AGREEMENT
AND PLAN OF MERGER, dated as of February 6, 2000 (this "Agreement"),
among PFIZER INC., a Delaware corporation ("Pfizer"), SEMINOLE ACQUISITION
SUB CORP., a Delaware corporation and a direct wholly-owned subsidiary
of Pfizer ("Merger Sub"), and WARNER-LAMBERT COMPANY, a Delaware corporation
("Warner-Lambert").
W I T N E S S E T H:
WHEREAS,
the Boards of Directors of Warner-Lambert and Pfizer deem it advisable
and in the best interests of each corporation and its respective stockholders
that Warner-Lambert and Pfizer engage in a business combination in
order to advance the long-term strategic business interests of Warner-Lambert
and Pfizer;
WHEREAS,
the combination of Warner-Lambert and Pfizer shall be effected by
the terms of this Agreement through a merger as outlined below (the
"Merger");
WHEREAS,
in furtherance thereof, the respective Boards of Directors of Warner-Lambert
and Pfizer have approved the Merger, upon the terms and subject to
the conditions set forth in this Agreement, pursuant to which each
share of common stock, par value $1.00 per share, of Warner-Lambert
("Warner-Lambert Common Stock") issued and outstanding immediately
prior to the Effective Time (as defined in Section 1.3), other than
shares owned or held directly by Pfizer or directly or indirectly
by Warner-Lambert, will be converted into the right to receive shares
of common stock, par value $0.05 per share, of Pfizer ("Pfizer Common
Stock") as set forth in Section 1.8;
WHEREAS,
for Federal income tax purposes, it is intended that the Merger shall
qualify as a reorganization within the meaning of Section 368(a) of
the Internal Revenue Code of 1986, as amended (the "Code"), and the
regulations promulgated thereunder; and
WHEREAS,
for accounting purposes, it is intended that the Merger shall be accounted
for as a pooling-of-interests transaction under United States generally
accepted accounting principles ("GAAP").
NOW, THEREFORE,
in consideration of the foregoing and the respective representations,
warranties, covenants and agreements set forth in this Agreement,
and intending to be legally bound hereby, the parties hereto agree
as follows:
ARTICLE I
THE MERGER; CERTAIN RELATED MATTERS
1.1 The
Merger.Upon the terms and subject to the conditions set forth
in this Agreement, and in accordance with the Delaware General Corporation
Law (the "DGCL"), Merger Sub shall be merged with and into Warner-Lambert
at the Effective Time. Following the Merger, the separate corporate
existence of Merger Sub shall cease and Warner-Lambert shall continue
as the surviving corporation (the "Surviving Corporation").
1.2
Closing. Upon the terms and subject to
the conditions set forth in Article VI and the termination rights
set forth in Article VII, the closing of the Merger (the "Closing")
will take place on the first Business Day after the satisfaction or
waiver (subject to applicable law) of the conditions (excluding conditions
that, by their nature, cannot be satisfied until the Closing Date)
set forth in Article VI, unless this Agreement has been theretofore
terminated pursuant to its terms or unless another time or date is
agreed to in writing by the parties hereto (the actual time and date
of the Closing being referred to herein as the "Closing Date"). The
Closing shall be held at the offices of Cadwalader, Wickersham & Taft,
100 Maiden Lane, New York, New York, 10038, unless another place is
agreed to in writing by the parties hereto.
1.3
Effective Time. As soon as practicable following the satisfaction
or waiver (subject to applicable law) of the conditions set forth
in Article VI, at the Closing the parties shall (i) file a certificate
of merger (the "Certificate of Merger") in such form as is required
by and executed in accordance with the relevant provisions of the
DGCL and (ii) make all other filings or recordings required under
the DGCL. The Merger shall become effective at such time as the Certificate
of Merger is duly filed with the Delaware Secretary of State or at
such subsequent time as Pfizer and Warner-Lambert shall agree and
as shall be specified in the Certificate of Merger (the date and time
the Merger becomes effective being the "Effective Time").
1.4
Effects of the Merger. At and after the Effective
Time, the Merger will have the effects set forth in the DGCL. Without
limiting the generality of the foregoing, and subject thereto, at
the Effective Time all the property, rights, privileges, powers and
franchises of Warner-Lambert and Merger Sub shall be vested in the
Surviving Corporation, and all debts, liabilities and duties of Warner-Lambert
and Merger Sub shall become the debts, liabilities and duties of the
Surviving Corporation.
1.5
Certificate of Incorporation. (a)
The certificate of incorporation of Warner-Lambert, as in effect immediately
prior to the Effective Time, shall be the certificate of incorporation
of the Surviving Corporation, until thereafter changed or amended
as provided therein or by applicable law.
