; and registrations or applications for registration of copyrights
in any domestic or foreign jurisdiction, and any renewals or extensions thereof;
and any similar intellectual property or proprietary rights.

            (q) Taxes

            (i) Parent and each of its Subsidiaries has timely filed, or has
      caused to be timely filed, all Tax Returns required to be filed, and all
      such Tax Returns are true, complete and accurate, except to the extent any
      failure to file or any inaccuracies in any filed Tax Returns would not,
      individually or in the aggregate, have a Material Adverse Effect on
      Parent. All Taxes shown to be due on such Tax Returns, or otherwise owed,
      have been or will be timely paid, except to the extent that any failure to
      pay, individually or in the aggregate, has not had and would not
      reasonably be expected to have a Material Adverse Effect on Parent.

            (ii) The most recent financial statements contained in the Parent
      SEC Reports reflect an adequate reserve for all Taxes payable by Parent
      and its Subsidiaries for all Taxable periods and portions thereof through
      the date of such financial statements. No deficiency with respect to any
      Taxes has been proposed, asserted or assessed against Parent or any of its
      Subsidiaries, and no requests for waivers of the time to assess any such
      Taxes are pending, except to the extent any such deficiency or request for
      waiver, individually or in the aggregate, has not had and would not
      reasonably be expected to have a Material Adverse Effect on Parent.

            (iii) The Federal income Tax Returns of Parent and each of its
      Subsidiaries consolidated in such Returns have been examined by and
      settled with the United States Internal Revenue Service for all years
      through 1995. All material assessments for Taxes


                                      -19-
<PAGE>
      due with respect to such completed and settled examinations or any
      concluded litigation have been fully paid.

            (iv) There are no material Liens for Taxes (other than for current
      Taxes not yet due and payable) on the assets of Parent or any of its
      Subsidiaries. Neither Parent nor any of its Subsidiaries is bound by any
      Tax sharing agreements with third parties.

            (v) Prior to the date of this Agreement, neither Parent nor any of
      its Subsidiaries has constituted either a "distributing corporation" or a
      "controlled corporation" (within the meaning of Section 355(a)(1)(A) of
      the Code) in a distribution intended to qualify for tax-free treatment
      under Section 355 of the Code (i) within the one-year period ending on the
      date of this Agreement or (ii) which could otherwise constitute part of a
      "plan" or "series of related transactions" (within the meaning of Section
      355(e) of the Code) in conjunction with the Merger.

            (vi) For purposes of this Agreement:

                  (A) "Taxes" includes all forms of taxation, whenever created
            or imposed, and whether of the United States or elsewhere, and
            whether imposed by a local, municipal, governmental, state, foreign,
            Federal or other Governmental Entity, or in connection with any
            agreement with respect to Taxes, including all interest, penalties
            and additions imposed with respect to such amounts.

                  (B) "Tax Return" means all Federal, state, local, provincial
            and foreign Tax returns, declarations, statements, reports,
            schedules, forms and information returns and any amended Tax return
            relating to Taxes.

            Section 3.2 Representations and Warranties of the Company. Except as
set forth in the Company Disclosure Schedule delivered by the Company to Parent
prior to the execution of this Agreement (the "Company Disclosure Schedule")
(each section of which qualifies the correspondingly numbered representation and
warranty or covenant and any other representation or warranty, if the disclosure
set forth in the Company Disclosure Schedule is readily applicable to such other
representation or warranty), the Company represents and warrants to Parent as
follows:

            (a) Organization, Standing and Power; Subsidiaries.

            (i) Each of the Company and each of its Subsidiaries is duly
      organized, validly existing and in good standing under the laws of its
      jurisdiction of incorporation or organization, has the requisite corporate
      (or similar) power and authority to own, lease and operate its properties
      and to carry on its business as now being conducted, except where the
      failures to be so organized, existing and in good standing or to have such
      power and authority, in the aggregate, would not reasonably be expected to
      have a Material Adverse Effect on the Company, and is duly qualified and
      in good standing to do business in each jurisdiction in which the nature
      of its business or the ownership or leasing of its properties makes such
      qualification necessary other than in such jurisdictions where the
      failures so to qualify or to be in good standing in the aggregate would
      not reasonably be expected to have a Material Adverse Effect on the
      Company.


                                      -20-
<PAGE>
      The copies of the certificate of incorporation and bylaws of the Company
      which were previously furnished or made available to Parent are true,
      complete and correct copies of such documents as in effect on the date of
      this Agreement.

            (ii) Exhibit 21 to the Company's Annual Report on Form 10K for the
      year ended December 31, 2001 ("Company Exhibit 21") includes all the
      Subsidiaries of the Company which as of the date of this Agreement are
      Significant Subsidiaries (as defined in Rule 1-02 of Regulation S-X of the
      SEC). All the outstanding shares of capital stock of, or other equity
      interests in, each such Significant Subsidiary have been validly issued
      and are fully paid and non-assessable and are, except as set forth in
      Company Exhibit 21, owned directly or indirectly by the Company, free and
      clear of all Liens and free of any other restriction (including any
      restriction on the right to vote, sell or otherwise dispose of such
      capital stock or other ownership interests), except for restrictions
      imposed by applicable securities laws. Except as set forth in the Company
      SEC Reports (as defined in Section 3.2(d)) filed prior to the date hereof,
      neither the Company nor any of its Subsidiaries directly or indirectly
      owns any equity or similar interest in, or any interest convertible into
      or exchangeable or exercisable for, any corporation, partnership, joint
      venture or other business association or entity (other than Subsidiaries),
      that is or would reasonably be expected to be material to the Company and
      its Subsidiaries taken as a whole.

            (b) Capital Structure.

            (i) As of March 31, 2002, the authorized capital stock of the
      Company consisted of (A) 3,000,000,000 shares of Company Common Stock, of
      which 1,295,761,753 shares were outstanding and 189,041,409 shares were
      held in the treasury of the Company, (B) 10,000,000 shares of Preferred
      Stock, par value $0.01 per share, of which 7,500 have been designated as
      Series B Convertible Perpetual Preferred Stock, of which 6,357 shares were
      outstanding and (C) 1,500,000 shares of Preferred Stock, no par value,
      which have been designated Series A Junior Participating Preferred Stock
      and reserved for issuance upon exercise of the rights (the "Company
      Rights") distributed to the holders of Company Common Stock pursuant to
      the Amended and Restated Rights Agreement dated as of February 20, 2001,
      between the Company and Mellon Investor Services LLC (the "Company Rights
      Agreement"). Since March 31, 2002 to the date of this Agreement, there
      have been no issuances of shares of the capital stock of the Company or
      any other securities of the Company other than issuances of shares of
      Company Common Stock (and accompanying Company Rights) pursuant to options
      or rights outstanding as of March 31, 2002 under the Benefit Plans of the
      Company. All issued and outstanding shares of the capital stock of the
      Company are duly authorized, validly issued, fully paid and
      non-assessable, and no class of capital stock is entitled to preemptive
      rights. There were outstanding as of March 31, 2002 no options, warrants
      or other rights to acquire capital stock from the Company other than (x)
      Company Rights and (y) options and other rights to acquire capital stock
      of the Company representing in the aggregate the right to purchase
      76,396,436 shares of Company Common Stock (collectively, the "Company
      Stock Options") under The Pharmacia & Upjohn, Inc. Long-Term Incentive
      Plan, The Pharmacia Corporation Management Incentive Plan, 2000 Operations
      Committee Incentive Plan, The Pharmacia Corporation 2001 Long Term


                                      -21-
<PAGE>
      Incentive Plan, The Operations Committee Incentive Plan - 2001 Long Term
      Incentive Plan and the Employee Stock Purchase Plan - 2001 Long Term
      Incentive Plan (collectively, the "Company Stock Option Plans"). Section
      3.2(b) of the Company Disclosure Schedule sets forth a complete and
      correct list, as of March 31, 2002, of the number of shares of Company
      Common Stock subject to Company Stock Options or other rights to purchase
      or receive Company Common Stock granted under the Company Benefit Plans or
      otherwise, the dates of grant and the exercise prices thereof. No options
      or warrants or other rights to acquire capital stock from the Company have
      been issued or granted since March 31, 2002 to the date of this Agreement.

            (ii) No bonds, debentures, notes or other indebtedness of the
      Company having the right to vote (or convertible into or exercisable for
      securities having the right to vote) on any matters on which holders of
      capital stock of the Company may vote ("Company Voting Debt") are issued
      or outstanding.

            (iii) Except as otherwise set forth in this Section 3.2(b), as of
      the date of this Agreement, there are no securities, options, warrants,
      calls, rights, commitments, agreements, arrangements or undertakings of
      any kind to which the Company or any of its Subsidiaries is a party or by
      which any of them is bound obligating the Company or any of its
      Subsidiaries to issue, deliver or sell, or cause to be issued, delivered
      or sold, additional shares of capital stock or other voting securities of
      the Company or any of its Subsidiaries or obligating the Company or any of
      its Subsidiaries to issue, grant, extend or enter into any such security,
      option, warrant, call, right, commitment, agreement, arrangement or
      undertaking. As of the date of this Agreement, there are no outstanding
      obligations of the Company or any of its Subsidiaries to repurchase,
      redeem or otherwise acquire any shares of capital stock of the Company or
      any of its Subsidiaries. There are not outstanding any stock-appreciation
      rights, security-based performance units, "phantom" stock or other
      security rights or other agreements, arrangements or commitments of any
      character (contingent or otherwise) pursuant to which any Person is or may
      be entitled to receive any payment or other value based on the revenues,
      earnings or financial performance, stock price performance or other
      attribute of the Company or any of its Subsidiaries or assets or
      calculated in accordance therewith (other than ordinary course payments or
      commissions to sales representatives of the Company based upon revenues
      generated by them without augmentation as a result of the transactions
      contemplated hereby) or to cause the Company or any of its Subsidiaries to
      file a registration statement under the Securities Act or which otherwise
      relate to the registration of any securities of the Company or its
      Subsidiaries.

            (c) Authority; No Conflicts.

            (i) The Company has all requisite corporate power and authority to
      enter into this Agreement and to consummate the transactions contemplated
      hereby, subject in the case of the consummation of the Merger to the
      adoption of this Agreement by the Company Stockholder Approval (as defined
      in Section 3.2(g)). The execution and delivery of this


                                      -22-
<PAGE>
      Agreement and the consummation of the transactions contemplated hereby
      have been duly authorized by all necessary corporate action on the part of
      the Company, subject in the case of the consummation of the Merger to the
      adoption of this Agreement by the Company Stockholder Approval. This
      Agreement has been duly executed and delivered by the Company and
      constitutes a valid and binding agreement of the Company, enforceable
      against it in accordance with its terms, except as such enforceability may
      be limited by bankruptcy, insolvency, reorganization, moratorium and
      similar laws relating to or affecting creditors generally or by general
      equity principles (regardless of whether such enforceability is considered
      in a proceeding in equity or at law).

            (ii) The execution and delivery of this Agreement by the Company
      does not or will not, as the case may be, and the consummation by the
      Company of the Merger and the other transactions contemplated hereby will
      not, conflict with, or result in a Violation pursuant to: (A) any
      provision of the certificate of incorporation or bylaws of the Company or
      any Significant Subsidiary (as defined in Rule 1-02 of Regulation S-X of
      the SEC) of the Company or (B) except as, in the aggregate, would not
      reasonably be expected to have a Material Adverse Effect on the Company
      or, subject to obtaining or making the consents, approvals, orders,
      authorizations, registrations, declarations and filings referred to in
      paragraph (iii) below, any loan or credit agreement, note, mortgage, bond,
      indenture, lease, benefit plan or other agreement, obligation, instrument,
      permit, concession, franchise, license, judgment, order, decree, statute,
      law, ordinance, rule or regulation applicable to the Company or any
      Subsidiary of the Company or their respective properties or assets.

            (iii) No consent, approval, order or authorization of, clearance by,
      or registration, declaration or filing with, any Governmental Entity is
      required by or with respect to the Company or any Subsidiary of the
      Company in connection with the execution and delivery of this Agreement by
      the Company or the consummation of the Merger and the other transactions
      contemplated hereby, except the Necessary Consents and such other
      consents, approvals, orders, authorizations, registrations, declarations
      and filings the failure of which to make or obtain, in the aggregate,
      would not reasonably be expected to have a Material Adverse Effect on the
      Company.

            (d) Reports and Financial Statements.

            (i) The Company has filed all required registration statements,
      prospectuses, reports, schedules, forms, statements and other documents
      required to be filed by it with the SEC since January 1, 2000
      (collectively, including all exhibits thereto, the "Company SEC Reports").
      No Subsidiary of the Company is required to file any form, report,
      registration statement or prospectus or other document with the SEC. None
      of the Company SEC Reports, as of their respective dates (and, if amended
      or superseded by a filing prior to the date of this Agreement or the
      Closing Date, then on the date of such filing), contained or will contain
      any untrue statement of a material fact or omitted or will omit to state a
      material fact required to be stated therein or necessary to make the
      statements therein, in light of the circumstances under which they were
      made, not misleading. Each of the financial statements (including the
      related notes and schedules) included or incorporated by reference in the
      Company SEC Reports presents fairly, or will present fairly, in all
      material respects, the consolidated financial position and consolidated
      results of operations, retained earnings and cash flows of the Company and


                                      -23-
<PAGE>
      its consolidated Subsidiaries as of the respective dates or for the
      respective periods set forth therein, all in conformity with GAAP
      consistently applied during the periods involved except as otherwise noted
      therein, and subject, in the case of the unaudited interim financial
      statements, to the absence of notes and normal and recurring year-end
      adjustments that have not been and are not expected to be material in
      amount. All of such Company SEC Reports, as of their respective dates (and
      as of the date of any amendment to the respective Company SEC Report),
      complied as to form in all material respects with the applicable
      requirements of the Securities Act and the Exchange Act and the rules and
      regulations promulgated thereunder.

            (ii) Except as disclosed in the Company SEC Reports filed prior to
      the date hereof, the Company and its Subsidiaries have not incurred any
      liabilities that are of a nature that would be required to be disclosed on
      a balance sheet of the Company and its Subsidiaries or the footnotes
      thereto prepared in conformity with GAAP, other than (A) liabilities
      incurred in the ordinary course of business, or (B) liabilities that, in
      the aggregate, would not reasonably be expected to have a Material Adverse
      Effect on the Company.

            (e) Information Supplied.

            (i) None of the information supplied or to be supplied by the
      Company for inclusion or incorporation by reference in (A) the Form S-4
      will, at the time the Form S-4 is filed with the SEC, at any time it is
      amended or supplemented or at the time it becomes effective under the
      Securities Act, contain any untrue statement of a material fact or omit to
      state any material fact required to be stated therein or necessary to make
      the statements therein not misleading, and (B) the Joint Proxy
      Statement/Prospectus will, on the date it is first mailed to the Company
      stockholders or Parent stockholders or at the time of the Company
      Stockholders Meeting or the Parent Stockholders Meeting, contain any
      untrue statement of a material fact or omit to state any material fact
      required to be stated therein or necessary in order to make the statements
      therein, in light of the circumstances under which they were made, not
      misleading. The Form S-4 and the Joint Proxy Statement/Prospectus will
      comply as to form in all material respects with the requirements of the
      Exchange Act and the Securities Act and the rules and regulations of the
      SEC thereunder. (ii) Notwithstanding the foregoing provisions of this
      Section 3.2(e), no representation or warranty is made by the Company with
      respect to statements made or incorporated by reference in the Form S-4 or
      the Joint Proxy Statement/Prospectus based on information supplied by
      Parent or Merger Sub for inclusion or incorporation by reference therein.

            (f) Board Approval. The Board of Directors of the Company, by
resolutions duly adopted by unanimous vote of those voting at a meeting duly
called and held and not subsequently rescinded or modified in any way (the
"Company Board Approval"), has duly (i) determined that this Agreement and the
Merger are advisable and are fair to and in the best interests of the Company
and its stockholders, (ii) approved this Agreement and the Merger and (iii)
recommended that the stockholders of the Company adopt this Agreement and
directed that


                                      -24-
<PAGE>
this Agreement and the transactions contemplated hereby be submitted for
consideration by the Company's stockholders at the Company Stockholders Meeting.

            (g) Vote Required. The affirmative vote of the holders of a majority
of the outstanding shares of Company Common Stock and Company Convertible
Preferred Stock (voting together with the Company Common Stock on an as
converted basis) to adopt this Agreement (the "Company Stockholder Approval") is
the only vote of the holders of any class or series of the Company capital stock
necessary to consummate the transactions contemplated hereby.

            (h) Litigation; Compliance with Laws.

            (i) Except as disclosed in the Company SEC Reports filed prior to
      the date of this Agreement, there are no Actions pending or, to the
      knowledge of the Company, threatened, against or affecting the Company or
      any Subsidiary of the Company which, in the aggregate, would reasonably be
      expected to have a Material Adverse Effect on the Company, nor are there
      any judgments, decrees, injunctions, rules or orders of any Governmental
      Entity or arbitrator outstanding against the Company or any Subsidiary of
      the Company which, in the aggregate, would reasonably be expected to have
      a Material Adverse Effect on the Company.

            (ii) Except as disclosed in the Company SEC Reports filed prior to
      the date of the Agreement and except as would, in the aggregate, not
      reasonably be expected to have a Material Adverse Effect on the Company,
      the Company and its Subsidiaries hold all permits, licenses, variances,
      exemptions, orders and approvals of all Governmental Entities which are
      necessary for the operation of the businesses of the Company and its
      Subsidiaries, taken as a whole (the "Company Permits"). The Company and
      its Subsidiaries are in compliance with the terms of the Company Permits,
      except where the failures to so comply, in the aggregate, would not
      reasonably be expected to have a Material Adverse Effect on the Company.
      Except as disclosed in the Company SEC Reports filed prior to the date of
      this Agreement, neither the Company nor any of its Subsidiaries is in
      violation of, and the Company and its Subsidiaries have not received any
      notices of violations with respect to, any laws, ordinances or regulations
      of any Governmental Entity, except for violations which, in the aggregate,
      would not reasonably be expected to have a Material Adverse Effect on the
      Company.

            (i) Absence of Certain Changes or Events. Except for liabilities
incurred in connection with this Agreement or the transactions contemplated
hereby, except as disclosed in the Company SEC Reports filed prior to the date
of this Agreement, and except as permitted by Section 4.2, since March 31, 2002,
(i) the Company and its Subsidiaries have conducted their business only in the
ordinary course; (ii) through the date hereof, there has not been any
declaration, setting aside or payment of any dividend or other distribution in
cash, stock or property in respect of the Company's capital stock, except for
dividends or other distributions on its capital stock publicly announced prior
to the date hereof; (iii) there has not been any action by the Company or any of
its Subsidiaries during the period from March 31, 2002 through the date of this
Agreement that, if taken during the period from the date of this Agreement
through the Effective Time would constitute a breach of Section 4.2; and (iv)
except as required by GAAP,


                                      -25-
<PAGE>
there has not been any change by the Company in accounting principles, practices
or methods. Except as disclosed in the Company SEC Reports filed prior to the
date of this Agreement, since March 31, 2002, there have not been any changes,
circumstances or events (including changes, circumstances or events involving,
impacting or related to development stage products of the Company) which, in the
aggregate, have had, or would reasonably be expected to have, a Material Adverse
Effect on the Company.

            (j) Environmental Matters. Except as, in the aggregate, would not
reasonably be expected to have a Material Adverse Effect on the Company and
except as disclosed in the Company SEC Reports filed prior to the date of this
Agreement, (i) the operations of the Company and its Subsidiaries have been and
are in compliance with all Environmental Laws and with all licenses required by
Environmental Laws, (ii) there are no pending or, to the knowledge of the
Company, threatened, Environmental Claims under or pursuant to Environmental
Laws against the Company or its Subsidiaries or involving any real property
currently or, to the knowledge of the Company, formerly owned, operated or
leased by the Company or its Subsidiaries, (iii) to the knowledge of the
Company, the Company and its Subsidiaries have not incurred any Environmental
Liabilities and no facts, circumstances or conditions relating to, arising from,
associated with or attributable to any real property currently or, to the
knowledge of the Company, formerly owned, operated or leased by the Company or
its Subsidiaries or operations thereon would reasonably be expected to result in
Environmental Liabilities, (iv) all real property owned and, to the knowledge of
the Company, all real property operated or leased by the Company or its
Subsidiaries is free of contamination from Hazardous Material that would have an
adverse effect on human health or the environment and (v) other than in
compliance with any Environmental Laws, there is not now, nor, to the knowledge
of the Company, has there been in the past, on, in or under any real property
owned, leased or operated by the Company or any of its predecessors (A) any
underground storage tanks, regulated pursuant to 40 C.F.R. Part 280 or delegated
state programs, dikes or impoundments containing more than a reportable quantity
of Hazardous Materials, (B) any friable asbestos-containing materials or (c) any
polychlorinated biphenyls.

            (k) Intellectual Property. Except as, in the aggregate, would not
reasonably be expected to have a Material Adverse Effect on the Company and
except as disclosed in the Company SEC Reports filed prior to the date of this
Agreement, (i) the Company and each of its Subsidiaries owns, or is licensed to
use (in each case, free and clear of any Liens), all Intellectual Property used
in or necessary for the conduct of its business as currently conducted; (ii) to
the knowledge of the Company, the use of any Intellectual Property by the
Company and its Subsidiaries does not infringe on or otherwise violate the
rights of any Person and is in accordance with any applicable license pursuant
to which the Company or any Subsidiary acquired the right to use any
Intellectual Property; (iii) to the knowledge of the Company, no Person is
challenging, infringing on or otherwise violating any right of the Company or
any of its Subsidiaries with respect to any Intellectual Property owned by
and/or licensed to the Company or its Subsidiaries; and (iv) neither the Company
nor any of its Subsidiaries has received any written notice or otherwise has
knowledge of any pending claim, order or proceeding with respect to any
Intellectual Property used by the Company and its Subsidiaries and to its
knowledge no Intellectual Property owned and/or licensed by the Company or its
Subsidiaries is being used or enforced in a manner that would reasonably be
expected to result in the abandonment, cancellation or unenforceability of such
Intellectual Property.


                                      -26-
<PAGE>
            (l) Brokers or Finders. No agent, broker, investment banker,
financial advisor or other firm or Person is or will be entitled to any broker's
or finder's fee or any other similar commission or fee in connection with any of
the transactions contemplated by this Agreement, based upon arrangements made by
or on behalf of the Company, except Goldman, Sachs & Co., whose fees and
expenses will be paid by the Company.

            (m) Opinions of the Company Financial Advisor. The Company has
received the opinion of Goldman, Sachs & Co., dated the date of this Agreement,
to the effect that, as of such date, the Exchange Ratio is fair, from a
financial point of view, to the holders of Company Common Stock, copies of which
opinions will promptly be provided to Parent.

            (n) Taxes.

            (i) The Company and each of its Subsidiaries has timely filed, or
      has caused to be timely filed, all Tax Returns required to be filed, and
      all such Tax Returns are true, complete and accurate, except to the extent
      any failure to file or any inaccuracies in any filed Tax Returns would
      not, individually or in the aggregate, have a Material Adverse Effect on
      the Company. All Taxes shown to be due on such Tax Returns, or otherwise
      owed, have been or will be timely paid, except to the extent that any
      failure to pay, individually or in the aggregate, has not had and would
      not reasonably be expected to have a Material Adverse Effect on the
      Company.

            (ii) The most recent financial statements contained in the Company
      SEC Reports reflect an adequate reserve for all Taxes payable by the
      Company and its Subsidiaries for all Taxable periods and portions thereof
      through the date of such financial statements. No deficiency with respect
      to any Taxes has been proposed, asserted or assessed against the Company
      or any of its Subsidiaries, and no requests for waivers of the time to
      assess any such Taxes are pending, except to the extent any such
      deficiency or request for waiver, individually or in the aggregate, has
      not had and would not reasonably be expected to have a Material Adverse
      Effect on the Company.

            (iii) The Federal income Tax Returns of the Company and each of its
      Subsidiaries consolidated in such Returns have been examined by and
      settled with the United States Internal Revenue Service for all years
      through 1995. All material assessments for Taxes due with respect to such
      completed and settled examinations or any concluded litigation have been
      fully paid.

            (iv) There are no material Liens for Taxes (other than for current
      Taxes not yet due and payable) on the assets of the Company or any of its
      Subsidiaries. Neither the Company nor any of its Subsidiaries is bound by
      any Tax sharing agreements with third parties.

            (v) Prior to the date of this Agreement, neither the Company nor any
      of its Subsidiaries has constituted either a "distributing corporation" or
      a "controlled corporation" (within the meaning of Section 355(a)(1)(A) of
      the Code) in a distribution intended to qualify for tax-free treatment
      under Section 355 of the Code (i) within the one-year period ending on the
      date of this Agreement or (ii) which could otherwise


                                      -27-
<PAGE>
      constitute part of a "plan" or "series of related transactions" (within
      the meaning of Section 355(e) of the Code) in conjunction with the Merger.

            (vi) The Company's aggregate adjusted Federal income tax basis in
      its shares of Monsanto common stock is currently, and at the time of the
      Monsanto Spin-Off or Monsanto Sale Transaction (as defined in Section
      5.16) occurs, will be, no less than $ 7 billion.

            (o) Certain Contracts. As of the date hereof, except as set forth in
the Company SEC Reports filed prior to the date of this Agreement or set forth
on Section 3.2(o) of the Company Disclosure Schedule, neither the Company nor
any of its Subsidiaries is a party to or bound by any "material contracts" (as
such term is defined in Item 601(b)(10) of Regulation S-K of the SEC). Except as
set forth on Schedule 3.2(o) of the Company Disclosure Schedule, neither the
Company nor any of its Subsidiaries is a party to or bound by any
non-competition agreements or any other agreements or arrangements that limit or
otherwise restrict the Company or any of its Subsidiaries or any of their
respective affiliates or any successor thereto or that would, after the
Effective Time, to the knowledge of the Company, limit or restrict Parent or any
of its affiliates (including the Surviving Corporation) or any successor
thereto, from engaging or competing in any line of business or in any geographic
area or, in the case of the pharmaceutical business, any therapeutic area, class
of drugs or mechanism of action, that relate to the top 25 marketed products or
any development stage product currently in Phase III.

            (p) Employee Benefit Plans. Section 3.2(p) of the Company Disclosure
Schedule, sets forth all U.S. Benefit Plans maintained by the Company or any of
its Subsidiaries; all Benefit Plans maintained by the Company or any of its
Subsidiaries outside the U.S. will be listed on listed on Schedule 3.2(p) by the
Company within seven (7) Business Days of the date of this Agreement. Except as
disclosed in the Company SEC Reports, there are no Benefit Plans maintained by
the Company (each, a "Company Benefit Plan") covering only the Company executive
officers. Each Company Benefit Plan has been operated and administered in
accordance with its terms and applicable law, except where failure to do so
would not reasonably be expected to have a Material Adverse Effect on the
Company. The execution of this Agreement and the consummation of the Merger will
not constitute an event under any Company Benefit Plan that will or may result
in any payment, acceleration, termination, forgiveness of indebtedness, vesting,
distribution, increase in compensation or benefits or obligation to fund
benefits with respect to any Company employee which, in the aggregate, have had,
or would reasonably be expected to have, a Material Adverse Effect on the
Company.

            (q) Labor Matters. Except where failure to comply would not
reasonably be expected to have a Material Adverse Effect on the Company, the
Company is and has been in compliance with all applicable laws of the United
States, or of any state or local government or any subdivision thereof or of any
foreign government respecting employment and employment practices, terms and
conditions of employment and wages and hours, including, without limitation,
ERISA, the Code, the Immigration Reform and Control Act, the WARN Act, any laws
respecting employment discrimination, sexual harassment, disability rights or
benefits, equal opportunity, plant closure issues, affirmative action, workers'
compensation, employee benefits, severance payments, COBRA, labor relations,
employee leave issues, wage and hour


                                      -28-
<PAGE>
standards, occupational safety and health requirements and unemployment
insurance and related matters, and is not engaged in any unfair labor practices.

            (r) Foreign Corrupt Practices and International Trade Sanctions. To
the Company's knowledge, neither the Company, nor any of its Subsidiaries, nor
any of their respective directors, officers, agents, employees or any other
Persons acting on their behalf has, in connection with the operation of their
respective businesses, (i) used any corporate or other funds for unlawful
contributions, payments, gifts or entertainment, or made any unlawful
expenditures relating to political activity to government officials, candidates
or members of political parties or organizations, or established or maintained
any unlawful or unrecorded funds in violation of Section 104 of the FCPA or any
other similar applicable foreign, Federal or state law, (ii) paid, accepted or
received any unlawful contributions, payments, expenditures or gifts, or (iii)
violated or operated in noncompliance with any export restrictions, anti-boycott
regulations, embargo regulations or other applicable domestic or foreign laws
and regulations except, in each case, which will not have a Material Adverse
Effect on the Company.

