PFIZER INC, PRE 14A, 1999-02-19

PFIZER INC
PRE 14A, 1999-02-19
PHARMACEUTICAL PREPARATIONS

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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the Securites Exchange Act of 1934
(Amendment No. )

Filed by the Registrant /x/
Filed by a Party other than the Registrant / /

Check the appropriate box:

/x/ Preliminary Proxy Statement

/ / Confidential, for the use of the Commission only (as permitted by
Rule 14a-6(e)(2)

/ / Definitive Proxy Statement

/ / Definitive Additional Materials

/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12

PFIZER INC.
- --------------------------------------------------------------------------------
(Name of Registrant As Specified In Its Charter)

- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

/x/ No fee required.

/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

1) Title of each class of securities to which transaction applies:

- --------------------------------------------------------------------------------

2) Aggregate number of securities to which transaction applies:

- --------------------------------------------------------------------------------

3) Per unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11:* ____________________________________________________

4) Proposed maximum aggregate value of transaction:_____________________________

5) Total fee paid: ____________________________________________________________

/ / Fee paid previously with preliminary materials.

/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the form or schedule and the date of its filing.

1) Amount previously paid: _____________________________________________________

2) Form, Schedule or Registration Statement No._________________________________

3) Filing party: _______________________________________________________________

4) Date filed:__________________________________________________________________

- -----------
*Set forth the amount on which the filing fee is calculated and state how it was
determined.

<PAGE>

[PFIZER LOGO OMITTED]

PROXY STATEMENT
March 12, 1999

[GRAPHIC OMITTED]

<PAGE>

HOW TO VOTE

Shareholders of record can vote any one of three ways:

o By Telephone: Call the toll-free telephone number on your proxy card to
vote by phone.

o Via Internet: Visit the web site on your proxy card to vote via the
Internet.

o By Mail: Mark, sign, date and mail your proxy card to First Chicago
Trust Company, a division of EquiServe, in the enclosed postage-paid
envelope.

If your shares are held in the name of a bank, broker or other holder of
record, you will receive instructions from the holder of record that you must
follow in order for your shares to be voted. Telephone and Internet voting also
will be offered to shareholders owning stock through certain banks and brokers.

REDUCE DUPLICATE MAILINGS

If you are a shareholder of record and have more than one account in your
name or at the same address as other shareholders of record, you may authorize
us to discontinue mailings of multiple Annual Reports. To discontinue mailings
of multiple Annual Reports, mark the designated box on the appropriate proxy
card(s), or follow the prompts when you vote if you are a shareholder of record
voting by telephone or Internet. Most shareholders can also view Proxy
Statements and Annual Reports over the Internet rather than receiving paper
copies in the mail. See your proxy card for further information.

<PAGE>

PFIZER INC.
235 EAST 42ND STREET
NEW YORK, NY 10017

--------------------------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
--------------------------------------------

TIME ...................... 10:00 a.m. on Thursday, April 22, 1999

PLACE ..................... Grand Hyatt Hotel
Empire State Ballroom
42nd Street and Lexington Avenue
New York City

ITEMS OF BUSINESS ......... (1) To elect five members of the Board of
Directors for three year terms.

(2) To approve KPMG LLP as our independent
auditors for the 1999 fiscal year.

(3) To approve a proposal to amend the
Company's Restated Certificate of
Incorporation to increase the number of
authorized shares of the Company's
common stock.

(4) To approve amendments to the Stock and
Incentive Plan to increase the number of
shares of common stock authorized to be
issued under the Plan and to extend the term
of the Plan to December 31, 2008.

(5) To transact such other business as may
properly come before the Meeting and any
adjournment or postponement.

RECORD DATE ............... You can vote if you are a shareholder of record
on February 26, 1999.

ANNUAL REPORT ............. Our 1998 Annual Report, which is not a part of
the proxy soliciting material, is enclosed.

PROXY VOTING .............. It is important that your shares be represented
and voted at the Meeting. Please vote in one of
these ways:

(1) USE THE TOLL-FREE TELEPHONE NUMBER shown on
the proxy card (this call is free in the
U.S.);

(2) VISIT THE WEB SITE noted on your proxy card
to vote via the Internet; OR

(3) MARK, SIGN, DATE AND PROMPTLY RETURN the
enclosed proxy card in the postage-paid
envelope.

Any proxy may be revoked at any time prior
to its exercise at the Meeting.
</TABLE>

C. L. Clemente
March 12, 1999 Secretary

<PAGE>

TABLE OF CONTENTS
--------------------------------------------------------------------

PAGE
PROXY STATEMENT .................................................... 1
Annual Meeting Admission .......................................... 1
Shareholders Entitled to Vote ..................................... 1
Proxies ........................................................... 1
Vote by Telephone ................................................. 2
Vote by Internet .................................................. 2
Vote by Mail ...................................................... 2
Voting at the Annual Meeting ...................................... 2
Voting on Other Matters ........................................... 2
Consolidation of Your Vote ........................................ 3
List of Shareholders .............................................. 3
Required Vote ..................................................... 3
Multiple Copies of Annual Report to Shareholders .................. 3
Electronic Access to Proxy Materials and Annual Report ............ 4
Cost of Proxy Solicitation ........................................ 4
Shareholder Account Maintenance ................................... 4
Section 16(a) Beneficial Ownership Reporting Compliance ........... 4

GOVERNANCE OF THE COMPANY .......................................... 5
Our Corporate Governance Principles ............................... 5
Board and Committee Membership .................................... 8
The Audit Committee .............................................. 8
The Corporate Governance Committee ............................... 9
The Executive Compensation Committee ............................. 9
The Executive Committee .......................................... 9
Compensation of Directors ......................................... 10
Fees and Benefit Plans for Non-Employee Directors ................ 10
Related Transactions ............................................. 11
Indemnification .................................................. 11

ITEM 1-ELECTION OF DIRECTORS ....................................... 12
Security Ownership of Directors and Officers ...................... 12
Nominees for Directors Whose Terms Expire in 2002 ................. 13
Directors Whose Terms Expire in 2000 .............................. 15
Directors Whose Terms Expire in 2001 .............................. 18
Named Executive Officers Who Are Not Directors .................... 21

ITEM 2-APPROVAL OF AUDITORS ........................................ 22

ITEM 3-INCREASE IN AUTHORIZED COMMON STOCK ......................... 23

ITEM 4-APPROVAL OF AMENDMENTS TO THE PFIZER INC. STOCK AND INCENTIVE
PLAN TO INCREASE THE NUMBER OF SHARES OF COMMON STOCK AUTHORIZED TO
BE ISSUED UNDER THE PLAN AND TO EXTEND THE TERM OF THE PLAN TO
DECEMBER 31, 2008 .................................................. 24
The Operation of the Plan ......................................... 25
STOCK OPTIONS .................................................... 25
STOCK AWARDS ..................................................... 26
STOCK APPRECIATION RIGHTS ........................................ 26
PERFORMANCE UNIT AWARDS .......................................... 26
TANDEM AWARDS .................................................... 27
Tax Consequences .................................................. 27
INCENTIVE STOCK OPTIONS .......................................... 27
NON-QUALIFIED STOCK OPTIONS ...................................... 27

<PAGE>

STOCK APPRECIATION RIGHTS .......................................... 27
STOCK AWARDS ...................................................... 27
PERFORMANCE UNIT AWARDS ........................................... 27

EXECUTIVE COMPENSATION .............................................. 29
Summary Compensation Table ......................................... 29
Total Options Exercised in 1998 and Year-End Values ................ 30
Option Grants in 1998 .............................................. 30
Long-Term Incentive Plan Awards in 1998 ............................ 31
Executive Compensation Committee Report ............................ 32
Performance Graph .................................................. 37
Employee Benefit and Long-Term Compensation Plans .................. 38

REQUIREMENTS, INCLUDING DEADLINES, FOR SUBMISSION OF PROXY PROPOSALS,
NOMINATION OF DIRECTORS AND OTHER BUSINESS OF SHAREHOLDERS .......... 41

EXHIBIT 1 ........................................................... i

<PAGE>

PFIZER INC.
235 EAST 42ND STREET
NEW YORK, NEW YORK 10017

PROXY STATEMENT
- --------------------------------------------------------------------------------

The proxy materials are delivered in connection with the solicitation by
the Board of Directors of Pfizer Inc. ("Pfizer," the "Company," "we," or "us"),
a Delaware corporation, of proxies to be voted at our 1999 Annual Meeting of
Shareholders and at any adjournment or postponement.

You are invited to attend our Annual Meeting of Shareholders on April 22,
1999, beginning at 10:00 a.m. The Meeting will be held at the Grand Hyatt Hotel,
Empire State Ballroom, at 42nd Street and Lexington Avenue, New York, New York.
Shareholders will be admitted beginning at 9:00 a.m.

The Empire State Ballroom is accessible to disabled persons and, upon
request, we will provide wireless headsets for hearing amplification. Sign
interpretation will also be offered upon request. Please call us in advance at
212-573-2265 if you require either of these services or other special
accommodations.

This Proxy Statement, form of proxy and voting instructions are being
mailed starting March 12, 1999.

ANNUAL MEETING ADMISSION

An admission ticket, which is required for entry into the Annual Meeting,
is attached to your proxy card. If you plan to attend the Annual Meeting, please
vote your proxy but keep the admission ticket and bring it to the Annual
Meeting.

If your shares are held in the name of a bank, broker or other holder of
record and you plan to attend the Meeting, you can obtain an admission ticket in
advance by providing proof of ownership, such as a bank or brokerage account
statement, to Pfizer Inc., c/o First Chicago Trust Company, a division of
EquiServe, P.O. Box 8923, Edison, New Jersey 08818-8923, or by calling
212-733-4679. If you do not have an admission ticket, you must show ownership of
Pfizer common stock at the door.

SHAREHOLDERS ENTITLED TO VOTE

Holders of record of Pfizer common stock at the close of business on
February 26, 1999 are entitled to receive this notice and to vote their shares
at the Annual Meeting. As of that date, there were _______________ shares of
common stock outstanding. Each share of common stock is entitled to one vote on
each matter properly brought before the Meeting.

PROXIES

YOUR VOTE IS IMPORTANT. Shareholders of record may vote their proxies by
telephone, Internet or mail. A toll-free telephone number and web site address
are included on your proxy card. If you choose to vote by mail, a postage-paid
envelope is provided.

Proxies may be revoked at any time before they are exercised by:

o written notice to the Secretary of the Company,

o timely delivery of a valid, later-dated proxy or

o voting by ballot at the Annual Meeting.

YOU MAY SAVE US THE EXPENSE OF A SECOND MAILING BY VOTING PROMPTLY. Choose
ONE of the following voting methods to cast your vote.

<PAGE>

HOW TO VOTE
- --------------------------------------------------------------------------------

VOTE BY TELEPHONE

You can vote your shares by telephone by calling the toll-free telephone
number (at no cost to you) on your proxy card. Telephone voting is available 24
hours a day. Easy-to-follow voice prompts allow you to vote your shares and
confirm that your instructions have been properly recorded. Our telephone voting
procedures are designed to authenticate shareholders by using individual control
numbers. If you vote by telephone you can also give us instructions to
discontinue future duplicate Annual Reports. IF YOU VOTE BY TELEPHONE YOU DO NOT
NEED TO RETURN YOUR PROXY CARD. IF YOU ARE LOCATED OUTSIDE THE U.S. AND CANADA,
SEE YOUR PROXY CARD FOR ADDITIONAL INSTRUCTIONS.

VOTE BY INTERNET

You can also choose to vote via the Internet. The web site for Internet
voting is on your proxy card. Internet voting is available 24 hours a day, AND
WILL BE ACCESSIBLE UNTIL 10:00 A.M. ON APRIL 21, 1999. As with telephone voting,
you will be given the opportunity to confirm that your instructions have been
properly recorded, and you can give us instructions to discontinue future
duplicate Annual Reports. IF YOU VOTE VIA THE INTERNET YOU DO NOT NEED TO RETURN
YOUR PROXY CARD.

VOTE BY MAIL

If you choose to vote by mail, simply mark your proxy, date and sign it,
and return it to First Chicago in the postage-paid envelope provided. If you
wish to discontinue future duplicate Annual Reports, check the box provided on
the card.

VOTING AT THE ANNUAL MEETING

The method by which you vote now will not limit your right to vote at the
Annual Meeting if you decide to attend in person. If your shares are held in the
name of a bank, broker or other holder of record, you must obtain a proxy,
executed in your favor, from the holder of record to be able to vote at the
Meeting.

All shares that have been properly voted - whether by telephone, Internet
or mail, and not revoked - will be voted at the Annual Meeting. If you sign and
return your proxy card but do not give voting instructions, the shares
represented by that proxy will be voted as recommended by the Board of
Directors.

VOTING ON OTHER MATTERS

If any other matters are properly presented at the Annual Meeting for
consideration, the persons named in the proxy will have the discretion to vote
on those matters for you. At the date this Proxy Statement went to press, we did
not know of any other matter to be raised at the Annual Meeting.

<PAGE>

CONSOLIDATION OF YOUR VOTE

You will receive only one proxy card for all the shares you hold:

o In your own name,

o In the Pfizer Inc. Shareholder Investment Program (the "Program"),

or, if you are a Pfizer employee,

o In the Pfizer Inc. Savings and Investment Plan (the "Plan").

Please note that if you own shares in joint name, and other shares in your
own name, you will receive a separate proxy card for the joint ownership. We can
only consolidate identically named accounts.

Pfizer employees who are entitled to give voting instructions to the
trustee of the Pfizer Inc. Employee Benefit Trust ("Trust") will not need to
complete a separate instruction card. Each vote of the shares consolidated into
the employee's proxy card will be furnished to the trustee of the Trust, as well
as the administrator of the Plan, as the employee's voting instructions for the
Plan shares and the Trust shares.