(b)
Pfizer will use its reasonable best efforts to amend the certificate
of incorporation of Pfizer effective as of the Effective Time, as
set forth in Exhibit 1.5(b) hereto, to increase the number of directors
on the Pfizer Board of Directors to not less than ten nor more than
twenty-four (the "Board Amendment"). If the Board Amendment is approved
by Pfizer's Stockholders at the Pfizer Stockholders Meeting, Pfizer
shall use its reasonable best efforts to appoint to the Pfizer Board
of Directors effective as of the Effective Time eight individuals
currently serving on the Warner-Lambert Board of Directors, each such
individual to be appointed to the class of the Pfizer Board of Directors
determined by Pfizer after taking into account the advice and recommendation
of the Transition Planning Team referred to in the letter mentioned
in Section 1.7 herein. In the event that the Board Amendment is not
approved by Pfizer's stockholders at the Pfizer Stockholder Meeting,
then Pfizer will take all action to expand its Board of Directors
to 18 members effective as of the Effective Time and appoint three
current Warner-Lambert directors to the Pfizer Board of Directors
and use its reasonable best efforts to appoint three additional current
Warner-Lambert directors to the Pfizer Board of Directors as each
new vacancy on the Pfizer Board of Directors occurs following the
Effective Time.
1.6 Bylaws.
The bylaws of Warner-Lambert, as in effect immediately prior to the
Effective Time, shall be the bylaws of the Surviving Corporation until
thereafter changed or amended as provided therein or by applicable
law.
(b)
The bylaws of Pfizer shall be amended effective as of the Effective
Time to the effect provided in Exhibit 1.6(b). The amendment to the
bylaws of Pfizer is referred to in this Agreement as the "Pfizer Bylaw
Amendment."
1.7 Officers
and Directors of Surviving Corporation and Pfizer. Upon
consummation of the Merger, the officers and directors of Pfizer shall
be as provided in the letter to the Chairman and the Chief Executive
Officer of Warner-Lambert, dated February 6, 2000, from the Chairman
and Chief Executive Officer of Pfizer.
1.8 Effect
on Capital Stock. (a) At the Effective Time, by virtue
of the Merger and without any action on the part of the holder thereof,
each share of Warner-Lambert Common Stock issued and outstanding immediately
prior to the Effective Time (other than shares of Warner-Lambert Common
Stock owned by Pfizer or Merger Sub or held by Warner-Lambert, all
of which shall be canceled as provided in Section 1.8(c)), together
with the associated Warner-Lambert Rights, shall be converted into
2.75 validly issued, fully paid and non-assessable shares of Pfizer
Common Stock (the "Exchange Ratio") and the associated Pfizer Rights
(together with any cash in lieu of fractional shares of Pfizer Common
Stock to be paid pursuant to Section 2.5, the "Merger Consideration").
(b)
As a result of the Merger and without any action on the part of the
holders thereof, at the Effective Time, all shares of Warner-Lambert
Common Stock (together with the associated Warner-Lambert Rights)
shall cease to be outstanding and shall be canceled and retired and
shall cease to exist, and each holder of a certificate which immediately
prior to the Effective Time represented any such shares of Warner-Lambert
Common Stock (a "Certificate") shall thereafter cease to have any
rights with respect to such shares of Warner-Lambert Common Stock,
except as provided herein or by law.
(c)
Each share of Warner-Lambert Common Stock issued and owned by Pfizer
or Merger Sub or held by Warner-Lambert at the Effective Time shall,
by virtue of the Merger, cease to be outstanding and shall be canceled
and retired and no stock of Pfizer or other consideration shall be
delivered in exchange therefor.
(d)
At the Effective Time, by virtue of the Merger and without any action
on the part of the holder thereof, each share of common stock, par
value $0.01 per share, of Merger Sub issued and outstanding immediately
prior to the Effective Time, shall be converted into one validly issued,
fully paid and non-assessable share of common stock, par value $1.00
per share, of the Surviving Corporation.
1.9 Warner-Lambert
Stock Options and Other Equity-Based Awards. (a) Each
Warner-Lambert Stock Option (as defined in Section 3.2(b)) that was
granted pursuant to the Warner-Lambert Stock Option Plans (as defined
in Section 3.2(b)) prior to the Effective Time and which remains outstanding
immediately prior to the Effective Time shall cease to represent a
right to acquire shares of Warner-Lambert Common Stock and shall be
converted, at the Effective Time, into an option to acquire, on the
same terms and conditions as were applicable under the Warner-Lambert
Stock Option (but taking into account any changes thereto, including
the acceleration thereof, provided for in the Warner-Lambert Stock
Option Plans or in such option by reason of this Agreement or the
transactions contemplated hereby), that number of shares of Pfizer
Common Stock determined by multiplying the number of shares of Warner-Lambert
Common Stock subject to such Warner-Lambert Stock Option by the Exchange
Ratio, rounded, if necessary, to the nearest whole share of Pfizer
Common Stock, at a price per share (rounded to the nearest one-hundredth
of a cent) equal to the per share exercise price specified in such
Warner-Lambert Stock Option divided by the Exchange Ratio; provided,
however, that in the case of any Warner-Lambert Stock Option to which
Section 421 of the Code applies by reason of its qualification under
Section 422 of the Code, the option price, the number of shares subject
to such option and the terms and conditions of exercise of such option
shall be determined in a manner consistent with the requirements of
Section 424(a) of the Code. On or prior to the Effective Time, Warner-Lambert
will take all actions necessary such that all Warner-Lambert Stock
Options outstanding prior to the Effective Time under the Warner-Lambert
Stock Option Plans are treated in accordance with the immediately
preceding sentences, including, but not limited to, precluding the
holder of each Warner-Lambert Stock Option from receiving any cash
payments in respect of such Option in connection with the Merger.