            (s) Company Stockholder Rights Plan. The Board of Directors of the
Company has amended the Company Rights Agreement (the "Rights Agreement
Amendment") in accordance with its terms to render it inapplicable to the
transactions contemplated by this Agreement. The Company has delivered to the
Parent a true and correct copy of the Rights Agreement Amendment.

            (t) Compliance with Co-Promotion Agreements. The Company has
delivered to Parent all material documents filed with governmental authorities
as required to be provided to Parent pursuant to the terms of the U.S.
Collaboration Agreement (Second Generation), dated as of February 18, 1998, by
and among, Parent, the Company (as successor to Monsanto Company) and G.D.
Searle & Co., the U.S. Collaboration Agreement (Celecoxib), dated as of February
18, 1998, by and among, Parent, the Company (as successor to Monsanto Company)
and G.D. Searle & Co., and any other agreements among Parent, the Company and
G.D. Searle & Co. with respect to Cox-2 Second Generation drugs and Celocoxib
(collectively, the "Co-Promotion Agreements"). To the knowledge of the Company,
these documents comprise all information that would be material to an evaluation
of the safety and efficacy of the Cox-2 Second Generation drugs and Celocoxib.

            (u) Monsanto Documents. All material agreements (whether written or
oral) between the Company and Monsanto have been disclosed in the Company SEC
Reports and there has not been any material amendment or change to any such
agreements and the Company has not entered into any new material agreements
(whether written or oral) with Monsanto since March 31, 2002.

            (v) No Restrictions on the Merger; Takeover Statutes. The Board of
Directors of the Company has taken all necessary action to render Section 203 of
the DGCL, and any other potentially applicable anti-takeover or similar statute
or regulation or provision of the certificate of incorporation or by-laws, or
other organizational or constitutive document or governing instruments of the
Company or any of its Subsidiaries, inapplicable to this Agreement and the
transactions contemplated hereby.


                                      -29-

<PAGE>

            Section 3.3 Representations and Warranties of Parent and Merger Sub.
Parent and Merger Sub represent and warrant to the Company as follows:

            (a) Organization. Merger Sub is a corporation duly incorporated,
validly existing and in good standing under the laws of Delaware. Merger Sub is
a direct wholly-owned subsidiary of Parent.

            (b) Corporate Authorization. Merger Sub has all requisite corporate
power and authority to enter into this Agreement and to consummate the
transactions contemplated hereby. The execution, delivery and performance by
Merger Sub of this Agreement and the consummation by Merger Sub of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of Merger Sub. This Agreement has been duly
executed and delivered by Merger Sub and constitutes a valid and binding
agreement of Merger Sub, enforceable against it in accordance with its terms,
except as such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and other similar laws relating to or affecting
creditors generally or by general equity principles (regardless of whether such
enforceability is considered in a proceeding in equity or at law). The copies of
the certificate of incorporation and bylaws of Merger Sub which were previously
furnished or made available to the Company are true, complete and correct copies
of such documents as in effect on the date of this Agreement.

            (c) Non-Contravention. The execution, delivery and performance by
Merger Sub of this Agreement and the consummation by Merger Sub of the
transactions contemplated hereby do not and will not contravene or conflict with
the certificate of incorporation or bylaws of Merger Sub or any law binding on
Merger Sub.

            (d) No Business Activities. Merger Sub has not conducted any
activities other than in connection with the organization of Merger Sub, the
negotiation and execution of this Agreement and the consummation of the
transactions contemplated hereby. Merger Sub has no Subsidiaries.

            (e) Capitalization of Merger Sub. The authorized capital stock of
Merger Sub consists of 1,000 shares of common stock, par value $0.01 per share,
all of which are validly issued and outstanding. All of the issued and
outstanding capital stock of Merger Sub is, and at the Effective Time will be,
owned by Parent, and there are (i) no other shares of capital stock or voting
securities of Merger Sub, (ii) no securities of Merger Sub convertible into or
exchangeable for shares of capital stock or voting securities of Merger Sub and
(iii) no options or other rights to acquire from Merger Sub, and no obligations
of Merger Sub to issue, any capital stock, voting securities or securities
convertible into or exchangeable for capital stock or voting securities of
Merger Sub.

                                   ARTICLE IV

                    COVENANTS RELATING TO CONDUCT OF BUSINESS

            Section 4.1 Covenants of Parent. During the period from the date of
this Agreement and continuing until the Effective Time, Parent agrees as to
itself and its Subsidiaries


                                      -30-
<PAGE>

that (except as expressly contemplated or permitted by this Agreement or as
disclosed in the Parent Disclosure Schedule or as required by a Governmental
Entity of competent jurisdiction or to the extent that the Company shall
otherwise consent in writing):

            (a) Ordinary Course. Parent and its Subsidiaries shall carry on
their respective businesses in the usual, regular and ordinary course in all
material respects, in substantially the same manner as heretofore conducted, and
shall use reasonable best efforts to preserve intact their present lines of
business, maintain their rights and franchises and preserve their relationships
with customers, suppliers and others having business dealings with them;
provided, however, that no action by Parent or its Subsidiaries with respect to
matters specifically permitted by any other provision of this Section 4.1 shall
be deemed a breach of this Section 4.1(a) unless such action would constitute a
breach of one or more of such other provisions.

            (b) Dividends. Parent shall not, and shall not permit any of its
Subsidiaries to, and shall not propose to, declare or pay any dividends or
distributions on or make other distributions in respect of any of its capital
stock, except (i) the declaration and payment of regular quarterly cash
dividends not in excess of the amount set forth in Section 4.1(b) of the Parent
Disclosure Schedule per share of Parent Common Stock with usual record and
payment dates for such dividends in accordance with past dividend practice and
(ii) for dividends by wholly owned Subsidiaries of Parent.

            (c) Governing Documents. Except to the extent required to comply
with applicable law or their obligations hereunder, Parent and Merger Sub shall
not amend or propose to so amend their respective certificates of incorporation,
bylaws or other governing documents.

            (d) No Acquisitions. Other than (i) acquisitions disclosed on the
Parent Disclosure Schedule and (ii) acquisitions for cash in existing or related
lines of business of Parent the fair market value of the total consideration
(including the value of indebtedness acquired or assumed) for which does not
exceed the amount that would be material to the business and assets of the
Parent and its Subsidiaries, taken as a whole, Parent shall not, and shall not
permit any of its Subsidiaries to, acquire or agree to acquire by merging or
consolidating with, or by purchasing a substantial equity interest in or a
substantial portion of the assets of, or by any other manner, any business
(including by acquisition of assets) or any corporation, partnership,
association or business organization or division thereof; provided, however,
that acquisitions that would otherwise be permitted under clause (ii) of this
Section 4.1(d) shall be prohibited if they, individually or in the aggregate,
present (x) a risk of making it materially more difficult to obtain any approval
or authorization required in order to meet the conditions set forth in Sections
6.1(c) and 6.1(f) or (y) a risk of materially delaying or impairing the
consummation of the Merger; and provided, further, however, that nothing in this
Section 4.1(d) shall prohibit (x) internal reorganizations or consolidations
involving existing Subsidiaries of Parent or (y) the creation of new
Subsidiaries of Parent organized to conduct or continue activities otherwise
permitted by this Agreement. Parent and its Subsidiaries shall not enter into
any joint venture, license or alliance or jointly promote, market or develop any
products with any other Person if such actions, individually or in the
aggregate, present (x) a risk of making it materially more difficult to obtain
any approval or authorization required in order to meet the conditions set forth


                                      -31-
<PAGE>

in Sections 6.1(c) and 6.1(f) or (y) a risk of materially delaying or impairing
the consummation of the Merger.

            (e) Accounting Methods. Except as disclosed in Parent SEC Reports
filed prior to the date of this Agreement, or as required by a Governmental
Entity, Parent shall not change its methods of accounting in effect at March 31,
2002, except as required by changes in GAAP as concurred in by Parent's
independent public accountants.

            (f) No Related Actions. Parent will not, and will not permit any of
its Subsidiaries to, agree or commit to do any of the foregoing. Section 4.2
Covenants of the Company. During the period from the date of this Agreement and
continuing until the Effective Time, the Company agrees as to itself and its
Subsidiaries that (except as expressly contemplated or permitted by this
Agreement, as disclosed in the Company Disclosure Schedule or as required by a
Governmental Entity of competent jurisdiction or to the extent that Parent shall
otherwise consent in writing):

            (a) Ordinary Course.

            (i) The Company and its Subsidiaries shall carry on their respective
      businesses in the usual, regular and ordinary course in all material
      respects, in substantially the same manner as heretofore conducted, and
      shall use reasonable best efforts to preserve intact their present lines
      of business, maintain their rights and franchises and preserve their
      relationships with customers, suppliers and others having business
      dealings with them; provided, however, that no action by the Company or
      its Subsidiaries with respect to matters specifically permitted by any
      other provision of this Section 4.2 shall be deemed a breach of this
      Section 4.2(a)(i) unless such action would constitute a breach of one or
      more of such other provisions.

            (ii) Other than in connection with acquisitions and activities
      permitted by Section 4.2(e), the Company shall not, and shall not permit
      any of its Subsidiaries to, (A) enter into any licensing agreement, except
      for licensing agreements set forth in Section 4.2(a)(ii) of the Company
      Disclosure Schedule and, subject to Section 4.2(e), any licensing
      agreement relating to the non-pharmaceutical licenses of the Company
      entered into in the ordinary course of business, (B) enter into or
      terminate any "material contract" as such term is defined in Item
      601(b)(10) of Regulation S-K of the SEC or agreement or make any change in
      any material lease or contract, other than in the ordinary course of
      business; (C) enter into any new line of business; (D) incur or commit to
      any capital expenditures or any obligations or liabilities in connection
      therewith other than Permitted Capital Expenditures (as defined below) and
      obligations or liabilities in connection therewith, (E) with respect to
      the pharmaceutical and consumer healthcare businesses, enter into any
      contract, agreement or other arrangement for the sale of products or
      inventories or for the furnishing of services by the Company or any of its
      Subsidiaries which contract, agreement or other arrangement involves
      amounts or expenditures in excess of $20 million or which may give rise to
      commitments which may extend beyond twelve months from the date of such
      contract, agreement or arrangement, unless, such contract, agreement or
      arrangement can be terminated by the Company or its Subsidiary,


                                      -32-
<PAGE>

      as the case may be, by giving less than 60 days' notice and without
      incurring an obligation to pay any material premium or penalty or
      suffering any other material detriment, or (F) with respect to the
      pharmaceutical business, enter into an agreement to provide rebates or
      discounts to public, governmental, or private entities, unless such
      agreement is able to be terminated within one year without penalty and the
      rebates or discounts therein do not differ significantly from prior
      arrangements or agreements. As used herein, a "Permitted Capital
      Expenditure" is a capital expenditure which (i) is set forth on a Capital
      Expenditure Schedule to be delivered by the Company as contemplated by the
      Company Disclosure Schedule or (ii) is (A) less than $20 million in the
      case of any single expenditure or related series of expenditures and (B)
      $100 million in the aggregate for all capital expenditures incurred
      pursuant to this clause (ii) and not clause (i). The Company will deliver
      to Parent on a quarterly basis a schedule of actual capital expenditures
      made.

            (b) Dividends; Changes in Share Capital. The Company shall not, and
shall not permit any of its Subsidiaries to, and shall not propose to, (i)
declare or pay any dividends on or make other distributions in respect of any of
its capital stock, except (A) the declaration and payment of regular quarterly
cash dividends not in excess of $0.135 per share of Company Common Stock and
6.25% of the per share stated value per annum per share of (x) Series B
Preferred Stock or (y) Company Convertible Preferred Stock, in each case, with
usual record and payment dates for such dividends in accordance with past
dividend practice; (B) dividends or distributions by wholly owned Subsidiaries
of the Company, (C) dividends or distributions from Monsanto to the Company, and
(D) any stock dividend or distribution by the Company to effect the Monsanto
Spin-Off; (ii) split, combine or reclassify any of its capital stock or issue or
authorize or propose the issuance of any other securities in respect of, in lieu
of or in substitution for, shares of its capital stock, except for any such
transaction by a wholly owned Subsidiary of the Company which remains a wholly
owned Subsidiary after consummation of such transaction, or (iii) repurchase,
redeem or otherwise acquire any shares of its capital stock or any securities
convertible into or exercisable for any shares of its capital stock except (I)
for the exchange of the Series B Preferred Stock in connection with the issuance
of the Company Convertible Preferred Stock, (II) for the purchase from time to
time by the Company of Company Common Stock (and the associated Company Rights)
in the ordinary course of business consistent with past practice in connection
with the Company Benefit Plans and (III) for the redemption or exchange of
Company Rights in accordance with Company Rights Agreement.

            (c) Issuance of Securities. The Company shall not, and shall not
permit any of its Subsidiaries to, issue, deliver or sell, or authorize or
propose the issuance, delivery or sale of, any shares of its capital stock of
any class, any Company Voting Debt or any securities convertible into or
exercisable for, or any rights, warrants, calls or options to acquire, any such
shares or Company Voting Debt, or enter into any commitment, arrangement,
undertaking or agreement with respect to any of the foregoing, other than (i)
the issuance of Company Common Stock (and the associated Company Rights) upon
the exercise of Company Stock Options or in connection with the Company Benefit
Plans, in each case, in accordance with their present terms or pursuant to
Company Stock Options or other stock based awards granted pursuant to clause
(iii) below, (ii) issuances by a wholly owned Subsidiary of the Company of
capital stock to such Subsidiary's parent or another wholly owned Subsidiary of
the Company, (iii) the granting of Company Stock Options or other stock based
awards to acquire shares of Company Common Stock granted under the Company
Benefit Plans in the ordinary course of business


                                      -33-
<PAGE>

consistent with past practice, (iv) pursuant to acquisitions set forth on the
Company Disclosure Schedule, (v) issuances in accordance with Company Rights
Agreement or (vi) the issuance of the Company Convertible Preferred Stock in
accordance with the terms and provisions of Section 4.7.

            (d) Governing Documents. Except to the extent required to comply
with its obligations hereunder or with applicable law, the Company shall not
amend or propose to so amend its certificate of incorporation or bylaws.

            (e) No Acquisitions. Other than (i) acquisitions disclosed on the
Company Disclosure Schedule and (ii) acquisitions for cash in existing or
related lines of business of the Company and its Subsidiaries, the fair market
value of the total consideration (including the value of indebtedness acquired
or assumed) for which does not exceed $20 million for any individual
acquisition, or $100 million in the aggregate for all such acquisitions, the
Company shall not, and shall not permit any of its Subsidiaries to, acquire or
agree to acquire by merging or consolidating with, or by purchasing a
substantial equity interest in or a substantial portion of the assets of, or by
any other manner, any business (including by acquisition of assets) or any
corporation, partnership, association or other business organization or division
thereof; provided, however, that the acquisitions that would otherwise be
permitted under clause (ii) of this Section 4.2(e) shall be prohibited if they,
individually or in the aggregate, present (x) a risk of making it materially
more difficult to obtain any approval or authorization required in order to meet
the conditions set forth in Sections 6.1(c) and 6.1(f) or (y) a risk of
materially delaying or impairing the consummation of the Merger; and provided,
further, however, that nothing in this Section 4.2(e) prohibit (x) internal
reorganizations or consolidations involving existing Subsidiaries of the Company
or (y) the creation of new Subsidiaries of the Company organized to conduct or
continue activities otherwise permitted by this Agreement.

            (f) No Dispositions. Other than (i) internal reorganizations or
consolidations involving existing Subsidiaries of the Company, (ii) dispositions
referred to in the Company SEC Reports filed prior to the date of this
Agreement, (iii) as may be required by or in conformance with law or regulation
in order to permit or facilitate the consummation of the transactions
contemplated hereby or the transactions disclosed in the Company Disclosure
Schedule, (iv) the sale or disposition of assets or stock of Monsanto, or (v)
the Monsanto Spin-Off, the Company shall not, and shall not permit any of its
Subsidiaries to, sell, lease or otherwise dispose of, or agree to sell, lease or
otherwise dispose of, any of its assets (including capital stock of Subsidiaries
of the Company but excluding inventory in the ordinary course of business), if
the fair market value of the total consideration (including the value of the
indebtedness acquired or assumed) therefor exceeds $20 million for any
individual disposition, or $100 million in the aggregate for all such
dispositions.

            (g) Investments; Indebtedness. The Company shall not, and shall not
permit any of its Subsidiaries to, other than in connection with actions
permitted by Section 4.2(e), (i) make any loans, advances or capital
contributions to, or investments in, any other Person, other than (x) by the
Company or a Subsidiary of the Company to or in the Company or any Subsidiary of
the Company, (y) pursuant to any contract or other legal obligation of the
Company or any of its Subsidiaries existing at the date of this Agreement or (z)
in the ordinary course of business consistent with past practice in an aggregate
amount not in excess of $100


                                      -34-
<PAGE>

million in the aggregate (provided that none of such transactions referred to in
this clause (z) presents a material risk of making it more difficult to obtain
any approval or authorization required in connection with the Merger under
Regulatory Laws) or (ii) create, incur, assume or suffer to exist any
indebtedness, issuances of debt securities, guarantees, loans or advances not in
existence as of the date of this Agreement except pursuant to the credit
facilities, indentures and other arrangements in existence on the date of this
Agreement or in the ordinary course of business consistent with past practice,
in each case as such credit facilities, indentures and other arrangements and
other existing indebtedness may be amended, extended, modified, refunded,
renewed or refinanced after the date of this Agreement; provided that any
outstanding borrowings or debt under such credit facilities, indentures and
other arrangements shall not exceed $250 million, in the aggregate.

            (h) Compensation. Other than as contemplated by Sections 4.2(c) or
4.2(h) of the Company Disclosure Schedule, the Company shall not increase the
amount of compensation of any director, executive officer or employee, make any
increase in or commitment to increase any employee benefits, issue any
additional Company Stock Options, adopt or make any commitment to adopt any
additional employee benefit plan or make any contribution, other than regularly
scheduled contributions, to any Company Benefit Plan and, in the case of any of
the foregoing, except, in any case, in the ordinary course of business
consistent with past practice or as required by an existing agreement.

            (i) Accounting Methods; Income Tax Elections. Except as disclosed in
the Company SEC Reports filed prior to the date of this Agreement, or as
required by a Governmental Entity, the Company shall not change its methods of
accounting in effect at March 31, 2002, except as required by changes in GAAP as
concurred in by the Company's independent public accountants. The Company shall
not (i) change its fiscal year or (ii) make or change any material tax election,
settle or compromise any material tax liability or claim for refund, without the
prior written consent of Parent.

            (j) Certain Agreements. The Company shall not, and shall not permit
any of its Subsidiaries to, enter into any agreements or arrangements that limit
or otherwise restrict the Company or any of its Subsidiaries or any of their
respective affiliates or any successor thereto, or that could, after the
Effective Time, limit or restrict Parent or any of its affiliates (including the
Surviving Corporation) or any successor thereto, from engaging or competing in
any line of business or in any geographic area or, in the case of the
pharmaceutical business, any therapeutic area, class of drugs or mechanism of
action which agreements or arrangements, individually or in the aggregate, would
reasonably be expected to have a Material Adverse Effect on Parent and its
Subsidiaries (including the Surviving Corporation and its Subsidiaries), taken
together, after giving effect to the Merger.

            (k) Monsanto Separation Agreements. Neither the Company nor its
Subsidiaries shall amend, modify, alter, supplement or terminate the Separation
Agreement, the Tax Sharing Agreement, the Corporate Agreement, the Intellectual
Property Transfer Agreement, the Services Agreement or the Employee Benefits and
Compensation Allocation Agreement, each agreement dated as of September 1, 2000
and by and between the Company and Monsanto and the Protocol Agreement, dated as
of July 1, 2002, by and among the Company, Monsanto and Solutia Inc.
(collectively and each as amended through the date hereof,


                                      -35-
<PAGE>

the "Separation Agreements"), other than, in any such case, for technical or
ministerial amendments necessary or appropriate to effect the Monsanto Spin-Off.

            (l) Settlement of Litigation. The Company shall not settle or
compromise any material action, suit or claim, or enter into any consent decree,
injunction or similar restraint or form of equitable relief in settlement of any
material action, suit or claim.

            (m) No Related Actions. The Company will not, and will not permit
any of its Subsidiaries to, agree or commit to any of the foregoing.

            Section 4.3 Monsanto Indebtedness.

            (a) The Company will use its reasonable best efforts consistent with
its obligation to effectuate the Monsanto Spin-Off, to collect all outstanding
indebtedness from Monsanto and Monsanto's subsidiaries and the release of all
guarantees of other Monsanto obligations to other parties (collectively,
"Monsanto Indebtedness"), other than current obligations for services provided
to Monsanto pursuant to any agreements between the Company and Monsanto for the
provision of services. The amount of Monsanto Indebtedness as of the date hereof
is not greater than $650 million. The Company shall not invest in or lend any
additional funds or extend further guarantees to Monsanto or to third parties on
behalf of Monsanto. The Company shall not convert any Monsanto Indebtedness into
equity or extend such indebtedness or guarantees beyond the terms currently
applicable to such Monsanto Indebtedness; provided, however, to the extent the
Company is unable to collect all of the Monsanto Indebtedness prior to the
Monsanto Spin-Off, such uncollected indebtedness may be extended to a date no
later than one (1) year after the Monsanto Spin-Off.

            (b) After the Monsanto Spin-Off, neither the Company nor any of its
Subsidiaries shall lend any monies or extend credit to, or discount the
receivables of, or enter into any sale or leaseback arrangement or any other
form of financing with, or give any form of guarantee or indemnity in respect
of, Monsanto or any of Monsanto's subsidiaries, associates or affiliates.

            Section 4.4 Governmental Filings. Each party shall (a) confer on a
regular basis with the other and (b) report to the other (to the extent
permitted by law or regulation or any applicable confidentiality agreement) on
material operational matters. The Company and Parent shall file all reports
required to be filed by each of them with the SEC (and all other Governmental
Entities) between the date of this Agreement and the Effective Time and shall
(to the extent permitted by law or regulation or any applicable confidentiality
agreement) deliver to the other party copies of all such reports, announcements
and publications filed with the SEC promptly after the same are filed.

            Section 4.5 Control of Other Party's Business. Nothing contained in
this Agreement shall give the Company, directly or indirectly, the right to
control or direct Parent's operations prior to the Effective Time. Nothing
contained in this Agreement shall give Parent, directly or indirectly, the right
to control or direct the Company's operations prior to the Effective Time. Prior
to the Effective Time, each of the Company and Parent shall exercise,


                                      -36-
<PAGE>

consistent with the terms and conditions of this Agreement, complete control and
supervision over its respective operations.

            Section 4.6 Actions to Company Benefit Plans. Except as set forth in
Section 4.6 of the Company Disclosure Schedule, during the period from the date
of this Agreement and continuing until the Effective Time, the Company agrees as
to itself and its Subsidiaries that neither the Company nor any of its
Subsidiaries, nor the Company's Board of Directors, nor any committee of the
Company, nor any employee of the Company shall take or cause to be taken any
action that would increase any payment, acceleration, termination, forgiveness
of indebtedness, vesting, distribution, increase in compensation or benefits or
obligation to fund benefits, or increase the number of participants, in each
case, with respect to any Company Benefit Plan disclosed in the Company SEC
Reports, except, in each case, in the ordinary course of business consistent
with past practice.

            Section 4.7 Exchange of Preferred Stock. Prior to the Effective
Time, the Company shall exchange all outstanding shares of Series B Preferred
Stock for Company Convertible Preferred Stock on a one-for-one basis and having
the terms set forth in Section 4.7 of the Company Disclosure Schedule.

                                   ARTICLE V

                              ADDITIONAL AGREEMENTS

            Section 5.1 Preparation of Proxy Statement; Stockholders Meetings.

            (a) As promptly as reasonably practicable following the date hereof,
Parent and the Company shall prepare and file with the SEC mutually acceptable
proxy materials which shall constitute the Joint Proxy Statement/Prospectus
(such proxy statement/prospectus, and any amendments or supplements thereto, the
"Joint Proxy Statement/Prospectus") and Parent shall prepare and file a
registration statement on Form S-4 with respect to the issuance of Parent Common
Stock in the Merger (the "Form S-4"). The Joint Proxy Statement/Prospectus will
be included in and will constitute a part of the Form S-4 as Parent's
prospectus. The Form S-4 and the Joint Proxy Statement/Prospectus shall comply
as to form in all material respects with the applicable provisions of the
Securities Act and the Exchange Act and the rules and regulations thereunder.
Each of Parent and the Company shall use reasonable best efforts to have the
Form S-4 declared effective by the SEC as promptly as practicable after the date
hereof and to keep the Form S-4 effective as long as is necessary to consummate
the Merger and the transactions contemplated thereby. Parent and the Company
shall, as promptly as practicable after receipt thereof, provide the other party
copies of any written comments and advise the other party of any oral comments,
with respect to the Joint Proxy Statement/Prospectus received from the SEC.
Parent shall provide the Company with a reasonable opportunity to review and
comment on any amendment or supplement to the Form S-4 prior to filing such with
the SEC, and will promptly provide the Company with a copy of all such filings
made with the SEC. Notwithstanding any other provision herein to the contrary,
no amendment or supplement (including by incorporation by reference) to the
Joint Proxy Statement/Prospectus or the Form S-4 shall be made without the
approval of both parties, which approval shall not be unreasonably withheld or
delayed; provided, that with respect to documents filed by a party which are


                                      -37-
<PAGE>

incorporated by reference in the Form S-4 or Joint Proxy Statement/Prospectus,
this right of approval shall apply only with respect to information relating to
the other party or its business, financial condition or results of operations;
and provided, further, that Parent, in connection with a Change in the Parent
Recommendation (as defined in Section 5.1(c)), and the Company, in connection
with a Change in the Company Recommendation (as defined in Section 5.1(b)), may
amend or supplement the Joint Proxy Statement/Prospectus or Form S-4 (including
by incorporation by reference) pursuant to a Qualifying Amendment (as defined
below) to effect such a Change, and in such event, this right of approval shall
apply only with respect to information relating to the other party or its
business, financial condition or results of operations, and shall be subject to
the right of each party to have its Board of Directors' deliberations and
conclusions accurately described. A "Qualifying Amendment" means an amendment or
supplement to the Joint Proxy Statement/Prospectus or Form S-4 (including by
incorporation by reference) to the extent it contains (i) a Change in the Parent
Recommendation or a Change in the Company Recommendation (as the case may be),
(ii) a statement of the reasons of the Board of Directors of Parent or the
Company (as the case may be) for making such Change in the Parent Recommendation
or Change in the Company Recommendation (as the case may be) and (iii)
additional information reasonably related to the foregoing. Parent will use
reasonable best efforts to cause the Joint Proxy Statements/Prospectus to be
mailed to Parent stockholders, and the Company will use reasonable best efforts
to cause the Joint Proxy Statement/Prospectus to be mailed to the Company's
stockholders, in each case, as soon as reasonably practicable after the Form S-4
is declared effective under the Securities Act. Parent shall also take any
action (other than qualifying to do business in any jurisdiction in which it is
not now so qualified or to file a general consent to service of process)
required to be taken under any applicable state securities laws in connection
with the Share Issuance and the Company shall furnish all information concerning
the Company and the holders of Company Common Stock as may be reasonably
requested in connection with any such action. Each party will advise the other
party, promptly after it receives notice thereof, of the time when the Form S-4
has become effective, the issuance of any stop order, the suspension of the
qualification of the Parent Common Stock issuable in connection with the Merger
for offering or sale in any jurisdiction, or any request by the SEC for
amendment of the Joint Proxy Statement/Prospectus or the Form S-4. If at any
time prior to the Effective Time any information relating to Parent or the
Company, or any of their respective affiliates, officers or directors, should be
discovered by Parent or the Company which should be set forth in an amendment or
supplement to any of the Form S-4 or the Joint Proxy Statement/Prospectus so
that any of such documents would not include any misstatement of a material fact
or omit to state any material fact necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading, the party
which discovers such information shall promptly notify the other party hereto
and, to the extent required by law, rules or regulations, an appropriate
amendment or supplement describing such information shall be promptly filed with
the SEC and disseminated to the stockholders of Parent and the Company.