If you own, or are entitled to give voting instructions for, shares in the
Plan or the Trust and do not vote your shares or give voting instructions, the
Plan administrator will vote your Plan shares in the same proportion as the
shares for which voting instructions have been received. TO ALLOW SUFFICIENT
TIME FOR VOTING BY THE TRUSTEE OF THE TRUST AND THE ADMINISTRATOR OF THE PLAN,
YOUR VOTING INSTRUCTIONS MUST BE RECEIVED BY APRIL 19, 1999.

If you hold Pfizer shares through any other Company plans, you will receive
voting instructions from that plan's administrator.

LIST OF SHAREHOLDERS

A list of shareholders entitled to vote at the Annual Meeting will be
available at the Annual Meeting and for ten days prior to the Meeting, between
the hours of 8:45 a.m. and 4:30 p.m., at our offices at 235 East 42nd Street,
New York, New York, by contacting the Secretary of the Company.

REQUIRED VOTE

The presence, in person or by proxy, of the holders of a majority of the
votes entitled to be cast by the shareholders entitled to vote at the Annual
Meeting is necessary to constitute a quorum. Abstentions and broker "non-votes"
are counted as present and entitled to vote for purposes of determining a
quorum. A broker "non-vote" occurs when a nominee holding shares for a
beneficial owner does not vote on a particular proposal because the nominee does
not have discretionary voting power for that particular item and has not
received instructions from the beneficial owner.

A plurality of the votes cast is required for the election of Directors.
Abstentions and broker "non-votes" are not counted for purposes of the election
of Directors.

The affirmative vote of a majority of the votes cast is required to approve
the appointment of KPMG LLP. Abstentions and broker "non-votes" are not counted
for purposes of approving this matter.

The affirmative vote of a majority of outstanding shares of common stock
entitled to vote is required to approve:

o the proposal to amend the Company's Restated Certificate of Incorporation to
increase the number of authorized shares of common stock, and

o the amendments to our Stock and Incentive Plan to increase the number of
shares authorized to be issued and to extend the term of the Plan.

Abstentions and broker "non-votes" will have the same effect as a vote
cast "against" each of these proposals.

MULTIPLE COPIES OF ANNUAL REPORT TO SHAREHOLDERS

Our 1998 Annual Report to Shareholders has been mailed to shareholders. If
more than one copy of the Annual Report is sent to your address, we will
discontinue the mailing of reports on the accounts you select if you mark the
designated box on the appropriate proxy card(s), or follow the prompts when you
vote

<PAGE>

if you are a shareholder of record voting by telephone or Internet.

At least one account must continue to receive the Annual Report, unless you
elect to view future Annual Reports over the Internet. Mailing of dividends,
Shareholder Investment statements and proxy materials will not be affected by
your election to discontinue future duplicate mailings of the Annual Report. To
discontinue or resume the mailing of an Annual Report to an account, call the
Pfizer Shareholder Services toll free number, 1-800-733-9393.

If you own shares of common stock through a bank, broker or other nominee
and receive more than one Pfizer Annual Report, contact the holder of record to
eliminate duplicate mailings.

ELECTRONIC ACCESS TO PROXY MATERIALS AND ANNUAL REPORT

The notice of Annual Meeting and Proxy Statement and the 1998 Annual Report
are available on our Internet site at www.pfizer.com. Most shareholders can
elect to view future Proxy Statements and Annual Reports over the Internet
instead of receiving paper copies in the mail.

If you are a shareholder of record, you can choose this option and save us
the cost of producing and mailing these documents by checking the appropriate
box on your proxy card or by following the instructions provided if you vote
over the Internet or by telephone. You can also choose between paper documents
and electronic access by calling the Pfizer Shareholder Services toll free
number (800) 733-9393, or signing up on the Internet through
www.vote-by-net.com/signup/pfizer.

If your shares are held through a bank, broker or other holder of record,
check the information provided by that entity for instructions on how to elect
to view future Proxy Statements and Annual Reports over the Internet.

If you are a shareholder of record and choose to view future Proxy
Statements and Annual Reports over the Internet, you will receive a proxy card
in the mail next year with instructions containing the Internet address to
access those documents.

Most shareholders who hold stock through a bank, broker or other holder of
record and who elect electronic access will receive an e-mail next year
containing the Internet address to access our Proxy Statement and Annual Report.

COST OF PROXY SOLICITATION

We will pay the expenses of soliciting proxies. Proxies may be solicited on
our behalf by Directors, officers or employees in person or by telephone,
electronic transmission, and facsimile transmission. We have hired Morrow & Co.
to assist us in the distribution and solicitation of proxies. We will pay Morrow
& Co. a fee of $25,000, plus reasonable expenses for these services.

SHAREHOLDER ACCOUNT MAINTENANCE

Our Transfer Agent is First Chicago Trust Company, a division of EquiServe.
All communications concerning accounts of shareholders of record, including
address changes, name changes, inquiries as to requirements to transfer shares
of common stock and similar issues can be handled by calling the Pfizer
Shareholder Services toll-free number, 1-800-733-9393, or contacting First
Chicago's web site at www.fctc.com. For other information about Pfizer,
shareholders can visit our web site at www.pfizer.com.

In addition, you can access your account through First Chicago's Internet
web site. You can view your current balance, access your account history, sell
or request a certificate for shares held in the Pfizer Shareholder Investment
Program and obtain current and historical stock prices. To access your account
on the Internet, visit http://gateway.fctc.com and type in your issue number,
account number and password. These can be found on your account statement or
dividend check stub.

<PAGE>

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934 requires our Directors
and executive officers to file reports of holdings and transactions in Pfizer
shares with the SEC and the New York Stock Exchange. Based on our records and
other information, we believe that in 1998 our Directors and executive officers
met all applicable SEC filing requirements, except that Ruth J. Simmons, a
Director, inadvertently filed a late Form 4 report covering one purchase
transaction.

GOVERNANCE OF THE COMPANY
- --------------------------------------------------------------------------------
OUR CORPORATE GOVERNANCE PRINCIPLES

ROLE AND COMPOSITION OF THE BOARD OF DIRECTORS

1. The Board of Directors, which is elected by the shareholders, is the
ultimate decision-making body of the Company except with respect to those
matters reserved to the shareholders. It selects the senior management team,
which is charged with the conduct of the Company's business. Having selected the
senior management team, the Board acts as an advisor and counselor to senior
management and ultimately monitors its performance.

2. The Board also plans for succession to the position of Chairman of the
Board and Chief Executive Officer as well as certain other senior management
positions. To assist the Board, the Chairman and CEO annually provides the Board
with an assessment of senior managers and their potential to succeed him/her.
He/she also provides the Board with an assessment of persons considered
potential successors to certain senior management positions.

3. It is the policy of the Company that the Board consist of a majority of
outside Directors and that the number of Directors not exceed a number that can
function efficiently as a body. The Corporate Governance Committee, in
consultation with the Chairman and CEO, considers and makes recommendations to
the Board concerning the appropriate size and needs of the Board. The Corporate
Governance Committee considers candidates to fill new positions created by
expansion and vacancies that occur by resignation, by retirement, or for any
other reason. Candidates are selected for their character, judgment, business
experience, and acumen. Scientific expertise, prior government service, and
familiarity with national and international issues affecting business are among
the relevant criteria. Final approval of a candidate is determined by the full
Board. The Corporate Governance Committee annually reviews the compensation of
Directors. All Directors are expected to own stock in the Company in an amount
that is appropriate for them.

4. It is the general policy of the Company that all major decisions be
considered by the Board as a whole. As a consequence, the committee structure of
the Board is limited to those committees considered to be basic to or required
for the operation of a publicly owned company. Currently these committees are
the Executive Committee, Audit Committee, Executive Compensation Committee, and
Corporate Governance Committee. The members and chairs of these committees are
recommended to the Board by the Corporate Governance Committee in consultation
with the Chairman and CEO. The Audit Committee, Executive Compensation
Committee, and Corporate Governance Committee are made up of only outside
Directors. The membership of these three committees is rotated from time to
time.

<PAGE>

5. In furtherance of its policy of having major decisions made by the Board
as a whole, the Company has a full indoctrination process for new Board members
that includes extensive materials, meetings with key management, and visits to
Company facilities.

6. It is the policy of the Company that the chairs of the Audit, Executive
Compensation, and Corporate Governance committees of the Board each act as the
chair at meetings or executive sessions of the outside Directors at which the
principal items to be considered are within the scope of the authority of his or
her committee. Experience has indicated that this practice, which has been in
place on an informal basis, provides for leadership at all of the meetings or
executive sessions of outside Directors without the need to designate a lead
Director.

7. The Executive Compensation Committee is responsible for setting annual
and long-term performance goals for the Chairman and CEO and for evaluating his
or her performance against such goals. The Committee meets annually with the
Chairman and CEO to receive his or her recommendations concerning such goals.
Both the goals and the evaluation are then submitted for consideration by the
outside Directors of the Board at a meeting or executive session of that group.
The Committee then meets with the Chairman and CEO to evaluate his or her
performance against such goals. The Executive Compensation Committee is also
responsible for setting annual and long-term performance goals and compensation
for the direct reports to the Chairman and CEO. These decisions are approved or
ratified by action of the outside Directors of the Board at a meeting or
executive session of that group.

8. It is the policy of the Company that the positions of Chairman of the
Board and Chief Executive Officer be held by the same person, except in unusual
circumstances. This combination has served the Company well over a great many
years. The function of the Board in monitoring the performance of the senior
management of the Company is fulfilled by the presence of outside Directors of
stature who have a substantive knowledge of the business.

9. The Chairman and CEO is responsible for establishing effective
communications with the Company's stakeholder groups, i.e., shareholders,
customers, company associates, communities, suppliers, creditors, governments,
and corporate partners. It is the policy of the Company that management speaks
for the Company. This policy does not preclude outside Directors from meeting
with shareholders, but it is suggested that any such meetings be with management
present.

FUNCTIONING OF THE BOARD

1. The Chairman of the Board and Chief Executive Officer sets the agenda
for Board meetings with the understanding that certain items pertinent to the
advisory and monitoring functions of the Board be brought to it periodically by
the Chairman and CEO for review and/or decision. For example, the annual
corporate budget is reviewed by the Board. Agenda items that fall within the
scope of responsibilities of a Board committee are reviewed with the chair of
that committee. Any member of the Board may request that an item be included on
the agenda.

2. Decisions made by the Corporate Management Committee, which is the
Company's senior management committee, are reported to the Board at each meeting
with the understanding that such decisions are subject to change by the Board.

3. Board materials related to agenda items are provided to Board members
sufficiently in advance of Board meetings where necessary to allow the Directors
to prepare for discussion of the items at the meeting.

<PAGE>

4. At the invitation of the Board, members of senior management recommended
by the Chairman and CEO attend Board meetings or portions thereof for the
purpose of participating in discussions. Generally, presentations of matters to
be considered by the Board are made by the manager responsible for that area of
the Company's operations. In addition, Board members have free access to all
other members of management and employees of the Company.

5. Executive sessions or meetings of outside Directors without management
present are held at least once each year to review the report of the outside
auditors, the criteria upon which the performance of the Chairman and CEO and
other senior managers is based, the performance of the Chairman and CEO against
such criteria, and the compensation of the Chairman and CEO and other senior
managers. Additional executive sessions or meetings of outside Directors may be
held from time to time as required. Executive sessions or meetings are held from
time to time with the Chairman and CEO for a general discussion of relevant
subjects.

FUNCTIONING OF COMMITTEES

1. The Audit, Executive Compensation, and Corporate Governance committees
consist of only outside Directors.

2. The frequency, length, and agenda of meetings of each of the committees
are determined by the chair of the committee. Sufficient time to consider the
agenda items is provided. Materials related to agenda items are provided to the
committee members sufficiently in advance of the meeting where necessary to
allow the members to prepare for discussion of the items at the meeting.

3. The responsibilities of each of the committees are determined by the
Board from time to time.

PERIODIC REVIEW

These principles are reviewed by the Board from time to time.

<PAGE>

BOARD AND COMMITTEE MEMBERSHIP

Our business, property and affairs are managed under the direction of our
Board of Directors. Members of our Board are kept informed of our business
through discussions with our Chairman and Chief Executive Officer and other
officers, by reviewing materials provided to them, by visiting our offices and
plants, and by participating in meetings of the Board and its committees.

During 1998, the Board of Directors met 12 times and had four ongoing
committees. Those committees consisted of an Audit Committee, a Corporate
Governance Committee, an Executive Compensation Committee, and an Executive
Committee. All of our Directors attended 75 percent or more of the regularly
scheduled and special meetings of the Board and Board committees on which they
served in 1998.

The table below provides membership and meeting information for each of the
Board committees.

- --------------------------------------------------------------------------------
CORPORATE EXECUTIVE
NAME AUDIT GOVERNANCE COMPENSATION EXECUTIVE
- ------------------------- ------- ------------ -------------- ----------
Dr. Brown .............. X
Mr. Burns .............. X* X
Mr. Cornwell ........... X
Mr. Harvey ............. X*
Ms. Horner ............. X* X
Dr. Ikenberry .......... X X
Mr. Kamen .............. X
Mr. Labrecque .......... X
Mr. Mead ............... X
Mr. Raines ............. X
Dr. Simmons ............ X
Mr. Steere ............. X*
Dr. Valles ............. X
1998 Meetings .......... 6 7 6 0
* Chair
- --------------------------------------------------------------------------------

THE AUDIT COMMITTEE

The Audit Committee is responsible for recommending the annual appointment
of the public accounting firm to be our outside auditors, subject to approval by
the Board and the shareholders. The Committee:

o reviews with the outside auditors the scope of the audit, the auditors' fees
and related matters;

o receives copies of the annual comments from the outside auditors on
accounting procedures and systems of control;

o reviews with the outside auditors any questions, comments or suggestions
they may have relating to our internal controls, accounting practices or
procedures or those of our subsidiaries;

o reviews with management and the outside auditors our annual and quarterly
financial statements and any material changes in accounting principles or
practices used in preparing the statements;

o reviews the programs of our Internal Audit Department, including procedures
for assuring implementation of accepted recommendations made by the outside
auditors, and receives summaries of all audit reports issued by the Internal
Audit Department; and

<PAGE>

reviews compliance with laws, regulations, and internal procedures, contingent
liabilities and risks that may be material to us.