(b)
Pursuant to the Warner-Lambert Stock Option Plans, restricted shares
of Warner-Lambert Common Stock granted pursuant thereto which are
outstanding immediately prior to the Effective Time shall become fully
vested and free of restrictions as of the Effective Time in accordance
with the terms thereof. Each such award shall be converted, as of
the Effective Time, into a number of shares of Pfizer Common Stock
equal to the product of (1) the number of shares subject to the award
and (2) the Exchange Ratio; and the number of shares of Pfizer Common
Stock as so determined shall be delivered to the holder of each such
award as soon as practicable following the Effective Time. On or prior
to the Effective Time, Warner-Lambert will take all actions necessary
such that awards of restricted shares are treated in accordance with
the immediately preceding sentences, including, but not limited to,
precluding each holder from receiving any cash payments in respect
of such awards in connection with the Merger.
(c)
All Warner-Lambert stock credits (including any fractions thereof)
in each stock account which is governed by the terms of Warner-Lambert's
1996 Stock Plan ("Warner-Lambert Stock Credits") shall, as of the
Effective Time, be converted into a number of Pfizer stock credits
equal to the product of (1) the number of Warner-Lambert Stock Credits
in such stock account immediately prior to the Effective Time and
(2) the Exchange Ratio, and shall otherwise remain subject to the
terms and conditions applicable to such Warner-Lambert Stock Credits.
On or prior to the Effective Time, Warner-Lambert shall take all actions
necessary to ensure that such Warner-Lambert Stock Credits are converted
in accordance with the immediately preceding sentence, including,
but not limited to, precluding each holder from receiving any cash
payments in respect of such stock account in connection with the Merger.
(d)
Prior to the Effective Time and pursuant to the authority reserved
by Warner-Lambert under the Warner-Lambert Stock Option Plans, Warner-Lambert
will take all actions necessary to preclude the holder of any stock
appreciation right or limited stock appreciation right granted separately
or in tandem with the awards described in Section 1.9(a) or (b) hereof
from receiving any cash payments in respect of such awards in connection
with the Merger.
(e)
As soon as practicable after the Effective Time, Pfizer shall deliver
to the holders of Warner-Lambert Stock Options appropriate notices
setting forth such holders' rights pursuant to the Warner-Lambert
Stock Option Plans (including that, in connection with the Merger
and pursuant to the terms of the Warner-Lambert Stock Option Plans,
the Warner-Lambert Stock Options of such holders have become fully
vested and exercisable) and the agreements evidencing the grants of
such Warner-Lambert Stock Options shall continue in effect on the
same terms and conditions (subject to the adjustments required by
this Section 1.9 after giving effect to the Merger and the terms of
the Warner-Lambert Stock Option Plans). To the extent permitted by
law, Pfizer shall comply with the terms of the Warner-Lambert Stock
Option Plans and shall take such reasonable steps as are necessary
or required by, and subject to the provisions of, such Warner-Lambert
Stock Option Plans, to have the Warner-Lambert Stock Options which
qualified as incentive stock options prior to the Effective Time continue
to qualify as incentive stock options of Pfizer after the Effective
Time.
(f)
Pfizer shall take all corporate action necessary to reserve for issuance
a sufficient number of shares of Pfizer Common Stock for delivery
upon exercise of Warner-Lambert Stock Options or in connection with
restricted shares or in connection with the settlement of stock accounts
in accordance with this Section 1.9. Promptly after the Effective
Time, Pfizer shall file a registration statement on Form S-3 or Form
S-8, as the case may be (or any successor or other appropriate forms),
with respect to the shares of Pfizer Common Stock subject to such
options or restricted shares or stock accounts and shall use commercially
reasonable efforts to maintain the effectiveness of such registration
statement or registration statements (and maintain the current status
of the prospectus or prospectuses contained therein) for so long as
such options, restricted shares or stock accounts remain outstanding.
With respect to those individuals who subsequent to the Merger will
be subject to the reporting requirements under Section 16(a) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"),
where applicable, Pfizer shall administer the Warner-Lambert Stock
Option Plans in a manner consistent with the exemptions provided by
Rule 16b-3 promulgated under the Exchange Act.