            (b) The Company shall duly take (subject to compliance with the
provisions of Section 3.1(e) and Section 3.2(e) (provided that the Company shall
have used reasonable best efforts to ensure that such representations are true
and correct)) all lawful action to call, give notice of, convene and hold a
meeting of its stockholders on a date as soon as reasonably practicable (the
"Company Stockholders Meeting") for the purpose of obtaining the Company
Stockholder Approval with respect to the adoption of this Agreement and shall
take all lawful action to solicit the adoption of this Agreement by the Company
Stockholder Approval; and the


                                      -38-
<PAGE>

Board of Directors of the Company shall recommend adoption of this Agreement by
the stockholders of the Company to the effect as set forth in Section 3.2(f)
(the "Company Recommendation"), and shall not withdraw, modify or qualify (or
propose to withdraw, modify or qualify) (a "Change") in any manner adverse to
Parent such recommendation or take any action or make any statement in
connection with the Company Stockholders Meeting inconsistent with such
recommendation (collectively, a "Change in the Company Recommendation");
provided the foregoing shall not prohibit accurate disclosure (and such
disclosure shall not be deemed to be a Change in the Company Recommendation) of
factual information regarding the business, financial condition or results of
operations of Parent or the Company or the fact that an Acquisition Proposal has
been made, the identity of the party making such proposal or the material terms
of such proposal (provided, that the Board of Directors of the Company does not
withdraw, modify or qualify (or propose to withdraw, modify or qualify) in any
manner adverse to Parent its recommendation) in the Form S-4 or the Joint Proxy
Statement/Prospectus or otherwise, to the extent such information, facts,
identity or terms is required to be disclosed under applicable law; and,
provided further, that the Board of Directors of the Company may make a Change
in the Company Recommendation (x) pursuant to Section 5.4 hereof or (y) prior to
the Company Stockholders Meeting if the Board of Directors of the Company
determines in good faith that a Material Adverse Effect has occurred with
respect to Parent. Notwithstanding any Change in the Company Recommendation,
this Agreement shall be submitted to the stockholders of the Company at the
Company Stockholders Meeting for the purpose of adopting the Agreement and
approving the Merger; provided that this Agreement shall not be required to be
submitted to the stockholders of the Company at the Company Stockholders Meeting
if this Agreement has been terminated pursuant to Section 7.1 hereof.

            (c) Parent shall duly take (subject to compliance with the
provisions of Section 3.2(e) and Section 3.1(e) (provided that Parent shall have
used reasonable best efforts to ensure that such representations are true and
correct)) all lawful action to call, give notice of, convene and hold a meeting
of its stockholders on a date as soon as reasonably practicable (the "Parent
Stockholders Meeting") for the purpose of obtaining the Parent Stockholder
Approval with respect to the approval of the Share Issuance and Certificate
Amendment and shall take all lawful action to solicit the approval of the Share
Issuance and Certificate Amendment by the Parent Stockholder Approval and the
Board of Directors of Parent shall recommend approval of each of the Share
Issuance and Certificate Amendment by the stockholders of Parent to the effect
as set forth in Section 3.1(f) (the "Parent Recommendation"), and shall not
Change in any manner adverse to the Company such recommendation or take any
action or make any statement in connection with the Parent Stockholders Meeting
inconsistent with such recommendation (collectively, a "Change in the Parent
Recommendation"); provided the foregoing shall not prohibit accurate disclosure
(and such disclosure shall not be deemed to be a Change in the Parent
Recommendation) of factual information regarding the business, financial
condition or operations of Parent or the Company (provided, that the Board of
Directors of Parent does not withdraw, modify or qualify (or propose to
withdraw, modify or qualify) in any manner adverse to the Company its
recommendation) in the Form S-4 or the Joint Proxy Statement/Prospectus or
otherwise, to the extent such information, facts, identity or terms is required
to be disclosed under applicable law; and provided further, that the Board of
Directors of Parent may make a Change in the Parent Recommendation prior to the
Parent Stockholders Meeting if the Board of Directors of Parent determines in
good faith that a Material Adverse Effect has occurred with respect to the
Company. Notwithstanding any Change in the Parent Recommendation, a


                                      -39-
<PAGE>

proposal to approve the Share Issuance and Certificate Amendment shall be
submitted to the stockholders of Parent at the Parent Stockholders Meeting for
the purpose of obtaining the Parent Stockholder Approval; provided that this
Agreement shall not be required to be submitted to the stockholders of Parent at
the Parent Stockholders Meeting if this Agreement has been terminated pursuant
to Section 7.1 hereof.

            (d) For purposes of this Agreement, a Change in the Company
Recommendation shall be deemed to include, without limitation, a recommendation
by the Company Board of Directors of a third party Acquisition Proposal with
respect to the Company.

            Section 5.2 Access to Information/Employees.

            (a) Upon reasonable notice, each party shall (and shall cause its
Subsidiaries to) afford to the officers, employees, accountants, counsel,
financial advisors and other authorized representatives of the other party
reasonable access during normal business hours, during the period prior to the
Effective Time, to all its properties, books, contracts, commitments, records,
officers and employees and, during such period, such party shall (and shall
cause its Subsidiaries to) furnish promptly to the other party (a) a copy of
each report, schedule, registration statement and other document filed,
published, announced or received by it during such period pursuant to the
requirements of Federal or state securities laws, as applicable (other than
documents which such party is not permitted to disclose under applicable law),
and (b) all other information concerning it and its business, properties and
personnel as such other party may reasonably request (including consultation on
a regular basis with such parties, agents, advisors, attorneys and
representatives with respect to litigation matters); provided, however, that
either party may restrict the foregoing access to the extent that (i) in the
reasonable judgment of such party, any law, treaty, rule or regulation of any
Governmental Entity applicable to such party requires such party or its
Subsidiaries to restrict or prohibit access to any such properties or
information (ii) in the reasonable judgment of such party, the information is
subject to confidentiality obligations to a third party (iii) such disclosure
would result in disclosure of any trade secrets of third parties or (iv)
disclosure of any such information or document could result in the loss of
attorney client privilege; provided, however, that with respect to this clause
(iv), the parties and/or counsel for the parties shall use their reasonable best
efforts to enter into such joint defense agreements or other arrangements, as
appropriate, so as to avoid the loss of attorney client privilege. Any such
information obtained pursuant to this Section 5.2 ("Confidential Information")
will be used solely for the purpose of consideration or performance of the
transactions contemplated by this Agreement or any other agreement related
hereto and will be kept confidential by the party obtaining such information and
all persons obtaining such information on such party's behalf or who obtain such
information from such party. Confidential Information shall not include
information that (A) is or becomes generally available to the public other than
as a result of disclosure by a party or its Representatives, or (B) is or
becomes available to a party (other than the disclosing party) or its
Representatives that is not known by the non-disclosing party to have any
obligation not to disclose such information. Notwithstanding the foregoing,
Confidential Information may be disclosed by a party (x) to its directors,
officers, employees, representatives (including, without limitation, financial
advisors, attorneys and accountants) or agents (collectively "Representatives")
who need to know such information if the party informs such Representatives of
the confidential nature of such information and directs them to treat such
information confidentially and to use such information


                                      -40-
<PAGE>

for no purpose other than as specifically permitted by the Agreement and (y) if
the party is legally required to make such disclosure as a result of a court
order, subpoena or similar legal duress, provided that prior to such disclosure,
the disclosing party gives to the other party prompt written notice of its
receipt of such order or subpoena or similar document so that the other party
has a reasonable opportunity prior to disclosure to obtain a protective order
(if disclosure of Confidential Information is so required, the disclosing party
shall disclose only that portion of such information that is so required and
shall assist the other party in obtaining protective orders or undertakings that
confidential treatment will be accorded to any such information furnished). In
the event of termination of this Agreement, each party will promptly return to
the other party all Confidential Information in its possession (including all
written materials prepared or supplied by or on its behalf containing or
reflecting any Confidential Information) and will not retain any copies,
extracts or other reproductions in whole or in part of any Confidential
Information. Any work papers, memoranda or other writings prepared by a party or
its Representatives derived from or incorporating any Confidential Information
shall be destroyed promptly upon termination of this Agreement, with such
destruction confirmed to the other party in writing. Any oral Confidential
Information will continue to be subject to the terms of this Section 5.2. Each
party shall be responsible for the breach of the terms of this Section 5.2 by
its Representative. Any investigation by Parent or the Company shall not affect
the representation and warranties of the Company and Parent, as the case may be.
In the event of any conflict between the terms of this Section 5.2 and the terms
of the Confidentiality Agreement, the terms of the Confidentiality Agreement
shall control.

            (b) After the date hereof, Parent and the Company shall establish a
mechanism reasonably acceptable to both parties by which Parent will be
permitted, prior to the Effective Time and subject to applicable law, to
communicate directly with the Company employees regarding employee related
matters after the Effective Time.

            Section 5.3 Reasonable Best Efforts.

            (a) Subject to the terms and conditions of this Agreement, each
party will use its reasonable best efforts to take, or cause to be taken, all
actions and to do, or cause to be done, all things necessary, proper or
advisable under this Agreement and applicable laws and regulations to consummate
the Merger and the other transactions contemplated by this Agreement as soon as
practicable after the date hereof, including (i) preparing and filing as
promptly as practicable all documentation to effect all necessary applications,
notices, petitions, filings, tax ruling requests and other documents and to
obtain as promptly as practicable all consents, clearances, waivers, licenses,
orders, registrations, approvals, permits, tax rulings and authorizations
necessary or advisable to be obtained from any third party and/or any
Governmental Entity in order to consummate the Merger or any of the other
transactions contemplated by this Agreement and (ii) taking all reasonable steps
as may be necessary to obtain all such material consents, clearances, waivers,
licenses, registrations, permits, authorizations, tax rulings, orders and
approvals. In furtherance and not in limitation of the foregoing, each party
hereto agrees to make an appropriate filing of a Notification and Report Form
pursuant to the HSR Act and any other Regulatory Law (as defined in Section
5.3(b) below) with respect to the transactions contemplated hereby as promptly
as practicable after the date hereof and to supply as promptly as practicable
any additional information and documentary material that may be requested
pursuant to the HSR Act and any other Regulatory Law and to


                                      -41-
<PAGE>

take all other actions necessary to cause the expiration or termination of the
applicable waiting periods under the HSR Act as soon as practicable. If
necessary to obtain any regulatory approval pursuant to any Regulatory Law, or
if any administrative or judicial action or proceeding, including any proceeding
by a private party, is instituted (or threatened to be instituted by a
Governmental Entity), challenging the Merger or any other transaction
contemplated by this Agreement as violative of any Regulatory Law, each of
Parent and the Company shall cooperate with each other and, if necessary to (I)
obtain any regulatory approval, (II) contest and resist any such action or
proceeding, or (III) have vacated, lifted, reversed or overturned any decree,
judgment, injunction, or other order (whether temporary, preliminary or
permanent): (x) Parent shall, and shall cause its Subsidiaries to, hold separate
any portion of its assets, or otherwise conduct its business or any portion of
its business, in a specified manner in one or more countries for a period of up
to six months after the Closing; (y) Parent shall take such actions with respect
to its assets or the assets of any of its Subsidiaries (including selling,
holding separate or otherwise disposing of such assets, or agreeing to, or
permitting, any of the foregoing with respect to such assets); and (z) the
Company at the direction of the Parent shall take such actions with respect to
its assets or the assets of any of its Subsidiaries (including selling, holding
separate or otherwise disposing of such assets, or agreeing to, or permitting
any of the foregoing with respect to such assets); unless, in the case of
actions taken pursuant to clauses (y) and (z), such actions, in the aggregate,
would (taking into account both quantitative and qualitative factors, and
assuming in the case of actions taken pursuant to clause (y) that such actions
were or had been taken by the Company or any of its Subsidiaries with respect to
assets of the Company of similar value or prospective value) result in a
Material Adverse Effect on the Company. For purposes of the previous sentence
only, the parties acknowledge that the value of drug candidates and discoveries
may be material before they provide any revenue or profit to the Company and
therefore the term "Material Adverse Effect" as it relates to the Company shall
include the prospects of the Company and its Subsidiaries, taken as a whole.

            (b) To the extent permissible under applicable law or any rule,
regulation or restriction of a Governmental Entity, each of Parent and the
Company shall, in connection with the efforts referenced in Section 5.3(a) to
obtain all requisite material approvals, clearances and authorizations for the
transactions contemplated by this Agreement under the HSR Act or any other
Regulatory Law, use its reasonable best efforts to (i) cooperate in all respects
with each other in connection with any filing or submission and in connection
with any investigation or other inquiry, including any proceeding initiated by a
private party, (ii) promptly inform the other party of any communication
received by such party from, or given by such party to, the Antitrust Division
of the Department of Justice (the "DOJ"), the Federal Trade Commission (the
"FTC") or any other Governmental Entity and of any material communication
received or given in connection with any proceeding by a private party, in each
case regarding any of the transactions contemplated hereby, (iii) permit the
other party, or the other party's legal counsel, to review any communication
given by it to, and consult with each other in advance of any meeting or
conference with, the DOJ, the FTC or any such other Governmental Entity or, in
connection with any proceeding by a private party, with any other Person and
(iv) give the other party the opportunity to attend and participate in such
meetings and conferences. For purposes of this Agreement, "Regulatory Law" means
the Sherman Act, as amended, Council Regulation No. 4064/89 of the European
Community, as amended (the "EC Merger Regulation") the Clayton Act, as amended,
the HSR Act, the Federal Trade Commission Act, as amended, and all other
Federal, state and foreign, if any, statutes, rules, regulations, orders,
decrees, administrative


                                      -42-
<PAGE>

and judicial doctrines and other laws that are designed or intended to prohibit,
restrict or regulate (i) foreign investment or (ii) actions having the purpose
or effect of monopolization or restraint of trade or lessening of competition.

            (c) If any objections are asserted with respect to the transactions
contemplated hereby under any Regulatory Law or if any suit is instituted by any
Governmental Entity or any private party challenging any of the transactions
contemplated hereby as violative of any Regulatory Law, each of Parent and the
Company shall use its reasonable best efforts to resolve any such objections or
challenge as such Governmental Entity or private party may have to such
transactions under such Regulatory Law so as to permit consummation of the
transactions contemplated by this Agreement.

            Section 5.4 Acquisition Proposals. The Company agrees that neither
it nor any of its Subsidiaries nor any of the officers and directors of it or
its Subsidiaries shall, and that it shall use its reasonable best efforts to
cause its and its Subsidiaries' employees, agents and representatives (including
any investment banker, attorney or accountant retained by it or any of its
Subsidiaries) not to, directly or indirectly, initiate, solicit, encourage or
knowingly facilitate (including by way of furnishing information) any inquiries
or the making of any proposal or offer with respect to a merger, reorganization,
share exchange, consolidation, business combination, recapitalization,
liquidation, dissolution or similar transaction involving it, or any purchase or
sale of the consolidated assets (including without limitation stock of
Subsidiaries) of the Company and its Subsidiaries, taken as a whole, having an
aggregate value equal to 15% or more of the market capitalization of the
Company, or any purchase or sale of, or tender or exchange offer for, 15% or
more of the equity securities of the Company (any such proposal or offer (other
than a proposal or offer made by the other party or an affiliate thereof) being
hereinafter referred to as an "Acquisition Proposal"). The Company further
agrees that neither it nor any of its Subsidiaries nor any of the officers and
directors of it or its Subsidiaries shall, and that it shall use its reasonable
best efforts to cause its and its Subsidiaries' employees, agents and
representatives (including any investment banker, attorney or accountant
retained by it or any of its Subsidiaries) not to, directly or indirectly, have
any discussion with or provide any confidential information or data to any
Person relating to an Acquisition Proposal, or engage in any negotiations
concerning an Acquisition Proposal, or knowingly facilitate any effort or
attempt to make or implement an Acquisition Proposal or (subject to Section
7.1(h)) accept an Acquisition Proposal. Notwithstanding anything in this
Agreement to the contrary, the Company and the Company's Board of Directors
shall be permitted to (A) to the extent applicable, comply with Rule 14d-9 and
Rule 14e-2 promulgated under the Exchange Act with regard to an Acquisition
Proposal, (B) effect a Change in the Company Recommendation, or (C) engage in
any discussions or negotiations with, or provide any information to, any Person
in response to an unsolicited bona fide written Acquisition Proposal by any such
Person, if and only to the extent that, with respect to the actions contemplated
by clauses (B) or (C), (i) the Company's Stockholders Meeting shall not have
occurred, (ii) (x) in the case of clause (B) above, (I) such change is permitted
by clause (y) of the second proviso of the first sentence of Section 5.1(b) or
(II) the Company has received an unsolicited bona fide written Acquisition
Proposal from a third party and the Company's Board of Directors concludes in
good faith that such Acquisition Proposal constitutes a Superior Proposal (as
defined in Section 8.11) and (y) in the case of clause (C) above, the Company's
Board of Directors concludes in good faith that there is a reasonable likelihood
that such Acquisition Proposal could result in a Superior Proposal, (iii) in


                                      -43-
<PAGE>

the case of clause (C) above, prior to providing any information or data to any
Person in connection with an Acquisition Proposal by any such Person, the
Company's Board of Directors receives from such Person an executed
confidentiality agreement containing terms at least as stringent as those
contained in Section 5.2 and (iv) in the case of clause (C) above, prior to
providing any information or data to any Person or entering into discussions or
negotiations with any Person, the Company notifies Parent promptly of such
inquiries, proposals or offers received by, any such information requested from,
or any such discussions or negotiations sought to be initiated or continued
with, any of its representatives indicating, in connection with such notice, the
name of such Person and the material terms and conditions of any inquiries,
proposals or offers. The Company agrees that it will promptly keep Parent
informed of the status and terms of any such proposals or offers and the status
and terms of any such discussions or negotiations. The Company agrees that it
will, and will cause its officers, directors and representatives to, immediately
cease and cause to be terminated any activities, discussions or negotiations
existing as of the date of this Agreement with any parties conducted heretofore
with respect to any Acquisition Proposal. The Company agrees that it will use
reasonable best efforts to promptly inform its directors, officers, key
employees, agents and representatives of the obligations undertaken in this
Section 5.4. Nothing in this Section 5.4 shall (x) permit Parent or the Company
to terminate this Agreement (except as specifically provided in Article VII
hereof) or (y) affect any other obligation of Parent or the Company under this
Agreement.

            Section 5.5 Employee Benefits Matters.

            (a) At the Effective Time, Parent shall provide employment to, or
shall cause the Surviving Corporation to provide employment to, employees who
were employed by the Company or its Subsidiaries as of the Effective Time
("Continuing Employees"). Nothing contained herein shall be deemed to guarantee
employment for any period of time or preclude the Parent's ability to terminate
any Continuing Employee for any reason subsequent to the Effective Time. Except
as may be otherwise required by law, nothing contained herein shall require
Parent to continue any particular Company Benefit Plan or compensation plan,
program or arrangement, or prevent the amendment, modification or termination
thereof; provided that Parent shall not take any action or cause the Surviving
Corporation to take any action (by way of amendment, termination or otherwise)
which is in violation of the terms of any Company Benefit Plan. From and after
the Effective Time until the second anniversary of the Effective Time (the
"Benefits Continuation Period"), Parent shall provide, or shall cause the
Surviving Corporation to provide compensation and employee benefits to the
Continuing Employees and former employees of the Company and its Subsidiaries
("Former Employees") which are substantially comparable in the aggregate to
those provided to such individuals by the Company and its Subsidiaries
immediately prior to the Effective Time; provided, however, that with respect to
employees who are subject to collective bargaining, compensation and benefits
shall be provided in accordance with the applicable collective bargaining
agreements. Following the Benefits Continuation Period, Parent shall provide, or
shall cause the Surviving Corporation to provide, compensation and benefits that
are substantially comparable in the aggregate to those provided to similarly
situated employees of Parent.

            (b) During the Benefits Continuation Period, Parent shall continue,
or shall cause the Surviving Corporation to continue, the severance and
post-retirement medical and dental benefits provided by the Company and its
Subsidiaries immediately prior to the Effective


                                      -44-
<PAGE>

Time as provided in the Pharmacia Separation Benefit Plans, as amended through
July 9, 2002. Further, Parent shall continue, or shall cause the Surviving
Corporation to continue, post-retirement medical, dental and life insurance
benefits for eligible Former Employees at the Company as in effect prior to the
Effective Time. Following the Benefits Continuation Period, (i) Parent shall
provide, or shall cause the Surviving Corporation to provide, to the Continuing
Employees severance benefits that are no less favorable than those provided to
similarly situated employees of Parent, and (ii) to the extent Parent alters or
modifies any retiree welfare benefits provided to any Continuing Employee or
Former Employee, such alteration or modification shall result in such individual
(and such individual's eligible dependents) receiving retiree welfare benefits
that are substantially comparable in the aggregate to those provided to
similarly situated employees and former employees of Parent. During the Benefits
Continuation Period, Parent shall provide, or shall cause the Surviving
Corporation to provide to Continuing Employees and Former Employees employed
outside of the United States compensation and benefits that are substantially
comparable in the aggregate to those provided to such persons immediately prior
to the Effective Time, subject to: such modifications as are necessary to comply
with applicable laws of the foreign countries and their political subdivisions;
and applicable labor agreements.

            (c) With respect to any Benefit Plans of Parent or the Surviving
Corporation in which Continuing Employees or Former Employees first become
eligible to participate on or after the Effective Time, Parent shall, and shall
cause the Surviving Corporation to, (i) waive any pre-existing condition
exclusions and waiting periods with respect to participation and coverage
requirements applicable to Continuing Employees and Former Employees under any
Benefit Plans of Parent or the Surviving Corporation, except to the extent that
such pre-existing condition exclusions or waiting periods apply to changes made
by such Continuing Employee or Former Employee under the terms of the Parent or
Surviving Corporation Benefit Plan on the same basis as would apply to any
employee or former employee of Parent making a similar change; (ii) provide each
Continuing Employee or Former Employee with credit for any co-payments and
deductible paid prior to the Effective Time (to the same extent such credit was
given under the analogous Company Benefit Plan prior to the Effective Time) in
satisfying any applicable deductible or out-of-pocket requirements under any
Parent Benefit Plan; and (iii) recognize service prior to the Effective Time
with the Company, its Subsidiaries and any predecessor entities of the Company,
for all purposes (including, without limitation, eligibility to participate,
vesting credit, entitlement to benefits and benefit accrual) of Benefit Plans of
Parent or the Surviving Corporation in which any Continuing Employee or Former
Employee participates to the same extent such service would be recognized by
Parent under the applicable Benefit Plan for similarly situated employees and
former employees of Parent; provided, however, that the foregoing shall not
apply to the extent it would result in any duplication of benefits for the same
period of service.

            (d) From and after the Effective Time, Parent shall honor, fulfill
and discharge and shall cause the Surviving Corporation to honor, fulfill and
discharge, in accordance with its terms, each Company Benefit Plan and related
funding arrangement, including each employment, change in control, severance and
termination agreement between the Company or any of its Subsidiaries and any
officer, director or employee of such company, including without limitation (i)
all legal and contractual obligations pursuant to outstanding retirement plans,
salary and bonus deferral plans, vested and accrued benefits and similar
employment and benefit arrangements and agreements in effect as of the Effective
Time,


                                      -45-
<PAGE>

including all the "change in control" provisions under the Company Benefit
Plans, and (ii) all vacation, personal and sick days accrued by Continuing
Employees and Former Employees as of the Effective Time.

            Section 5.6 Fees and Expenses. Subject to Section 7.2, whether or
not the Merger is consummated, all Expenses incurred in connection with this
Agreement and the transactions contemplated hereby shall be paid by the party
incurring such Expenses, except (a) if the Merger is consummated, the Surviving
Corporation or its relevant Subsidiary shall pay, or cause to be paid, any and
all property or transfer taxes imposed on the Company or its Subsidiaries and
(b) Expenses incurred in connection with the filing, printing and mailing of the
Joint Proxy Statement/Prospectus, which shall be paid 50% by Parent and 50% by
the Company. As used in this Agreement, "Expenses" includes all out-of-pocket
expenses (including, without limitation, all fees and expenses of counsel,
accountants, investment bankers, experts and consultants to a party hereto and
its affiliates) incurred by a party or on its behalf in connection with or
related to the authorization, preparation, negotiation, execution and
performance of this Agreement and the transactions contemplated hereby,
including the preparation, printing, filing and mailing of the Joint Proxy
Statement/Prospectus and the solicitation of stockholder approvals and all other
matters related to the transactions contemplated hereby.

            Section 5.7 Directors' and Officers' Indemnification and Insurance.

            (a) From and after the Effective Time the Parent agrees that it will
(i) indemnify and hold harmless, against any costs or expenses (including
attorney's fees), judgments, fines, losses, claims damages or liabilities
incurred in connection with any claim, action, suit, proceeding or
investigation, whether civil, criminal, administrative or investigative, and
provide advancement of expenses to, all past and present directors, officers and
employees of the Company and its Subsidiaries (in all of their capacities) (a)
to the same extent such persons are indemnified or have the right to advancement
of expenses as of the date of this Agreement by the Company pursuant to the
Company's certificate of incorporation, bylaws and indemnification agreements,
if any, in existence on the date hereof with any directors, officers and
employees of the Company and its Subsidiaries and (b) without limitation to
clause (a), to the fullest extent permitted by law, in each case, for acts or
omissions at or prior to the Effective Time (including for acts or omissions
occurring in connection with the approval of this Agreement and the consummation
of the transactions contemplated hereby), (ii) include and cause to be
maintained in effect in the Surviving Corporation's (or any successor's)
certificate of incorporation and bylaws for a period of six years after the
Effective Time, the current provisions regarding elimination of liability of
directors, indemnification of officers, directors and employees and advancement
of expenses contained in the certificate of incorporation and bylaws of the
Company and (iii) cause to be maintained for a period of six years after the
Effective Time the current policies of directors' and officers' liability
insurance and fiduciary liability insurance maintained by the Company (provided
that Parent (or any successor) may substitute therefor policies of at least the
same coverage and amounts containing terms and conditions which are, in the
aggregate, no less advantageous to the insured) with respect to claims arising
from facts or events that occurred on or before the Effective Time (including
for acts or omissions occurring in connection with the approval of this
Agreement and the consummation of the transactions contemplated hereby). The
obligations of Parent under this Section 5.7 shall not be terminated or modified
in such a manner as to adversely affect any indemnitee to whom this Section 5.7


                                      -46-
<PAGE>

applies without the consent of such affected indemnitee (it being expressly
agreed that the indemnitees to whom this Section 5.7 applies shall be third
party beneficiaries of this Section 5.7).

            (b) If Parent or any of its successors or assigns (i) shall
consolidate with or merge into any other corporation or entity and shall not be
the continuing or surviving corporation or entity of such consolidation or
merger or (ii) shall transfer all or substantially all of its properties and
assets to any individual, corporation or other entity, then, and in each such
case, proper provisions shall be made so that the successors and assigns of
Parent shall assume all of the obligations set forth in this Section 5.7.

            Section 5.8 Public Announcements. Parent and the Company shall use
reasonable best efforts to develop a joint communications plan and each party
shall use reasonable best efforts (i) to ensure that all press releases and
other public statements with respect to the transactions contemplated hereby
shall be consistent with such joint communications plan, and (ii) unless
otherwise required by applicable law or by obligations pursuant to any listing
agreement with or rules of any securities exchange, to consult with each other
before issuing any press release or, to the extent practical, otherwise making
any public statement with respect to this Agreement or the transactions
contemplated hereby. In addition to the foregoing, except to the extent
disclosed in or consistent with the Joint Proxy Statement/Prospectus in
accordance with the provisions of Section 5.1, neither Parent nor the Company
shall issue any press release or otherwise make any public statement or
disclosure concerning the other party or the other party's business, financial
condition or results of operations without the consent of the other party, which
consent shall not be unreasonably withheld or delayed; provided, the foregoing
shall be subject to the requirements of law and to each party's obligations
pursuant to any listing agreement or the rules of any national securities
exchange.

            Section 5.9 Accountant's Letters.

            (a) Parent shall use reasonable best efforts to cause to be
delivered to the Company two letters from Parent's independent public
accountants, one dated approximately the date on which the Form S-4 shall become
effective and one dated the Closing Date, each addressed to Parent and the
Company, in form reasonably satisfactory to the Company and customary in scope
for comfort letters delivered by independent public accountants in connection
with registration statements similar to the Form S-4.

            (b) The Company shall use reasonable best efforts to cause to be
delivered to Parent two letters from the Company's independent public
accountants, one dated approximately the date on which the Form S-4 shall become
effective and one dated the Closing Date, each addressed to the Company and
Parent, in form reasonably satisfactory to Parent and customary in scope for
comfort letters delivered by independent public accountants in connection with
registration statements similar to the Form S-4.

            Section 5.10 Listing of Shares of Parent Common Stock. Parent shall
use its reasonable best efforts to cause the shares of Parent Common Stock to be
issued in the Merger and the shares of Parent Common Stock to be reserved for
issuance upon exercise of the


                                      -47-
<PAGE>

Company Stock Options to be approved for listing on the NYSE, subject to
official notice of issuance, prior to the Closing Date.