THE CORPORATE GOVERNANCE COMMITTEE

The Corporate Governance Committee is responsible for considering and
making recommendations to the Board concerning the appropriate size, function,
and needs of the Board. This responsibility includes:

o considering and recommending candidates to fill new positions on the Board;

o reviewing candidates recommended by shareholders;

o conducting inquiries into the backgrounds and qualifications of possible
candidates; and

o recommending the Director nominees for approval by the Board and the
shareholders.

The Committee's additional functions are:

o to consider questions of possible conflicts of interest of Board members and
of our senior executives;

o to monitor and recommend the functions of the various committees of the
Board;

o to recommend members of the committees;

o to advise on changes in Board compensation;

o to make recommendations on the structure of Board meetings; and

o to recommend matters for consideration by the Board.

The Committee also:

o considers and reviews our Corporate Governance Principles;

o reviews, periodically, our Shareholder Rights Plan;

o establishes Director retirement policies;

o reviews the functions of the senior officers and makes recommendations on
changes;

o reviews the job performance of officers and other senior executives with the
Chairman and CEO;

o reviews the outside activities of senior executives; and

o reviews with the Chairman and CEO the succession plans relating to officer
positions.

THE EXECUTIVE COMPENSATION COMMITTEE

The Executive Compensation Committee is responsible for establishing annual
and long-term performance goals for our elected officers. This responsibility
includes establishing the compensation and evaluating the performance of the
Chairman and CEO and other elected officers. In addition, the Committee:

o determines and certifies the shares awarded under the Performance-
Contingent Share Award Program;

o grants options and awards under the Stock and Incentive Plan;

o advises on the setting of compensation for senior executives whose
compensation is not otherwise set by the Committee;

o monitors compliance by officers with our program of required stock
ownership; and

o publishes an annual Executive Compensation Committee Report for the
shareholders.

THE EXECUTIVE COMMITTEE

The Executive Committee performs such duties and exercises the powers
delegated to it by the Board of Directors.

<PAGE>

COMPENSATION OF DIRECTORS

- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CASH RETAINER AND MEETING FEES
ANNUAL BOARD AND
BOARD/COMMITTEE BUSINESS COMMITTEE
DIRECTOR RETAINER MEETING FEES* MEETING FEES TOTAL
- -------- ----------------- --------------- -------------- ----------
<S> <C> <C> <C> <C>
Dr. Brown .............. $30,000 $33,000 $10,500 $73,500
Mr. Burns .............. 32,000 30,000 10,500 72,500
Mr. Cornwell ........... 30,000 33,750 9,750 73,500
Mr. Harvey ............. 31,500 36,000 12,000 79,500
Ms. Horner ............. 32,000 33,000 10,500 75,500
Dr. Ikenberry .......... 30,500 31,500 10,500 72,500
Mr. Kamen .............. 30,000 18,000 7,500 55,500
Mr. Labrecque .......... 30,000 24,000 10,500 64,500
Mr. Mead ............... 30,000 30,000 7,500 67,500
Mr. Raines ............. 7,500 3,000 3,000 13,500
Dr. Simmons ............ 30,000 27,000 9,000 66,000
Dr. Valles ............. 30,000 30,000 9,000 69,000
* Includes fees relating to a trip by the Board to visit our offices and plants in several
Latin American countries.
</TABLE>
- --------------------------------------------------------------------------------

FEES AND BENEFIT PLANS FOR NON-EMPLOYEE DIRECTORS

ANNUAL CASH RETAINER FEES. Non-employee Directors receive an annual cash
retainer fee of $26,000 per year. Non-employee Directors who serve on one Board
committee or more (other than the Executive Committee) receive an additional
annual fee of $4,000. In addition, the Chair of a Board committee receives an
additional $2,000 per year, per committee.

MEETING FEES. Non-employee Directors also receive a fee of $1,500 for
attending each Board meeting, committee meeting, the Annual Meeting of
Shareholders, each day of a visit to a plant or office of ours or our
subsidiaries, and for attending any other business meeting to which the Director
is invited as a representative of the Company.

UNIT AWARDS. On the day of the 1998 Annual Meeting of Shareholders, all of
our non-employee Directors who continued as Directors were awarded 1,200 units
under the Pfizer Inc. Nonfunded Deferred Compensation and Unit Award Plan for
Non-Employee Directors (the "Unit Award Plan"). Upon joining the Board on
October 1, 1998, Mr. Raines received an initial award of 1,200 units under the
Unit Award Plan.

Under the Unit Award Plan, Directors who are not our employees may defer
all or a part of their annual cash retainers and meeting fees until they cease
to be Directors. At the Director's election, the fees held in the Director's
account may be credited either with interest at the rate of return of the
Intermediate Bond Fund of the Pfizer Inc. Savings and Investment Plan, or with
units. The units are calculated by dividing the amount of the fee by the closing
price of our common stock on the last business day before the date that the fee
would be paid. The units in a Director's account are increased by the value of
any distributions on the common stock. When a Director ceases to be a Director,
the amount held in the Director's account is paid in cash. The amount paid is
determined by multiplying the number of units in the account by the closing
price of the common stock on the last business day before the payment date.

Also under the Unit Award Plan, non-employee Directors are granted an
initial award of 1,200 units when they become a Director. Afterwards, each
non-employee Director is granted an annual award of 1,200 units ("Annual Unit
Award") on the day of our Annual Meeting, provided the Director continues to
serve as a Director following the meeting. The awards under the Unit Award

<PAGE>

Plan are made in addition to the Directors' annual cash retainers and meeting
attendance fees. Such units are not payable until the recipients cease to be
Directors.

RETAINER UNIT AWARDS

On the day of the 1998 Annual Meeting of Shareholders, all non-employee
Directors who continued as Directors were also awarded 258 units under the
Pfizer Inc. Annual Retainer Unit Award Plan. Under this Plan, Directors receive
the equivalent of their annual retainer fee in similarly restricted units. These
awards are in addition to the Annual Unit Awards, the Directors' annual cash
retainers and meeting attendance fees, and are made annually on the day of our
Annual Meeting. The number of units awarded to the non-employee Directors is
based upon the five-day average of the closing trading price of our common stock
on the New York Stock Exchange for the first five trading days after April 1 of
each year (rounded up to the nearest unit). TRUSTS. In certain circumstances, we
are obligated to fund trusts established to secure our obligations to make
payments to our Directors under the above benefit plans, programs or agreements
in advance of the time payment is due.

RELATED TRANSACTIONS

From time to time in 1998, we have asked Dr. Brown to provide consulting
services in connection with our business. He received a total of $26,000 for
those services. We anticipate that Dr. Brown will continue to provide similar
services to us in the future as he and we may agree from time to time.

We have business arrangements with organizations with which certain of our
Directors are affiliated. However, none of those arrangements are material to
either us or any of those organizations.

We incurred expenses for the personal use of Company transportation of
$1,590 by Dr. Brown, $1,287 by Dr. Ikenberry, and $1,447 by Mr. Raines.

INDEMNIFICATION

We indemnify our Directors and officers to the fullest extent permitted by
law so that they will serve free from undue concern that they will not be
indemnified. This is required under our By-laws, and we have also signed
agreements with each of those individuals contractually obligating us to provide
this indemnification to them.

<PAGE>

ITEM 1-ELECTION OF DIRECTORS
- --------------------------------------------------------------------------------

The Board of Directors is divided into three classes, with each class
currently consisting of five Directors whose terms expire at successive annual
meetings. Five Directors will be elected at the Annual Meeting to serve for a
three-year term expiring at our Annual Meeting in the year 2002.

The persons named in the enclosed proxy intend to vote the proxy for the
election of each of the five nominees, unless you indicate on the proxy card
that your vote should be withheld from any or all such nominees. If you are
voting by telephone or Internet, you will be instructed how to withhold your
vote from some or all such nominees. Each nominee elected as a Director will
continue in office until his or her successor has been elected, or until his or
her death, resignation or retirement.

The Board of Directors has proposed the following nominees for election as
Directors with terms expiring in 2002 at the Annual Meeting: Michael S. Brown;
Constance J. Horner; Thomas G. Labrecque; Franklin D. Raines and Jean-Paul
Valles.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF THESE NOMINEES
AS DIRECTORS.

We expect each nominee for election as a Director to be able to serve if
elected. If any nominee is not able to serve, proxies will be voted in favor of
the remainder of those nominated and may be voted for substitute nominees,
unless the Board chooses to reduce the number of Directors serving on the Board.

The principal occupation and certain other information about the nominees
and other Directors whose terms of office continue after the Annual Meeting are
set forth on the following pages.

SECURITY OWNERSHIP OF DIRECTORS AND OFFICERS

As of February 26, 1999, the nominees, other Directors, and the named
executive officers of the Company:

o owned beneficially, directly or indirectly, the number of shares of common
stock indicated;

o held options, exercisable within 60 days after that date, to purchase the
number of shares of common stock indicated pursuant to the Company's Stock
and Incentive Plan;

o held the number of units indicated pursuant to the Company's Nonfunded
Deferred Compensation and Unit Award Plan for Non-Employee Directors and the
Company's Annual Retainer Unit Award Plan; and

o held the number of units indicated pursuant to the Company's Supplemental
Savings Plan.

As of that date, no person beneficially owned more than five percent of the
Company's outstanding common stock; all Directors and executive officers as a
group owned ________ shares of common stock and options, exercisable within 60
days after that date, to purchase _________ shares of common stock, which
together amounted to less than one percent of the Company's outstanding common
stock.

<PAGE>

<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNT OF BENEFICIAL
OWNERSHIP OF SHARES OF
NAME AND AGE AS OF THE POSITION, PRINCIPAL OCCUPATION, COMMON STOCK,(1)
APRIL 22, 1999 MEETING DATE BUSINESS EXPERIENCE AND DIRECTORSHIPS OPTIONS AND UNITS
- ----------------------------- --------------------------------------- -----------------------
</TABLE>
- --------------------------------------------------------------------------------
NOMINEES FOR DIRECTORS WHOSE TERMS EXPIRE IN 2002
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
MICHAEL S. BROWN ..58 Distinguished Chair in Biomedical Sciences Shares: 400
from 1989 and Regental Professor from 1985 Units: 4,535(2)
[GRAPHIC OMITTED] at the University of Texas Southwestern
Medical Center at Dallas. Co-recipient of the
Nobel Prize in Physiology or Medicine in 1985
and the National Medal of Science in 1988.
Member of the National Academy of Sciences.
Director of Regeneron Pharmaceuticals, Inc.
Our Director since 1996. Member of our
Corporate Governance Committee.
- ----------------------------------------------------------------------------------------------
CONSTANCE J. HORNER ..57 Guest Scholar since 1993 at The Brookings Shares: 6,196
Institution, an organization devoted to Units: 6,562(2)
[GRAPHIC OMITTED] nonpartisan research, education and
publication in economics, government and
foreign policy and the social sciences.
Commissioner of the U.S. Commission on Civil
Rights from 1993 to 1998. Served at the White
House as Assistant to the President and as
Director of Presidential Personnel from
August 1991 to January 1993. Deputy
Secretary, U. S. Department of Health and
Human Services from 1989 to 1991. Director
of the U. S. Office of Personnel Management
from 1985 to 1989. Director of Foster Wheeler
Corporation, Ingersoll-Rand Company and
The Prudential Insurance Company of
America. Our Director since 1993. Chair of our
Corporate Governance Committee and
member of our Executive Committee.

- -----------------------------------------------------------------------------------------------
</TABLE>

<PAGE>

- ---------------------------------------------------------------------------------------------

FRANKLIN D. RAINES ..50 Chairman and Chief Executive Officer of Shares: 0
Fannie Mae, a company that provides a Units: 1,330(2)
[GRAPHIC OMITTED] secondary market for residential mortgages
through portfolio purchases, issuance of
mortgage-backed securities, and other
services, since January 1999. Director of the
Office of Management and Budget for the
Clinton administration from 1996 to 1998.
Director of America Online Inc. A former
Director of Pfizer from 1993 to 1996, Mr.
Raines was re-elected to our Board in October
1998. Member of our Audit Committee.

- ---------------------------------------------------------------------------------------------
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNT OF BENEFICIAL
OWNERSHIP OF SHARES OF
NAME AND AGE AS OF THE POSITION, PRINCIPAL OCCUPATION, COMMON STOCK,(1)
APRIL 22, 1999 MEETING DATE BUSINESS EXPERIENCE AND DIRECTORSHIPS OPTIONS AND UNITS
- ----------------------------- --------------------------------------- -----------------------
</TABLE>
- --------------------------------------------------------------------------------
NOMINEES FOR DIRECTORS WHOSE TERMS EXPIRE IN 2002
(CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
JEAN-PAUL VALLES ..62 Chairman of Minerals Technologies Inc. Shares: 263,060(4)
("MTI"), a resource and technology-based Units: 19,376(2)
[GRAPHIC OMITTED] company that develops, produces and markets
specialty mineral, mineral-based and synthetic
mineral products, since 1989. Chief Executive
Officer of MTI since 1992. Formerly our Vice
Chairman from March to October 1992, and served
in a number of our executive positions, including
Executive Vice President from 1991 to 1992.
Director of the National Association of
Manufacturers. Our Director since 1980. Member of
our Audit Committee.
</TABLE>
- --------------------------------------------------------------------------------
DIRECTORS WHOSE TERMS EXPIRE IN 2000
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
M. ANTHONY BURNS ..56 Chairman of the Board since 1985, Chief Shares: 6,800
Executive Officer since 1983, President and Units: 6,562(2)
[GRAPHIC OMITTED] Director since 1979 of Ryder System, Inc., a
provider of transportation and logistics
services. Director of The Chase Manhattan
Bank, The Chase Manhattan Corporation and
J. C. Penney Company, Inc. Trustee of the
University of Miami. Member of the Business
Council, the Business Roundtable and the
Business Roundtable's Policy Committee and
Chair of its Health and Retirement Task Force.
Our Director since 1988. Chair of our
Executive Compensation Committee and
Member of our Executive Committee.