1.10
Certain Adjustments. If, between the date of this
Agreement and the Effective Time, the outstanding Pfizer Common Stock
or Warner-Lambert Common Stock shall have been changed into a different
number of shares or different class by reason of any reclassification,
recapitalization, stock split, split-up, combination or exchange of
shares or a stock dividend or dividend payable in any other securities
shall be declared with a record date within such period, or any similar
event shall have occurred, the Exchange Ratio shall be appropriately
adjusted to provide to the holders of Warner-Lambert Common Stock
the same economic effect as contemplated by this Agreement prior to
such event.
1.11
Associated Rights. References in Article I and Article
II of this Agreement to Warner-Lambert Common Stock shall include,
unless the context requires otherwise, the associated Warner-Lambert
Rights and references in Article I and Article II of this Agreement
to Pfizer Common Stock shall include, unless the context requires
otherwise, the associated Pfizer Rights.
ARTICLE II
EXCHANGE OF CERTIFICATES
2.1 Exchange
Fund. Prior to the Effective Time, Pfizer shall appoint a commercial
bank or trust company reasonably acceptable to Warner-Lambert having
net capital of not less than $300,000,000, or a subsidiary thereof,
to act as exchange agent hereunder for the purpose of exchanging Certificates
for the Merger Consideration (the "Exchange Agent"). At or prior to
the Effective Time, Pfizer shall deposit with the Exchange Agent,
in trust for the benefit of holders of shares of Warner-Lambert Common
Stock, certificates representing the Pfizer Common Stock issuable
pursuant to Section 1.8 in exchange for outstanding shares of Warner-Lambert
Common Stock. Pfizer agrees to make available to the Exchange Agent
from time to time as needed, cash sufficient to pay cash in lieu of
fractional shares pursuant to Section 2.5 and any dividends and other
distributions pursuant to Section 2.3. Any cash and certificates of
Pfizer Common Stock deposited with the Exchange Agent shall hereinafter
be referred to as the "Exchange Fund."
2.2
Exchange Procedures. Promptly after the Effective Time, the Surviving
Corporation shall cause the Exchange Agent to mail to each holder
of a Certificate (i) a letter of transmittal which shall specify that
delivery shall be effected, and risk of loss and title to the Certificates
shall pass, only upon proper delivery of the Certificates to the Exchange
Agent, and which letter shall be in customary form and have such other
provisions as Pfizer may reasonably specify (such letter to be reasonably
acceptable to Warner-Lambert prior to the Effective Time) and (ii)
instructions for effecting the surrender of such Certificates in exchange
for the applicable Merger Consideration. Upon surrender of a Certificate
to the Exchange Agent together with such letter of transmittal, duly
executed and completed in accordance with the instructions thereto,
and such other documents as may reasonably be required by the Exchange
Agent, the holder of such Certificate shall be entitled to receive
in exchange therefor (A) one or more shares of Pfizer Common Stock
(which shall be in uncertificated book-entry form unless a physical
certificate is requested) representing, in the aggregate, the whole
number of shares that such holder has the right to receive pursuant
to Section 1.8 (after taking into account all shares of Warner-Lambert
Common Stock then held by such holder) and (B) a check in the amount
equal to the cash that such holder has the right to receive pursuant
to the provisions of this Article II, including cash in lieu of any
fractional shares of Pfizer Common Stock pursuant to Section 2.5 and
dividends and other distributions pursuant to Section 2.3. No interest
will be paid or will accrue on any cash payable pursuant to Section
2.3 or Section 2.5. In the event of a transfer of ownership of Warner-Lambert
Common Stock which is not registered in the transfer records of Warner-Lambert,
one or more shares of Pfizer Common Stock evidencing, in the aggregate,
the proper number of shares of Pfizer Common Stock, a check in the
proper amount of cash in lieu of any fractional shares of Pfizer Common
Stock pursuant to Section 2.5 and any dividends or other distributions
to which such holder is entitled pursuant to Section 2.3, may be issued
with respect to such Warner-Lambert Common Stock to such a transferee
if the Certificate representing such shares of Warner-Lambert Common
Stock is presented to the Exchange Agent, accompanied by all documents
required to evidence and effect such transfer and to evidence that
any applicable stock transfer taxes have been paid.
2.3
Distributions with Respect to Unexchanged Shares. No dividends
or other distributions declared or made with respect to shares of
Pfizer Common Stock with a record date after the Effective Time shall
be paid to the holder of any unsurrendered Certificate with respect
to the shares of Pfizer Common Stock that such holder would be entitled
to receive upon surrender of such Certificate and no cash payment
in lieu of fractional shares of Pfizer Common Stock shall be paid
to any such holder pursuant to Section 2.5 until such holder shall
surrender such Certificate in accordance with Section 2.2. Subject
to the effect of applicable laws, following surrender of any such
Certificate, there shall be paid to such holder of shares of Pfizer
Common Stock issuable in exchange therefor, without interest, (a)
promptly after the time of such surrender, the amount of any cash
payable in lieu of fractional shares of Pfizer Common Stock to which
such holder is entitled pursuant to Section 2.5 and the amount of
dividends or other distributions with a record date after the Effective
Time theretofore paid with respect to such whole shares of Pfizer
Common Stock, and (b) at the appropriate payment date, the amount
of dividends or other distributions with a record date after the Effective
Time but prior to such surrender and a payment date subsequent to
such surrender payable with respect to such shares of Pfizer Common
Stock.