            Section 5.11 Dividends. After the date of this Agreement, each of
Parent and the Company shall coordinate with the other the payment of dividends
with respect to the Parent Common Stock and Company Common Stock and the record
dates and payment dates relating thereto, it being the intention of the parties
that holders of Parent Common Stock and Company Common Stock shall not receive
two dividends, or fail to receive one dividend, for any single calendar quarter
with respect to their shares of Parent Common Stock and/or Company Common Stock
or any shares of Parent Common Stock that any such holder receives in exchange
for such shares of Company Common Stock in the Merger. Notwithstanding the
foregoing, such coordination shall not in any manner affect the Company's
ability to declare a dividend on the shares of Common Stock to effect the
Monsanto Spin-Off.

            Section 5.12 Affiliates. Not less than 45 days prior to the
Effective Time, the Company shall deliver to Parent a letter identifying all
persons who, in the judgment of the Company, may be deemed at the time this
Agreement is submitted for adoption by the stockholders of the Company,
"affiliates" of the Company for purposes of Rule 145 under the Securities Act
and applicable SEC rules and regulations, and such list shall be updated as
necessary to reflect changes from the date thereof. The Company shall use
reasonable best efforts to cause each person identified on such list to deliver
to Parent not less than 30 days prior to the Effective Time, a written agreement
substantially in the form attached as Exhibit 5.12 hereto (an "Affiliate
Agreement").

            Section 5.13 Section 16 Matters. Prior to the Effective Time, each
of Parent and the Company shall take all such steps as may be required to cause
any dispositions of Company Common Stock (including derivative securities with
respect to Company Common Stock) or acquisitions of Parent Common Stock
(including derivative securities with respect to Parent Common Stock) resulting
from the transactions contemplated by Article I or Article II of this Agreement
by each individual who is subject to the reporting requirements of Section 16(a)
of the Exchange Act with respect to the Company, to be exempt under Rule 16b-3
promulgated under the Exchange Act, such steps to be taken in accordance with
the No-Action Letter dated January 12, 1999, issued by the SEC to Skadden, Arps,
Slate, Meagher & Flom LLP.

            Section 5.14 Tax Treatment. Parent and the Company intend the Merger
to qualify as a reorganization under Section 368(a) of the Code. Each of Parent
and the Company, and each of their respective affiliates shall, to the extent
consistent with their rights and obligations under this Agreement, use their
reasonable best efforts to cause the Merger to so qualify and to obtain the
opinions of Cadwalader, Wickersham & Taft and Sullivan & Cromwell referred to in
Section 6.2(c) and 6.3(c) of this Agreement. For purposes of the tax opinions
described in Sections 6.2(c) and 6.3(c) of this Agreement, each of Parent and
the Company shall use their reasonable best efforts to provide representation
letters substantially in the form of Exhibits 6.2(c)(2) and 6.2(c)(3) hereto,
each dated on or before the date the Form S-4 shall become effective, and
subsequently, on the Closing Date. Except for actions specifically contemplated
by this Agreement, each of Parent, Merger Sub and the Company and each of their
respective affiliates shall use their reasonable best efforts not to take any
action, fail to take any action, cause any action to be taken or not taken, or
suffer to exist any condition, which action or


                                      -48-
<PAGE>

failure to take action or condition would prevent, or would be reasonably likely
to prevent, (i) the Merger from qualifying as a reorganization within the
meaning of Section 368(a) of the Code, or (ii) the Monsanto Spin-Off from
qualifying as a Tax-free distribution under Section 355 of the Code.

            Section 5.15 Tax Certificates. The Company shall deliver to Parent
at the time of the Monsanto Spin-Off, unless the Monsanto Sale Transaction (as
defined in Section 5.16) shall have occurred, a representation letter in the
form of Exhibit 5.15 hereto, dated as of the date of the Monsanto Spin-Off.

            Section 5.16 Completion of Spin-off or Sale of Monsanto. The Company
shall cause either (i) the Monsanto Spin-Off, (ii) the sale of all or
substantially all of the assets of Monsanto and transfer of all its liabilities
to an entity no less creditworthy than Monsanto followed by the liquidation and
dissolution of Monsanto, or (iii) the sale of all of the Company's equity
interest in Monsanto (any of clauses (ii) or (iii), the "Monsanto Sale
Transaction") to occur.

            Section 5.17 Restructure of Transaction. In the event that either of
Cadwalader, Wickersham & Taft or Sullivan & Cromwell is unable to render its
opinion pursuant to Sections 6.2(c) or 6.3(c), respectively, Parent and the
Company shall negotiate in good faith to revise the structure of the business
combination between the Company and Parent such that each of Cadwalader,
Wickersham & Taft and Sullivan & Cromwell will be able to render such opinion,
provided that no such revision to the structure of the Merger shall (a) result
in any change in the Merger Consideration, (b) be adverse to the interests of
Parent, the Company, Merger Sub, the holders of shares of Parent Common Stock or
the holders of shares of Company Common Stock or Company Convertible Preferred
Stock or other capital stock of the Company, or (c) unreasonably impede or delay
consummation of the Merger. If the structure of the Merger is so revised, this
Agreement shall be amended by the parties as appropriate to give effect to the
revised structure of the Merger with each party executing a written amendment to
this Agreement as necessary to reflect the foregoing.

            Section 5.18 Election to Parent's Board of Directors. Prior to the
Effective Time, Parent shall (i) cause Mr. Frederick Hassan to be appointed to
Parent's board of directors at the Effective Time and (ii) take all action
necessary so that, at the Effective Time and so long as he is willing and able
to serve, Mr. Hassan shall be appointed the Vice-Chairman of Parent.

                                   ARTICLE VI

                              CONDITIONS PRECEDENT

            Section 6.1 Conditions to Each Party's Obligation to Effect the
Merger. The respective obligations of the Company, Parent and Merger Sub to
effect the Merger are subject to the satisfaction or waiver on or prior to the
Closing Date of the following conditions:

            (a) Stockholder Approval. (i) The Company shall have obtained the
Company Stockholder Approval in connection with the adoption of this Agreement
by the stockholders of the Company and (ii) Parent shall have obtained the
Parent Stockholder


                                      -49-
<PAGE>

Approval in connection with the approval of each of the Share Issuance and the
Certificate Amendment by the stockholders of Parent.

            (b) No Injunctions or Restraints, Illegality. No Laws shall have
been adopted or promulgated, and no temporary restraining order, preliminary or
permanent injunction or other order, judgment, decision, opinion or decree
issued by a court or other Governmental Entity of competent jurisdiction in the
United States or the European Union shall be in effect, having the effect of
making the Merger illegal or otherwise prohibiting consummation of the Merger.

            (c) HSR Act; EC Merger Regulation. Each of (i) the waiting period
(and any extension thereof) applicable to the Merger under the HSR Act shall
have been terminated or shall have expired, and any investigation opened by
means of a second request for additional information or otherwise shall have
been terminated or closed, and (ii) the approval of the Merger by the European
Commission shall have been granted pursuant to the EC Merger Regulation.

            (d) NYSE Listing. The shares of Parent Common Stock to be issued in
the Merger and such other shares to be reserved for issuance in connection with
the Merger shall have been approved for listing on the NYSE, subject to official
notice of issuance.

            (e) Effectiveness of the Form S-4. The Form S-4 shall have been
declared effective by the SEC under the Securities Act. No stop order suspending
the effectiveness of the Form S-4 shall have been issued by the SEC and no
proceedings for that purpose shall have been initiated or threatened by the SEC.

            (f) Governmental and Regulatory Approvals. Other than the filing
provided for under Section 1.3 and filings pursuant to the HSR Act and EC Merger
Regulation (which are addressed in Section 6.1(c)), all consents, clearances,
approvals and actions of, filings with and notices to any Governmental Entity
required of Parent, the Company or any of their Subsidiaries in connection with
the execution and delivery of this Agreement and the consummation of the Merger,
the Share Issuance and the other transactions contemplated hereby shall have
been made or obtained (as the case may be), except for those the failure of
which to be made or obtained, individually or in the aggregate, would not
reasonably be expected to have a Material Adverse Effect on Parent and its
Subsidiaries (including the Surviving Corporation and its Subsidiaries), taken
together after giving effect to the Merger.

            (g) Blue Sky Approvals. Parent shall have received all state
securities and "blue sky" permits and approvals necessary to consummate the
transactions contemplated hereby.

            Section 6.2 Additional Conditions to Obligations of Parent and
Merger Sub. The obligations of Parent and Merger Sub to effect the Merger are
subject to the satisfaction of, or waiver by Parent, on or prior to the Closing
Date of the following conditions:

            (a) Representations and Warranties. Each of the representations and
warranties of the Company set forth in this Agreement that is qualified as to
Material Adverse Effect shall be true and correct, and each of the
representations and warranties of the Company set forth in this Agreement that
is not so qualified shall be true and correct, except where the


                                      -50-
<PAGE>

failure to be so true and correct, individually or in the aggregate, would not
have a Material Adverse Effect on the Company, in each case, as of the date of
this Agreement and as of the Closing Date as though made on and as of the
Closing Date (except to the extent in either case that such representations and
warranties speak as of another date), and Parent shall have received a
certificate of the chief executive officer and the chief financial officer of
the Company to such effect.

            (b) Performance of Obligations of the Company. The Company shall
have performed or complied with all agreements and covenants required to be
performed by it under this Agreement at or prior to the Closing Date that are
qualified as to Material Adverse Effect and shall have performed or complied in
all material respects with all other material agreements and covenants required
to be performed by it under this Agreement at or prior to the Closing Date and
Parent shall have received a certificate of the chief executive officer and the
chief financial officer of the Company to such effect.

            (c) Tax Opinions. Parent shall have received from Cadwalader,
Wickersham & Taft, counsel to Parent, on or before the date the Form S-4 shall
become effective, and subsequently, on the Closing Date, written opinions dated
as of such dates substantially in the form of Exhibit 6.2(c)(1). In rendering
such opinions, counsel to Parent shall be entitled to rely upon representations
provided by Parent and the Company substantially in the form of Exhibits
6.2(c)(2) and 6.2(c)(3) (allowing for such amendments to the representations as
counsel to Parent deems reasonably necessary).

            (d) Tax Certificates. The Company shall have delivered to Parent at
the time of the Monsanto Spin-Off, unless the Monsanto Sale Transaction shall
have occurred, a representation letter in the form of Exhibit 5.15 hereto, dated
as of the date of the Monsanto Spin-Off.

            (e) The Company Rights Agreement. No Share Acquisition Date or
Distribution Date (as such terms are defined in Company Rights Agreement) shall
have occurred pursuant to Company Rights Agreement.

            (f) Events Related to Monsanto. The Monsanto Sale Transaction or the
Monsanto Spin-Off shall have been completed.

            (g) No Material Change. The Company and its Subsidiaries shall not
have suffered from the date of this Agreement any change that would reasonably
be expected to have a Material Adverse Effect on the Company.

            Section 6.3 Additional Conditions to Obligations of the Company. The
obligations of the Company to effect the Merger are subject to the satisfaction
of, or waiver by the Company, on or prior to the Closing Date of the following
additional conditions:

            (a) Representations and Warranties. Each of the representations and
warranties of Parent set forth in this Agreement that is qualified as to
Material Adverse Effect shall be true and correct, and each of the
representations and warranties of Parent set forth in this Agreement that is not
so qualified shall be true and correct, except where the failure to be so true
and correct, individually or in the aggregate, would not have a Material Adverse
Effect on


                                      -51-
<PAGE>

Parent, in each case, as of the date of this Agreement and as of the Closing
Date as though made on and as of the Closing Date (except to the extent in
either case that such representations and warranties speak as of another date),
and the Company shall have received a certificate of the chief executive officer
and the chief financial officer of Parent to such effect.

            (b) Performance of Obligations of Parent. Parent shall have
performed or complied with all agreements and covenants required to be performed
by it under this Agreement at or prior to the Closing Date that are qualified as
to Material Adverse Effect and shall have performed or complied in all material
respects with all other material agreements and covenants required to be
performed by it under this Agreement at or prior to the Closing Date, and the
Company shall have received a certificate of the chief executive officer and the
chief financial officer of Parent to such effect.

            (c) Tax Opinions. The Company shall have received from Sullivan &
Cromwell, counsel to the Company, on or before the date the Form S-4 shall
become effective, and subsequently, on the Closing Date, written opinions dated
as of such dates substantially in the form of Exhibit 6.3(c)(1). In rendering
such opinion, counsel to the Company shall be entitled to rely upon
representations provided by Parent and the Company substantially in the form of
Exhibits 6.2(c)(2) and 6.2(c)(3) (allowing for such amendments to the
representations as counsel to the Company deems reasonably necessary).

            (d) Events Related to Monsanto. The Monsanto Sale Transaction or the
Monsanto Spin-Off shall have been completed; provided, that the Company shall
not be entitled to assert this condition to Closing if it has not complied with
the terms of Section 5.16 hereof. (e) Parent Rights Agreement. No Stock
Acquisition Date or Distribution Date (as such terms are defined in the Parent
Rights Agreement) shall have occurred pursuant to the Parent Rights Agreement.

            (f) No Material Changes. Parent and its Subsidiaries shall not have
suffered from the date of this Agreement any change that would reasonably be
expected to have a Material Adverse Effect on Parent.

                                  ARTICLE VII

                            TERMINATION AND AMENDMENT

            Section 7.1 General. This Agreement may be terminated and the
transactions contemplated hereby may be abandoned at any time prior to the
Effective Time notwithstanding approval thereof by the stockholders of the
Company:

            (a) by mutual written consent duly authorized by the Boards of the
Company and Parent;

            (b) by the Company or Parent if the Closing shall not have occurred
on or before April 15, 2003 (the "Termination Date" which term shall include the
date of any extension under this Section 7.1(b)); provided, however, that if on
the Termination Date the


                                      -52-
<PAGE>

conditions to Closing set forth in Sections 6.1(c) and 6.1(f) shall not have
been fulfilled but all other conditions to Closing shall or shall be capable of
being fulfilled then the Termination Date shall be automatically extended to
July 15, 2003 (the "Extended Termination Date"); and provided, further, that the
right to terminate this Agreement under this Section 7.1(b) shall not be
available to any party whose failure to fulfill any material obligation under
this Agreement has been the cause of, or resulted in, the failure of the Closing
to occur before such date;

            (c) by the Company, if Parent shall have breached in any material
respect any of its representations or warranties or failed to perform in any
material respect any of its covenants or other agreements contained in this
Agreement, which breach or failure to perform (1) is incapable of being cured by
Parent prior to the Termination Date and (2) renders the condition set forth in
Section 6.3(a) or 6.3(b) incapable of being satisfied prior to the Termination
Date;

            (d) by Parent, if the Company shall have breached in any material
respect any of its representations or warranties or failed to perform in any
material respect any of its covenants or other agreements contained in this
Agreement, which breach or failure to perform (1) is incapable of being cured by
the Company prior to the Termination Date and (2) renders the condition set
forth in Section 6.2(a) or 6.2(b) incapable of being satisfied prior to the
Termination Date;

            (e) by the Company or Parent, upon written notice to the other
party, if a Governmental Entity of competent jurisdiction in the United States
or of the European Union shall have issued an order, judgment, decision,
opinion, decree or ruling or taken any other action (which the party seeking to
terminate shall have used its reasonable best efforts to resist, resolve, annul,
quash, or lift, as applicable, subject to the provisions of Section 5.3)
permanently enjoining or otherwise prohibiting the consummation of the
transactions contemplated by this Agreement, and such order, decree, ruling or
action shall have become final and non-appealable; provided, however, that the
party seeking to terminate this Agreement pursuant to this clause (e) has
fulfilled its obligations under Section 5.3;

            (f) by the Company if (i) the Board of Directors of Parent shall
have withdrawn or changed or modified the Parent Recommendation in a manner
adverse to the Company or (ii) for any reason Parent fails to call or hold the
Parent Stockholders Meeting within six months of the date hereof (provided that
if the Form S-4 shall not have become effective for purposes of the Federal
securities laws by the date that is 20 business days prior to the date that is
five months from the date hereof, then such six month period shall be extended
by the number of days from that elapse from the end of the five-month period
until the effective date of the Form S-4);

            (g) by Parent if (i) the Board of Directors of the Company shall
have withdrawn or changed or modified the Company Recommendation in a manner
adverse to Parent or (ii) for any reason the Company fails to call or hold the
Company Stockholders Meeting within six months of the date hereof (provided that
if the Form S-4 shall not have become effective for purposes of the Federal
securities laws by the date that is 20 business days prior to the date that is
five months from the date hereof, then such six month period shall be extended
by


                                      -53-
<PAGE>

the number of days from that elapse from the end of the five-month period until
the effective date of the Form S-4);

            (h) by the Company, if the (i) Board of Directors of the Company
authorizes the Company, subject to complying with the terms of this Agreement,
to enter into a binding written agreement concerning a transaction that
constitutes a Superior Proposal to the Company and the Company notifies Parent
in writing that it intends to enter into such an agreement, attaching the most
current version of such agreement (or a description of all material terms and
conditions thereof) to such notice, (ii) Parent does not make, within five
business days of receipt of the Company's written notification of its intention
to enter into a binding agreement for such Superior Proposal, an offer that the
Board of Directors of the Company determines, in good faith after consultation
with a financial advisor of nationally recognized reputation, is at least as
favorable to the Company's stockholders as such Superior Proposal, it being
understood that the Company shall not enter into any such binding agreement
during such five-day period, and (iii) the Company, at or prior to any
termination pursuant to this Section 7.1(h), pays Parent the Termination Fee (as
defined below) set forth in Section 7.2;

            (i) by the Company or Parent, if the Parent Stockholder Approval
shall not have been received at a duly held meeting of the stockholders of
Parent called for such purpose (including any adjournment or postponement
thereof); and

            (j) by the Company or Parent, if the Company Stockholder Approval
shall not have been received at a duly held meeting of the stockholders of the
Company called for such purpose (including any adjournment or postponement
thereof).

            Section 7.2 Obligations in Event of Termination.

            (a) In the event of any termination of this Agreement as provided in
Section 7.1, this Agreement shall forthwith become wholly void and of no further
force and effect (except with respect to Section 3.1(j), Section 3.2(l), Section
5.2, Section 5.6, this Section 7.2 and Article VIII, which shall remain in full
force and effect) and there shall be no liability on the part of the Company or
Parent; provided, however, that termination shall not preclude any party from
suing the other party for, or relieve any party hereto from any liability
arising from a, willful breach of this Agreement; and, provided, further,
however, that if this Agreement is terminated for any reason, other than a
termination (1) by Parent pursuant to Section 7.1(g) (but only if the reason for
the termination was based on a Change in the Company Recommendation pursuant to
the terms of Section 5.4) or (2) by the Company pursuant to Section 7.1(h), then
the provisions of the sixth paragraph of the Confidentiality Agreement shall
continue to apply following the termination of the Merger Agreement and the date
set forth in the definition of "Standstill Period" set forth in the last
sentence of the sixth paragraph of the Confidentiality Agreement shall be
modified to be the date that is two (2) years from the date of the termination
of the Merger Agreement; provided, however, that the provisions of the sixth
paragraph of the Confidentiality Agreement shall terminate on the date that an
event described in clause (y) of such paragraph shall occur and provided further
that the Company agrees to notify Parent not later than 48 hours prior to
entering into any agreement with respect to a Business Combination.


                                      -54-
<PAGE>

            (b) If this Agreement is terminated (i) by Parent pursuant to
Section 7.1(g) (but only if, on or before the date this Agreement is terminated,
there shall have been made an offer or proposal for, or any announcement of any
intention with respect to (including the filing of a statement of beneficial
ownership on Schedule 13D discussing the possibility of or reserving the right
to engage in), a transaction that would constitute a Business Combination
involving the Company (whether or not such offer, proposal, announcement or
agreement will have been rejected or withdrawn prior to the date this Agreement
is terminated)); (ii) by Parent or the Company pursuant to Section 7.1(j)
because of the failure to obtain the Company Stockholder Approval (but only if,
after the date hereof and prior to the Company Stockholder Meeting, there shall
have been made public to a significant number of the Company's stockholders an
offer or proposal for, or any public announcement of any intention with respect
to (including the filing of a statement of beneficial ownership on Schedule 13D
discussing the possibility of or reserving the right to engage in), a
transaction that would constitute a Business Combination involving the Company
(whether or not such offer, proposal, announcement or agreement will have been
rejected or withdrawn prior to the date of the Company Stockholder Meeting));
(iii) by Parent or the Company pursuant to Section 7.1(b) because the Merger
shall not have been consummated at or prior to the Termination Date or the
Extended Termination Date, as the case may be, and, at the time of the
termination, (x) the Company Stockholder Approval shall not have been obtained
and (y) after the date hereof and prior to the Termination Date or the Extended
Termination Date, as the case may be, there shall have been made an offer or
proposal for, or an announcement of any intention with respect to (including the
filing of a statement of beneficial ownership on Schedule 13D discussing the
possibility of or reserving the right to engage in), a transaction that would
constitute a Business Combination involving the Company (whether or not such
offer, proposal, announcement or agreement will have been rejected or withdrawn
prior to the Termination Date or the Extended Termination Date, as the case may
be); or (iv) by the Company pursuant to Section 7.1(h), then (A) in the case of
clauses (b)(i), (b)(ii), and (b)(iii) if within twelve months of termination of
this Agreement, the Company enters into a definitive agreement with any Person
(other than Parent or any of Parent's affiliates) with respect to a Business
Combination or any Business Combination with respect to the Company is
consummated, then the Company shall pay to Parent, not later than one business
day after the earlier of the date such agreement is entered into or such
Business Combination is consummated, a termination fee of $1,600,000,000 (the
"Termination Fee") and (B) in the case of clauses (b)(iv), the Company shall pay
to Parent, at or prior to such termination pursuant to Section 7.1(h), the
Termination Fee. Notwithstanding the foregoing, no Termination Fee shall be
payable by the Company to Parent if the Parent stockholders do not approve the
Share Issuance or Certificate Amendment.

            (c) For the purposes of this Section 7.2, "Business Combination"
means with respect to the Company, (i) a merger, reorganization, consolidation,
share exchange, business combination, recapitalization, liquidation, dissolution
or similar transaction involving such party as a result of which either (A) the
Company's stockholders prior to such transaction (by virtue of their ownership
of such party's shares) in the aggregate cease to own at least 50% of the voting
securities of the entity surviving or resulting from such transaction (or the
ultimate parent entity thereof) or, regardless of the percentage of voting
securities held by such stockholders, if any Person shall beneficially own,
directly or indirectly, at least 40% of the voting securities of such ultimate
parent entity or (B) the individuals comprising the board of directors of the
Company prior to such transaction do not constitute a majority of the board of
directors of such ultimate


                                      -55-
<PAGE>

parent entity, (ii) a sale, lease, exchange, transfer or other disposition of at
least 40% of the assets of the Company and its Subsidiaries, taken as a whole,
in a single transaction or a series of related transactions, or (iii) the
acquisition, directly or indirectly, by a Person of beneficial ownership of 40%
or more of the common stock of the Company whether by merger, consolidation,
share exchange, business combination, tender or exchange offer or otherwise
(other than a merger, reorganization, consolidation, share exchange, business
combination, recapitalization, liquidation, dissolution or similar transaction
upon the consummation of which the Company's stockholders would in the aggregate
beneficially own greater than 50% of the voting securities of such Person).

            (d) All payments under this Section 7.2 shall be made by wire
transfer of immediately available funds to an account designated by Parent.

            (e) The parties each agree that the agreements contained in Section
7.2(b) are an integral part of the transaction contemplated by this Agreement
and constitute liquidated damages and not a penalty. If the Company fails to
promptly pay Parent any fee due under such Section 7.2(b), the Company shall pay
the costs and expenses of Parent (including legal fees and expenses) in
connection with any action, including the filing of any lawsuit or legal action,
taken to collect payment.

            Section 7.3 Amendment. This Agreement may be amended by the parties,
by action taken or authorized by their respective Boards of Directors, at any
time before or after approval of the matters presented in connection with the
Merger by the stockholders of the Company and Parent, but, after any such
approval, no amendment shall be made which by law or in accordance with the
rules of any relevant stock exchange requires further approval by such
stockholders without such further approval. This Agreement may not be amended
except by an instrument in writing signed on behalf of each of the parties.

            Section 7.4 Extension; Waiver. At any time prior to the Effective
Time, the parties, by action taken or authorized by their respective Boards of
Directors, may, to the extent legally allowed, (i) extend the time for the
performance of any of the obligations or other acts of the other parties, (ii)
waive any inaccuracies in the representations and warranties contained herein or
in any document delivered pursuant hereto and (iii) waive compliance with any of
the agreements or conditions contained herein. Any agreement on the part of a
party hereto to any such extension or waiver shall be valid only if set forth in
a written instrument signed on behalf of such party. The failure of any party to
this Agreement to assert any of its rights under this Agreement or otherwise
shall not constitute a waiver of those rights.

            Section 7.5 No Effect on Existing Agreements. Except as expressly
set forth herein, nothing in this Agreement shall affect the rights and
obligations of the parties with respect to any other agreements between the
parties, including without limitation, the Co-Promotion Agreements.


                                      -56-
<PAGE>

                                    ARTICLE
                                      VIII

                               GENERAL PROVISIONS

            Section 8.1 Non-Survival of Representations, Warranties and
Agreements. None of the representations, warranties, covenants and other
agreements in this Agreement or in any instrument delivered pursuant to this
Agreement, including any rights arising out of any breach of such
representations, warranties, covenants and other agreements, shall survive the
Effective Time, except for those covenants and agreements contained herein and
therein (including Section 5.7) that by their terms apply or are to be performed
in whole or in part after the Effective Time and this Article VIII.

            Section 8.2 Notices. All notices and other communications hereunder
shall be in writing and shall be deemed duly given (a) on the date of delivery
if delivered personally, or by telecopy or telefacsimile, upon confirmation of
receipt, (b) on the first Business Day following the date of dispatch if
delivered by a recognized next-day courier service, or (c) on the tenth Business
Day following the date of mailing if delivered by registered or certified mail,
return receipt requested, postage prepaid. All notices hereunder shall be
delivered as set forth below, or pursuant to such other instructions as may be
designated in writing by the party to receive such notice:

            (a)   if to Parent or Merger Sub, to:

                  Pfizer Inc.
                  235 East 42nd Street
                  New York, New York 10017
                  Fax: (212) 808-8924
                  Attention:  Jeffrey Kindler, Esq.

                  with a copy to:

                  Cadwalader, Wickersham & Taft
                  100 Maiden Lane
                  New York, New York 10038
                  Fax: (212) 504-6666
                  Attention:  Dennis J. Block, Esq.

            (b)   if to the Company to:

                  Pharmacia Corporation
                  100 Route 206 North
                  Peapack, New Jersey 07977
                  Fax: (908) 901-1810
                  Attention:  Richard T. Collier, Esq.


                                      -57-
<PAGE>

                  with a copy to:

                  Sullivan & Cromwell
                  125 Broad Street
                  New York, New York 10004
                  Fax: (212) 558-3588
                  Attention:  Neil T. Anderson, Esq.
                              Keith A. Pagnani, Esq.

            Section 8.3 Interpretation. When a reference is made in this
Agreement to Sections, Exhibits or Schedules, such reference shall be to a
Section of or Exhibit or Schedule to this Agreement unless otherwise indicated.
The table of contents and headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement. Whenever the words "include", "includes" or "including" are used
in this Agreement, they shall be deemed to be followed by the words "without
limitation.

            Section 8.4 Counterparts. This Agreement may be executed in one or
more counterparts, all of which shall be considered one and the same agreement
and shall become effective when one or more counterparts have been signed by
each of the parties and delivered to the other party, it being understood that
both parties need not sign the same counterpart.

            Section 8.5 Entire Agreement; No Third Party Beneficiaries.

            (a) This Agreement (including the Exhibits and Schedules hereto) and
the Confidentiality Agreement constitute the entire agreement, and supersede all
prior agreements and understandings, both written and oral, among the parties
with respect to the subject matter hereof and thereof.

            (b) This Agreement shall be binding upon and inure solely to the
benefit of each party hereto, and nothing in this Agreement, express or implied,
is intended to or shall confer upon any other Person any right, benefit or
remedy of any nature whatsoever under or by reason of this Agreement, other than
Section 5.7 (which is intended to be for the benefit of the Persons covered
thereby and may be enforced by such Persons).

            Section 8.6 Governing Law. This Agreement shall be governed and
construed in accordance with the laws of the State of New York (without giving
effect to choice of law principles thereof).