- ---------------------------------------------------------------------------------------------
</TABLE>
15

<PAGE>

<TABLE>
<S> <C> <C>
GEORGE B. HARVEY ..68 Former Chairman, President, and Chief Shares: 6,380
Executive Officer from 1983 through 1996, Units: 15,230(2)
[GRAPHIC OMITTED] and Director from 1980 through 1996, of
Pitney Bowes Inc., a provider of mailing and
office systems and management and financial
services. Director of McGraw-Hill, Inc., Merrill
Lynch & Co., Inc., and Massachusetts Mutual
Life Insurance Company. Our Director since
1994. Chair of our Audit Committee.

- ---------------------------------------------------------------------------------------------------

STANLEY O. IKENBERRY.. 64 President since 1996 of the American Council Shares: 13,241(4)
on Education, an independent nonprofit Units: 36,340(2)
[GRAPHIC OMITTED] association dedicated to ensuring high-quality
education at colleges and universities
throughout the United States. President from
1979 through July 1995, of the University of
Illinois. Director of Utilicorp United Inc.
Member of the Board of Trustees of the
Carnegie Foundation for the Advancement of
Teaching. Member of the Board of Overseers
of Teachers' Insurance & Annuity Association -
College Retirement Equities Fund
(TIAA-CREF). Director of the National Museum
of Natural History, Smithsonian Institution.
Our Director since 1982. Member of our
Corporate Governance and Executive
Committees.

- ---------------------------------------------------------------------------------------------------
</TABLE>

<PAGE>

<TABLE>
<S> <C> <C>
HARRY P. KAMEN ..65 Former Chairman of the Board and Chief Shares: 840
Executive Officer from 1993 through June Units: 7,031(2)
[GRAPHIC OMITTED] 1998, and President from 1995 through November
1997, of Metropolitan Life Insurance Company, a
multi-service insurance provider. Director of
Bethlehem Steel Corporation, Nvest L.P. and Banco
Santander (Spain). Vice Chairman of the
Conference Board, Director of the New York City
Partnership, the National Association of
Securities Dealers, Inc., and Member of The
Business Council of New York State. Our Director
since 1996. Member of our Corporate
Governance Committee.

- ---------------------------------------------------------------------------------------------

JOHN F. NIBLACK ..60 Executive Vice President since 1993. Shares: 173,598(4)
Responsible for our Central Research, Animal Options: 159,920
[GRAPHIC OMITTED] Health, Licensing and Development, Units: 8,985(3)
Corporate Quality Assurance and Medical
Affairs Divisions. Dr. Niblack was elected our
Vice President - Central Research in 1990. Our
Director since June 1997.

- ---------------------------------------------------------------------------------------------
</TABLE>

<PAGE>

- --------------------------------------------------------------------------------------------------

HENRY A. MCKINNELL ..56 Executive Vice President since 1992 and Shares: 170,694(5)
President - Pfizer Pharmaceuticals Group since Options: 340,336
[GRAPHIC OMITTED] January, 1997. Responsible for our Consumer Units: 13,329(3)
Health Care and Corporate Strategic Planning
and Policy Groups since 1995, and for our
Medical Technology Group from 1992 to 1995.
Our Chief Financial Officer from 1990 through
1996. Director of Aviall, Inc., Dun & Bradstreet
Corp., and John Wiley & Sons, Inc. Also a
Director of the Pharmaceutical Research and
Manufacturers of America (PhRMA), the
Healthcare Leadership Council, the
Committee for Economic Development and
the National Association of Manufacturers.
Member of the Board of Trustees of the New
York Public Library and the New York City
Police Foundation. Our Director since June
1997.

- ----------------------------------------------------------------------------------------------------
</TABLE>

<PAGE>

- -------------------------------------------------------------------------------------------

RUTH J. SIMMONS ..53 President since 1995 of Smith College, a Shares: 293
private liberal arts college for women located Units: 4,525(2)
[GRAPHIC OMITTED] in Northampton, Massachusetts. Vice Provost
of Princeton University from 1992 to 1995.
Provost of Spelman College from 1990 to
1991. Director of Metropolitan Life Insurance
Company. Member of The Conference Board.
Fellow of the American Academy of Arts and
Sciences and Member of the Council on
Foreign Relations. Our Director since January
1997. Member of our Audit Committee.

- ---------------------------------------------------------------------------------------------
</TABLE>

<PAGE>

- ---------------------------------------------------------------------------------------------------
</TABLE>

<PAGE>

- ----------------------------------------------------------------------------------------------

C.L. CLEMENTE 61 Our Senior Vice President - Corporate Affairs; Shares: 257,089(4)
Secretary and Corporate Counsel since 1992. Options: 190,264
Mr. Clemente joined us in 1964 and, after Units: 31,745(3)
serving in a number of positions of increasing
responsibility, was elected our Vice President;
General Counsel and Secretary in 1986.
</TABLE>

- ---------------------
(1) As of February 26, 1999, this number includes shares credited for
employee-Directors under the Savings and Investment Plan, or deferred under
the Performance-Contingent Share Award Program. The Plan and the Program are
further described in this Proxy Statement under the heading "Employee
Benefit and Long-Term Compensation Plans."

(2) As of February 26, 1999, these units are held under the Pfizer Inc.
Nonfunded Deferred Compensation and Unit Award Plan for Non-Employee
Directors and the Pfizer Inc. Annual Retainer Unit Award Plan. The value of
a Director's unit account is measured by the price of the common stock. The
Plans are further described in this Proxy Statement under the heading "Fees
and Benefit Plans for Non-Employee Directors."

(3) As of February 26, 1999, these units are held under the Supplemental Savings
Plan. The value of these units is measured by the price of the common stock.
This Plan is further described in this Proxy Statement under the sub-heading
"Savings and Investment Plan."

(4) These shares do not include the following number of shares held in the names
of family members, as to which beneficial ownership is disclaimed: Mr.
Clemente - 8,712 shares; Dr. Ikenberry - 6,000 shares; Mr. Miller - 15,000
shares; Dr. Niblack - 5,836 shares; and Dr. Valles - 47,440 shares.

(5) As of February 26, 1999, this number includes shares held in a grantor
retained annuity trust.

<PAGE>

ITEM 2-APPROVAL OF AUDITORS
- --------------------------------------------------------------------------------

The Board of Directors, upon the recommendation of its Audit Committee, has
appointed KPMG LLP to serve as our independent auditors for 1999, subject to the
approval of our shareholders.

Representatives of KPMG LLP will be present at the Annual Meeting to answer
questions. They will also have the opportunity to make a statement if they
desire to do so.

Total audit fees incurred by us for all independent auditors for 1998 were
approximately $4,925,000, of which approximately $4,775,000 was attributable to
KPMG LLP.

The affirmative vote of a majority of votes cast on this proposal is
required for the approval of this proposal.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE APPROVAL OF KPMG LLP AS
OUR INDEPENDENT AUDITORS FOR THE YEAR 1999.

<PAGE>

ITEM 3-INCREASE IN AUTHORIZED COMMON STOCK
- --------------------------------------------------------------------------------

The Board has unanimously adopted the following resolution, subject to
shareholder approval, amending our Restated Certificate of Incorporation to
increase the number of shares of authorized common stock, par value $.05 per
share, to nine billion (9,000,000,000) shares:

"RESOLVED, that the first paragraph of Article FOURTH of the Restated
Certificate of Incorporation be amended to read as follows:

A. Authorized Shares and Classes of Stock.

The total number of shares and classes of stock that the Company shall have
authority to issue is nine billion twelve million (9,012,000,000) shares, which
shall be divided into two classes, as follows: twelve million (12,000,000)
shares of Preferred Stock, without par value and nine billion (9,000,000,000)
shares of Common Stock of the par value of $.05 per share."

If the proposed amendment is adopted by the shareholders, we plan to file a
Certificate of Amendment to the Restated Certificate of Incorporation to be
effective as soon as practicable following the Annual Meeting of Shareholders.

On December 31, 1998, of the 3,000,000,000 authorized shares of common
stock, a total of 1,294,266,560 shares was outstanding, 113,025,561 shares were
held in the Company's treasury, and 7,562,290 shares were reserved for issuance
under the Shareholder Investment Program. In addition, 42,746,443 shares were
reserved for issuance in connection with our stock based compensation plans. The
remainder of shares of authorized common stock was not issued or subject to
reservation. No shares of authorized Preferred Stock were outstanding.

If the increase in authorized shares is approved, the Board intends,
barring unusual circumstances, to vote on a three-for-one stock split in the
form of a stock dividend at its meeting which follows the Annual Meeting of
Shareholders.

The additional shares will be available for future acquisitions of property
and of securities of other companies and for other corporate purposes. The Board
believes that it is beneficial to us to have the additional shares available for
such purposes without delay or the necessity of a special shareholders' meeting.
We have no immediate plans, arrangements, commitments or understandings with
respect to the issuance of any of the additional shares of common stock which
would be authorized by the proposed amendment.

The additional shares will be available for issuance from time to time
without further action by the shareholders and without first offering such
shares to the shareholders. Shareholders do not have preemptive rights with
respect to the common stock. The issuance of common stock, or securities
convertible into common stock, on other than a pro-rata basis would result in
the dilution of a present shareholder's interest in the Company.

We have not proposed the increase in the authorized number of shares with
the intention of using the additional shares for anti-takeover purposes,
although we could theoretically use the additional shares to make it more
difficult or to discourage an attempt to acquire control of the Company.

The affirmative vote of the holders of a majority of the outstanding shares
of common stock entitled to vote is required for the adoption of the proposed
amendment.

THE BOARD UNANIMOUSLY RECOMMENDS A VOTE FOR THE PROPOSAL TO AMEND THE
RESTATED CERTIFICATE OF INCORPORATION TO INCREASE THE AUTHORIZED NUMBER OF
SHARES OF COMMON STOCK.

<PAGE>

The Pfizer Inc. Stock and Incentive Plan (the "Plan") enables us to grant
stock options, stock awards, stock appreciation rights, performance unit awards
and tandem awards (collectively referred to as "grants") to our employees. Our
shareholders initially approved the Plan in 1965, and since then have approved a
number of amendments to the Plan. Our non-employee Directors are not eligible to
participate in the Plan. The Plan currently expires on December 31, 2005 but,
upon the approval our shareholders, this expiration date will be extended to
December 31, 2008.

The Board believes that the Plan has added substantial value over the
years. By allowing us to offer employees long-term performance-based
compensation, such as stock options, the Plan enables us to attract, motivate
and retain experienced and highly qualified employees who contribute to our
continuing financial success.

From the Plan's inception in 1965, through December 31, 1998, options
covering 381,482,404 shares (including options that subsequently terminated or
lapsed and were regranted under the terms of the Plan) have been granted to
employees. From 1965 through December 31, 1998, options for 249,356,970 shares
have been exercised. A total of 83,203,733 shares were subject to outstanding
options as of such date, leaving 3,425,803 shares available for future options
or awards. As of February 26, 1999, a total of shares were subject to
outstanding options, leaving shares available for future options or awards.

The Board believes that an additional share reserve will allow us to
continue to provide the necessary incentives to our employees over the years.
Accordingly, the Board adopted amendments to the Plan, subject to shareholder
approval, to increase the total number of shares of common stock available for
issuance under the Plan by an additional 55 million shares and to extend the
term of the Plan to December 31, 2008.

If you approve the current proposal to increase the number of shares
authorized to be issued under the Plan, a total of approximately 58,425,803
shares will be available for future options or awards under the Plan.

In addition to the broader general terms of the Plan, the Company has
committed that: (1) no more than 5 million shares will be granted as restricted
stock or equivalent awards having no exercise price; (2) the balance of the new
shares will be granted under options with an exercise price of no less than the
fair market value of the underlying stock at the time of grant, a term of no
longer than 10 years, and a vesting period of one or more years from the grant
date; and (3) the options will not be repriced without our shareholders'
approval.

Since 1991, we successfully completed four stock purchase programs. Under
the last completed program, we purchased more than 26 million shares at a total
cost of $2 billion. In September, 1998, we began a new program to purchase up to
$5 billion worth of our shares. We purchase additional shares as a means of
returning excess capital to shareholders. We intend to continue purchasing
shares with the goal of substantially preventing dilution from the Plan and
other share issuances.

The language of the proposed amendments is attached to this Proxy Statement
as Exhibit 1. The principal features of the Plan are described below.

<PAGE>

THE OPERATION OF THE PLAN

The Plan is administered by the Employee Compensation and Management
Development Committee. However, only the Executive Compensation Committee - a
committee comprised of non-employee Directors of the Company - is authorized to
administer those portions of the Plan relating to the grant of stock options,
stock, appreciation rights and grants or awards made to employees who are
Directors and/or executive officers of the Company. The current members of the
Executive Compensation Committee are Mr. Burns (Chair), Mr. Labrecque and Mr.
Mead. The current members of the Employee Compensation and Management
Development Committee are Mr. Steere (Chair), Dr. McKinnell, Dr. Niblack, Mr.
Shedlarz (Senior Vice President and Chief Financial Officer), and Mr. Robison
(Senior Vice President Employee Resources). The Employee Compensation and
Management Development Committee and the Executive Compensation Committee will
be referred to together as the "Plan Committees."

In the event of any change in the outstanding shares of common stock that
occurs by reason of a stock dividend, stock split, recapitalization, merger,
consolidation, combination, exchange of shares or other similar corporate
change, the aggregate number of shares of common stock subject to each
outstanding option under the Plan, and its stated option price, are
automatically adjusted.

Within certain limits, the Board has the right to alter, amend or revoke
the Plan. However, the Board must have the approval of the shareholders:

o to alter or amend the Plan to increase the maximum number of shares of common
stock that may be issued under the Plan or the number of such shares that may
be issued to any one participant;

o to extend the term of the Plan or of options granted under it;

o to reduce the option price below that now provided for under the Plan; or

o to change certain conditions of the exercise of options.

The proceeds received by us from the sale of stock under the Plan are added
to our general funds.