2.4 No
Further Ownership Rights in Warner-Lambert Common Stock. All
shares of Pfizer Common Stock issued and cash paid upon conversion
of shares of Warner-Lambert Common Stock in accordance with the terms
of Article I and this Article II (including any cash paid pursuant
to Section 2.3 or 2.5) shall be deemed to have been issued or paid
in full satisfaction of all rights pertaining to the shares of Warner-Lambert
Common Stock.
2.5 No
Fractional Shares of Pfizer Common Stock. (a) No certificates
or scrip or shares of Pfizer Common Stock representing fractional
shares of Pfizer Common Stock or book-entry credit of the same shall
be issued upon the surrender for exchange of Certificates and such
fractional share interests will not entitle the owner thereof to vote
or to have any rights of a stockholder of Pfizer or a holder of shares
of Pfizer Common Stock.
(b)
Notwithstanding any other provision of this Agreement, each holder
of shares of Warner-Lambert Common Stock exchanged pursuant to the
Merger who would otherwise have been entitled to receive a fraction
of a share of Pfizer Common Stock (after taking into account all Certificates
delivered by such holder) shall receive, in lieu thereof, cash (without
interest) in an amount equal to the product of (i) such fractional
part of a share of Pfizer Common Stock multiplied by (ii) the closing
price for a share of Pfizer Common Stock on the New York Stock Exchange,
Inc. ("NYSE") Composite Transactions Tape on the date of the Effective
Time or, if such date is not a Business Day, the Business Day immediately
following the date on which the Effective Time occurs.
(c)
As promptly as practicable after the determination of the amount of
cash, if any, to be paid to holders of fractional interests, the Exchange
Agent shall so notify Pfizer, and Pfizer shall cause the Surviving
Corporation to deposit such amount with the Exchange Agent and shall
cause the Exchange Agent to forward payments to such holders of fractional
interests subject to and in accordance with the terms hereof.
2.6 Termination
of Exchange Fund. Any portion of the Exchange Fund which remains
undistributed to the holders of Certificates for six months after
the Effective Time shall be delivered to Pfizer or otherwise on the
instruction of Pfizer, and any holders of the Certificates who have
not theretofore complied with this Article II shall thereafter look
only to Pfizer for the Merger Consideration with respect to the shares
of Warner-Lambert Common Stock formerly represented thereby to which
such holders are entitled pursuant to Section 1.8 and Section 2.2,
any cash in lieu of fractional shares of Pfizer Common Stock to which
such holders are entitled pursuant to Section 2.5 and any dividends
or distributions with respect to shares of Pfizer Common Stock to
which such holders are entitled pursuant to Section 2.3. Any such
portion of the Exchange Fund remaining unclaimed by holders of shares
of Warner-Lambert Common Stock five years after the Effective Time
(or such earlier date immediately prior to such time as such amounts
would otherwise escheat to or become property of any Governmental
Entity (as defined in Section 3.1(c)(iii)) shall, to the extent permitted
by law, become the property of the Surviving Corporation free and
clear of any claims or interest of any Person previously entitled
thereto.
2.7 No
Liability. None of Pfizer, Merger Sub, Warner-Lambert, the
Surviving Corporation or the Exchange Agent shall be liable to any
Person in respect of any Merger Consideration from the Exchange Fund
delivered to a public official pursuant to any applicable abandoned
property, escheat or similar law.
2.8 Investment
of the Exchange Fund. The Exchange Agent shall invest
any cash included in the Exchange Fund as directed by Pfizer on a
daily basis; provided, that no such gain or loss thereon shall affect
the amounts payable to Warner-Lambert stockholders pursuant to Article
I and the other provisions of this Article II. Any interest and other
income resulting from such investments shall promptly be paid to Pfizer.
2.9 Lost
Certificates. If any Certificate shall have been lost,
stolen or destroyed, upon the making of an affidavit of that fact
by the Person claiming such Certificate to be lost, stolen or destroyed
and, if required by the Surviving Corporation, the posting by such
Person of a bond in such reasonable amount as the Surviving Corporation
may direct as indemnity against any claim that may be made against
it with respect to such Certificate, the Exchange Agent will deliver
in exchange for such lost, stolen or destroyed Certificate the applicable
Merger Consideration with respect to the shares of Warner-Lambert
Common Stock formerly represented thereby, any cash in lieu of fractional
shares of Pfizer Common Stock, and unpaid dividends and distributions
on shares of Pfizer Common Stock deliverable in respect thereof, pursuant
to this Agreement.