            Section 8.7 Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any law or
public policy, all other terms and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party. Notwithstanding the foregoing, upon such
determination that any term or other provision is invalid, illegal or incapable
of being enforced, the parties shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as closely as
possible in an acceptable manner in order that the transactions contemplated
hereby are consummated as originally contemplated to the greatest extent
possible.


                                      -58-
<PAGE>

            Section 8.8 Assignment. Neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned by any of the
parties, in whole or in part (whether by operation of law or otherwise), without
the prior written consent of the other party, and any attempt to make any such
assignment without such consent shall be null and void, except that Merger Sub
may assign, in its sole discretion, any or all of its rights, interests and
obligations under this Agreement to any direct wholly owned Subsidiary of Parent
without the consent of the Company, but no such assignment shall relieve Merger
Sub of any of its obligations under this Agreement. Subject to the preceding
sentence, this Agreement will be binding upon, inure to the benefit of and be
enforceable by the parties and their respective successors and assigns.

            Section 8.9 Submission to Jurisdiction; Waivers. Each of Parent and
the Company irrevocably agrees that any legal action or proceeding with respect
to this Agreement or for recognition and enforcement of any judgment in respect
hereof brought by the other party hereto or its successors or assigns may be
brought and determined in the Chancery or other Courts of the State of Delaware,
and each of Parent and the Company hereby irrevocably submits with regard to any
such action or proceeding for itself and in respect to its property, generally
and unconditionally, to the nonexclusive jurisdiction of the aforesaid courts.
Each of Parent and the Company hereby irrevocably waives, and agrees not to
assert, by way of motion, as a defense, counterclaim or otherwise, in any action
or proceeding with respect to this Agreement, (a) any claim that it is not
personally subject to the jurisdiction of the above-named courts for any reason
other than the failure to lawfully serve process (b) that it or its property is
exempt or immune from jurisdiction of any such court or from any legal process
commenced in such courts (whether through service of notice, attachment prior to
judgment, attachment in aid of execution of judgment, execution of judgment or
otherwise), and (c) to the fullest extent permitted by applicable law, that (i)
the suit, action or proceeding in any such court is brought in an inconvenient
forum, (ii) the venue of such suit, action or proceeding is improper and (iii)
this Agreement, or the subject matter hereof, may not be enforced in or by such
courts.

            Section 8.10 Enforcement. The parties agree that irreparable
damage would occur in the event that any of the provisions of this Agreement
were not performed in accordance with their specific terms. It is accordingly
agreed that the parties shall be entitled to specific performance of the terms
hereof, this being in addition to any other remedy to which they are entitled at
law or in equity.

            Section 8.11 Definitions. As used in this Agreement:

            (a) "beneficial ownership" or "beneficially own" shall have the
meaning under Section 13(d) of the Exchange Act and the rules and regulations
thereunder.

            (b) "Benefit Plans" means, with respect to any Person, each employee
benefit plan, program, policy, arrangement and contract (including, without
limitation, any "employee benefit plan," as defined in Section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA") and any
bonus, deferred compensation, stock bonus, stock purchase, restricted stock,
stock option, employment, termination, stay agreement or bonus, change in
control and severance plan, program, policy, arrangement and contract, written
or oral) in effect on the date of this Agreement or disclosed on the Company
Disclosure Schedule or the


                                      -59-
<PAGE>

Parent Disclosure Schedule, as the case may be, to which such Person or its
Subsidiary is a party, which is maintained or contributed to by such Person, or
with respect to which such Person could incur material liability under Section
4069, 4201 or 4212(c) of ERISA.

            (c) "Board of Directors" means the Board of Directors of any
specified Person and any committees thereof.

            (d) "Business Day" means any day on which banks are not required or
authorized to close in the City of New York.

            (e) "Confidentiality Agreement" means the letter agreement, dated
June 27, 2002 between Parent and the Company.

            (f) "known" or "knowledge" means, with respect to any party, the
actual knowledge of such party's executive officers and senior management as
listed on such party's annual report to its shareholders and such knowledge as
would be reasonably expected to be known by such executive officers in the
ordinary and usual course of the performance of their professional
responsibilities to such party.

            (g) "Material Adverse Effect" means, with respect to any entity, any
event, change, circumstance or effect that is or is reasonably likely to be
materially adverse to (i) the business, financial condition or results of
operations of such entity and its Subsidiaries, taken as a whole, other than any
event, change, circumstance or effect relating (w) to the economy or financial
markets in general, (x) in general to the industries in which such entity
operates and not specifically relating to (or having the effect of specifically
relating to or having a materially disproportionate effect (relative to most
other industry participants) on) such entity, (y) to changes in applicable law
or regulations or in GAAP or (z) to the announcement of this Agreement or the
transactions contemplated hereby or (ii) the ability of such entity to
consummate the transactions contemplated by this Agreement. Except as
specifically set forth in this Agreement, all references to Material Adverse
Effect on Parent or its Subsidiaries contained in this Agreement shall be deemed
to refer solely to Parent and its Subsidiaries without including its ownership
of the Company and its Subsidiaries after the Merger.

            (h) "other party" means, with respect to the Company, Parent and
means, with respect to Parent, the Company, unless the context otherwise
requires.

            (i) "Person" means an individual, corporation, limited liability
company, partnership, association, trust, unincorporated organization, other
entity or group (as defined in the Exchange Act).

            (j) "Subsidiary" when used with respect to any party means any
corporation or other organization, whether incorporated or unincorporated, (i)
of which such party or any other Subsidiary of such party is a general partner
(excluding partnerships, the general partnership interests of which held by such
party or any Subsidiary of such party do not have a majority of the voting
interests in such partnership) or (ii) at least a majority of the securities or
other interests of which having by their terms ordinary voting power to elect a
majority of the Board of Directors or others performing similar functions with
respect to such corporation or other organization is directly or indirectly
owned or controlled by such party or by any one or


                                      -60-
<PAGE>

more of its Subsidiaries, or by such party and one or more of its Subsidiaries;
provided, that the parties agree that notwithstanding any other provision of
this Agreement, the term "Subsidiary" shall not, with respect to the Company and
for the purposes of (x) Section 6.2(a) (as it relates to the accuracy of the
Company's representations and warranties as of the Closing Date only), but only
if the Monsanto Spin-Off shall have occurred, and (y) Article IV (except as to
the ability of the Company to control or prohibit action of Monsanto pursuant to
the Separation Agreements or otherwise), Article V (except as to the ability of
the Company to control or prohibit action of Monsanto pursuant to the Separation
Agreements or otherwise) and Section 7.1(d) only, include Monsanto Company.

            (k) "Superior Proposal" means with respect to the Company, a bona
fide written proposal made by a third party which is (I)(i) for a sale, lease,
exchange, transfer or other disposition of at least 40% of the assets of the
Company and its Subsidiaries, taken as a whole, in a single transaction or a
series of related transactions, or (ii) for the acquisition, directly or
indirectly, by such third party of beneficial ownership of 30% or more of the
common stock of the Company whether by merger, consolidation, share exchange,
business combination, tender or exchange offer or otherwise, and which is (II)
otherwise on terms which the Board of Directors of the Company in good faith
concludes (after consultation with its financial advisors and outside counsel),
taking into account, among other things, all legal, financial, regulatory and
other aspects of the proposal and the third party making the proposal, (i)
would, if consummated, result in a transaction that is more favorable to its
stockholders (in their capacities as stockholders), from a financial point of
view, than the transactions contemplated by this Agreement and (ii) is
reasonably capable of being completed.


                                      -61-
<PAGE>

            IN WITNESS WHEREOF, Parent, Merger Sub and the Company have caused
this Agreement to be signed by their respective officers thereunto duly
authorized, all as of the date first written above.

                                       PFIZER INC.



                                       By: /s/ Henry A. McKinnell
                                           ------------------------------
                                           Henry A. McKinnell, Ph.D.
                                           Chairman of the Board and
                                           Chief Executive Officer


                                       PILSNER ACQUISITION SUB CORP.



                                       By: /s/ David Shedlarz
                                           ------------------------------
                                           David Shedlarz
                                           President

                                       PHARMACIA CORPORATION



                                       By: /s/ Fred Hassan
                                           ------------------------------
                                           Fred Hassan
                                           Chairman and Chief
                                           Executive Officer


                                      -1-
<PAGE>

                                      Index

                                                                            PAGE


Acquisition Proposal.....................................................    43
Actions..................................................................    15
affiliate................................................................    10
Affiliate Agreement......................................................    48
Agreement................................................................     1
beneficial ownership.....................................................    59
beneficially own.........................................................    59
Benefit Plans............................................................    59
Benefits Continuation Period.............................................    44
Blue Sky Laws............................................................    14
Board of Directors.......................................................    60
Business Combination.....................................................    55
Business Day.............................................................    60
Certificate Amendment....................................................    13
Certificate of Merger....................................................     2
Certificates.............................................................     3
Change...................................................................    39
Change in the Company Recommendation.....................................    39
Change in the Parent Recommendation......................................    39
Closing..................................................................     2
Closing Date.............................................................     2
Code.....................................................................     1
Common Certificates......................................................     3
Common Stock Merger Consideration........................................     3
Company..................................................................     1
Company Benefit Plan.....................................................    28
Company Board Approval...................................................    24
Company Common Stock.....................................................     1
Company Convertible Preferred Stock......................................     1
Company Disclosure Schedule..............................................    20
Company Exhibit 21.......................................................    21
Company Permits..........................................................    25
Company Recommendation...................................................    39
Company Rights...........................................................    21
Company Rights Agreement.................................................    21
Company SEC Reports......................................................    23
Company Stock Option Plans...............................................    22
Company Stock Options....................................................    21
Company Stockholder Approval.............................................    25
Company Stockholders Meeting.............................................    38
Company Voting Debt......................................................    22
Confidential Information.................................................    40


                                      -1-
<PAGE>

Confidentiality Agreement................................................    60
Continuing Employee......................................................    44
Co-Promotion Agreements..................................................    29
DGCL.....................................................................     2
DOJ......................................................................    42
EC Merger Regulation.....................................................    42
Effective Time...........................................................    .2
Environmental Claim......................................................    18
Environmental Law........................................................    18
Environmental Liabilities................................................    18
ERISA....................................................................    59
Exchange Act.............................................................     5
Exchange Agent...........................................................     6
Exchange Fund............................................................     6
Exchange Ratio...........................................................     3
Expenses.................................................................    46
Extended Termination Date................................................    53
FCPA.....................................................................    17
Form S-4.................................................................    37
Former Employees.........................................................    44
FTC......................................................................    42
GAAP.....................................................................    14
Governmental Entity......................................................    13
Hazardous Material.......................................................    18
HSR Act..................................................................    14
Intellectual Property....................................................    19
Joint Proxy Statement/Prospectus.........................................    37
knowledge................................................................    60
known....................................................................    60
Liens....................................................................    11
Material Adverse Effect..................................................    60
Merger...................................................................     1
Merger Consideration.....................................................     3
Merger Sub...............................................................     1
Monsanto.................................................................     5
Monsanto Indebtedness....................................................    36
Monsanto Sale Transaction................................................    49
Monsanto Spin-Off........................................................     5
Necessary Consents.......................................................    14
NYSE.....................................................................     8
other party..............................................................    60
Parent...................................................................     1
Parent Board Approval....................................................    15
Parent Common Stock......................................................     1
Parent Convertible Preferred Stock.......................................     1


                                      -2-
<PAGE>

Parent Disclosure Schedule...............................................    10
Parent Exhibit 21........................................................    11
Parent Permits...........................................................    16
Parent Recommendation....................................................    39
Parent Rights............................................................    11
Parent Rights Agreement..................................................    11
Parent SEC Reports.......................................................    14
Parent Stock Option Plans................................................    12
Parent Stock Options.....................................................    12
Parent Stockholder Approval..............................................    13
Parent Stockholders Meeting..............................................    39
Parent Voting Debt.......................................................    12
parties..................................................................    .1
Permitted Capital Expenditure............................................    33
Person...................................................................    60
Preferred Certificates...................................................     3
Preferred Merger Consideration...........................................     3
Qualifying Amendment.....................................................    38
Regulatory Law...........................................................    42
Representatives..........................................................    40
Rights Agreement Amendment...............................................    29
SEC......................................................................    10
Securities Act...........................................................    10
Separation Agreements....................................................    36
Series B Preferred Stock.................................................     1
Share Issuance...........................................................    13
Subsidiary...............................................................    60
Superior Proposal........................................................    61
Surviving Corporation....................................................     2
Tax Return...............................................................    20
Taxes....................................................................    20
Termination Date.........................................................    52
Termination Fee..........................................................    55
Violation................................................................    13


                                      -3-


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>4
<FILENAME>y62256exv99w1.txt
<DESCRIPTION>AMENDMENT TO THE GLOBAL AGREEMENT
<TEXT>
<PAGE>
                                                                    Exhibit 99.1


                                    AMENDMENT

            THIS AMENDMENT dated as of July 13, 2002 (the "Effective Date") is
made by and between Pfizer Inc. ("PFIZER") and Pharmacia Corporation and G.D.
Searle LLC (together, "PHARMACIA") (collectively, the "Parties").

            WHEREAS, the Parties entered into a certain Global Agreement
(Celecoxib and Second Generation) dated February 18, 1998 as from time to time
amended or supplemented ("Global Agreement");

            WHEREAS, PFIZER, Pilsner Acquisition Sub Corp. and PHARMACIA have
entered into an Agreement and Plan of Merger, dated as of July 13, 2002 (the
"Merger Agreement");

            WHEREAS, the Parties wish to amend certain sections of the Global
Agreement.

            NOW, THEREFORE, the Parties agree as follows:

            1.    Upon the occurrence of (1) the obligation of PHARMACIA to pay
to PFIZER a Termination Fee (as such term is defined in the Merger Agreement) in
accordance with Section 7.2(b) of the Merger Agreement and (2) the consummation
of the Business Combination (as such term is defined in the Merger Agreement)
that caused the Termination Fee to become due and payable (the "Amendment
Event"), Section 3.2(a) of the Global Agreement will be deleted and replaced
with the following:

                  "(a) Promptly after the Effective Date PFIZER shall appoint
            three (3) representatives and PHARMACIA shall appoint two (2)
            representatives to the EMC. PFIZER shall appoint its President of
            Pfizer Pharmaceuticals Group, its President of U.S. Pharmaceuticals
            and its Senior Vice President of Science and Technology and
            PHARMACIA shall appoint its President, Global Prescription Business
            and its Chief Scientific Officer as its representatives. PFIZER
            shall also designate the chairperson of the EMC, which designation
            may be changed by PFIZER at any time. A party may change any of its
            representatives at any time if a new person is appointed to any of
            the foregoing positions by giving written notice to the other
            party."

            2.    Sections 3.3 (Collaboration Steering Committee), 3.4
(Operations Management Committee), 3.6 (Global Commercialization Committee), 3.8
(Development Committee), 3.10 (Regulatory Committee), 3.12 (Country
Commercialization Committees) contain a sentence addressing the designation of
the chairperson of the respective subcommittees. Upon the occurrence of an
Amendment Event, such sentence in the respective Sections listed in the prior
sentence shall be amended, in each case, as follows: "PFIZER will designate the
chairperson of the [subcommittee name], which designation may be changed by
PFIZER at any time."
<PAGE>
            3.    Upon the occurrence of an Amendment Event, the penultimate
sentence in Section 3.9 (DC Responsibilities) that reads "Based on the
recommendations in each Development Plan, PHARMACIA may elect to have PFIZER,
with its consent, undertake certain development activities" shall be deleted and
the following substituted therefor: "Based on recommendations in each
Development Plan, PFIZER may elect to have PHARMACIA, with its consent,
undertake certain development activities."

            4.    Except as modified herein, all of the terms and conditions of
the Global Agreement shall remain in full force and effect.

            5.    Terms and expressions defined in the Global Agreement shall
have the same meaning in this Amendment.

            IN WITNESS WHEREOF, the Parties have signed this Amendment as of the
Effective Date.

                                       PFIZER INC.


                                       By: /s/ Henry A. McKinnell
                                          -------------------------------------
                                          Name:  Henry A. McKinnell, Ph.D.
                                          Title: Chief Executive Officer



                                       PHARMACIA CORPORATION
                                       and
                                       G.D. SEARLE LLC


                                       By: /s/ Fred Hassan
                                          -------------------------------------
                                          Name:  Fred Hassan
                                          Title:






                                      -2-

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.2
<SEQUENCE>5
<FILENAME>y62256exv99w2.txt
<DESCRIPTION>PRESS RELEASE
<TEXT>
<PAGE>
                                                                    Exhibit 99.2

For immediate release:                                   Contact: Andy McCormick
July 15, 2002                                                       212-573-1226


                  PFIZER ANNOUNCES SECOND-QUARTER 2002 RESULTS,
                   REAFFIRMS STRONG OUTLOOK FOR FULL-YEAR 2002
                                       ---
    SECOND-QUARTER NET INCOME UP 10 PERCENT TO $2.086 BILLION, DILUTED EPS UP
     10 PERCENT TO $.33, BOTH FROM CONTINUING OPERATIONS EXCLUDING CERTAIN
                   SIGNIFICANT ITEMS AND MERGER-RELATED COSTS
                                       ---
            COMPANY REFINES FULL-YEAR 2002 EARNINGS FORECAST, EXPECTS
          2002 DILUTED EPS OF $1.58 (21 PERCENT GROWTH), ON SAME BASIS
                                       ---
                    FUTURE PFIZER PERFORMANCE TO BE DRIVEN BY
                 BROAD, DEEP, AND PATENT-PROTECTED PRODUCT LINE
                  AND REGULATORY FILINGS OF MAJOR NEW MEDICINES
                                       ---
  REPORTED SECOND-QUARTER NET INCOME INCREASED 7 PERCENT TO $1.957 BILLION AND
                   REPORTED DILUTED EPS UP 10 PERCENT TO $.32


NEW YORK, July 15 - Pfizer Inc said today that second-quarter net income
increased by 10 percent to $2.086 billion and diluted earnings per share (EPS)
increased by 10 percent to $.33, both from continuing operations excluding
certain significant items and merger-related costs.

Reported net income in the quarter increased 7 percent to $1.957 billion, and
reported diluted EPS increased 10 percent to $.32. Included in these numbers are
certain significant items and merger-related costs, which are detailed in the
attached financial schedules and supplemental information.

"Pfizer continues to stand apart from the industry based on our ability to
sustain balanced growth and investment and by our solid prospects for 2002 and
beyond," said Hank McKinnell,


                                     -more-
<PAGE>
                                      -2-


chairman and chief executive officer. "Those prospects are significantly
enhanced by today's separate announcement that Pfizer and Pharmacia have entered
into a definitive merger agreement. Together, our commercial and financial
strengths will offer greater opportunities to expand our business, improve
people's well-being, and increase shareholder value."

Revenues of $8.033 billion in the second quarter of 2002 were up 8 percent,
excluding a second-quarter prior-year accounting adjustment to harmonize Pfizer
and Warner-Lambert's methods of treating Medicaid and contract rebate accruals.

Pfizer's human pharmaceutical business achieved revenue growth of 9 percent to
$6.317 billion in the quarter (up 10 percent excluding the impact of foreign
exchange), on the same basis. Year-to-date prescription growth rates for
Pfizer's key human pharmaceutical products are at or above their therapeutic
category growth rates.

Product performance and regulatory highlights since the end of the first quarter
include:

      -     An agreement between Pfizer and Serono announced last week to
            co-promote Serono's multiple sclerosis treatment Rebif (interferon
            beta 1-a) in the U.S. Rebif complements Pfizer's broad portfolio of
            products that treat neurological disorders, including Neurontin,
            Aricept, Zoloft, and Geodon.

      -     Celebrex and Bextra, COX-2-specific inhibitors discovered and
            developed by Pharmacia and co-promoted by Pfizer and Pharmacia,
            continued to extend their lead over competitors. Bextra and Celebrex
            together currently account for 23.6 percent of audited monthly new
            prescriptions among U.S. non-steroidal anti-inflammatory drugs in
            May.


                                     -more-
<PAGE>
                                      -3-


      -     Lipitor, the world's leading cholesterol-lowering medicine and the
            largest-selling pharmaceutical of any kind, had second-quarter
            worldwide revenue growth of 24 percent. In April, the Food and Drug
            Administration (FDA) approved new recommended starting doses for
            Lipitor. In addition to the previously recommended starting dose of
            10 mg, the FDA has now approved a 20 mg dose and, for patients
            requiring a reduction in LDL cholesterol of more than 45 percent, a
            40 mg recommended starting dose. This change will allow health-care
            professionals greater flexibility in treating the estimated 54
            million Americans who are eligible for cholesterol-lowering drug
            therapy. Lipitor has gained wide physician and patient acceptance
            based on its ability to bring the vast majority of patients to
            target cholesterol goals across the full dosing range.

      -     Viagra, for erectile dysfunction, achieved second-quarter revenue
            growth of 10 percent worldwide. New prescription volume in the U.S.
            increased to nearly one-half-million per month, resulting in the
            highest quarterly number of new prescriptions since Viagra's launch
            in 1998. In the U.K. and Japan, the two largest international
            markets, Viagra achieved revenue growth, excluding the impact of
            foreign exchange, of 18 percent and 16 percent, respectively.

      -     Zoloft achieved second-quarter worldwide revenue growth of 12
            percent. Zoloft was approved in June by the FDA for the treatment of
            premenstrual dysphoric disorder, which affects approximately 5
            percent of women in the U.S. With this new indication, Zoloft is the
            only selective serotonin reuptake inhibitor indicated for six
            different psychiatric disorders.


                                     -more-
<PAGE>
                                      -4-


      -     Spiriva is the first once-a-day inhaled bronchodilator treatment for
            chronic obstructive pulmonary disease and is co-promoted with
            Boehringer Ingelheim, the discoverer and developer of the compound.
            Spiriva was launched in six European markets, including Germany, in
            June and also received national approval for marketing in the U.K.
            and Spain.

      -     Vfend completed the European Mutual Recognition Procedure in March
            and received FDA approval in May. Vfend is an important new
            treatment for acute invasive aspergillosis and for other rare but
            serious fungal infections. Vfend is scheduled for launch in the U.S.
            in August and in many European countries beginning in September.

      -     Geodon, Pfizer's new novel antipsychotic therapy for the treatment
            of schizophrenia, continued to demonstrate its efficacy and safety
            to physicians worldwide. In June, the FDA approved Geodon for
            injection, making it the first atypical antipsychotic medicine
            approved in the United States for intramuscular (IM) use. This
            approval provides the opportunity for continuity of care, allowing
            physicians to begin treating patients on the intramuscular form and
            to progress to the oral formulation. Geodon IM will be available
            through hospitals and clinics beginning in September.

Karen Katen, executive vice president of the Company and president of the Pfizer
Pharmaceuticals Group, stated, "Pfizer markets eight of the world's 30
largest-selling medicines, more than any other pharmaceutical company. These
medicines -- Lipitor, Norvasc, Celebrex, Zoloft, Neurontin, Viagra, Zithromax,
and Zyrtec -- achieved revenues of more than $10.3 billion through the first
half of 2002, growing an aggregate 15 percent and representing 79 percent of the
Company's human pharmaceutical revenues."


                                     -more-
<PAGE>
                                      -5-


The competitiveness of Lipitor, Zoloft, Neurontin, Zithromax, and Geodon were
improved during the quarter by the addition of significant new labeling,
indications, or dosage forms. These product expansion approvals are part of an
R&D pipeline that contains 68 new product enhancements plus 94 new molecular
entities, for a total of 162 ongoing projects.

Pfizer now has five new chemical entities that were recently approved or are
undergoing regulatory review in the U.S. and/or the European Union: Vfend;
Geodon; Bextra (discovered and developed by Pharmacia); Spiriva (discovered and
developed by Boehringer Ingelheim); and Relpax. All five products are expected
to be launched in new markets during 2002. In addition, Pfizer will now
co-promote Rebif (discovered and developed by Serono), an important new
treatment for multiple sclerosis, in the U.S.

Pfizer anticipates completing regulatory filings in 2002 for use of pregabalin
in neuropathic pain, epilepsy, and generalized anxiety disorder and for use of
darifenacin in treating overactive bladder. Advanced-stage clinical studies are
continuing for several agents, including Exubera, an inhalable form of insulin
under co-development, co-manufacture, and co-marketing with Aventis, with the
participation of Inhale Therapeutic Systems, and the dual therapy agent
combining Lipitor and Norvasc, the world's leading cholesterol-lowering and
antihypertensive medicines. We are currently assessing our regulatory filing
strategy for Exubera with our partner Aventis.

Animal Health sales in the second quarter increased 11 percent to $274 million
(up 15 percent excluding the impact of foreign exchange), compared to the same
period in 2001. This strong performance reflected double-digit growth (excluding
the impact of foreign exchange) in both livestock and companion-animal product
lines. Our companion-animal products Revolution and



                                     -more-
<PAGE>
                                      -6-


Rimadyl and our livestock medicines Dectomax and RespiSure/ Stellamune showed
strong sales growth, excluding the impact of foreign exchange.

The full impact of the Company's implementation of Statement of Financial
Accounting Standards No. 142, Goodwill and Other Intangible Assets, reflected in
accordance with generally accepted accounting principles as of the beginning of
2002, resulted in a $410 million after-tax writedown (or $.07 per diluted share)
primarily related to impairment of goodwill in the Animal Health business, as
well as a writedown of certain intangible assets of various businesses.

Sales of Pfizer's Consumer businesses in the second quarter grew 5 percent to
$1.333 billion (up 7 percent excluding the impact of foreign exchange), compared
to the same period in 2001. Sales of Consumer Healthcare products grew 10
percent to $646 million (up 11 percent excluding the impact of foreign
exchange). Growth reflects strong acceptance of Listerine mouthwash as well as
the continued success of Listerine PocketPaks. In the Adams confectionery
business, sales in the quarter decreased 1 percent to $475 million (up 3 percent
excluding the impact of foreign exchange). Shaving product sales increased 2
percent to $162 million (up 4 percent excluding the impact of foreign exchange).
Sales of Tetra products remained approximately the same at $50 million (up 2
percent excluding the impact of foreign exchange). As previously announced, the
Company is exploring strategic options, including possible sale, for Tetra,
Adams, and the Schick-Wilkinson Sword shaving products businesses.

"Second-quarter diluted EPS from continuing operations, excluding certain
significant items and merger-related costs, of $.33 exceeds our previous
estimate of single-digit growth due to a reduction in the effective tax rate,"
said David Shedlarz, executive vice president and chief financial officer of the
Company. The effective tax rate for 2002 for continuing


                                     -more-
<PAGE>
                                      -7-


operations, excluding the cumulative effect of a change in accounting principle,
certain significant items, and merger-related costs, is now forecast at 23.5
percent.

"Earnings growth in the second quarter, and in fact in each quarter of 2002, is
affected by the changing impact of foreign exchange and the unusual pattern of
operating expenses in 2001," Mr. Shedlarz continued. Foreign exchange adversely
affected revenues in the quarter by $115 million, or 1.5%. The foreign-exchange
impact in the second half of the year, at current rates, is expected to be
favorable.

As illustrated in the following table, the concentration of operating expenses
in the fourth quarter of 2001 -- $800 million to $1.2 billion higher than any
other quarter of 2001 -- is significantly impacting the quarterly pattern of
2002 EPS growth.

                  OPERATING EXPENSES (SI&A AND R&D, $ BILLIONS)

<TABLE>
<CAPTION>
                       1Q          2Q          3Q                4Q
                       --          --          --                --
<S>                   <C>         <C>         <C>               <C>
2001                  $3.5        $3.9        $3.8              $4.7
2002                  $4.0        $4.2        $4.4(est.)        $4.6(est.)
GROWTH (%)             +14%        +10%         +15%(est.)        -2%(est.)
</TABLE>

Mr. Shedlarz remarked, "Year-over-year operating expense comparisons will remain
a challenge in the third quarter, resulting in anticipated third-quarter EPS
growth, excluding certain significant items and merger-related costs, in the low
double digits.

"Fourth-quarter EPS growth is expected to be exceptionally strong, reflecting
both a favorable foreign-exchange impact, at current exchange rates, and
favorable comparisons with the abnormally high expense levels during the fourth
quarter of 2001.


                                     -more-
<PAGE>
                                      -8-



"We have refined our full-year 2002 EPS target and now expect diluted EPS from
continuing operations, excluding the cumulative effect of a change in accounting
principle, certain significant items, and merger-related costs, of $1.58 (21
percent growth). Moreover, we anticipate double-digit full-year 2002 revenue
growth at current exchange rates, margin improvements, and continuing
investments in product support and in R&D (which is now expected to be about
$5.2 billion for the year). Synergies related to the Warner-Lambert merger are
now expected to be $1.8 billion for the year," Mr. Shedlarz stated.