STOCK OPTIONS

The price of any stock option granted may not be less than the fair market
value of the stock on the date the option is granted. The option price is
payable in cash or, if the grant provides, in common stock. Generally, no option
may be exercised during the first year of its term or such longer period as may
be specified in the option. The Plan allows the Board to make all unvested stock
options immediately exercisable upon a change of control of the Company. A
"change in control" would include:

o the acquisition by a third party of 20% or more of our common stock,

o a merger,

o liquidation, or

o sale of substantially all of our assets.

The Plan also allows the Plan Committees to make options that are not yet
exercisable, immediately exercisable:

o where an optionee's employment is to be terminated due to a divestiture or a
downsizing by us;

o for a retiring optionee who holds options with extended vesting provisions;
or

o to prevent inequities.

All unexercised options terminate after a certain number of years, or
earlier, depending upon the optionee's termination of employment, retirement,
death, or breach of any provision of the option. The Plan Committees determine
the term of each stock option grant at the time of the grant. The term of any
incentive stock option may not exceed ten years from the date of grant. Shares
under options that have terminated or lapsed, including options that have been
surrendered unexercised, may be made subject to further options or awards.

<PAGE>

There are approximately 45,000 employees worldwide who are currently
eligible to participate in the Plan, including 21 executive officers. In 1998,
21 executive officers were collectively granted a total of 1,400,303 options for
ten years at $105.63 per share (the then-current market price) under the Plan.
During the same period, 22,571 other employees were granted a total of
16,190,587 options for ten years. Of this amount, 16,171,587 options were
granted at the same price per share; 15,000 options were granted at $88.38 per
share, and 4,000 options were granted at $107.66 per share. Three of the Named
Executive Officers of the Company - Mr. Steere, Dr. McKinnell and Dr. Niblack
are also Directors of the Company. The options received under the Plan in 1998
by these three Named Executive Officers and the Company's other Named Executive
Officers are set forth in the table entitled "Option Grants in 1998."

On February 26, 1999, the closing price of the common stock traded on the
New York Stock Exchange was $_____ per share, as reported in THE WALL STREET
JOURNAL.

STOCK AWARDS

The Plan provides for the granting of stock awards that generally vest only
after one year of additional service, and which consist of shares of common
stock issued to participating employees as additional compensation for their
services to us.

In 1998, five employees received the right to earn up to a maximum of
59,400 shares of common stock, in the aggregate, under the Plan. The potential
size of these awards is determined by using the same non-discretionary formula
that is used to determine awards made under the Performance-Contingent Share
Award Program, which is discussed under the heading "Employee Benefit and
Long-Term Compensation Plans" later in the Proxy Statement. The performance
periods for these awards range from two to five years. To the extent that our
performance exceeds the low end of the range of the performance of our Peer
Group in either or both of the performance criteria, a varying amount of common
stock up to the maximum aggregate amount will be earned by these employees at
the end of the applicable performance period.

In addition, in 1998, five of our executive officers received restricted
stock awards under the Plan totaling 1,300 shares, and one other employee
received a restricted stock award totaling 100 shares. All of these awards will
vest over a three-year period. Prior to vesting, shares will be subject to
forfeiture if these individuals do not continue as our employees during the
restricted period, unless their employment ends as a result of disability, death
or a change in control of the Company.

STOCK APPRECIATION RIGHTS

The Plan permits the granting of stock appreciation rights to the holders
of stock options under the Plan. These rights replace the ability of the
recipient to exercise the related option, and instead would entitle the
recipient to elect to receive, without payment to us:

o a number of shares of common stock determined under a formula set forth in
the Plan; or

o if provided in the terms of the award, cash as determined under such formula;
or

o a combination of cash and shares.

We have not issued any stock appreciation rights since 1980.

PERFORMANCE UNIT AWARDS

The Plan permits the granting of performance unit awards, consisting of
unvested performance units which are credited to participating employees. The
initial value of each unit is determined by reference to the book or market
value of the common stock or to our earnings or such other criteria related to
our performance as the Plan Committees deem appropriate. No performance unit
award will vest prior to one year after the date of the award. Performance unit
awards are payable in cash

<PAGE>

or, if so provided in the terms of the award, in shares of common stock.

We have not issued any performance unit awards under the Plan.

TANDEM AWARDS

The Plan also permits the granting of tandem awards which provide for a
right of election among two or more of the following: an option, which may
include a stock appreciation right; a performance unit award; and a stock award.

We have not issued any tandem awards under the Plan.

TAX CONSEQUENCES

The following information relates only to certain federal tax consequences
in connection with the Plan. State tax treatment is subject to individual state
laws and is not reviewed in this discussion.

INCENTIVE STOCK OPTIONS

An incentive stock option results in no taxable income to the optionee or a
deduction to us at the time it is granted or exercised. If the optionee holds
the stock received as a result of an exercise of a stock option for at least two
years from the date of the grant and one year from the date of exercise, then
the gain is treated as long-term capital gain. If the shares are disposed of
during this period, the option will be treated as a non-qualified stock option.
We receive a tax deduction only if the shares are disposed of during such
period. The deduction is equal to the amount of taxable income to the optionee.

NON-QUALIFIED STOCK OPTIONS

A non-qualified stock option results in no taxable income to the optionee
or deduction to us at the time it is granted. An optionee exercising such an
option will, at that time, realize taxable compensation in the amount of the
difference between the option price and the then market value of the shares.
Subject to the applicable provisions of the Internal Revenue Code of 1986, as
amended (the "Code"), a deduction for federal income tax purposes will be
allowable to us in the year of exercise in an amount equal to the taxable
compensation realized by the optionee.

STOCK APPRECIATION RIGHTS

No income will be recognized by the recipient of a stock appreciation right
until shares representing the amount of the appreciation or the cash equivalent,
if so elected, are transferred to the recipient pursuant to the exercise of the
right. The amount of such income will be equal to the fair market value of such
shares on the exercise date (or the cash equivalent), and will be ordinary
income. Subject to the applicable provisions of the Code, we will be entitled to
a deduction at the same time and in the same amount as the employee realizes
ordinary income as a result of the exercise of the right.

STOCK AWARDS

No income will be recognized by the recipient of a stock award if such
award is subject to a substantial risk of forfeiture. Generally, at the time the
substantial risk of forfeiture terminates with respect to a stock award, the
then fair market value of the stock will constitute ordinary income to the
employee. Subject to the applicable provisions of the Code, a deduction for
federal income tax purposes will be allowable to us in an amount equal to the
compensation realized by the employee.

PERFORMANCE UNIT AWARDS

The grant of a performance unit award generally will result in taxable
income to the employee on the earlier of actual receipt of compensation pursuant
to the award or when such compensation is credited to the employee's account, or
set apart, or otherwise made available. Subject to the applicable provisions of
the Code, a deduction for federal income tax purposes will be allowable

<PAGE>

to us in an amount equal to the compensation realized by the employee.

The affirmative vote of the holders of a majority of the outstanding shares
of common stock entitled to vote is required for the adoption of the proposed
amendments.

THE BOARD UNANIMOUSLY RECOMMENDS A VOTE FOR THE PROPOSAL TO APPROVE THE
AMENDMENTS TO THE STOCK AND INCENTIVE PLAN TO INCREASE THE NUMBER OF SHARES
AUTHORIZED TO BE ISSUED UNDER THE PLAN AND TO EXTEND THE TERM OF THE PLAN TO
DECEMBER 31, 2008.

28
<PAGE>

EXECUTIVE COMPENSATION
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
--------------------------
ANNUAL COMPENSATION LONG TERM COMPENSATION
----------------------------------------- -------------------------
AWARDS PAYMENTS
------------ ------------
OTHER RESTRICTED SECURITIES
ANNUAL STOCK UNDERLYING LTIP ALL OTHER
NAME AND SALARY BONUS(1) COMPENSATION(2) AWARDS(3) OPTIONS(4) PAYOUTS(5) COMPENSATION(6)
PRINCIPAL POSITION YEAR ($) ($) ($) ($) (#) ($) ($)
- ------------------------ ------ ----------- ----------- ----------------- ------------ ------------ ------------ ----------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Mr. Steere ............ 1998 1,379,700 86,801 0 157,000
Chairman/CEO

" " " ................. 1997 1,316,500 2,545,300 17,968 0 300,000 8,837,500 144,688
" " " ................. 1996 1,190,000 2,300,700 20,747 0 300,000 3,815,000 131,053

- ----------------------------------------------------------------------------------------------------------------------------------
Dr. McKinnell ......... 1998 835,700 29,536 0 72,304
Executive V.P.
" " " ................. 1997 787,000 971,900 37,300 0 130,000 3,535,000 63,584
" " " ................. 1996 704,000 802,600 24,144 0 120,000 1,430,625 57,294

- ----------------------------------------------------------------------------------------------------------------------------------
Dr. Niblack ........... 1998 768,200 4,724 0 62,084
Executive V.P.
" " " ................. 1997 712,600 783,900 4,845 0 120,000 2,969,400 54,324
" " " ................. 1996 640,000 645,500 4,935 0 100,000 1,201,725 50,457

- ----------------------------------------------------------------------------------------------------------------------------------
Mr. Miller ............ 1998 649,100 19,320 31,689 49,500
Senior V.P.;
General Counsel
" " " ................. 1997 619,400 588,400 17,279 0 90,000 2,121,000 43,340
" " " ................. 1996 540,000 464,100 17,912 0 80,000 858,375 35,834

- ----------------------------------------------------------------------------------------------------------------------------------
Mr. Clemente .......... 1998 601,100 17,364 0 42,972
Senior V.P.-
Corporate Affairs;
Secretary and
Corporate Counsel
" " " ................. 1997 573,600 473,200 20,373 0 70,000 1,908,900 38,508
" " " ................. 1996 507,500 389,100 17,117 0 60,000 801,150 39,108

- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

(1) The amounts shown in this column for 1998 constitute the Annual Incentive
Awards made to each officer based on the Board's evaluation of each
officer's performance. These awards are discussed in further detail in the
Executive Compensation Committee Report.

(2) The amounts shown in this column represent tax payments made by us on behalf
of each officer relating to his use of Company transportation and personal
financial counseling. The total for Mr. Steere for 1998 also includes the
aggregate incremental cost to the Company - $59,684 - of providing
perquisites and other personal benefits to him. Of this amount, $53,984
represents the incremental cost of his personal use of Company automobiles
and aircraft. Mr. Steere is required by the Company to travel only on its
aircraft for security reasons.

(3) The amount shown in this column represents the dollar value on the date of
grant (August 27, 1998) of 300 shares of the Company's common stock awarded
as part of Mr. Miller's 1998 compensation. These shares of restricted stock
vest on August 27, 2001. Dividends are paid during the restricted period on
all restricted shares.

(4) Adjusted for our June 1997 two-for-one stock split.

(5) Represents the dollar market value of shares of our common stock on February
12, 1999 (the payment date) earned under the Company's
Performance-Contingent Share Award Program using the closing sales price of
our common stock ($______) on the New York Stock Exchange on that date. The
number of Performance-Contingent Shares awarded to each Named Executive
Officer was as follows: Mr. Steere, _______ shares; Dr. McKinnell, ______
shares; Dr. Niblack, ______ shares; Mr. Miller, ______ shares; Mr. Clemente,
_______shares; and all executive officers and Directors as a group, _______
shares.

(6) The amounts shown in this column represent Company matching funds under our
Savings and Investment Plan (a tax-qualified retirement savings plan) and
related supplemental plan which are discussed under the heading "Employee
Benefit and Long-Term Compensation Plans."

<PAGE>

TOTAL OPTIONS EXERCISED IN 1998 AND YEAR-END VALUES

This table gives information for options exercised by each of the Named
Executive Officers in 1998, and the value (stock price less exercise price) of
the remaining options held by those executive officers at year-end, using the
mean of the high and the low trading price ($126.9688) of our common stock on
December 31, 1998.

NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
OPTIONS HELD AT 12/31/98 AT 12/31/98
----------------------------- ----------------------------
SHARES
ACQUIRED VALUE
ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
NAME (#) ($) (#) (#) ($) ($)
- ------------------------- ------------- ------------ ------------- --------------- ------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Mr. Steere ............ 264,400 21,006,056 710,800 900,000 71,150,523 58,700,520
Dr. McKinnell ......... 78,808 7,471,696 457,436 374,000 47,571,857 23,829,671
Dr. Niblack ........... 104,876 8,719,136 236,000 332,000 23,515,516 20,705,122
Mr. Miller ............ 48,268 3,529,671 173,768 262,000 17,285,393 16,822,686
Mr. Clemente .......... 32,802 2,923,695 262,608 187,000 27,560,995 10,907,676
- ----------------------------------------------------------------------------------------------------------------------------------

</TABLE>

OPTION GRANTS IN 1998

This table shows all options to purchase our common stock granted to each
of our Named Executive Officers in 1998 and the potential value of such grants
at stock price appreciation rates of 0%, 5% and 10%, compounded annually over
the maximum ten-year term of the options. Also shown is the potential gain of
all outstanding shares of common stock held by our shareholders as of December
31, 1998, using the same base price and appreciation rates and compounded over
the same ten-year period. The 5% and 10% rates of appreciation are required to
be disclosed by SEC rules and are not intended to forecast possible future
appreciation, if any, in our stock price.

POTENTIAL REALIZABLE VALUE AT
ASSUMED
INDIVIDUAL ANNUAL RATES OF STOCK PRICE
GRANTS APPRECIATION FOR OPTION TERM ($)
-------------------------------------------------------- ------------------------------------------
NUMBER OF PERCENT OF
SECURITIES TOTAL OPTIONS
UNDERLYING GRANTED TO EXERCISE OR
OPTIONS EMPLOYEES IN BASE PRICE EXPIRATION
NAME GRANTED (#)(1) FISCAL YEAR ($/SH)(2) DATE 0% 5% 10%
---- ---------------- -------------------------- ----------- ---- ------------------ ------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Mr. Steere ................ 300,000 1.71 105.63 8/26/2008 0 19,929,041.83 50,504,104.82
Dr. McKinnell ............. 130,000 0.74 105.63 8/26/2008 0 8,635,918.13 21,885,112.09
Dr. Niblack ............... 120,000 0.68 105.63 8/26/2008 0 7,971,616.73 20,201,641.93
Mr. Miller ................ 90,000 0.51 105.63 8/26/2008 0 5,978,712.55 15,151,231.45
Mr. Clemente .............. 75,000 0.43 105.63 8/26/2008 0 4,982,260.46 12,626,026.20
Potential Gain for all shareholders at Assumed Appreciation Rates ................... 85,978,308,035.86 217,885,913,362.71
</TABLE>

---------------------
(1) Option grants for Named Executive Officers who received grants in 1998
consisted of Key-Employee Grants that are exercisable one fifth on each
anniversary date beginning on August 27, 1999.