2.10 Withholding
Rights. Each of the Surviving Corporation and Pfizer shall
be entitled to deduct and withhold from the consideration otherwise
payable pursuant to this Agreement to any holder of shares of Warner-Lambert
Common Stock such amounts as it is required to deduct and withhold
with respect to the making of such payment under the Code and the
rules and regulations promulgated thereunder, or any provision of
state, local or foreign tax law. To the extent that amounts are so
withheld by the Surviving Corporation or Pfizer, as the case may be,
such withheld amounts shall be treated for all purposes of this Agreement
as having been paid to the holder of the shares of Warner-Lambert
Common Stock in respect of which such deduction and withholding was
made by the Surviving Corporation or Pfizer, as the case may be.
2.11 Further
Assurances. At and after the Effective Time, the officers
and directors of the Surviving Corporation will be authorized to execute
and deliver, in the name and on behalf of Warner-Lambert or Merger
Sub, any deeds, bills of sale, assignments or assurances and to take
and do, in the name and on behalf of Warner-Lambert or Merger Sub,
any other actions and things to vest, perfect or confirm of record
or otherwise in the Surviving Corporation any and all right, title
and interest in, to and under any of the rights, properties or assets
acquired or to be acquired by the Surviving Corporation as a result
of, or in connection with, the Merger.
2.12 Stock
Transfer Books. The stock transfer books of Warner-Lambert
shall be closed immediately upon the Effective Time and there shall
be no further registration of transfers of shares of Warner-Lambert
Common Stock thereafter on the records of Warner-Lambert. On or after
the Effective Time, any Certificates presented to the Exchange Agent
or Pfizer for any reason shall be converted into the Merger Consideration
with respect to the shares of Warner-Lambert Common Stock formerly
represented thereby (including any cash in lieu of fractional shares
of Pfizer Common Stock to which the holders thereof are entitled pursuant
to Section 2.5) and any dividends or other distributions to which
the holders thereof are entitled pursuant to Section 2.3.
2.13 Affiliates.
Notwithstanding anything to the contrary herein, to the fullest
extent permitted by law, no certificates representing shares of Pfizer
Common Stock or cash shall be delivered to a Person who may be deemed
an "affiliate" of Warner-Lambert in accordance with Section 5.13 hereof
for purposes of Rule 145 under the Securities Act of 1933, as amended
(the "Securities Act"), or for purposes of qualifying the Merger for
pooling-of-interests accounting treatment under Opinion 16 of the
Accounting Principles Board and applicable rules and regulations of
the Securities and Exchange Commission (the "SEC") until such Person
has executed and delivered an Affiliate Agreement (as defined in Section
5.13) to Pfizer.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.1
Representations and Warranties of Pfizer. Except as set
forth in the Pfizer disclosure schedule delivered by Pfizer to Warner-Lambert
prior to the execution of this Agreement (the "Pfizer Disclosure Schedule")
(each section of which qualifies the correspond-ingly numbered representation
and warranty or covenant), Pfizer represents and warrants to Warner-Lambert
as follows:
(a)
Organization, Standing and Power; Subsidiaries.
(i)
Each of Pfizer and each of its Subsidiaries (as defined in Section
8.11) is duly organized, validly existing and in good standing under
the laws of its jurisdiction of incorporation or organization, has
the requisite power and authority to own, lease and operate its
properties and to carry on its business as now being conducted,
except where the failures to be so organized, existing and in good
standing or to have such power and authority, in the aggregate,
would not reasonably be expected to have a Material Adverse Effect
on Pfizer, and is duly qualified and in good standing to do business
in each jurisdiction in which the nature of its business or the
ownership or leasing of its properties makes such qualification
necessary other than in such jurisdictions where the failures so
to qualify or to be in good standing, in the aggregate, would not
reasonably be expected to have a Material Adverse Effect on Pfizer.
The copies of the certificate of incorporation and bylaws of Pfizer
which were previously furnished or made available to Warner-Lambert
are true, complete and correct copies of such documents as in effect
on the date of this Agreement.
(ii)
Exhibit 21 to Pfizer's Annual Report on Form 10K for the year ended
December 31, 1998 includes all the Subsidiaries of Pfizer which
as of the date of this Agreement are Significant Subsidiaries (as
defined in Rule 1-02 of Regulation S-X of the SEC). All the outstanding
shares of capital stock of, or other equity interests in, each such
Significant Subsidiary have been validly issued and are fully paid
and non-assessable and are, except as set forth in Exhibit 21, owned
directly or indirectly by Pfizer, free and clear of all pledges,
claims, liens, charges, encumbrances and security interests of any
kind or nature whatsoever (collectively "Liens") and free of any
other restriction (including any restriction on the right to vote,
sell or otherwise dispose of such capital stock or other ownership
interests), except for restrictions imposed by applicable securities
laws. Except as set forth in the Pfizer SEC Reports (as defined
in Section 3.1(d)) filed prior to the date hereof, neither Pfizer
nor any of its Subsidiaries directly or indirectly owns any equity
or similar interest in, or any interest convertible into or exchangeable
or exercisable for, any corporation, partnership, joint venture
or other business association or entity (other than Subsidiaries),
that is or would reasonably be expected to be material to Pfizer
and its Subsidiaries taken as a whole.