"With our broad product portfolio, unsurpassed research scale, and global reach,
Pfizer continues to deliver strong performance," Dr. McKinnell concluded. "At
the same time - - as reflected in today's Pfizer/Pharmacia merger agreement
announcement -- we continue to look for and embrace innovative ways to move
`beyond number one' and to become the most valued company in the world for all
our constituencies, including investors."

INVESTORS SHOULD REFER TO TODAY'S SEPARATE PRESS ANNOUNCEMENT OF THE
PFIZER/PHARMACIA MERGER AGREEMENT FOR ADDITIONAL INFORMATION PERTAINING TO
CURRENT OPERATIONS AND RESULTS AS WELL AS TO PROJECTIONS OF FUTURE PERFORMANCE.

FOR ADDITIONAL DETAILS, PLEASE SEE THE ATTACHED FINANCIAL SCHEDULES, PRODUCT
REVENUE TABLES, AND SUPPLEMENTAL INFORMATION.

DISCLOSURE NOTICE: The information contained in this document is as of July 15,
2002. The Company assumes no obligation to update any forward-looking statements
contained in this document as a result of new information or future events or
developments.

This document and the attachments contain forward-looking information about the
Company's financial results and estimates, business prospects, and products in
research that involve substantial risks and uncertainties. You can identify
these statements by the fact that they use words such as "anticipate,"
"estimate," "expect," "project," "intend," "plan," "believe," and other words
and terms of similar meaning in connection with any discussion of future
operating or financial performance. Among the factors that could cause actual
results to differ materially are the following: the success of research and
development


                                     -more-
<PAGE>
                                      -9-


activities and the speed with which regulatory authorizations and product
launches may be achieved; competitive developments affecting our current growth
products; the ability to successfully market both new and existing products
domestically and internationally; difficulties or delays in manufacturing; trade
buying patterns; ability to meet generic and branded competition after the
expiration of the Company's patents; trends toward managed care and health-care
cost containment; possible U.S. legislation affecting pharmaceutical pricing and
reimbursement or Medicare; exposure to product liability and other types of
lawsuits; contingencies related to actual or alleged environmental
contamination; the Company's ability to protect its intellectual property both
domestically and internationally; interest rate and foreign currency exchange
rate fluctuations; governmental laws and regulations affecting domestic and
foreign operations, including tax obligations; changes in generally accepted
accounting principles; any changes in business, political, and economic
conditions due to the threat of future terrorist activity in the U.S. and other
parts of the world, and related U.S. military action overseas; growth in costs
and expenses; changes in our product mix; and the impact of acquisitions,
divestitures, restructurings, product withdrawals, and other unusual items,
including our ability to obtain the anticipated results and synergies from our
announced proposed acquisition of Pharmacia and the increased uncertainty
created by the integration of the two businesses, as well as the timing and
success of the announced exploration of strategic options of the Adams,
Schick-Wilkinson Sword, and Tetra businesses. A further list and description of
these risks, uncertainties, and other matters can be found in the Company's
Annual Report on Form 10-K for the fiscal year ended December 31, 2001, and in
its periodic reports on Forms 10-Q and 8-K (if any).


                                     -more-
<PAGE>
                       PFIZER INC AND SUBSIDIARY COMPANIES
                   CONDENSED CONSOLIDATED STATEMENT OF INCOME
                                   (UNAUDITED)


(millions of dollars, except per share data)

<TABLE>
<CAPTION>
                                        Second Quarter                                   Six Months
                                     --------------------         % Incr./         ----------------------          % Incr./
                                     2002            2001         (Decr.)*         2002              2001           (Decr.)*
                                     ----            ----         --------         ----              ----           --------
<S>                                <C>              <C>           <C>           <C>               <C>               <C>
Revenues                           $ 8,033          $7,622           5          $ 16,452          $ 15,205             8

Costs and expenses:
 Cost of sales                       1,197           1,150           4             2,403             2,374             1
 Selling, informational
  and administrative expenses        2,983           2,746           9             5,812             5,264            10
 Research and development
  expenses                           1,257           1,116          13             2,458             2,144            15
 Merger-related costs                  166             206         (19)              275               476           (42)
 Other (income)/
  deductions--net                      (46)             13          **              (129)              (44)          193
                                   -------          ------                      --------          --------

Income from continuing
 operations before
 provision for taxes on
 income, minority
 interests and cumulative
 effect of a change in
 accounting principle                2,476           2,391           4             5,633             4,991            13

Provision for taxes on
 income                                519             590         (12)            1,302             1,258             3

Minority interests                      --               9         (98)                1                11           (88)
                                   -------          ------                      --------          --------

Income from continuing
 operations before
 cumulative effect of a
 change in accounting
 principle                           1,957           1,792           9             4,330             3,722            16

Discontinued
 operations--net of tax                 --              37          **                --                37            **
                                   -------          ------                      --------          --------

Income before cumulative
 effect of a change in
 accounting principle                1,957           1,829           7             4,330             3,759            15

Cumulative effect of a
 change in accounting
 principle--net of tax                  --              --          --              (410)               --            **
                                   -------          ------                      --------          --------
Net income                         $ 1,957          $1,829           7          $  3,920          $  3,759             4
                                   =======          ======                      ========          ========


Earnings per common share:
 Basic:
  Income from continuing
   operations before
   cumulative effect of a
   change in accounting
   principle                       $   .32          $  .29          10          $    .70          $    .60            17
  Discontinued
   operations--net of tax               --              --          --                --                --            --
  Cumulative effect of a
   change in accounting
   principle--net of tax                --              --          --              (.07)               --            **
                                   -------          ------                      --------          --------
  Net income                       $   .32          $  .29          10          $    .63          $    .60             5
                                   =======          ======                      ========          ========

 Diluted:
  Income from continuing
   operations before
   cumulative effect of a
   change in accounting
   principle                       $   .32          $  .29          10          $    .69          $    .59            17
  Discontinued
   operations--net of tax               --              --          --                --                --            --
  Cumulative effect of a
   change in accounting
   principle--net of tax                --              --          --              (.07)               --            **
                                   -------          ------                      --------          --------
  Net income                       $   .32          $  .29          10          $    .62          $    .59             5
                                   =======          ======                      ========          ========
</TABLE>

    *  - Percentages may reflect rounding adjustments.
    ** - Calculation not meaningful.

    1. The above financial statement presents the three-month and six-month
       periods ended June 30, 2002 and July 1, 2001.  Subsidiaries operating
       outside the United States are included for the three-month and six-
       month periods ended May 26, 2002 and May 27, 2001.

    2. On January 1, 2002, we adopted the provisions of the Emerging Issues
       Task Force (EITF) Issue No. 00-25, Vendor Income Statement
       Characterization of Consideration Paid to a Reseller of the Vendor's
       Products, which requires the cost of certain vendor consideration to
       be classified as a reduction of revenue rather than as a marketing
       expense.  As a result, we restated the second quarter and first six
       months of 2001 to reclassify certain marketing expenses from Selling,
       informational and administrative expenses to Revenues.  These
       reclassifications have no effect on net income.

    3. On January 1, 2002, we adopted Statement of Financial Accounting
       Standards (SFAS) No. 142, Goodwill and Other Intangible Assets.  As a
       result of adopting SFAS No. 142, we recorded non-cash charges of $565
       million ($410 million after-tax) in the first six months of 2002 with
       $536 million ($393 million after-tax) for the impairment provisions
       related to goodwill in our Animal Health business and $29 million
       ($17 million after-tax) for the impairment provisions related to
       identifiable intangible assets.  These charges are recorded as a
       cumulative effect of a change in accounting principle as of the
       beginning of 2002.

    4. The financial results for the three-month and six-month periods ended
       June 30, 2002 are not necessarily indicative of the results which
       ultimately might be achieved for the current year.
<PAGE>
                        PFIZER INC AND SUBSIDIARY COMPANIES
                             RESULTS FROM CONTINUING OPERATIONS
               EXCLUDING CERTAIN SIGNIFICANT ITEMS AND MERGER-RELATED COSTS
                                         (UNAUDITED)


    (millions of dollars, except per share data)


<TABLE>
<CAPTION>
                                     Second Quarter                           Six Months
                                   ------------------                     ------------------
                                   2002          2001       % Incr.       2002          2001        % Incr.
                                   ----          ----       -------       ----          ----        -------
<S>                               <C>           <C>         <C>         <C>            <C>          <C>
Revenues                          $8,033        $7,447         8        $16,452        $15,030         9

Income from continuing
 operations before
 provision for taxes on
 income, minority
 interests and cumulative
 effect of a change in
 accounting principle             $2,664        $2,522         6        $ 5,910        $ 5,411         9

Income from continuing
 operations before
 cumulative effect of a
 change in accounting
 principle                        $2,086        $1,890        10        $ 4,519        $ 4,019        12

Diluted earnings per
 common share from
 continuing operations
 before cumulative effect
 of a change in accounting
 principle                        $  .33        $  .30        10        $   .72        $   .63        14
</TABLE>

    1. The above financial information presents the three-month and six-month
       periods ended June 30, 2002 and July 1, 2001.  Subsidiaries operating
       outside the United States are included for the three-month and six-
       month periods ended May 26, 2002 and May 27, 2001.

    2. On January 1, 2002, we adopted Statement of Financial Accounting
       Standards (SFAS) No. 142, Goodwill and Other Intangible Assets.  As a
       result of adopting SFAS No. 142, we recorded non-cash charges of $565
       million ($410 million after-tax) in the first six months of 2002 with
       $536 million ($393 million after-tax) for the impairment provisions
       related to goodwill in our Animal Health business and $29 million
       ($17 million after-tax) for the impairment provisions related to
       identifiable intangible assets.  These charges are recorded as a
       cumulative effect of a change in accounting principle as of the
       beginning of 2002.

    3. Revenues as shown above for the second quarter and first six months of
       2001 exclude the favorable impact of $175 million from a harmonization
       adjustment of Pfizer/Warner-Lambert accounting methodology for Medicaid
       and contract rebate accruals.

    4. Income and diluted earnings per common share from continuing operations
       before cumulative effect of a change in accounting principle as shown
       above exclude the following items:

<TABLE>
<CAPTION>
(millions of dollars)                             Second Quarter                Six Months
                                                 -----------------          ------------------
                                                 2002         2001          2002          2001
                                                 ----         ----          ----          ----
<S>                                              <C>         <C>           <C>           <C>
MERGER-RELATED COSTS, PRE-TAX:
 Integration costs                               $109        $ 137         $ 181         $ 264
 Restructuring charges                             57           69            94           212
                                                 ----        -----         -----         -----

   Total merger-related costs                     166          206           275           476
                                                 ----        -----         -----         -----

SIGNIFICANT ITEMS, PRE-TAX:
 Harmonization of accounting methodology+          --         (175)           --          (175)
 Gain on the sale of a minor product
  line++                                           --           --           (20)           --
 Gains on the sales of research-related
  equity investments++                             --           --            --           (17)
 Co-promotion charges++                            22          100            22           136
                                                 ----        -----         -----         -----
   Total significant items                         22          (75)            2           (56)
                                                 ----        -----         -----         -----

TOTAL MERGER-RELATED COSTS AND
 SIGNIFICANT ITEMS, PRE-TAX                       188          131           277           420
Provision for taxes on income                      59           33            88           123
                                                 ----        -----         -----         -----
TOTAL MERGER-RELATED COSTS AND
 SIGNIFICANT ITEMS, AFTER-TAX                    $129        $  98         $ 189         $ 297
                                                 ====        =====         =====         =====
</TABLE>

       + Represents the harmonization of Pfizer/Warner-Lambert accounting
         methodology for Medicaid and contract rebate accruals included in
         Revenues.

       ++ Included in Other (income)/deductions--net.



<PAGE>
                                   PFIZER INC
                            SEGMENT/PRODUCT REVENUES
                              SECOND QUARTER 2002
                                  (UNAUDITED)
                             (millions of dollars)


<TABLE>
<CAPTION>
                                                                      QUARTER-TO-DATE
                              ----------------------------------------------------------------------------------------------------
                                       WORLDWIDE                             U.S.                           INTERNATIONAL
                              ----------------------------       -----------------------------       -----------------------------
                                                        %                                   %                                 %
                              2002        2001        Change     2002        2001         Change     2002        2001       Change
                              ----        ----        ------     ----        ----         ------     ----        ----       ------
<S>                          <C>         <C>          <C>        <C>         <C>          <C>        <C>         <C>          <C>
TOTAL REVENUES               8,033       7,622          5        4,752       4,604          3        3,281       3,018          9
==================================================================================================================================

- ----------------------------------------------------------------------------------------------------------------------------------
PHARMACEUTICALS              6,700       6,347          6        4,053       3,964          2        2,647       2,383         11
- ----------------------------------------------------------------------------------------------------------------------------------
     TOTAL HUMAN
      PHARMA-
      CEUTICALS              6,317       5,994          5        3,886       3,811          2        2,431       2,183         11

     HARMONIZATION
      OF ACCOUNTING
      METHODOLOGY**              0         175         --            0         175         --            0           0         --
                             -----------------------------------------------------------------------------------------------------
     TOTAL HUMAN
      PHARMACEUTICALS
      EXCLUDING
      HARMONIZATION
      OF ACCOUNTING
      METHODOLOGY            6,317       5,819          9        3,886       3,636          7        2,431       2,183         11

       -CARDIOVASCULAR
        DISEASES             3,019       2,692         12        1,656       1,519          9        1,363       1,173         16
          LIPITOR            1,783       1,439         24        1,151         977         18          632         462         37
          NORVASC              886         879          1          380         391         (3)         506         488          4
          CARDURA              132         132         --            2           8        (74)         130         124          5
          ACCUPRIL/
           ACCURETIC           140         141         (1)          81          84         (3)          59          57          3

       -INFECTIOUS
        DISEASES               712         788        (10)         379         449        (16)         333         339         (2)
          ZITHROMAX            251         262         (4)         160         173         (7)          91          89          2
          DIFLUCAN             245         248         (1)         124         120          3          121         128         (5)
          VIRACEPT              69          85        (19)          69          85        (19)           0           0         --

       -CENTRAL
        NERVOUS
        SYSTEM
        DISORDERS            1,188       1,073         11          922         857          8          266         216         23
          ZOLOFT               574         514         12          456         410         11          118         104         13
          NEURONTIN            458         432          6          381         374          2           77          58         33
          GEODON                48          22        119           45          21        109            3           1        461
          ARICEPT*              50          36         37            0           0         --           50          36         37

       -DIABETES                61          65         (6)          53          57         (7)           8           8          3
          GLUCOTROL XL          57          59         (4)          51          55         (6)           6           4         30

       -ALLERGY                302         253         19          302         253         19            0           0         --
          ZYRTEC               302         252         20          302         252         20            0           0         --

       -VIAGRA                 385         351         10          213         198          8          172         153         12

       -ALLIANCE
        REVENUE
        (Aricept,
        Bextra and
        Celebrex)              388         306         27          317         242         31           71          64         12

   CAPSUGEL                    109         106          3           45          47         (5)          64          59         10

   ANIMAL HEALTH               274         247         11          122         106         15          152         141          8

- ----------------------------------------------------------------------------------------------------------------------------------
CONSUMER PRODUCTS            1,333       1,275          5          699         640          9          634         635         --
- ----------------------------------------------------------------------------------------------------------------------------------
   -CONSUMER
    HEALTH CARE
    PRODUCTS                   646         586         10          462         404         14          184         182          1

   -CONFECTIONERY
    PRODUCTS                   475         481         (1)         152         158         (3)         323         323         --

   -SHAVING
    PRODUCTS                   162         159          2           63          56         12           99         103         (4)

   -TETRA FISH
    PRODUCTS                    50          49         --           22          22         (2)          28          27          2
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>


    *  - Represents direct sales under license agreement with Eisai Co., Ltd.

    ** - Represents the harmonization of Pfizer/Warner-Lambert accounting
         methodology for Medicaid and contract rebate accruals.

    Certain amounts and percentages may reflect rounding adjustments.

    Certain prior year data have been reclassified to conform to the current
    year presentation.
<PAGE>
                                           PFIZER INC
                                    SEGMENT/PRODUCT REVENUES
                                        SIX MONTHS 2002
                                          (UNAUDITED)
                                      (millions of dollars)


<TABLE>
<CAPTION>
                                                                 ****YEAR-TO-DATE****
                             ------------------------------------------------------------------------------------------------------
                                        WORLDWIDE                              U.S.                           INTERNATIONAL
                             --------------------------------      ------------------------------     -----------------------------
                                                         %                                   %                                 %
                              2002         2001        Change      2002        2001        Change       2002        2001     Change
                             ======================================================================================================
<S>                          <C>          <C>           <C>       <C>          <C>         <C>        <C>         <C>          <C>
TOTAL REVENUES               16,452       15,205         8        10,151       9,332         9        6,301       5,873          7
===================================================================================================================================

- -----------------------------------------------------------------------------------------------------------------------------------
PHARMACEUTICALS              13,852       12,715         9         8,766       8,055         9        5,086       4,660          9
- -----------------------------------------------------------------------------------------------------------------------------------
   TOTAL HUMAN
    PHARMACEUTICALS          13,131       12,041         9         8,438       7,757         9        4,693       4,284         10

   HARMONIZATION
    OF ACCOUNTING
    METHODOLOGY**                 0          175        --             0         175        --            0           0         --
                             ------------------------------------------------------------------------------------------------------

   TOTAL HUMAN
    PHARMACEUTICALS
    EXCLUDING
    HARMONIZATION
    OF ACCOUNTING
    METHODOLOGY              13,131       11,866        11         8,438       7,582        11        4,693       4,284         10

      -CARDIOVASCULAR
       DISEASES               6,185        5,401        15         3,577       3,116        15        2,608       2,285         14
         LIPITOR              3,636        2,905        25         2,450       2,016        22        1,186         889         33
         NORVASC              1,817        1,739         4           829         781         6          988         958          3
         CARDURA                263          275        (4)           13          28       (55)         250         247          1
         ACCUPRIL/
          ACCURETIC             315          286        10           202         173        17          113         113          1

      -INFECTIOUS
       DISEASES               1,643        1,737        (5)          974       1,052        (7)         669         685         (2)
         ZITHROMAX              659          680        (3)          459         488        (6)         200         192          4
         DIFLUCAN               513          511        --           278         267         4          235         244         (4)
         VIRACEPT               165          184       (10)          165         184       (10)           0           0         --

      -CENTRAL NERVOUS
       SYSTEM DISORDERS       2,645        2,238        18         2,139       1,820        18          506         418         21
         ZOLOFT               1,314        1,122        17         1,086         913        19          228         209          9
         NEURONTIN            1,025          812        26           880         704        25          145         108         36
         GEODON                  86           87        (2)           81          86        (6)           5           1        318
         ARICEPT*                95           69        38             0           0        --           95          69         38

      -DIABETES                 146          151        (3)          131         135        (3)          15          16         (5)
       GLUCOTROL XL             137          139        (1)          127         130        (2)          10           9         12

      -ALLERGY                  523          448        17           523         448        17            0           0         --
         ZYRTEC                 522          446        17           522         446        17            0           0         --

      -VIAGRA                   807          728        11           476         436         9          331         292         13

      -ALLIANCE
       REVENUE
       (Aricept,
       Bextra and
       Celebrex)                688          592        16           555         463        20          133         129          3

   CAPSUGEL                     208          207        --            88          90        (2)         120         117          3

   ANIMAL HEALTH                513          467        10           240         208        16          273         259          5

- -----------------------------------------------------------------------------------------------------------------------------------
CONSUMER
 PRODUCTS                     2,600        2,490         4         1,385       1,277         8        1,215       1,213         --
- -----------------------------------------------------------------------------------------------------------------------------------

   -CONSUMER
     HEALTH CARE
     PRODUCTS                 1,284        1,154        11           932         816        14          352         338          4

   -CONFECTIONERY
    PRODUCTS                    916          935        (2)          290         310        (6)         626         625         --

   -SHAVING
    PRODUCTS                    306          311        (2)          119         111         7          187         200         (7)

   -TETRA FISH
    PRODUCTS                     94           90         5            44          40        11           50          50         --
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>


    *  - Represents direct sales under license agreement with Eisai Co., Ltd.

    ** - Represents the harmonization of Pfizer/Warner-Lambert accounting
         methodology for Medicaid and contract rebate accruals.

    Certain amounts and percentages may reflect rounding adjustments.
    Certain prior year data have been reclassified to conform to the current
    year presentation.
<PAGE>
                                   PFIZER INC
                            SUPPLEMENTAL INFORMATION

<TABLE>
<CAPTION>
SHARES OUTSTANDING AND REPORTED EPS INFORMATION:             1H02        1H01
                                                             ----        ----
<S>                                                       <C>         <C>
Shares Outstanding (millions) - Basic EPS                   6,195.3     6,248.6
Basic EPS                                                 $     .63   $     .60
Basic EPS From Continuing Operations Excluding the
  Cumulative Effect of a Change in Accounting Principle,
  Certain Significant Items, and Merger-Related Costs     $     .73   $     .64

Shares Outstanding (millions) - Diluted EPS                 6,291.2     6,378.4
Diluted EPS                                               $     .62   $     .59
Diluted EPS From Continuing Operations Excluding the
  Cumulative Effect of a Change in Accounting Principle,
  Certain Significant Items, and Merger-Related Costs     $     .72   $     .63
</TABLE>

QUESTIONS:

Q1)   WHAT IS PFIZER'S FINANCIAL OUTLOOK FOR THE REMAINDER OF THE YEAR?

A1)   We have refined our full-year 2002 EPS target range and now expect diluted
      EPS from continuing operations, excluding the cumulative effect of a
      change in accounting principle, certain significant items, and
      merger-related costs of $1.58 (21%). Moreover, we anticipate double-digit
      full-year 2002 revenue growth at current exchange rates, margin
      improvements, and continuing investments in product support and in R&D
      (which is now expected to be about $5.2 billion for the year).

      Year-over-year operating expense comparisons will remain a challenge in
      the third quarter, resulting in anticipated third-quarter EPS growth,
      excluding certain significant items and merger-related costs, in the low
      double digits.

      Fourth-quarter EPS growth is expected to be exceptionally strong,
      reflecting both a favorable foreign-exchange impact, at current exchange
      rates, and favorable comparisons with the abnormally high expense levels
      during the fourth quarter of 2001, which were $800 million to $1.2 billion
      higher than any other quarter in 2001. Operating expenses in 2002, both
      actual and projected, follow a more normal pattern. The following are
      actual and projected operating expenses for the two years.

                              SI&A and R&D Expenses

      ($ billions)

<TABLE>
<CAPTION>
                    1Q             2Q              3Q              4Q
                    --             --              --              --
<S>                <C>            <C>             <C>             <C>
      2001         $3.5           $3.9            $3.8            $4.7
      2002         $4.0           $4.2            $4.4(est.)      $4.6(est.)
                    +14%           +10%            +15%(est.)       -2%(est.)
</TABLE>
<PAGE>
Q2)   HOW DID CHANGES TO ACCOUNTING REGULATIONS IMPACT PFIZER'S 2002 RESULTS?

A2)   On January 1, 2002, we adopted the provisions of Statement of Financial
      Accounting Standards (SFAS) No. 142, Goodwill and Other Intangible Assets.
      Under the provisions of SFAS No. 142, intangible assets with indefinite
      lives and goodwill are no longer amortized but are subject to annual
      impairment tests. Separable intangible assets with finite lives continue
      to be amortized over their useful lives. In the second quarter of 2002, we
      determined and recorded, retroactive to the beginning of 2002 in
      accordance with accounting principles generally accepted in the United
      States of America, a non-cash charge of $536 million ($393 million
      after-tax) for the impairment provisions as they relate to goodwill in the
      Animal Health business. In the first quarter of 2002, we had recorded a
      non-cash charge of $29 million ($17 million after tax), for the impairment
      provisions as they relate to identifiable intangible assets. The aggregate
      amount of these charges, $565 million ($410 million after tax), is
      reported as the one-time cumulative effect of a change in accounting
      principle for the first half of 2002.

Q3)   WHAT WAS THE IMPACT ON PFIZER'S REVENUES FROM VOLUME, PRICE CHANGES, THE
      EFFECTS OF FOREIGN EXCHANGE, AND THE 2001 ACCOUNTING HARMONIZATION?

<TABLE>
<CAPTION>
A3)                                                       2Q02     1H02
                                                          ----     ----
<S>                                                      <C>      <C>
      Volume                                              8.7%    10.4%
      Price                                               0.5%     0.8%
                                                         ------   ------
      Revenue Growth Excluding Accounting Harmonization
         and Foreign Exchange                             9.2%    11.2%
      Foreign Exchange                                   (1.5%)   (1.8%)
                                                         ------   ------
      Revenue Growth Excluding Accounting Harmonization   7.7%     9.4%
      Accounting Harmonization                           (2.3%)   (1.2%)
                                                         ------   ------
      Total Reported Revenue Growth                       5.4%     8.2%
                                                         ------   ------
</TABLE>


Q4)   HAS PFIZER ANNOUNCED ANY PRICE INCREASES FOR ITS U.S. PHARMACEUTICAL
      PRODUCT LINES?

A4)   Effective July 1, 2002, Pfizer increased the published prices of Glucotrol
      XL (6.3%), Geodon (5.5%), Neurontin capsules (3.0%), Tikosyn (3.0%),
      Accupril/ Accuretic (2.0%), Cardura (2.0%), Diflucan (2.0%), Femhrt
      (2.0%), Lipitor 20 mg (2.0%), and Zithromax (2.0%).

Q5)   WHAT SIGNIFICANT ADVANCES WERE ACHIEVED BY PFIZER'S PRODUCT PORTFOLIO
      SINCE THE FIRST QUARTER?
<PAGE>
A5)   Pfizer had several events that will enhance sales of existing products and
      strengthen the future product portfolio:

      -     Approval by the FDA of new recommended starting doses for Lipitor of
            20 mg and, for patients that require a reduction in LDL cholesterol
            of more than 45%, 40 mg

      -     Approval of the intramuscular form of Geodon in the U.S.

      -     Launch of Geodon in European markets, including Germany

      -     Approval of Vfend in the U.S., in addition to its European approval
            in March

      -     Approval of Neurontin for post-herpetic neuralgia in the U.S.

      -     Approval of Spiriva in Europe and launch in six countries, including
            Germany - Approval of Zithromax for three-day dosing of chronic
            obstructive pulmonary disease in the U.S.

      -     Approval of Zoloft for premenstrual dysphoric disorder in the U.S.

      -     Approval of Relpax for migraine in Japan (the product was launched
            in July 2002)

      -     Agreement with Serono to co-promote the multiple sclerosis drug
            Rebif (interferon beta 1-a) in the U.S.

Q6)   WHAT IS THE STATUS OF PFIZER'S PRODUCTS RECENTLY APPROVED OR UNDERGOING
      REGULATORY REVIEW?

A6)   Pfizer now has five new chemical entities that were recently approved or
      are undergoing regulatory review in the U.S. and/or the European Union:

      -     Vfend, a new antifungal, was approved in both oral and intravenous
            forms in the U.S. by the FDA in May 2002. Vfend completed the Mutual
            Recognition Procedure in the E.U. in March 2002. Launch of Vfend in
            the U.S. is expected in August and in Europe beginning in September.

      -     Geodon, a new antipsychotic, was launched in the U.S. in the first
            quarter of 2001 and is currently achieving a 4.4% share of weekly
            new prescriptions. Geodon has been approved in several major
            European countries and was launched in Germany in April 2002, with
            further launches to occur throughout 2002. Geodon intramuscular (IM)
            form was approved in June 2002 by the FDA, making it the first
            atypical antipsychotic approved in the U.S. for intramuscular use.
            The approval of Geodon IM provides the opportunity for continuity of
            care, allowing patients to begin treatment on the intramuscular form
            and to progress to the oral formulation.

      -     Bextra (discovered and developed by Pharmacia Corporation), a new
            selective COX-2 inhibitor for osteoarthritis, rheumatoid arthritis,
            and primary dysmenorrhea, was launched in April in the U.S. by over
            6,000 Pfizer and Pharmacia sales representatives. Bextra achieved a
            5.6% share of U.S. new
<PAGE>
            prescriptions of NSAIDs in May. To date, the Bextra launch has had
            little impact on the market share of Celebrex. Bextra was filed in
            Europe in the third quarter of 2001.

      -     Spiriva, a muscarinic M3 antagonist for chronic obstructive
            pulmonary disease discovered and developed by Boehringer Ingelheim
            and co-promoted by Boehringer Ingelheim and Pfizer, completed mutual
            recognition in the E.U. in April 2002. Spiriva was launched in
            Germany and five other countries in June, with additional European
            launches expected in the third quarter. Spiriva was filed in the
            U.S. in December 2001.