(2) The exercise price for all stock option grants shown in this column is the
average of the high and low market price of our common stock on the date of
the grant.

<PAGE>

LONG-TERM INCENTIVE PLAN-AWARDS IN 1998

This table gives information concerning the participation of the Named
Executive Officers in a long-term compensation plan called the
Performance-Contingent Share Award Program. Under this plan, they were awarded
the right to earn shares of our common stock ("Performance-Contingent Shares").
Actual payouts of these Performance-Contingent Shares, if any, will be
determined by a non-discretionary formula which measures our performance over a
five-year period using certain performance goals that were determined by our
Executive Compensation Committee and approved by the Board. The formula is
comprised of two performance criteria, total shareholder return (including
reinvestment of dividends) and growth in diluted earnings per share, over the
performance period relative to the industry Peer Group. If our performance
exceeds the low end of the range of the Peer Group's performance for either or
both of the performance criteria, a varying amount of shares up to the maximum
will be earned. These awards are also discussed in the Executive Compensation
Committee Report.

<TABLE>
<CAPTION>
ESTIMATED FUTURE PAYOUTS UNDER
PERFORMANCE PERIOD (OR NON-STOCK PRICE-BASED PLANS
OTHER PERIOD UNTIL -------------------------------
NAME NUMBER OF SHARES(1) MATURATION OR PAYMENT) THRESHOLD(2) (#) TARGET (#) MAXIMUM (#)
- --------------------- --------------------- ------------------------ ------------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Mr. Steere ......... * 1/1/99 - 12/31/03 10,000 60,000 100,000
Dr. McKinnell. ..... * 1/1/99 - 12/31/03 4,700 28,200 47,000
Dr. Niblack. ....... * 1/1/99 - 12/31/03 4,200 25,200 42,000
Mr. Miller ......... * 1/1/99 - 12/31/03 3,000 18,000 30,000
Mr. Clemente ....... * 1/1/99 - 12/31/03 2,500 15,000 25,000
</TABLE>

- ---------------------
(1) The actual number of Performance-Contingent Shares that will be paid out at
the end of the applicable period, if any, cannot be determined because the
shares earned by the Named Executive Officers will be based upon our future
performance compared to the future performance of the Peer Group.

(2) If our minimum performance in both performance measures is at the low end of
the range relative to the Peer Group, then no Performance-Contingent Shares
will be earned by the Named Executive Officers. To the extent that our
performance exceeds the low end of the range of Peer Group performance, the
minimum shares that will be awarded is shown in the "Threshold" column.

- --------------------------------------------------------------------------------

<PAGE>

EXECUTIVE COMPENSATION COMMITTEE REPORT

Please see the glossary at the end of this report for definitions of the
incentive and long-term compensation awards referred to in this discussion.

OVERVIEW OF COMPENSATION PHILOSOPHY AND PROGRAM

The Executive Compensation Committee establishes the salaries and other
compensation of the executive officers of the Company, including its Chairman
and CEO and other executive officers named in the Compensation Table (the "Named
Executive Officers"). The Committee consists entirely of independent Directors
who are not officers or employees of the Company.

The Company's executive compensation program is designed to:

o retain executive officers by paying them competitively, motivate them to
contribute to the Company's success, and reward them for their performance;

o link a substantial part of each executive officer's compensation to the
performance of both the Company and the individual executive officer; and

o encourage significant ownership of Company common stock by executive
officers.

As discussed below, the program consists of, and is intended to balance,
three elements:

o SALARIES. Salaries are based on the Committee's evaluation of individual job
performance and an assessment of the salaries and total compensation mix
paid by the Company's Peer Group to executive officers holding equivalent
positions. This Peer Group consists of the eleven health care companies
referred to in the Performance Graph that follows this report.

o EXECUTIVE ANNUAL INCENTIVE AWARDS. Executive Annual Incentive Awards are
based on an evaluation of both individual and Company performance against
quantitative and qualitative measures.

o LONG-TERM INCENTIVE COMPENSATION. Long-term incentive awards, which consist
of stock options and Performance-Contingent Share Awards, are designed to
insure that incentive compensation is linked to the long-term performance of
the Company and its common stock.

In addition, the Named Executive Officers and other members of senior
management are expected to own a minimum amount of common stock under the
Company's stock ownership program. The program is intended to further tie the
interests of management to the interests of shareholders.

EVALUATION OF EXECUTIVE PERFORMANCE

The Committee does not rely solely on predetermined formulae or a limited
set of criteria when it evaluates the performance of the Chairman and CEO and
the Company's other executive officers. Instead, the Committee considers:

o management's overall accomplishments;

o the accomplishments of the individual executives;

o the Company's financial performance; and

o other criteria discussed below.

In 1998, management continued to effectively implement its long-term
strategies, which included:

o improving operating margins;

o continuing the implementation of reengineering projects and restructuring
programs;

o divesting non-core businesses;

o maintaining the flow of new product candidates in the Company's research
pipeline; and

o augmenting the Company's research and marketing abilities with key external
collaborations.

The Committee believes that the success of these strategies is evidenced
by:

<PAGE>

o the Company's strong financial performance in 1998;

o the Company's operating margins;

o the breadth of the Company's current product portfolio which resulted in
considerable sales growth in 1998;

o the acceptance of the Company's products in the current marketplace;

o the number of promising product candidates under development by the Company;

o co-promotion arrangements with respect to Celebrex and inhaled insulin; and

o the completion of the divestiture of the Medical Technology Group
businesses.

The Committee also considers management's responses to the changes
occurring within the U. S. marketplace for health care products and services.
The impact of managed care in the health care market continues to be of
particular importance to the Company and its shareholders. It is the Committee's
opinion that, in this uncertain environment, management continues to effectively
develop and implement strategies that position the Company to remain a leader in
the health care industry. In addition, Mr. Steere and his senior management team
are undertaking significant actions to communicate the Company's position on
health care issues to its shareholders, the public and the government. The
success of these efforts and their benefits to the Company cannot, of course, be
quantifiably measured, but the Committee believes they are vital to the
Company's continuing success.

TOTAL COMPENSATION

To establish target total compensation levels of Company executives, the
Committee considers competitive market total compensation. The total
compensation package for each executive is then broken down into the three basic
components indicated above, and discussed in more detail below. In recent years,
the Committee directed a shift in the mix of the Company's executive
compensation towards incentive compensation, with proportionately lesser
emphasis on salaries. This strategy is intended to increase the performance
orientation of the Company's executive compensation, and the Committee intends
to maintain this emphasis in 1999. Based on available public data and the
analysis of its outside compensation advisors, the total compensation of Mr.
Steere and the other Named Executive Officers generally fell in the upper
quartile of total compensation paid by the Peer Group to their executives
holding equivalent positions, and the Committee believes that position was
consistent with the outstanding performance of the Company compared to the Peer
Group.

SALARIES

In setting the 1998 salaries of the Chairman and CEO and the other
executive officers, the Committee:

o evaluated each officer's individual job performance;

o assessed the Company's performance; and

o considered salaries paid by the Peer Group to executive officers holding
equivalent positions.

CHAIRMAN AND CEO. Mr. Steere's salary in 1998 totaled $1,379,700. For 1999,
it has been set at $1, ___,___ which represents a ___% increase from his 1998
salary.

OTHER NAMED EXECUTIVE OFFICERS. The 1998 salaries of the other Named
Executive Officers are shown in the "Salary" column of the Summary Compensation
Table.

EXECUTIVE ANNUAL INCENTIVE AWARDS

In 1997, the Board of Directors adopted and the shareholders approved the
Pfizer Inc. Executive Annual Incentive Plan. Under the terms of this plan a
maximum award of 0.3% of Adjusted Net Income as defined in the plan was
established for each employee participating in the plan. This maximum exceeds
the current level of Annual Incentive Awards made by the Committee and the
Committee will continue to base the awards on Company and individual performance
criteria within the established maximum.

<PAGE>

For 1998, an Annual Incentive Award of $_,____,___ for Mr. Steere was
approved by the Committee and confirmed by the Board. The Annual Incentive
Awards for 1998 paid to each of the Named Executive Officers are shown in the
"Bonus" column of the Summary Compensation Table.

LONG-TERM INCENTIVE COMPENSATION

In 1998, Mr. Steere and the other executive officers participated in the
Company's long-term incentive compensation program. As discussed below, the
program consisted of:

o stock option grants made under the Company's Stock and Incentive Plan; and

o awards made under the Company's Performance-Contingent Share Award Program.

(A) STOCK OPTIONS

The Committee granted Key-Employee Stock Options to each executive officer
in 1998 under the Company's Stock and Incentive Plan. In selecting the size of
the Key-Employee Stock Option grants, the Committee reviewed:

o competitive data relating to similar grants made by the Peer Group to
executive officers holding comparable positions;

o the individual stock ownership of the Company's executive officers; and

o the interrelationship with the Performance-Contingent Share Awards
established for the 1999-2003 performance period for such officers.

CHAIRMAN AND CEO. Based upon this data, Mr. Steere was awarded Key-Employee
Stock Options for 300,000 shares of common stock.

OTHER NAMED EXECUTIVE OFFICERS. The other Named Executive Officers were
awarded the number of Key-Employee Stock Options shown in the table headed
"Option Grants in 1998." The Key-Employee Stock Options of the Named Executive
Officers and all other executive officers will vest over a five-year period,
with 20 percent of the options vesting each year.

Key-Employee Stock Options granted to Mr. Steere and the other Named
Executive Officers, when combined with the value of the Performance-Contingent
Shares that these officers may potentially earn, are targeted by the Committee
to fall at the median range of the value of long-term incentives granted by the
Peer Group to executive officers holding comparable positions.

o This targeting assumes that the Company's performance also falls at the
median of the Peer Group's performance.

o If the Company's actual performance exceeds the median performance of the
Peer Group, however, the total value of long-term incentive awards (which
would include Performance-Contingent Share Awards discussed below) will be
higher than the median awards made by the Peer Group.

o Similarly, if the Company's performance falls below the median performance
of the Peer Group, the total value of the long-term incentive awards would
fall below the median awards of the Peer Group.

(B) PERFORMANCE-CONTINGENT SHARE AWARDS

The Committee also established awards for Mr. Steere and other executive
officers, including the Named Executive Officers, for the 1999-2003 performance
period under the Company's Performance-Contingent Share Award Program (the
"Program"). The potential size of each award, including the maximum number of
shares of common stock that may be earned by each executive officer, was
established by the Committee after examining long-term compensation awarded by
the Peer Group to executive officers holding comparable positions. Payments
pursuant to the awards are determined by using a non-discretionary formula
comprised

<PAGE>

of the following two performance criteria measured over the applicable
performance period relative to the performance of the Peer Group:

o total shareholder return; and

o earnings per share growth.

The performance formula weighs each criterion equally. To the extent that
the Company's performance exceeds the low end of the range of the performance of
the Peer Group in either or both of the performance criteria, a varying amount
of shares of common stock up to the maximum will be earned.

Except for the Program awards established in 1993, which provided for
shorter performance periods, the performance period for all awards made under
the Program is five years. Based on the Company's performance during the
1994-1998 performance period, Mr. Steere and the other Named Executive Officers
earned___,___ Performance-Contingent Shares under the Program award formula
described above.

CHAIRMAN AND CEO. The total number of such shares earned by Mr. Steere for
the 1994-1998 Program was _______. The number of Performance-Contingent Shares
that Mr. Steere may earn at the end of the five-year performance period
(1/1/99-12/31/2003) will range from 0 to 100,000.

OTHER NAMED EXECUTIVE OFFICERS. The total number of shares earned by each
of the Named Executive Officers for the 1994-1998 Program is shown in footnote 5
to the "LTIP Payouts" column of the Summary Compensation Table. The number of
Performance-Contingent Shares that Dr. McKinnell may earn at the end of the
five-year performance period (1/1/99-12/31/2003) will range from 0 to 47,000,
the number of such shares that Dr. Niblack may earn will range from 0 to 42,000,
the number of shares that Mr. Miller may earn will range from 0 to 30,000 and
the number of shares Mr. Clemente may earn will range from 0 to 25,000.

The above information is included in the table headed "Long-Term Incentive
Plan-Awards in 1998."

TAX POLICY ON DEDUCTIBILITY OF COMPENSATION

Section 162(m) of the Internal Revenue Code limits the tax deduction
available to the Company to $1 million for compensation paid (not including
amounts which by agreement are required to be deferred) to the Company's five
most highly compensated officers, unless certain requirements are met. One
requirement is that the Committee consist entirely of outside Directors. The
Committee meets this requirement. Another requirement is that compensation over
$1 million must be based upon Company attainment of performance goals approved
by the shareholders. The Executive Annual Incentive Plan meets this requirement.
In addition, the Company's Stock and Incentive Plan is "performance- based" so
awards under that plan are eligible for exceptions to the deduction limitation.
The Committee expects that all incentive compensation of the Company's five most
highly compensated officers will qualify as a tax deductible expense when paid.