(i)
As of December 31, 1999, the authorized capital stock of Pfizer
consisted of (A) 9,000,000,000 shares of Pfizer Common Stock of
which 3,846,907,771 shares were outstanding and 413,166,530 shares
were held in the treasury of Pfizer and (B) 12,000,000 shares of
Preferred Stock, no par value, of which 3,000,000 shares have been
designated Series A Junior Preferred Stock and reserved for issuance
upon exercise of the rights (the "Pfizer Rights") distributed to
the holders of Pfizer Common Stock pursuant to the Rights Agreement,
dated as of October 6, 1997 between Pfizer and ChaseMellon Shareholder
Services, L.L.C. (the "Pfizer Rights Agreement"). Since December
31, 1999 to the date of this Agreement, there have been no issuances
of shares of the capital stock of Pfizer or any other securities
of Pfizer other than issuances of shares pursuant to options or
rights outstanding as of December 31, 1999 under the Benefit Plans
(as defined in Section 8.11(b)) of Pfizer. All issued and outstanding
shares of the capital stock of Pfizer are, and when shares of Pfizer
Common Stock are issued in the Merger or upon exercise of stock
options converted in the Merger pursuant to Section 1.9, such shares
will be, duly authorized, validly issued, fully paid and non-assessable
and free of any preemptive rights. There were outstanding as of
December 31, 1999 no options, warrants or other rights to acquire
capital stock from Pfizer other than (x) the Pfizer Rights and (y)
options, restricted stock and other rights to acquire capital stock
from Pfizer representing in the aggregate the right to purchase
approximately 273,104,687 shares of Pfizer Common Stock (collectively,
the "Pfizer Stock Options") under Pfizer's Stock and Incentive Plan,
Pfizer's Performance-Contingent Share Award Program, Pfizer's Annual
Retainer Unit Award Plan (for non-employee Directors), Pfizer's
Nonfunded Deferred Compensation and Unit Award Plan for Non-Employee
Directors and Pfizer's Restricted Stock Plan for Non-Employee Directors
(collectively, the "Pfizer Stock Option Plans"). Section 3.1(b)
of the Pfizer Disclosure Schedule sets forth a complete and correct
list, as of December 31, 1999, of the number of shares of Pfizer
Common Stock subject to Pfizer Stock Options or other rights to
purchase or receive Pfizer Common Stock granted under the Pfizer
Benefit Plans or otherwise, the dates of grant and the exercise
prices thereof. No options or warrants or other rights to acquire
capital stock from Pfizer have been issued or granted since December
31, 1999 to the date of this Agreement.
(ii)
No bonds, debentures, notes or other indebtedness of Pfizer having
the right to vote on any matters on which holders of capital stock
of Pfizer may vote ("Pfizer Voting Debt") are issued or outstanding.
(iii)
Except as otherwise set forth in this Section 3.1(b) and as contemplated
by Section 1.8 and Section 1.9, as of the date of this Agreement,
there are no securities, options, warrants, calls, rights, commitments,
agreements, arrangements or undertakings of any kind to which Pfizer
or any of its Subsidiaries is a party or by which any of them is
bound obligating Pfizer or any of its Subsidiaries to issue, deliver
or sell, or cause to be issued, delivered or sold, additional shares
of capital stock or other voting securities of Pfizer or any of
its Subsidiaries or obligating Pfizer or any of its Subsidiaries
to issue, grant, extend or enter into any such security, option,
warrant, call, right, commitment, agreement, arrangement or undertaking.
As of the date of this Agreement, there are no outstanding obligations
of Pfizer or any of its Subsidiaries to repurchase, redeem or otherwise
acquire any shares of capital stock of Pfizer or any of its Subsidiaries.
(c)
Authority; No Conflicts.
(i)
Pfizer has all requisite corporate power and authority to enter
into this Agreement and to consummate the transactions contemplated
hereby, subject to obtaining the requisite stockholder approval
of the issuance of the shares of Pfizer Common Stock to be issued
in the Merger (the "Share Issuance") and the Board Amendment (collectively,
the "Pfizer Stockholder Approval"). The execution and delivery of
this Agreement and the consummation of the transactions contemplated
hereby have been duly authorized by all necessary corporate action
on the part of Pfizer, subject to obtaining the Pfizer Stockholder
Approval. This Agreement has been duly executed and delivered by
Pfizer and constitutes a valid and binding agreement of Pfizer,
enforceable against it in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium and similar laws relating to or affecting creditors generally
or by general equity principles (regardless of whether such enforceability
is considered in a proceeding in equity or at law).