      -     Relpax, a triptan for migraine, completed mutual recognition in the
            E.U. in July 2001 and has been launched in the U.K., Italy, and
            other markets. Pfizer received marketing approval for Relpax in
            Japan and launched the product in July 2002. In the U.S., Pfizer
            recently completed a cardiovascular physiology study requested by
            the FDA in their approvable letter of December 2000. We are
            currently analyzing the data and expect to file it shortly with the
            FDA. We anticipate FDA approval by yearend 2002 and U.S. launch soon
            thereafter.

            All five products are expected to be launched in new markets during
            2002.

Q7)   WHAT REGULATORY FILINGS DOES PFIZER ANTICIPATE DURING 2002?

A7)   Pfizer anticipates completing regulatory filings in 2002 for use of
      pregabalin in neuropathic pain, epilepsy, and generalized anxiety disorder
      and for use of darifenacin in treating overactive bladder.

Q8)   HOW DID FOREIGN EXCHANGE FLUCTUATIONS AFFECT PFIZER'S RESULTS?

A8)   Changes in foreign exchange rates had a negative effect on revenues in the
      second quarter of $115 million, or 1.5%, and a negative effect on revenues
      in the first half of $277 million, or 1.8%, due to the strengthening of
      the dollar relative to most foreign currencies, including the Japanese yen
      and Euro. Because of recent weakening of the dollar, the foreign-exchange
      impact on revenues in the second half of the year, at current exchange
      rates, is expected to be favorable.

Q9) HOW HAVE SALES OF LIPITOR PROGRESSED?

A9)   Worldwide sales of Lipitor increased to $1.783 billion in the second
      quarter, growth of 24% (up 25% excluding the impact of foreign exchange)
      compared to the same period in 2001. Lipitor is the most widely prescribed
      statin for lowering cholesterol and the most widely prescribed
      pharmaceutical product of any kind in the world. Lipitor has gained wide
      physician and patient acceptance based on
<PAGE>
      its ability to bring the vast majority of patients to target cholesterol
      goals across the full dosing range. The safety profile and efficacy of
      Lipitor have been demonstrated in more than 400 ongoing and completed
      clinical trials involving over 80,000 patients and in more than 36 million
      patient years of therapy.

      In April 2002, the FDA approved new recommended starting doses for
      Lipitor. In addition to the previously recommended starting dose of 10 mg,
      the FDA has now approved a 20 mg dose and, for patients that require a
      reduction in LDL cholesterol of more than 45%, a 40 mg recommended
      starting dose. As in the past, therapy for patients requiring further
      reductions can be adjusted up to the 80 mg dose. The new recommended
      dosing will allow physicians greater flexibility in treating the estimated
      54 million Americans eligible for cholesterol-lowering drug therapy in the
      U.S. based on each patient's individual risk, with fewer dose adjustments.
      In addition, the revised Lipitor labeling further supports the
      implementation of national cholesterol guidelines that call for early and
      intensive treatment in cholesterol management.

      We will reinforce Lipitor's already vast clinical database by studying
      this best-in-class therapy in a large program of additional clinical
      trials. Beyond Lipitor's current leadership, there is a significant
      opportunity for further growth, primarily through expansion of the statin
      market. It is estimated that 54 million Americans are in need of medical
      therapy for high cholesterol, but less than one-third of these people are
      actually receiving treatment.

Q10)  WHAT WAS THE REASON FOR THE CONTINUED SALES GROWTH OF NORVASC?

A10)  Norvasc, the most-prescribed cardiovascular agent worldwide with nearly 26
      billion patient days of therapy, showed global revenue growth of 1% in the
      second quarter of 2002 to $886 million (up 3% excluding the impact of
      foreign exchange), compared to the same period in 2001. Its success has
      been driven by its outstanding efficacy, once-daily dosing, consistent
      24-hour control of hypertension and angina, and excellent safety and
      tolerability.

      Norvasc is one of the treatment arms in ALLHAT, an NIH-sponsored landmark
      hypertension trial that compares the benefits of older versus newer
      antihypertensive agents on coronary heart disease, death, and myocardial
      infarction in 42,000 patients. ALLHAT was recently completed, and results
      are expected at the end of 2002.

      This year, we expect to complete several clinical trials for
      Lipitor/Norvasc dual therapy in patients with both high cholesterol and
      high blood pressure. We expect Lipitor/Norvasc dual therapy to be
      available to patients by 2004.

Q11)  HOW IS CELEBREX PERFORMING?
<PAGE>
A11)  Celebrex is the #1 branded NSAID and the #1 COX-2-specific inhibitor in
      the world. Pfizer and Pharmacia Corporation, the company that discovered
      and developed Celebrex, co-promote this product in more than 60 countries.
      In the countries where Pfizer and Pharmacia co-promote Celebrex, Pharmacia
      records sales and Pfizer records a portion of revenue as alliance revenue.
      In certain other countries, Pfizer directly records sales of the product.
      The product provides relief of a variety of painful conditions, including
      the pain and inflammation of osteoarthritis (OA), adult rheumatoid
      arthritis (RA), acute pain, and primary dysmenorrhea in adults. In
      addition, Celebrex is approved to reduce the number of adenomatous
      colorectal polyps in familial adenomatous polyposis (FAP) -- a rare and
      devastating genetic disease that may result in colorectal cancer -- as an
      adjunct to usual care. Celebrex provides strong efficacy, excellent
      tolerability, and a proven safety profile. With the recent approval for
      acute pain and primary dysmenorrhea in the U.S., Celebrex is now the
      COX-2-specific inhibitor approved to treat the broadest range of
      conditions.

      The Celebrex launch remains the most successful of any drug in the history
      of the pharmaceutical industry. Celebrex is currently receiving more than
      2.2 million total prescriptions a month in the U.S., which makes it the #1
      prescribed arthritis brand in that market. Year-to-date through May 2002,
      about 11.2 million U.S. total prescriptions had been written for Celebrex,
      about 14% more than for Vioxx, another COX-2-specific inhibitor. Since
      launch, more than 35 million patients have been prescribed Celebrex
      globally. Outside the U.S., Celebrex continues to outpace the overall
      anti-arthritic market. It is the #1 selective COX-2 inhibitor in Europe on
      a unit basis.

      In June, after a comprehensive review of the Celecoxib Long-term Arthritis
      Safety Study (CLASS) data, the FDA approved revised labeling for Celebrex.
      The new prescribing information includes additional gastrointestinal (GI)
      safety data showing the estimated cumulative incidence of upper GI ulcer
      complications and symptomatic ulcers for Celebrex patients at 0.78% versus
      an annual NSAID category rate of 2-4%. Additionally, the revised label
      also includes data indicating that there was no increased risk for serious
      cardiovascular (CV) adverse events observed compared to the non-specific
      NSAID comparators (diclofenac and ibuprofen). These CV events included
      heart attack, stroke, and unstable angina.

Q12)  HOW DID ZOLOFT PERFORM?

A12)  Worldwide sales of Zoloft, a selective serotonin re-uptake inhibitor
      (SSRI) for the treatment of depression, increased 12% (also up 12%
      excluding the impact of foreign exchange) to $574 million in the second
      quarter, compared to the same period in 2001. Zoloft is the most
      prescribed SSRI in the U.S. The product has sustained strong growth
      notwithstanding the launch of generic fluoxetine, and
<PAGE>
      Zoloft's growth is expected to continue. Zoloft is currently outpacing
      market growth in the U.S. and other key markets.

      Zoloft has proven efficacy, safety, and tolerability across a broad range
      of depression and anxiety disorders. This is important from a clinical
      perspective, as there is significant co-morbidity between depression and
      anxiety disorders: 50% of patients with depression also have an anxiety
      disorder during a 12-month period. A new meta-analysis of data pooled from
      five double-blind, 12-week studies of patients with severe major
      depression showed that significantly more patients treated with Zoloft
      responded to therapy than did patients treated with fluoxetine. Depression
      affects approximately 20 million Americans and can be mild, moderate, or
      severe.

      In May, the FDA approved Zoloft for treatment of premenstrual dysphoric
      disorder (PMDD). PMDD is distinguished from premenstrual syndrome (PMS) by
      the severity of symptoms, the degree of impact on a woman's daily
      activities, and the presence of a distinct mood change. In the U.S.,
      approximately 5% of women experience PMDD. Pfizer will maintain the brand
      name Zoloft in the marketing of this new indication.

      Anxiety disorders for which Zoloft is approved include panic disorder,
      obsessive-compulsive disorder (OCD) in adults and children, and
      post-traumatic stress disorder (PTSD) in adults. Zoloft is the only SSRI
      indicated for both the acute and long-term treatment of OCD in children
      and adolescents. With the approval for the treatment of PMDD, Zoloft is
      the antidepressant in the U.S. market with the most approved indications
      across mood and anxiety disorders.

      Filings were submitted to the FDA for pediatric depression in December
      2001 (which qualified Zoloft for a six-month patent extension) and for
      social anxiety in January 2002. Social anxiety is a chronic anxiety
      disorder affecting approximately 10 million Americans.

Q13)  HOW DID NEURONTIN PERFORM?

A13)  Sales of Neurontin increased 6% (also up 6% excluding the impact of
      foreign exchange) to $458 million in the second quarter, compared to the
      same period in 2001. Restraints to production capacity in 2001 impacted
      sales growth in the first and second quarter of 2002. More than 8 million
      patients have been prescribed Neurontin in the U.S. since its approval.
      Neurontin is the number one acute epilepsy drug in the U.S. and worldwide.

      Neurontin has also been approved in more than 50 markets for treatment of
      a range of neuropathic pain conditions. Neurontin was approved by the FDA
      in
<PAGE>
      May for the management of post-herpetic neuralgia (PHN). PHN is most
      commonly described as pain in the area affected by herpes zoster,
      persisting at least three months after healing of the herpes zoster skin
      rash. Herpes zoster is a painful viral infection also known as shingles.
      In the United States alone, more than one million new cases of herpes
      zoster are diagnosed each year. Approximately 10-15% of all patients with
      herpes zoster develop PHN, which, once established, can persist for many
      years. Neurontin is the first oral medication approved in the U.S. for
      this condition.
<PAGE>
Q14)  HOW DID ZITHROMAX PERFORM?

A14)  Zithromax sales decreased 4% (down 3% excluding the impact of foreign
      exchange) to $251 million in the second quarter, compared to the same
      period in 2001, in part due to a mild flu season. Zithromax is the
      most-prescribed brand-name oral antibiotic in the U.S. and the
      second-largest-selling antibiotic worldwide. The product is recognized by
      physicians for its broad efficacy, compliance advantages, favorable
      side-effect profile, and a good-tasting liquid formulation for children.

      In May 2002, the FDA approved Zithromax as the first and only three-day
      regimen for the treatment of acute bacterial exacerbations of chronic
      obstructive pulmonary disease (COPD), with Zithromax given at a dose of
      500 mg once daily. COPD is the fifth leading cause of death worldwide and
      the fourth leading cause of death in the U.S. and is responsible for
      500,000 hospitalizations in the U.S. per year.

      In the first quarter of 2002, Pfizer launched the Zithromax oral
      suspension as both a single-dose regimen and a three-day regimen for the
      treatment of acute otitis media in pediatric patients. Acute otitis media
      is the most common infection in young children, accounting for at least 30
      million sick child visits to doctors each year. The approval was based on
      a recent study, where a single dose of Zithromax oral suspension was as
      effective in curing children's otitis media infections as 10 days of
      twice-a-day Augmentin.

Q15)  WHAT FACTORS ACCOUNT FOR VIAGRA'S PERFORMANCE?

A15)  Viagra is the world's most recognized pharmaceutical brand. Worldwide
      sales of Viagra grew 10% (up 11% excluding the impact of foreign exchange)
      to $385 million in the second quarter, compared to the same period in
      2001. The product is among the most widely prescribed medications, with
      over 120 million prescriptions having been written since launch by nearly
      600,000 physicians for more than 20 million men worldwide, including 12
      million men in the U.S. New prescription volume in the U.S. increased 10%
      compared to the same period last year. About half of American men aged 40
      to 70 are affected with ED to some degree. In the U.K. and Japan, the two
      largest international markets for Viagra, the product achieved revenue
      growth, excluding the impact of foreign exchange, of 18% and 16%,
      respectively, in the second quarter of 2002 compared to 2001.

      Viagra allows many men with erectile dysfunction (ED) to achieve
      erections, leading to an improvement in their sexual health. A growing
      body of medical evidence from over 100 completed or ongoing clinical
      studies continues to demonstrate the excellent efficacy and safety profile
      of Viagra:
<PAGE>
      -     An extensive long-term study of approximately 1,000 men with ED
            taking Viagra for 4-5 years found that 96% of them remain satisfied
            with the treatment. The data also found Viagra to be well tolerated,
            with a low discontinuation rate (1-2%).

      -     A placebo-controlled study of men taking two or more
            antihypertensive medications showed that Viagra improved erections
            in 70% of men with severe vascular disease, and the side effects
            were no different from those seen in healthy men with ED.

      -     Studies demonstrate that the efficacy and safety of Viagra were
            similar in black and Hispanic American men as in white patients.
            More than 79% and 89% of black and Hispanic American men,
            respectively, reported improved erections, and 81% and 90%,
            respectively, reported improved ability for sexual intercourse.

      -     Viagra has been found to be effective at treating erectile
            dysfunction associated with the use of psychotropic medications
            (antidepressants and antipsychotics) and when treating men with
            erectile dysfunction secondary to radiation therapy for prostate
            cancer.

      -     Analysis of efficacy and treatment satisfaction data collected from
            partners of patients in clinical trials has shown that partner
            responses parallel those of the patients and are highly
            statistically significant compared to placebo.

      -     A placebo-controlled study of men with ED and chronic stable angina
            who exercised up to a level of exertion double that experienced by
            most people during sexual activity demonstrated that Viagra patients
            exercised longer and experienced no serious adverse events, further
            reinforcing the product's excellent cardiovascular safety.

      -     Numerous anecdotal reports and small studies have suggested that
            Viagra is effective and safe when used in the treatment of pulmonary
            arterial hypertension in both children and in adults, a condition
            that is generally fatal. A clinical development program is underway
            to further investigate this as a potential future use of Viagra.

Q16)  HOW DID DIFLUCAN PERFORM?

A16)  Sales of Diflucan decreased 1% (up 1% excluding the impact of foreign
      exchange) to $245 million in the second quarter, compared to the same
      period in 2001. This sales volume, after 14 years on the market, reflects
      the unique features and benefits of Diflucan and the medical need that it
      continues to fulfill. It treats systemic fungal infections, often present
      in critically ill hospitalized
<PAGE>
      patients, as well as fungal infections of the mouth (thrush), throat, and
      esophagus. Diflucan is also effective as a single-dose oral treatment for
      vaginal candidiasis.

      In June 2001, Pfizer announced that it would offer Diflucan at no charge
      to HIV/AIDS patients in the 50 least-developed countries, as identified by
      the United Nations, where HIV/AIDS is most prevalent. The Diflucan
      Partnership was developed in cooperation with the United Nations and the
      World Health Organization and expands upon the existing South African
      Diflucan Partnership Program, a collaboration between Pfizer and the South
      African Ministry of Health. Patient numbers and clinical sites continue to
      increase, with more than 2 million doses dispensed and more than 27,000
      prescriptions processed. The program has now been launched in Uganda,
      Swaziland, Botswana, Namibia, and Lesotho. An additional seven countries
      will be receiving Diflucan by the end of 2002: the Democratic Republic of
      Congo, Malawi, Mozambique, Tanzania, Rwanda, Zambia, and Zimbabwe.

      In the 50 least developed countries with an HIV prevalence of greater than
      one percent, roughly 12 million people are reported to be infected with
      HIV/AIDS. Although Diflucan is not a treatment for HIV/AIDS, it has proven
      highly effective in treating two opportunistic infections, cryptococcal
      meningitis and esophageal candidiasis, that afflict large numbers of
      people with AIDS. Cryptococcal meningitis is a life-threatening brain
      infection caused by the yeast Cryptococcus neoformans. Of those suffering
      from untreated meningitis, the mortality rate is more than 90%.

Q17)  WHAT FACTORS DROVE ZYRTEC'S GROWTH?

A17)  Sales of Zyrtec, a leading prescription antihistamine in the U.S., grew
      20% to $302 million in the second quarter, compared to the same period in
      2001. Among established prescription antihistamines, Zyrtec continues to
      be the fastest-growing in new prescriptions in the U.S. year-to-date,
      achieving growth at more than five times the market rate. This growth can
      be attributed to strong performances by Zyrtec syrup, which continues to
      be the most-prescribed antihistamine syrup in the U.S., and Zyrtec-D 12
      Hour, launched in the third quarter of 2001. Zyrtec-D 12 Hour is still the
      only prescription oral antihistamine/decongestant combination medicine
      approved to treat both year-round indoor and outdoor allergies as well as
      nasal congestion. With 30% of all allergy sufferers also experiencing
      nasal congestion, and with decongestant combinations accounting for about
      one fifth of total U.S. antihistamine prescriptions, a significant
      opportunity exists for Zyrtec-D.

      Zyrtec provides strong, rapid, and long-lasting relief for seasonal and
      perennial allergies and hives (chronic idiopathic urticaria) with
      once-daily dosing. In two
<PAGE>
      two-day clinical studies conducted in an artificially controlled pollen
      environment, Zyrtec began working in about one hour, compared to about
      three hours for Claritin. In the same studies, Zyrtec provided twice the
      symptom relief as Claritin.

      Most people with allergies have both indoor and outdoor allergies, but
      indoor allergies are tougher to treat. Unlike some other prescription
      allergy medications, Zyrtec has a proven history of treating both
      year-round indoor and seasonal outdoor allergies. It is also indicated for
      use in children as young as two years old, and can be safely used to treat
      allergies in children six years or older with mild-to-moderate asthma. In
      December 2001, Pfizer submitted a supplemental filing to the FDA with
      additional safety and efficacy data for use of Zyrtec in children age six
      months to two years. Based on this filing, Pfizer received a six-month
      patent extension for Zyrtec.

Q18)  WHAT ARE SOME OF THE KEY BENEFITS OF ARICEPT?

A18)  Aricept continues to be the world's leading medicine for the symptomatic
      treatment of Alzheimer's disease (AD). In the U.S., U.K., France, Germany,
      and Japan, Aricept is co-promoted by Pfizer and Eisai Co., Ltd., the
      company that discovered and developed the compound, with Eisai recording
      sales and Pfizer recording a portion of profit as alliance revenue. In
      certain countries, Pfizer directly records sales of the product.

      About 10% of people over 65 suffer from AD, including 4 million Americans.
      U.S. society spends as much as $100 billion a year for AD. By 2050, it is
      estimated that nearly 14 million Americans will suffer from this disease.
      Aricept has been taken for more than 710 million patient days by more than
      1.7 million patients in the U.S. with mild-to-moderate AD to enhance or
      maintain cognition and function by preserving levels of the
      neurotransmitter acetylcholine in the brain. In controlled clinical trials
      of up to six months, more than 80% of patients taking Aricept experienced
      improved cognition or no further decline compared to 58% of patients on
      placebo. In one study, 48 weeks of treatment with Aricept produced a delay
      of more than two years to placement in a nursing home compared with less
      than eight weeks of therapy with Aricept. A 3,500-patient study presented
      at a meeting of the American Geriatrics Society found that annual
      healthcare costs of patients with AD treated with Aricept for more than
      nine months averaged about $4,200 less than patients not receiving
      treatment. Aricept is well tolerated, with a low incidence of side
      effects, offers convenient, once-daily dosing, and can be taken with or
      without food.

      Pfizer and Eisai are progressing in development of a new indication of
      Aricept for vascular dementia. In a placebo-controlled study presented at
      a recent meeting of the American Association for Geriatric Psychiatry,
      treatment with Aricept
<PAGE>
      significantly improved the cognitive and global function of patients with
      vascular dementia. A second, placebo-controlled study presented at a
      meeting of the American Academy of Neurology also showed that treatment
      with Aricept significantly improved the cognitive and global function of
      patients with vascular dementia. This condition, characterized by
      cognitive decline caused by a single, localized stroke or series of
      strokes, is second only to AD as a cause of dementia. Up to one third of
      all diagnosed dementia cases are vascular dementia.

Q19)  HOW IS GEODON PERFORMING?

A19)  Geodon has been launched in Sweden, Germany, the United States, and 21
      other markets. Sales for the second quarter of 2002 totaled $48 million,
      up 119%, compared to the same period in 2001 due to the relatively low
      sales in the second quarter of 2001 following the initial stocking of the
      trade in the U.S. in the first quarter of 2001. Geodon has been prescribed
      for over 250,000 patients worldwide. In the U.S., it is available on the
      formularies of all state Medicaid programs, the Veterans Administration,
      and more than 1,200 hospitals. In Europe, where the product is sold under
      the trade name Zeldox, launches of both the oral and intramuscular form
      will occur throughout 2002 and 2003.

      Discovered and developed by Pfizer, Geodon is a serotonin and dopamine
      antagonist that is effective in treating the wide range of positive,
      negative, and depressive symptoms associated with schizophrenia. Positive
      symptoms include visual and auditory hallucinations and delusions. The
      harder-to-treat negative symptoms include blunted affect, social
      withdrawal, and lack of motivation. Schizophrenia is a chronic illness
      that requires lifelong treatment, affects approximately 1% of the world's
      population, and is estimated to cost more than $104 billion in hospital
      costs, medications, health-care services, and lost productivity annually.

      In June 2002, the intramuscular (IM) formulation of Geodon was approved in
      the U.S., where it is the first atypical antipsychotic medicine approved
      for IM use. Acute agitation in patients with psychosis is one of the most
      common psychiatric emergencies and is characterized by uncooperative or
      even violent behavior. IM medicines are important in this setting because
      of their rapid onset of action. Geodon IM works quickly and without the
      excessive sedation and movement disorders that are distressing to patients
      and are common to other widely prescribed treatment options. Geodon IM
      allows continuity of care, as physicians rapidly control patients with
      acute symptoms of psychotic behavior with the IM formulation and then
      maintain the patient with Geodon Oral. Pfizer is also studying Geodon in
      mania and is developing an oral suspension dosage form.

      An eight-week multicenter study of 296 patients with acute schizophrenia
      or schizoaffective disorder showed that Geodon was as effective against
      both
<PAGE>
      positive and negative symptoms as Risperdal, without the weight gain and
      prolactin elevation seen with Risperdal and with a lower incidence of
      extrapyramidal side effects. A six-week multicenter study of 299 patients
      with acute schizophrenia or schizoaffective disorder showed that Geodon
      was as effective against both positive and negative symptoms as Zyprexa,
      without the adverse changes in insulin levels, blood lipid levels, and
      body weight seen with Zyprexa. Significant weight gain, associated with
      many currently available antipsychotic medicines, is distressing and
      stigmatizing to patients and often results in non-compliance. Patients who
      gain weight may also be at greater risk for cardiovascular complications
      such as increased lipid levels and poor glycemic control.

      Geodon is associated with a small prolongation of the QTc interval of the
      electrocardiogram, an effect seen with certain other marketed medicines
      and some antipsychotics. To date, the post-approval clinical experience
      with Geodon has been consistent with the clinical trials program. Our
      post-marketing safety reports show no increased risk associated with QTc
      prolongation, including no cases of torsade de pointes arrhythmia, no
      increase in the overall mortality rate, and no signals of increased
      cardiovascular risk.

Q20)  HOW IS THE BEXTRA LAUNCH GOING?

A20)  Bextra was launched in the U.S. in April 2002 for the relief of pain and
      inflammation of osteoarthritis (OA), adult rheumatoid arthritis (RA), and
      primary dysmenorrhea. Bextra is off to a very good start and has already
      achieved a 5.6% share of new prescriptions of the NSAID market as of May.
      Celebrex and Bextra together achieved new prescription share of 23.6%.
      Pfizer and Pharmacia Corporation, the company that discovered and
      developed Bextra, co-promote this product in most major world markets. In
      the countries where Pfizer and Pharmacia co-promote Bextra, Pharmacia
      records sales and Pfizer records a portion of revenue as alliance revenue.
      In certain other countries, Pfizer directly records sales of the product.
      Bextra offers once-daily dosing for OA and RA patients. The product has a
      significantly lower incidence of endoscopically detected gastroduodenal
      ulcers versus traditional NSAIDs (naproxen, ibuprofen, and diclofenac) and
      significantly less dyspepsia versus naproxen. In controlled comparative
      arthritis trials of up to 26 weeks, Bextra in daily doses of 10 mg or 20
      mg demonstrated an incidence of edema and hypertension similar to
      comparator NSAIDs.

      Results of two investigational studies published in the May 2002 Journal
      of the American Dental Association showed that Bextra dosed at 20 mg and
      40 mg provided relief for the treatment of pain associated with dental
      surgery. The results showed comparable pain relief to Tylox (oxycodone 10
      mg/ acetaminophen 1,000 mg), a schedule 2 narcotic.
<PAGE>
Q21)  WHAT IS THE REGULATORY STATUS OF RELPAX?

A21)  Relpax, an oral 5-HT 1b/1d agonist for the acute treatment of migraine,
      has been launched in 24 countries worldwide, including most of Europe and,
      earlier in July, Japan. Launches will continue throughout 2002. Relpax has
      been approved in the E.U. in dosage levels of 20 mg, 40 mg, and 80 mg. In
      the U.S., Pfizer completed a cardiovascular physiology study requested by
      the FDA in their approvable letter of December 2000. With resubmission of
      this data to the FDA, Pfizer anticipates approval by yearend 2002, with a
      U.S. launch to follow.

      The efficacy, safety, and tolerability of Relpax were established in ten
      randomized, double-blind, placebo-controlled studies involving more than
      13,000 migraine sufferers and over 70,000 migraine attacks as part of a
      global clinical program. Headache response, defined as a reduction in
      headache severity from moderate or severe pain to mild or no pain, was
      assessed up to two hours after dosing. Data from these trials demonstrate
      that up to 77% of patients treated with an 80 mg dose and 65% of patients
      treated with a 40 mg dose experienced headache relief at two hours. The
      medical journal Neurology recently accepted for publication a second
      Relpax Phase III clinical trial, again demonstrating the excellent
      efficacy of Relpax 40 mg and 80 mg over Imitrex 50 mg and 100 mg.

      Migraine is a common and debilitating medical disorder, experienced by
      more than 28 million people in the U.S. alone (18% of women and 6% of
      men). More than 10% of adults in Europe suffer from migraine. Despite the
      often chronic and disabling nature of migraines -- symptoms of which
      include severe headache pain, nausea, and sensitivity to light or sound --
      the vast majority of sufferers have never been diagnosed or treated with
      prescription medication.

Q22)  WHAT IS THE REGULATORY STATUS OF PFIZER'S NEW ANTIFUNGAL VFEND?

A22)  Vfend, a new antifungal, was approved in both oral and intravenous forms
      in the U.S. by the FDA in May and in the E.U. in March. Launch of Vfend is
      anticipated in August in the U.S. and beginning in September in Europe.

      In the U.S., Vfend is indicated for primary treatment of acute invasive
      aspergillosis and salvage therapy for rare but serious fungal infections
      caused by the pathogens Scedosporium apiospermum and Fusarium spp. In
      Europe, Vfend is also approved for the treatment of fluconazole-resistant
      serious invasive Candida infections (including C. krusei). In the largest
      prospective comparative clinical trial ever conducted in invasive
      aspergillosis, a deadly fungal infection occurring in immune-compromised
      patients, 53% of patients who received Vfend had a successful response at
      12 weeks of treatment, compared to 32% of those who received amphotericin
      B. The survival rate of the Vfend-treated patients
<PAGE>
      was 71% versus 58% of those in the amphotericin B arm. The number of
      hospitalized patients at risk for serious fungal infections is growing as
      more patients undergo bone marrow/stem cell and solid organ transplants as
      well as aggressive chemotherapy for cancer. Fungal infections in these
      immune-compromised patients are associated with high morbidity and
      mortality and require prompt and effective treatment.

      Vfend can be administered both orally and intravenously, unlike most
      currently available treatments, which are available in intravenous form
      only. This allows for flexibility in patient care with Vfend, permitting
      step-down therapy from intravenous to oral administration and potentially
      allowing the patient to be discharged from the hospital sooner.

Q23)  WHAT IS THE STATUS OF SPIRIVA?

A23)  Spiriva was approved by regulatory authorities in Europe in April 2002.
      The product was launched in six countries, including Germany, in June.
      Spiriva, discovered and developed by Boehringer Ingelheim, is the first
      once-a-day inhaled bronchodilator treatment for chronic obstructive
      pulmonary disease (COPD) and a significant advance over other treatment
      options. It will be co-promoted worldwide by Pfizer and Boehringer
      Ingelheim. COPD is a chronic respiratory disorder that includes chronic
      bronchitis and emphysema and is characterized by limited airflow
      accompanied by symptoms such as dyspnea (shortness of breath), cough,
      wheezing, and increased sputum production. According to the World Health
      Organization, about 600 million people suffer from COPD, though many are
      undiagnosed. The disease claims three million lives annually. It is
      estimated that one in five smokers will develop COPD, which is the
      fifth-leading cause of death worldwide and the fourth-leading cause of
      death in the U.S.