STOCK OWNERSHIP PROGRAM

Upon this Committee's recommendation, the Board adopted a stock ownership
program in August 1993. The program defines "stock ownership" as stock owned by
the executive officer directly or through the Company's Savings and Investment
Plan or awarded pursuant to the Performance- Contingent Share Award Program and
subsequently deferred. Under the guidelines of the program established by the
Committee, which were increased in 1997, employee Directors (currently Mr.
Steere, Dr. McKinnell and Dr. Niblack) own Company common stock equal in value
to at least five times their annual salaries. The program also extends to the
other Named Executive Officers and other members of the Corporate Management
Committee, who own Company common stock equal in value to at least four times
their annual salaries. All other executive officers own Company stock with a
value

<PAGE>

equivalent to three times their annual salaries, and all other participants in
the Performance-Contingent Share Award Program own an amount equal in value to
their annual salary.

GLOSSARY

EXECUTIVE ANNUAL INCENTIVE AWARDS. These awards are annual cash payments
which may be awarded by the Committee pursuant to the Executive Annual Incentive
Award Plan which sets a maximum award of 0.3% of Adjusted Net Income, as defined
in the plan, to each executive officer on the basis of both Company performance
and individual performance over the prior year. Qualitative and quantitative
performance indicators used to serve as the basis for an assessment of the
performance of the executive officers are established by the Committee (and
approved by the Board in the case of the CEO) at the beginning of the
performance period.

KEY-EMPLOYEE STOCK OPTIONS. Stock options granted under the Company's Stock
and Incentive Plan to a select group of management employees in the U. S. and
overseas who are considered to have a substantial impact on the Company's
operations.

PERFORMANCE-CONTINGENT SHARES. These are shares of Pfizer Inc. common stock
that may be awarded by the Committee to the Named Executive Officers and certain
other employees of the Company under the Performance-Contingent Share Award
Program. For shares to be issued to any such officer or employee, however,
certain preestablished Company performance criteria must be met over a
preestablished performance period. This program is described in further detail
under the caption "Performance-Contingent Share Award Program."

STOCK AND INCENTIVE PLAN. This refers to the Pfizer Inc. Stock and
Incentive Plan which is described in further detail in Item 4 and under the
caption "Stock and Incentive Plan."

THE EXECUTIVE COMPENSATION COMMITTEE:

Mr. Burns (Chair)
Mr. Labrecque
Mr. Mead

<PAGE>

PERFORMANCE GRAPH

This graph compares our total shareholder returns (assuming reinvestment of
dividends), the Standard & Poor's ("S&P") 500 Composite Stock Index ("S&P 500"),
and an industry peer index compiled by us that consists of several companies
(the "Peer Group")(1). The graph assumes $100 invested at the per share closing
price of the common stock on the New York Stock Exchange Composite Tape on
December 31, 1993, in Pfizer and each of the other indices.

[FIGURES BELOW REPRESENTS PERFORMANCE GRAPH]

Pfizer Peer Group S&P 500
1993 100.0 100.0 100.0
1994 115.3 113.1 101.3
1995 192.2 177.9 139.4
1996 257.5 222.0 171.4
1997 468.5 331.3 228.6
1998 791.4 479.5 293.9

- ---------------------
(1) The following companies comprise the Peer Group: Abbott Laboratories,
American Home Products Corp., Baxter International Inc., Bristol-Myers
Squibb Company, Colgate-Palmolive Co., Johnson & Johnson, Eli Lilly and
Company, Merck and Co., Inc., Pharmacia & Upjohn Inc., Schering-Plough
Corp., and Warner-Lambert Company. The Peer Group consolidation was done on
a weighted average basis (market capitalization basis, adjusted at the
beginning of each year).

<PAGE>

EMPLOYEE BENEFIT AND LONG-TERM COMPENSATION PLANS

RETIREMENT ANNUITY PLAN

The Retirement Annuity Plan (the "Retirement Plan") is a funded,
tax-qualified, noncontributory defined benefit pension plan that covers certain
employees, including the Named Executive Officers. Benefits under the Retirement
Plan are based upon the employee's years of service and final average earnings
with us and/or our "Associate Companies" and are payable after retirement in the
form of an annuity or a lump sum. Earnings covered by the Retirement Plan are
base pay, bonus, and long-term incentive compensation, excluding gains on stock
option exercises. The amount of annual earnings that may be considered in
calculating benefits under the Retirement Plan is limited by law. For 1999, the
annual limitation is $160,000.

Benefits under our Retirement Plan are calculated as an annuity equal to the
greater of:

o 1.4 percent of the participant's final average earnings for the five highest
calendar years multiplied by years of service, or

o 1.75 percent of such earnings less 1.5 percent of Primary Social Security
benefits multiplied by years of service.

Years of service under these formulas cannot exceed 35. Contributions to the
Retirement Plan are made entirely by us and are paid into a trust fund from
which the benefits of participants will be paid.

The Retirement Plan currently limits pensions paid under the Plan to an
annual maximum of $130,000, payable at age 65. We also have an unfunded
supplemental plan that provides out of our general assets an amount
substantially equal to the difference between the amount that would have been
payable under the Retirement Plan, in the absence of legislation limiting
pension benefits and earnings that may be considered in calculating pension
benefits, and the amount actually payable under the Retirement Plan. In certain
circumstances, we are obligated to fund trusts established to secure obligations
to make payments under the supplemental plan.

PENSION PLAN TABLE

The following table shows, for the final compensation and years of service
indicated, the annual pension benefit, payable commencing upon retirement at age
65 under the present benefit formula of the Retirement Plan and its related
supplemental plan. The estimated retirement benefits have been computed on the
assumptions that:

o payments will be made in the form of a 50 percent joint and survivor annuity
(and both the Plan member and spouse are age 65),

o during the period of employment the employee received annual compensation
increases of six percent, and

o the employee retired as of December 31, 1998.

- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEARS OF SERVICE
- -----------------------------------------------------------------------------------------
REMUNERATION 15 20 25 30 35
- ------------- ------------ ------------ ------------ ------------ -------------
<S> <C> <C> <C> <C> <C>
$ 100,000 $ 17,539 $ 23,385 $ 29,231 $ 35,078 $ 40,924
500,000 100,532 134,043 167,554 201,064 234,575
1,000,000 204,274 272,365 340,457 408,548 476,639
3,000,000 619,241 825,654 1,032,068 1,238,482 1,444,895
5,000,000 1,034,208 1,378,943 1,723,679 2,068,415 2,413,151
9,500,000 1,967,883 2,623,844 3,279,805 3,935,766 4,591,727
12,500,000 2,590,333 3,453,778 4,317,222 5,180,666 6,044,111
15,500,000 3,212,783 4,283,711 5,354,639 6,425,567 7,496,495
18,500,000 3,835,234 5,113,645 6,392,056 7,670,467 8,948,879
21,500,000 4,457,684 5,943,579 7,429,473 8,915,368 10,401,262
</TABLE>

- --------------------------------------------------------------------------------

<PAGE>

As of December 31, 1998, Mr. Steere had 36 years; Dr. McKinnell had 28
years; Dr. Niblack had 31 years; Mr. Miller had 28 years; and Mr. Clemente had
35 years under the Retirement Plan and the supplemental plan. Compensation
covered by the Retirement Plan and its related supplemental plan for the Named
Executive Officers equals the amounts set forth in the 1998 "Salary," "Bonus"
and "LTIP Payouts" columns of the Summary Compensation Table.

PERFORMANCE-CONTINGENT SHARE AWARD PROGRAM

Under the Performance-Contingent Share Award Program, participating
employees may be granted an opportunity by our Executive Compensation Committee
to earn shares of common stock, provided certain performance criteria are met.
The performance formula is nondiscretionary and is comprised of two performance
criteria:

o total shareholder return (including reinvestment of dividends), and

o growth in diluted earnings per share (as reported),

measured point-to-point over the applicable performance period relative to
the performance of the Peer Group. Our 200 most highly compensated employees are
eligible to participate. Except for awards made in 1993, all awards granted
under the Program are based upon a five-year performance period. Awards earned
by the Named Executive Officers under this Program for the performance period
ended December 31, 1998 are shown in the "LTIP Payouts" column of the Summary
Compensation Table. Receipt of shares awarded under this Program may be
deferred.

EXECUTIVE ANNUAL INCENTIVE PLAN

The Named Executive Officers, as well as the other members of our Corporate
Management Committee participate in the Executive Annual Incentive Plan. The
purpose of the Plan is to ensure the tax deductibility of the bonus for the
Company. The maximum individual annual bonus under this plan is 0.3% (three
tenths of one percent) of Adjusted Net Income. The Plan defines "Adjusted Net
Income" to mean income before cumulative effect of accounting changes as shown
on the audited Consolidated Statement of Income of the Company. If income before
cumulative effect of accounting changes is not shown on the Statement, then
Adjusted Net Income will mean net income as shown on the Statement. Receipt of
bonuses paid from this Plan can be deferred until a later date or retirement.
Deferred bonuses may be invested in either a Pfizer unit fund or an
interest-bearing fund.

SAVINGS AND INVESTMENT PLAN

Under the Savings and Investment Plan (the "Savings Plan"), a tax-qualified
retirement savings plan, participating employees may contribute up to 15 percent
of regular earnings into their Savings Plan accounts. A participating employee
may elect to make after-tax contributions, before-tax contributions, or both
after-tax and before-tax contributions. In addition, under the Savings Plan, we
contribute an amount equal to one dollar for each dollar contributed by
participating employees up to the first two percent of their regular earnings
and fifty cents for each additional dollar contributed by employees on the next
four percent of their regular earnings. Our matching contributions are invested
solely in our common stock.

The Savings Plan currently limits the additions that can be made to a
participating employee's account to $30,000 per year. The term "additions"
includes our matching contributions, before-tax contributions made by us at the
request of the participating employee under Section 401(k) of the Code, and
employee after-tax contributions.

Of those additions, the current maximum before-tax contribution is limited
to $10,000 per year. In addition, no more than $160,000 of annual compensation
may be taken into account in computing benefits under the Savings Plan. We have
a supplemental plan to pay out of general assets an amount substantially equal
to the difference between

<PAGE>

the amount that, in the absence of legislation limiting such additions and the
$160,000 limitation on earnings, would have been allocated to a participating
employee's account as employee before-tax contributions, our matching
contributions and the amount actually allocated under the Savings Plan.

Employees affected by these limitations who make deferrals of income under
this supplemental plan receive credit for such deferrals towards their
retirement benefit under our retirement plans. In certain circumstances, we are
obligated to fund trusts established to secure obligations to make payments
under the supplemental plan.

Amounts deferred, if any, under the Savings Plan and the related
supplemental plan by the Named Executive Officers are included in the "Salary"
and "Bonus" columns of the Summary Compensation Table. Our matching
contributions allocated to the Named Executive Officers under the Savings Plan
and the related supplemental plan are shown in the "All Other Compensation"
column of the Summary Compensation Table.

STOCK AND INCENTIVE PLAN

Under the Stock and Incentive Plan, our employees may be granted stock
options, stock appreciation rights, stock awards (including restricted stock
awards and performance-based stock awards), or performance unit awards, either
as a result of a general grant or as a result of an award based on having met
certain performance criteria. Where an employee is also an officer, the
performance criteria are determined by the Executive Compensation Committee. Our
non-employee Directors are not eligible to participate in this Plan. The Stock
and Incentive Plan is described in greater detail in Item 4 of this Proxy
Statement.

SEVERANCE AGREEMENTS

We have entered into severance agreements with our executive officers,
including each of the Named Executive Officers. The agreements continue through
September 30, 1999, and provide that they are to be automatically extended in
one-year increments unless we give prior notice of termination.

These agreements are intended to provide for continuity of management in
the event of a change in control. The agreements provide that covered executive
officers could be entitled to certain severance benefits following a change in
control of the Company. If, following such a change in control, the executive
officer is terminated for any reason, other than for disability or for cause, or
if such executive officer terminates his or her employment for good reason (as
defined in the agreements), then the executive officer is entitled to a
severance payment that will be 2.99 times the greater of (i) the executive
officer's base amount, as defined in the agreements or (ii) the sum of the
executive officer's (a) base salary in effect at the time of termination and (b)
the higher of the (x) last full-year annual incentive payment or (y) target
annual incentive payment for the year in which termination occurs. The severance
payment generally would be made in the form of a lump sum.

In addition, in the event of such a termination following a change in
control, under the agreements each executive officer would receive a payout of
all outstanding Performance-Contingent Share Awards that had been granted prior
to the date of termination at the maximum amounts that could have been earned
pursuant to the awards, along with all shares earned but deferred in accordance
with the deferral feature of the Performance-Contingent Share Award Program. The
executive officer would also receive a benefit payable from our general funds
calculated using the benefit calculation provisions of our Retirement Annuity
Plan and our unfunded Supplemental Retirement Plan with the following additional
features:

o the executive officer would receive credit for an additional three years of
service and compensation for purposes of calculating such benefit;

<PAGE>

o the benefit would commence at age 55 (or upon the date of termination, if
the executive officer is then over age 55) and for this purpose, three years
would be added to the executive officer's age;

o such benefit would be further determined without any reduction on account of
its receipt prior to age 65; and

o such benefit would be offset by any amounts otherwise payable under our
Retirement Annuity Plan and unfunded Supplemental Retirement Plan.

The executive officer would also become vested in all other benefits
available to our retirees including retiree medical coverage. All restrictions
on restricted stock awarded to such executive officer would lapse and all
unvested options granted to such executive officer would vest and become
exercisable for the remainder of the term of the option.

If a change in control occurs, the agreements are effective for a period of
four years from the end of the then existing term. Under the severance
agreements, a change in control would include any of the following events:

o any "person", as defined in the Securities Exchange Act of 1934, as amended,
acquires 20 percent or more of our voting securities;

o a majority of our Directors are replaced during a two-year period; or

o shareholders approve certain mergers, or a liquidation or sale of our
assets.

In the event that any payments made in connection with a change in control
would be subjected to the excise tax imposed by Section 4999 of the Code, we
will "gross up" the executive officer's compensation for all federal, state and
local income and excise taxes and any penalties and interest.

In certain circumstances, we are obligated to fund trusts established to
secure our obligations to make payments under the severance agreements in
advance of the time payment is due.