      Data from clinical trials involving more than 3,000 patients worldwide
      have demonstrated that Spiriva is highly effective, providing sustained
      bronchodilation with significant symptomatic improvement in dyspnea. Data
      from these studies also indicate that Spiriva reduced exacerbations of
      COPD, resulting in fewer hospitalizations and improved patient
      health-related quality of life. Spiriva also was shown to be well
      tolerated, with dry mouth as the main side effect.

      In September 2001, Boehringer Ingelheim and Pfizer presented new data on
      Spiriva at a meeting of the European Respiratory Society. Spiriva was
      shown to be effective in treating patients with COPD and to be superior to
      the long-acting beta agonist salmeterol in several key measurements. In a
      six-month study involving 623 COPD patients, Spiriva was shown to be
      significantly superior to salmeterol in lung function. There was no
      evidence of a loss of effectiveness of Spiriva during the study. Patients
      receiving Spiriva reported a statistically
<PAGE>
      significant improvement in dyspnea, the most disabling respiratory symptom
      for patients with COPD, versus placebo, whereas patients receiving
      salmeterol did not. Spiriva patients also reported statistically
      significant improvement in health-related quality of life. Data from other
      clinical trials presented at scientific meetings also show Spiriva to be
      superior to ipratropium bromide in several key measurements.

      In April 2002, Boehringer Ingelheim and Pfizer presented new data on
      Spiriva at the annual meeting of the American Thoracic Society. Patients
      who used Spiriva were able to exercise over 20% longer than patients who
      used placebo. In addition, patients who used Spiriva experienced less
      shortness of breath both while exercising and during activities of daily
      living.

Q24)  WHAT IS THE STATUS OF PFIZER'S CO-PROMOTION OF REBIF WITH SERONO?

A24)  Last week, Pfizer and Serono announced an agreement to co-promote Serono's
      multiple sclerosis (MS) treatment Rebif (interferon beta 1-a) in the U.S.
      Rebif has been shown to decrease the frequency of clinical exacerbations
      and delay the accumulation of physical disability associated with
      relapsing forms of MS. Rebif is recommended for use at a dosage of 44 mcg
      three times per week injected subcutaneously. Under the terms of the
      agreement, Pfizer will pay Serono an up-front fee of $200 million, which
      will be capitalized and amortized over the life of the product. Pfizer
      will share all commercialization and development costs in the U.S. and
      will receive a payment based on Rebif sales in the U.S. Serono will record
      all sales and continue to distribute the product in the U.S. The product
      will be sold under the Rebif brand name. Serono will be the sole marketer
      for Rebif in the rest of the world. MS is a chronic inflammatory condition
      of the nervous system and is the most common non-traumatic neurological
      disease in young adults. MS affects approximately 350,000 Americans. While
      symptoms can vary, the most common symptoms of MS include blurred vision,
      numbness or tingling in the limbs, and problems with strength and
      coordination. The relapsing forms of the disease are the most common forms
      of MS.

Q25)  WHAT IS THE STATUS OF THE PFIZER FOR LIVING SHARE CARD PROGRAM?

A25)  On January 15, we launched an innovative prescription benefit program
      called the Pfizer for Living Share Card. The program is designed to help a
      targeted group of patients access tools to manage their health. The
      program includes three elements: a membership card that enables patients
      to receive up to a 30-day supply of a Pfizer medicine for $15, a help line
      to assist low-income senior citizens in learning about other health-care
      services and benefits, and easy-to-read health information on 16 common
      medical conditions.
<PAGE>
      The Pfizer Share Card is available to Medicare enrollees with annual gross
      incomes of less than $18,000 ($24,000 for couples) who lack
      prescription-drug coverage or who are not eligible for Medicaid or any
      other publicly funded prescription benefit programs. The projected
      financial impact of this program is included in Pfizer's current revenue
      and earnings growth guidance for 2002 through 2004.

      The response to the Share Card has been overwhelmingly positive. The
      Pfizer Share Card can be used at more than 48,000 retail pharmacies
      nationwide, representing 93% of all U.S. pharmacies. Since the program's
      announcement, the Share Card call center has:

      -     Received more than 940,000 inquiries

      -     Received more than 560,000 requests for applications

      -     Reviewed more than 250,000 completed applications

      -     Enrolled more than 170,000 members, and

      -     Filled more then 280,000 Pfizer prescriptions.

      We are actively reaching out to people who may be eligible for the Share
      Card by organizing enrollment days at senior centers, churches, and
      community groups.

Q26)  HOW DID THE ANIMAL HEALTH BUSINESS PERFORM?

A26)  In the quarter, Animal Health sales increased 11% to $274 million (up 15%
      excluding the impact of foreign exchange), compared to the same period in
      2001. This strong performance reflected double-digit growth (excluding the
      impact of foreign exchange) in both livestock and companion-animal product
      lines. Our companion-animal products Revolution and Rimadyl and our
      livestock medicines Dectomax and RespiSure/Stellamune showed strong
      growth, excluding the impact of foreign exchange.

Q27)  HOW DID PFIZER'S CONSUMER BUSINESSES PERFORM?

A27)  Sales of Pfizer's consumer businesses, which include consumer healthcare
      products, Adams confectionery products, Schick-Wilkinson Sword shaving
      products, and Tetra fish-food products, grew 5% (up 7% excluding the
      impact of foreign exchange) to $1.333 billion in the second quarter,
      compared to the same period in 2001. Sales of Consumer Healthcare products
      grew 10% (up 11% excluding the impact of foreign exchange) to $646 million
      due to strong performances of Listerine mouthwash and Listerine
      PocketPaks.

Q28)  WHAT IS THE STATUS OF THE ADAMS, SCHICK-WILKINSON SWORD, AND TETRA
      BUSINESSES?
<PAGE>
A28)  In June, Pfizer announced it was exploring strategic options for the Adams
      confectionery business and the Schick-Wilkinson Sword shaving products
      business, including possible sale. Headquartered in Parsippany, New
      Jersey, Adams is one of the world's largest providers of confectionery
      products. Adams conducts business in over 70 countries and has
      approximately 12,000 employees worldwide. Schick-Wilkinson Sword is the
      world's second largest producer of shaving products. Schick-Wilkinson
      Sword is headquartered in Milford, Connecticut, conducts business in more
      than 50 countries, and has approximately 3,500 employees worldwide. In
      March, Pfizer announced that it was exploring strategic options for the
      Tetra aquarium and pond supplies division, including possible sale. The
      Tetra business has approximately 700 employees in the U.S., Germany, the
      U.K., France, Italy, and Japan.

Q29)  WHAT ARE PFIZER'S COST-SAVINGS EXPECTATIONS FROM THE INTEGRATION OF PFIZER
      AND WARNER-LAMBERT?

A29)  By year-end 2002, we now anticipate $1.8 billion in merger-related cost
      savings. Savings stem from increased purchasing power of the combined
      entity, the reduction of operating expenses, the closure of redundant
      facilities, and the elimination of redundant positions in the work force.

      Integration, restructuring, and transaction costs of $2.5 billion
      (excluding costs associated with the termination of the failed
      Warner-Lambert/American Home Products merger) have been recorded from the
      close of the transaction through the end of the second quarter of 2002
      ($166 million recorded in the second quarter of 2002). We now anticipate
      total merger-related costs through 2002 (excluding the AHP break-up fee)
      of about $2.8 billion.

Q30)  WHAT WERE THE PRINCIPAL FACTORS AFFECTING OTHER (INCOME)/DEDUCTIONS --
      NET?

<TABLE>
<CAPTION>
A30)  ($ millions)                                          Second Quarter            First Half
                                                            --------------            ----------
      (INCOME)/DEDUCTIONS                                  2002        2001        2002        2001
                                                           ----        ----        ----        ----
<S>                                                        <C>         <C>         <C>        <C>
      Net Interest Income                                  ($38)       ($71)       ($71)      ($152)
      Co-Promotion Charges                                   22         100          22         136
      Gains on the Sales of Research-
        Related Equity Investments                           --          --          --         (17)
      Amortization of Goodwill and Other Intangibles         17          24          22          49
      Gain on the Divestiture of a Minor Product Line        --          --         (20)         --
      Other                                                 (47)        (40)        (82)        (60)
                                                           ----       -----       -----       -----

      Other (Income)/Deductions -- Net                     ($46)      $  13       ($129)      ($ 44)
                                                            ----       -----       -----       -----
</TABLE>
<PAGE>
      The reduction in interest income is primarily a factor of significantly
      lower short-term interest rates in 2002 versus 2001. Amortization of
      goodwill and intangibles is lower in 2002 versus 2001 as a result of the
      adoption of SFAS No. 142 -- Goodwill and Other Intangible Assets.

Q31)  WHAT IS PFIZER'S EFFECTIVE TAX RATE FOR 2002?

A31)  The 2002 effective tax rate for continuing operations, excluding the
      cumulative effect of a change in accounting principle, certain significant
      items, and merger-related costs, has been reduced to 23.5%, due primarily
      to product mix and tax planning initiatives. The tax rate of 21.7% in the
      second quarter, from continuing operations excluding certain significant
      items and merger-related costs, reflects this lower full-year rate as well
      as a catch-up adjustment for the first quarter.
<PAGE>
Q32)  WHAT IS THE STATUS OF PFIZER'S SHARE-PURCHASE PROGRAM?

A32)  In May 2002, the company completed its existing share-purchase program,
      authorized in June 2001, under which it purchased 120 million shares at a
      cost of $4.8 billion. Recently, the company also announced a new
      authorization to purchase up to $10 billion worth of the company's common
      stock. This current program has now been increased to $16 billion and will
      be completed during 2003.

Q33) WILL PFIZER BE HOLDING A CONFERENCE CALL?

A33)  Pfizer will be holding a conference call for analysts and investors to
      discuss the Pfizer/Pharmacia transaction and second-quarter earnings at
      11:00AM today. To ensure universal access, the conference call will be
      simultaneously broadcast over Pfizer's corporate website -- www.pfizer.com
      -- and will be archived for five days thereafter.



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.3
<SEQUENCE>6
<FILENAME>y62256exv99w3.txt
<DESCRIPTION>PRESS RELEASE
<TEXT>
<PAGE>

                                                                    Exhibit 99.3


For Immediate Release                       Contact: Andy McCormick
July 15, 2002                                        Pfizer Inc
                                                     212-573-1226

                                                     Paul Fitzhenry
                                                     Pharmacia Corp.
                                                     908-901-8770

      PFIZER TO ACQUIRE PHARMACIA CORPORATION FOR $60 BILLION IN STOCK,
STRATEGICALLY POSITIONING COMPANY FOR LONG-TERM LEADERSHIP IN RAPIDLY CHANGING
PHARMACEUTICAL INDUSTRY

      FAST-GROWING COMPANIES HAVE PARTNERED SINCE 1998 TO MAKE ARTHRITIS
MEDICINE CELEBREX THE MOST SUCCESSFUL NEW PHARMACEUTICAL LAUNCH EVER; COMBINED
COMPANY EXPECTED TO HAVE AS MANY AS 12 PRODUCTS WITH ANNUAL REVENUES GREATER
THAN $1 BILLION

      COMBINED R&D PIPELINE WILL HAVE NEARLY 120 NEW CHEMICAL ENTITIES IN
DEVELOPMENT AND OVER 80 IN-LINE PRODUCT ENHANCEMENT PROGRAMS; PFIZER THERAPEUTIC
PORTFOLIO TO BE ENHANCED BY PHARMACIA'S STRENGTH IN ONCOLOGY, OPHTHALMOLOGY AND
ENDOCRINOLOGY

      TRANSACTION EXPECTED TO BE NON-DILUTIVE TO ADJUSTED DILUTED EARNINGS PER
SHARE IN 2003 AND ACCRETIVE THEREAFTER; PEAK YEAR SYNERGIES OF $2.5 BILLION TO
BE ACHIEVED BY 2005 PFIZER TO EXPAND EXISTING SHARE PURCHASE PROGRAM TO $16
BILLION; PHARMACIA TRANSACTION IS MAJOR REDEPLOYMENT OF PFIZER ASSETS INTO CORE
PHARMACEUTICALS BUSINESS

NEW YORK, N.Y. AND PEAPACK, N.J., JULY 15 - - Pfizer Inc (NYSE:PFE) and
Pharmacia Corporation (NYSE: PHA) jointly announced today that they have signed
a definitive agreement providing for Pfizer to acquire Pharmacia in a
stock-for-stock transaction valued at $60 billion, expanding the company's core
strengths in pharmaceuticals and health care.

Pharmacia also announced that its Board of Directors intends to proceed with its
previously announced spin-off of its remaining 84% ownership of Monsanto (NYSE:
MON) to its current


                                     -more-
<PAGE>
                                      -2-


shareholders. After the Monsanto spin-off, Pfizer will exchange 1.4 shares of
Pfizer common stock for each outstanding share of Pharmacia stock in a tax-free
transaction valued at $45.08 per Pharmacia share, based on Pfizer's July 12
closing stock price of $32.20. This transaction represents a 44% premium based
on the average closing prices of the two stocks over the last 30 days, adjusted
for the Monsanto spin-off.

"This is an extraordinary opportunity to combine two of the fastest-growing and
most innovative pharmaceutical companies and to position Pfizer for sustained
long-term leadership of the global pharmaceutical industry," said Hank
McKinnell, chairman and chief executive officer of Pfizer. "By combining with
Pharmacia, we are ensuring that our core capabilities in the discovery,
development and commercialization of new medicines are strong around the world.

"Our industry is changing rapidly. Remarkable advances in the scientific
understanding of the origins of disease will sharply increase drug discovery
targets and will create major opportunities for Pfizer. But it is increasingly
costly to fund the high-risk and long-term research required to develop
pharmaceutical products. At the same time, payers and providers want high value
and affordable medicines.

"We intend to meet these challenges head on. Our new company will be positioned
to deliver a stream of innovative new products and cost-effective health care
solutions. With Pharmacia, we will have the products, pipeline, scale, and
financial flexibility to extend our leadership."

"Combining Pfizer with Pharmacia is a strategic opportunity that immediately
creates a global pharmaceutical company with unsurpassed resources and
capabilities," said Fred Hassan, chairman and chief executive officer of
Pharmacia Corporation.

                                     -more-

<PAGE>
                                      -3-


"Our companies are already highly effective partners as shown by the
extraordinary success of the COX-2 products. A strategic combination with the
industry leader, Pfizer, will now give us the opportunity to maximize the
potential of both our current products and our pipeline.

"We are proud of our Pharmacia people, whose world-class capabilities have
enabled us to deliver outstanding performance and value. We are also pleased
that our shareholders will receive not only an immediate premium for their
shares, but also the opportunity to participate in Pfizer's long-term growth
with its truly outstanding product line and exciting pipeline."

Upon closing of the transaction, Mr. Hassan will become Vice Chairman of Pfizer,
assisting with integration and corporate strategy, and a member of the Pfizer
Board of Directors.

Dr. McKinnell cited other key attributes of the combined company:

      -     A product portfolio unequalled in depth and breadth.

            -     The companies' combined product portfolios are highly
                  complementary.

            -     By combining with Pharmacia, Pfizer will have the opportunity
                  to support as many as 12 products with annual revenues greater
                  than $1 billion.

            -     Category leadership includes key products in cardiovascular,
                  endocrinology, neuroscience, arthritis and inflammation,
                  infectious diseases, urology, ophthalmology and oncology.

            -     The combined portfolio will have a strong patent position.


                                     -more-

<PAGE>
                                      -4-


      -     A stronger pipeline and expanded R&D program.

            -     The combined company will have an R&D pipeline containing
                  nearly 120 new chemical entities in development and over 80
                  additional projects for product enhancements.

            -     The companies' combined R&D budget for 2002 exceeds $7
                  billion, making it by far the largest privately funded
                  biomedical research organization in the world.

            -     With Pharmacia, Pfizer plans to file 20 new drug applications
                  with global regulatory authorities over the next five years.

            -     Pfizer's late-stage pipeline will be enhanced by major
                  Pharmacia products that include eplerenone, a new category of
                  treatment for cardiovascular diseases; parecoxib, the first
                  injectable selective COX-2 inhibitor; and CDP-870 for
                  rheumatoid arthritis.

      -     Enhanced scale and financial flexibility.


            -     Pfizer and Pharmacia will have combined annual revenues for
                  2002 of approximately $48 billion, including $39 billion in
                  prescription sales.

            -     Already the leading pharmaceutical company in the United
                  States and Canada, Pfizer with Pharmacia will move from fourth
                  to first in Europe; from third to first in Japan; and from
                  fifth to first in Latin America in pharmaceutical sales.

            -     Synergies will be phased in, starting at $1.4 billion in 2003
                  and increasing to $2.2 billion in 2004 and $2.5 billion in
                  2005.

"By combining Pfizer with Pharmacia, we will have the financial and human
resources to bring new product opportunities to the market and to fund them to
their full potential. We met or


                                     -more-

<PAGE>
                                      -5-


exceeded all of our targets in the integration of Warner-Lambert, and we
anticipate another successful integration given that our two organizations have
worked so successfully on Celebrex and Bextra," Dr. McKinnell said.

                             KEY PRODUCT HIGHLIGHTS

Karen Katen, executive vice president of Pfizer and president of Pfizer's global
pharmaceutical business, said: "The combination of Pharmacia's portfolio with
Pfizer's brand-name franchises represents a superb opportunity to strengthen our
relationships with prescribing physicians and continue patient education and
outreach focused on helping people live longer and healthier lives. With
Pharmacia, we are ensuring that millions of patients around the world will
continue to benefit from our skill in developing therapies for cancer,
cardiovascular disease, mental health, respiratory and infectious diseases, eye
disease, and many other areas of medical need. Our medical mission has never
been more important, and as we look ahead with excitement and anticipation, I am
especially proud of Pfizer people and their dedication to the needs of
patients."

Ms. Katen reviewed the key new products that will be added to Pfizer's portfolio
of major products:

      -     In 1999, Pfizer and Pharmacia jointly introduced the
            anti-inflammatory Celebrex, the first-in-class selective COX-2
            inhibitor. It was the most successful new product launch ever in the
            industry. This medicine has become the number one branded treatment
            for arthritis in the world, and it has been prescribed to more than
            35 million patients worldwide. With its recent approval in the U.S.
            for acute pain and for dysmenorrhea, Celebrex has the most complete


                                     -more-

<PAGE>
                                      -6-


            range of approved indications among selective COX-2 inhibitors on
            the market today.

      -     Pfizer and Pharmacia sales representatives began promoting a second
            selective COX-2 inhibitor, Bextra, in April, 2002. Together,
            Celebrex and Bextra now account for over 23% of new NSAID
            prescriptions. In addition, launches of Bextra and parecoxib
            (branded Dynastat in Europe) are in progress in a number of
            international markets. Pharmacia is currently conducting studies to
            support the NDA filing for parecoxib in the U.S.

      -     Pharmacia's Xalatan (latanoprost ophthalmic solution) lowers eye
            pressure in patients with open-angle glaucoma not controlled by
            other medications. This revolutionary treatment for glaucoma is now
            the leading ophthalmic prescription medicine in the world.

      -     Pharmacia's Genotropin, the world's top-selling recombinant growth
            hormone, is indicated for the treatment of children and adults with
            growth hormone deficiency. - Pharmacia also has world-class oncology
            products, which include Camptosar for treatment of metastatic
            colorectal cancer as well as therapies for breast cancer.

Most major Pfizer products are patent protected through this decade. For
example, U.S. patents for Lipitor expire in 2010, and for Viagra in 2011.
Pharmacia's most significant U.S. patents expire in the next decade (Celebrex in
2013, Bextra in 2015).

                                 R&D HIGHLIGHTS

Peter B. Corr, Ph.D., senior vice president science and technology for Pfizer,
said: "We will sharpen the focus of our R&D efforts to concentrate on compounds
that can be differentiated as truly innovative in an increasingly competitive
marketplace, deliver our joint late-stage programs to


                                     -more-

<PAGE>
                                      -7-


registration and build our discovery and exploratory human development programs
for the future. The practical impact of combining with Pharmacia is very simple:
we will have many more candidates, more financial flexibility and human
resources to support them, and the best chance to find the maximum number of
innovative medicines. We will also expand our presence into new therapeutic
categories, including the addition of strong oncology and ophthalmology products
to Pfizer's existing R&D programs in these areas. With our expanded global
scientific and medical resources, I am very confident that we will deliver more
and more medical breakthroughs to patients who look to us for new treatments and
cures for a host of serious diseases."

Pharmacia's pipeline includes treatments for cardiovascular disease, CNS
disorders, ophthalmic conditions, infectious diseases, urology, endocrinology,
oncology and arthritis/inflammation. Pharmacia has four compounds undergoing
regulatory review and five Phase III candidates.

                              FINANCIAL INFORMATION

David Shedlarz, executive vice president and chief financial officer of Pfizer,
said: "This acquisition underscores our commitment to redeploying our
substantial financial resources to fund growth opportunities in our core
pharmaceuticals business. Our combination with Pharmacia will greatly strengthen
our global pharmaceuticals business and through it we will gain valuable
efficiencies and productivity improvements."

Mr. Shedlarz cited the following other factors:

      -     Pfizer's shareholders will own approximately 77% of the combined
            company, and Pharmacia's shareholders will own approximately 23%.
            The transaction is expected to close by year-end 2002, subject to
            the approval by shareholders of


                                     -more-

<PAGE>
                                      -8-


            both companies, necessary governmental and regulatory approvals and
            other usual and customary closing conditions.

      -     Excluding the effects of purchase accounting and merger-related
            expenses, the transaction is expected to be non-dilutive to Pfizer's
            2003 adjusted diluted earnings per share and $0.06 accretive in
            2004. (Adjusted earnings is defined in Appendix A.)

      -     In a second-quarter earnings report released this morning, Pfizer
            reaffirmed its guidance of double-digit revenue growth in 2002. The
            company refined its guidance for 2002 diluted EPS, excluding the
            cumulative effect of an accounting change, certain significant items
            and merger-related costs, to $1.58, or 21% growth, which is within
            the range of earlier guidance. Pharmacia released a statement this
            morning that expresses comfort with consensus estimates for the
            second quarter 2002, and reaffirms guidance of $1.52-1.57 EPS for
            the full year 2002.

      -     From 2002 to 2004 on a stand-alone basis, Pfizer expects compounded
            annual revenue growth of 11%, growth in net income of 14%, and
            growth in diluted EPS of 16%, excluding the cumulative effect of the
            change in accounting principle, certain significant items and
            merger-related costs.

      -     On a pro forma basis, the combined entity will have $11.9 billion in
            adjusted earnings and $47.9 billion in revenues in 2002. It is
            forecast to have a compounded annual growth from 2002 to 2004 of 10%
            for revenues and 19% for adjusted earnings. Pro forma revenue of the
            entity is forecast to increase to $57.8 billion, and adjusted
            earnings to $16.7 billion ($2.18 per share), by 2004. Adjusted
            diluted earnings per share of $2.18 in 2004 are $0.06 higher than
            Pfizer's stand-alone estimate of $2.12. (See Appendix B.)

      -     Indicative of the exceptional financial strength of the company,
            Pfizer said that it would expand its previously


                                     -more-

<PAGE>
                                      -9-


            announced share repurchase program from $10 billion to $16 billion
            via open market purchases, as circumstances and prices warrant, as
            well as accelerate the buyback period with the anticipation of
            completing it in 2003.

Dr. McKinnell concluded, "This is a major step toward fulfilling our mission of
becoming the most valued company to patients, customers, colleagues, investors,
business partners, and the communities where we work and live. As a major global
pharmaceutical company, we understand the responsibilities of leadership, and we
will continue to address affordability and access issues. Our continuing
outreach will include innovative policy solutions, as well as expanding
public/private partnerships that address global public health issues.

"By joining with Pharmacia, we will remain at the forefront of medical
innovation, working on behalf of patients to ensure they receive the benefits of
breakthrough medicines."

Pfizer invites investors and the general public to listen, at www.pfizer.com, to
a webcast of a conference call with investment analysts at 11:00 a.m. EDT today,
15 July.

Pfizer was advised by Lazard and Bear Stearns & Co. Inc. Pharmacia was advised
by Goldman, Sachs & Co.

Cadwalader, Wickersham and Taft provided legal counsel to Pfizer and Sullivan &
Cromwell provided legal counsel to Pharmacia.

DISCLOSURE NOTICE: THE INFORMATION CONTAINED IN THIS DOCUMENT IS AS OF JULY 15,
2002. THE COMPANY ASSUMES NO OBLIGATION TO UPDATE ANY FORWARD-LOOKING STATEMENTS
CONTAINED IN THIS DOCUMENT AS A RESULT OF NEW INFORMATION OR FUTURE EVENTS OR
DEVELOPMENTS.

This document and the attachments contain forward-looking information about the
Company's financial results and estimates,


                                     -more-

<PAGE>
                                      -10-


business prospects, and products in research that involve substantial risks and
uncertainties. You can identify these statements by the fact that they use words
such as "anticipate," "estimate," "expect," "project," "intend," "plan,"
"believe," and other words and terms of similar meaning in connection with any
discussion of future operating or financial performance. Among the factors that
could cause actual results to differ materially are the following: the success
of research and development activities and the speed with which regulatory
authorizations and product launches may be achieved; competitive developments
affecting our current growth products; the ability to successfully market both
new and existing products domestically and internationally; difficulties or
delays in manufacturing; trade buying patterns; ability to meet generic and
branded competition after the expiration of the Company's patents; trends toward
managed care and health-care cost containment; possible U.S. legislation
affecting pharmaceutical pricing and reimbursement or Medicare; exposure to
product liability and other types of lawsuits; contingencies related to actual
or alleged environmental contamination; the Company's ability to protect its
intellectual property both domestically and internationally; interest rate and
foreign currency exchange rate fluctuations; governmental laws and regulations
affecting domestic and foreign operations, including tax obligations; changes in
generally accepted accounting principles; any changes in business, political,
and economic conditions due to the threat of future terrorist activity in the
U.S. and other parts of the world, and related U.S. military action overseas;
growth in costs and expenses; changes in our product mix; and the impact of
acquisitions, divestitures, restructurings, product withdrawals, and other
unusual items, including our ability to obtain the anticipated results and
synergies from our announced proposed acquisition of Pharmacia and the increased
uncertainty created by the integration of the two businesses, as well as the
timing and success of the announced exploration of strategic options of the
Adams, Schick-Wilkinson Sword, and Tetra businesses. A further list and
description of these risks, uncertainties, and other matters can be found in the
Company's Annual Report on Form 10-K for the fiscal year ended December 31,
2001, and in its periodic reports on Forms 10-Q and 8-K (if any).


                                     -more-

<PAGE>
                                      -11-


APPENDIX A. ACCOUNTING INFORMATION - ADJUSTED EARNINGS

GAAP NET INCOME

      +     Cumulative effect of change in accounting principle(1)

      +     Certain significant items(1)

      +     Effect of purchase price allocations on assets

            -     Write-off of in-process R&D

            -     Amortization of identifiable intangibles

            -     Effect of write-up of assets to fair market value

      +     Merger-related costs

            -     Integration expenses

            -     Restructuring charges

      =     ADJUSTED EARNINGS

(1) See Pfizer Second Quarter Earnings Release.


                                     -more-

<PAGE>

                                      -12-



APPENDIX B. FINANCIAL INFORMATION

<TABLE>
<CAPTION>
                                                                       2002-2004
                              2002            2003          2004        CAGR
                              ----            ----          ----        ----
<S>                           <C>             <C>           <C>        <C>
PFIZER

Total Revenues                $35.1           $39.0         $42.9         11%
Net Income(1)                 $ 9.8           $11.3         $12.7         14%
Diluted EPS(1)                $1.58           $1.84         $2.12         16%

COMBINED ENTITY

Total Revenues                $47.9(2)(+)     $52.8(2)      $57.8(2)      10%(2)
Adjusted Earnings(3)          $11.9(+)        $14.4         $16.7         19%
Adjusted Diluted EPS(3)          --           $1.84         $2.18
</TABLE>


(1) Excludes the cumulative effect of change in accounting principle, certain
significant items and merger-related costs.

(2) Adjusted to reflect the elimination of the impact of the COX-2 co-promotion
agreement.

(3) As defined in Appendix A.

(+) Pro forma shown for comparison purposes only; closing anticipated by
year-end 2002.

</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----