REQUIREMENTS, INCLUDING DEADLINES, FOR SUBMISSION OF PROXY
PROPOSALS, NOMINATION OF DIRECTORS AND OTHER BUSINESS OF
SHAREHOLDERS
- --------------------------------------------------------------------------------

Under the rules of the SEC, if a shareholder wants us to include a proposal
in our Proxy Statement and form of proxy for presentation at our 2000 Annual
Meeting of Shareholders, the proposal must be received by us, attention: Mr. C.
L. Clemente, Secretary, at our principal executive offices by November 13, 1999.

Under our By-laws, and as permitted by the rules of the SEC, certain
procedures are provided which a shareholder must follow to nominate persons for
election as Directors or to introduce an item of business at an annual meeting
of shareholders. These procedures provide that nominations for Director nominees
and/or an item of business to be introduced at an annual meeting of shareholders
must be submitted in writing to the Secretary of the Company at 235 East 42nd
Street, New York, NY 10017-5755. We must receive the notice of your intention to
introduce a nomination or proposed item of business at our 2000 Annual Meeting
no later than:

o 60 days in advance of the 2000 Annual Meeting if it is being held within 30
days preceding the anniversary date (April 22, 1999) of this year's meeting;
or

o 90 days in advance of such meeting if it is being held on or after the
anniversary date of this year's meeting.

For any other annual or special meeting, the nomination or item of business
must be received by the tenth day following the date of public disclosure of the
date of the meeting.

Our annual meeting of shareholders is generally held on the fourth Thursday
of

<PAGE>

April. Assuming that our 2000 Annual Meeting is held on schedule, we must
receive notice of your intention to introduce a nomination or other item of
business at that meeting by February 27, 2000. If we do not receive notice by
that date, or if we meet other requirements of the SEC rules, the persons named
as proxies in the proxy materials relating to that meeting will use their
discretion in voting the proxies when these matters are raised at the meeting.

The nomination must contain the following information about the nominee:

o name;

o age;

o business and residence addresses;

o principal occupation or employment;

o the number of shares of common stock held by the nominee;

o the information that would be required under the rules of the SEC in a Proxy
Statement soliciting proxies for the election of such nominee as a Director;
and

o a signed consent of the nominee to serve as a Director of the Company, if
elected.

Notice of a proposed item of business must include:

o a brief description of the substance of, and the reasons for, conducting
such business at the annual meeting;

o the shareholder's name and address;

o the number of shares of common stock held by the shareholder (with
supporting documentation where appropriate); and

o any material interest of the shareholder in such business.

The Board is not aware of any matters that are expected to come before the
Annual Meeting other than those referred to in this Proxy Statement. If any
other matter should come before the Annual Meeting, the persons named in the
accompanying proxy intend to vote the proxies in accordance with their best
judgment.

The chairman of the meeting may refuse to allow the transaction of any
business not presented beforehand, or to acknowledge the nomination of any
person not made, in compliance with the foregoing procedures.

- --------------------------------------------------------------------------------

Whether or not you plan to attend the Meeting, please vote by telephone or
Internet or mark, sign, date and promptly return the enclosed proxy in the
enclosed envelope. The toll-free number to vote by telephone is at no cost to
you. No postage is required for mailing in the United States.

By order of the Board of Directors,

C. L. Clemente
March 12, 1999 Secretary

<PAGE>

EXHIBIT 1

STOCK AND INCENTIVE PLAN
(New material underlined. Material to be deleted
shown as stricken.)

***

3. TOTAL NUMBER OF SHARES

Subject to the provisions of Section 6(h), the maximum amount of stock
which may be issued under the Plan is 338,000,000 393,000,000* shares of the
Common Stock of the Company (comprised of 24,000,000* shares authorized in 1965,
24,000,000* shares authorized in 1969, 24,000,000** shares authorized in 1972,
24,000,000** shares authorized in 1975, 24,000,000** shares authorized in 1980,
40,000,000*** shares authorized in 1983, 44,000,000*** shares authorized in
1986, 44,000,000*** shares authorized in 1989, 44,000,000**** shares authorized
in 1992, and 46,000,000***** shares authorized in 1996 and 55,000,000 shares
authorized in 1999). No participant shall be granted (i) options which would
result in such participant receiving more than 480,000* shares of the total
number of shares authorized in 1965, more than 480,000* shares of the total
number of shares authorized in 1969, or more than 480,000** shares of the total
number of shares authorized in 1972, or (ii) options or awards which would
result in such participant receiving more than 480,000** shares of the total
number of shares authorized in 1975, more than 800,000** shares of the total
number of shares authorized in 1980, more than 800,000*** shares of the total
number of shares authorized in 1983, more than 1,200,000*** shares of the total
number of shares authorized in 1986, more than 1,200,000*** shares of the total
number of shares authorized in 1989, more than 1,200,000**** shares of the total
number of shares authorized in 1992, more than 1,200,000***** shares of the
total number of shares authorized in 1996, or more than 1,500,000 shares of the
total number of shares authorized in 1999, or (iii) any option, stock award or
performance unit award which would result in ownership by such participant of
more than ten percent of the stock of the Company within the meaning of Section
422 of the Internal Revenue Code, or (iv) any incentive stock option, as defined
in Section 422 of the Internal Revenue Code, granted after December 31, 1986,
which would result in such participant receiving a grant of incentive stock
options for stock that would have an aggregate fair market value in excess of
$100,000, determined as of the time that the option is granted, that would be
exercisable for the first time by such participant during any calendar year. No
option with respect to any shares authorized in 1975 shall be granted to the
extent that shares authorized in 1972 are available therefor, or with respect to
any shares authorized in 1980 to the extent that shares authorized in 1972 or
shares authorized in 1975 are available therefor, or with respect to any shares
authorized in 1983 to the extent that shares authorized in 1972, 1975 or 1980
are available therefor, or with respect to any shares authorized in 1986 to the
extent that shares authorized in 1972, 1975, 1980 or 1983 are available
therefor, or with respect to any shares authorized in 1989 to the extent that
shares authorized in 1972, 1975, 1980, 1983, or 1986 are available therefor, or
with respect to any shares authorized in 1992 to the extent that shares
authorized in 1972, 1975, 1980, 1983, 1986 or 1989 are available therefor, or
with respect to any shares authorized in 1996 to the extent that shares
authorized in 1972, 1975, 1980, 1983, 1986, 1989, or 1992 are available
therefor, or with respect to any shares authorized in 1999 to the extent that
shares authorized in 1972, 1975, 1980, 1983, 1986, 1989, 1992, or 1996 are
available therefor. With respect to all options and stock awards granted on or
after January 1, 1972, the records of the Company shall specify the number of
shares authorized in 1965, the number of shares authorized in 1969, the number
of shares authorized in 1972, the number of shares authorized in 1975, the
number of shares authorized in 1980, the number of shares authorized in 1983,
the number of shares authorized in 1986, the number of shares authorized in
1989, the number of shares authorized in 1992, and the number of shares
authorized in 1996 and the number of shares authorized in 1999 covered by such
options or awards. None of the shares authorized in 1965, 1969 or 1972 shall be
available for stock awards.

***

<PAGE>

5. TERM OF PLAN

No option with respect to shares authorized in or prior to 1969 under this
Plan shall be granted pursuant to this Plan after December 31, 1978, no option
with respect to shares authorized in 1972 shall be granted pursuant to this Plan
after December 31, 1992, no option, stock appreciation right or stock award,
with respect to shares authorized in 1975 shall be granted pursuant to this Plan
after December 31, 1992, no option, stock appreciation right, stock award,
performance unit award or tandem award with respect to shares authorized in 1980
shall be granted pursuant to this Plan after December 31, 1992, no option, stock
appreciation right, stock award, performance unit award or tandem award with
respect to shares authorized in 1983 shall be granted pursuant to this Plan
after December 31, 1992, no option, stock appreciation right, stock award,
performance unit award or tandem award with respect to shares authorized in 1986
shall be granted pursuant to this Plan after December 31, 1995, no option, stock
appreciation right, stock award, performance unit award or tandem award with
respect to shares authorized in 1989 shall be granted pursuant to this Plan
after December 31, 1998, no option, stock appreciation right, stock award,
performance unit award or tandem award with respect to shares authorized in 1992
shall be granted pursuant to this Plan after December 31, 2001, no option, stock
appreciation right, stock award, performance unit award or tandem award with
respect to shares authorized in 1996 shall be granted pursuant to this Plan
after December 31, 2005, no option, stock appreciation right, stock award,
performance unit award or tandem award with respect to shares authorized in 1999
shall be granted pursuant to this Plan after December 31, 2008, but options,
stock appreciation rights, performance unit awards, tandem awards and
restrictions on awards may extend beyond such dates.

- ---------------------
* Adjusted for the three-for-one stock split in 1970, the two-for-one stock
split in 1983, the two-for-one stock split in 1991, the two-for-one stock
split in 1995, and the two-for-one stock split in 1997.

** Adjusted for the two-for-one stock split in 1983, the two-for-one stock
split in 1991, the two-for-one stock split in 1995, and the two-for-one
stock split in 1997.

*** Adjusted for the two-for-one stock split in 1991, the two-for-one stock
split in 1995, and the two-for-one stock split in 1997.

**** Adjusted for the two-for-one stock split in 1995 and the two-for-one
stock split in 1997.

***** Adjusted for the two-for-one stock split in 1997.

<PAGE>

[RECYCLE LOGO OMITTED] [SOY INK LOGO OMITTED]

This Proxy Statement is printed entirely on recycled and recyclable paper. Soy
ink, rather than petroleum-based ink, is used throughout.

<PAGE>
PFIZER INC.
PROXY
SOLICITED BY THE BOARD OF DIRECTORS

P The undersigned appoints William C. Steere, Jr., Henry A. McKinnell,
R and C. L. Clemente, and each of them, as proxies, each with full power
O of substitution, and authorizes them to represent and to vote, as
X designated on the reverse side of this form, all the shares of common
Y stock of Pfizer Inc. held of record by the undersigned on February 26,
1999, and all of the shares as to which the undersigned then had the
right to give voting instructions to the record holder under the
Pfizer Inc. Shareholder Investment Program, the Pfizer Inc. Savings
and Investment Plan and the Pfizer Inc. Employee Benefit Trust, at the
Annual Meeting of Shareholders to be held on April 22, 1999 at 10:00
a.m. at the Grand Hyatt Hotel, Empire State Ballroom, New York, New
York, or any adjournment or postponement.

IF NO OTHER INDICATION IS MADE ON THE REVERSE SIDE OF THIS FORM, THE
PROXIES SHALL VOTE (AND ANY VOTING INSTRUCTIONS TO RECORD HOLDERS
SHALL BE GIVEN) FOR ITEMS 1, 2, 3 AND 4 AND, IN THEIR DISCRETION, UPON
SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING.

---------------
SEE REVERSE
SIDE
---------------

- --------------------------------------------------------------------------------
s PLEASE FOLD AND DETACH HERE IF YOU ARE NOT VOTING BY INTERNET OR TELEPHONE s

IF YOU PLAN TO ATTEND THE ANNUAL MEETING, PLEASE BRING THIS ADMISSION TICKET
WITH YOU.

ADMISSION TICKET

PFIZER INC.

ANNUAL MEETING OF SHAREHOLDERS

THURSDAY, APRIL 22, 1999
10:00 A.M.
GRAND HYATT HOTEL
EMPIRE STATE BALLROOM
42ND STREET AND LEXINGTON AVENUE
NEW YORK, NEW YORK

<PAGE>

|
- ----- Please mark your |
X votes as in this | 2649
- ----- example. |_ _ _

- --------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ITEMS 1, 2, 3 AND 4
- --------------------------------------------------------------------------------

FOR WITHHELD
1. Election of [ ] [ ] Vote Nominees:
Directors. (Mark WITHHELD 1. Michael S. Brown
ONE box only.) from all 2. Constance J. Horner
nominees 3. Thomas G. Labrecque
4. Franklin D. Raines
5. Jean-Paul Valles

FOR all nominees, except vote withheld from the following nominees (if any):

-----------------------------

- --------------------------------------------------------------------------------

FOR AGAINST ABSTAIN
2. A proposal to approve the appointment of [ ] [ ] [ ]
KPMG LLP as independent auditors for
1999.

3. A proposal to amend the Company's [ ] [ ] [ ]
Restated Certificate of Incorporation
to increase the number of authorized
shares of the Company's common stock.

4. A proposal to amend the Stock and Incentive [ ] [ ] [ ]
Plan to increase the number of shares of
common stock authorized to be issued
under the Plan and to extend its term to
December 31, 2008.
- --------------------------------------------------------------------------------
SPECIAL ACTION [ ] Change of [ ]
Address
Discontinue Annual Report
Mailing for this Account
- --------------------------------------------------------------------------------

IF ACTING AS ATTORNEY, EXECUTOR, TRUSTEE, OR IN
OTHER REPRESENTATIVE CAPACITY, PLEASE SIGN NAME
AND TITLE.

------------------------------------------------
(SIGNATURE OF SHAREHOLDER) DATE

------------------------------------------------
(SIGNATURE, IF HELD JOINTLY) DATE

- --------------------------------------------------------------------------------
s FOLD AND DETACH HERE IF YOU ARE NOT VOTING BY INTERNET OR TELEPHONE s

PFIZER INC.

Dear Shareholder:

We encourage you to take advantage of the convenient ways to vote your shares:
You can vote your shares electronically through the Internet or the telephone 24
hours a day, seven days a week. This eliminates the need to return the proxy
card.

To vote your shares electronically you must use the control number printed in
the box above, just below the perforation. The series of numbers that appear in
the box above must be used to access the system.

1. To vote over the Internet:
o Log on the Internet and go to the web site http://www.vote-by-net.com

2. To vote over the telephone:
o On a touch-tone telephone call 1-800-OK2-VOTE (1-800-652-8683)
o Outside of the U.S. and Canada call 201-324-0377.

Your electronic vote authorizes the named proxies in the same manner as if you
marked, signed, dated and returned the proxy card.

If you choose to vote your shares electronically or by the telephone, there is
no need for you to mail back your proxy card.

YOUR VOTE IS IMPORTANT. THANK YOU FOR VOTING.