(ii)
The execution and delivery of this Agreement by Pfizer does not
or will not, as the case may be, and the consummation by Pfizer
of the Merger and the other transactions contemplated hereby will
not, conflict with, or result in any violation of, or constitute
a default (with or without notice or lapse of time, or both) under,
or give rise to a right of, or result by its terms in the, termination,
amendment, cancellation or acceleration of any obligation or the
loss of a material benefit under, or the creation of a lien, pledge,
security interest, charge or other encumbrance on, or the loss of,
any assets, including Intellectual Property (any such conflict,
violation, default, right of termination, amendment, cancellation
or acceleration, loss or creation, a "Violation") pursuant to: (A)
any provision of the certificate of incorporation or bylaws of Pfizer
or any material Subsidiary of Pfizer, or (B) except as, in the aggregate,
would not reasonably be expected to have a Material Adverse Effect
(as defined in Section 8.11(g)) on Pfizer, subject to obtaining
or making the consents, approvals, orders, authorizations, registrations,
declarations and filings referred to in paragraph (iii)
below, any loan or credit agreement, note, mortgage, bond, indenture,
lease, benefit plan or other agreement, obligation, instrument,
permit, concession, franchise, license, judgment, order, decree,
statute, law, ordinance, rule or regulation applicable to Pfizer
or any Subsidiary of Pfizer or their respective properties or assets.
(iii)
No consent, approval, order or authorization of, or registration,
declaration or filing with, any supranational, national, state,
municipal, local or foreign government, any instrumentality, subdivision,
court, administrative agency or commission or other authority thereof,
or any quasi-governmental or private body exercising any regulatory,
taxing, importing or other governmental or quasi-governmental authority
(a "Governmental Entity"), is required by or with respect to Pfizer
or any Subsidiary of Pfizer in connection with the execution and
delivery of this Agreement by Pfizer or the consummation of the
Merger and the other transactions contemplated hereby, except for
those required under or in relation to (A) the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended (the "HSR Act"),
(B) state securities or "blue sky" laws (the "Blue Sky Laws"), (C)
the Securities Act, (D) the Exchange Act, (E) the DGCL with respect
to the filing of the Certificate of Merger, (F) rules and regulations
of the NYSE, (G) antitrust or other competition laws of other jurisdictions,
and (H) such consents, approvals, orders, authorizations, registrations,
declarations and filings the failures of which to make or obtain,
in the aggregate, would not reasonably be expected to have a Material
Adverse Effect on Pfizer. Consents, approvals, orders, authorizations,
registrations, declarations and filings required under or in relation
to any of the foregoing clauses (A) through (G) are hereinafter
referred to as "Necessary Consents."
(d) Reports
and Financial Statements.
(i)
Pfizer has filed all required registration statements, prospectuses,
reports, schedules, forms, statements and other documents required
to be filed by it with the SEC since January 1, 1998 (collectively,
including all exhibits thereto, the "Pfizer SEC Reports"). No Subsidiary
of Pfizer is required to file any form, report, registration statement,
prospectus or other document with the SEC. None of the Pfizer SEC
Reports, as of their respective dates (and, if amended or superseded
by a filing prior to the date of this Agreement or the Closing Date,
then on the date of such filing), contained or will contain any
untrue statement of a material fact or omitted or will omit to state
a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which
they were made, not misleading. Each of the financial statements
(including the related notes) included in the Pfizer SEC Reports
presents fairly, in all material respects, the consolidated financial
position and consolidated results of operations and cash flows of
Pfizer and its consolidated Subsidiaries as of the respective dates
or for the respective periods set forth therein, all in conformity
with GAAP consistently applied during the periods involved except
as otherwise noted therein, and subject, in the case of the unaudited
interim financial statements, to the absence of notes and normal
year-end adjustments that have not been and are not expected to
be material in amount. All of such Pfizer SEC Reports, as of their
respective dates (and as of the date of any amendment to the respective
Pfizer SEC Report), complied as to form in all material respects
with the applicable requirements of the Securities Act and the Exchange
Act and the rules and regulations promulgated thereunder.
(ii)
Except as disclosed in the Pfizer SEC Reports filed prior to the
date hereof, since December 31, 1998, Pfizer and its Subsidiaries
have not incurred any liabilities that are of a nature that would
be required to be disclosed on a balance sheet of Pfizer and its
Subsidiaries or the footnotes thereto prepared in conformity with
GAAP, other than (A) liabilities incurred in the ordinary course
of business or (B) liabilities that, in the aggregate, would not
reasonably be expected to have a Material Adverse Effect on Pfizer.
(e)
Information Supplied.
(i)
None of the information supplied or to be supplied by Pfizer for
inclusion or incorporation by reference in (A) the Form S-4 (as
defined in Section 5.1) will, at the time the Form S-4 is filed
with the SEC, at any time it is amended or supplemented or at the
time it becomes effective under the Securities Act, contain any
untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements
therein not misleading and (B) the Joint Proxy Statement/Prospectus
(as defined in Section 5.1) will, on the date it is first mailed
to Warner-Lambert stockholders or Pfizer stockholders or at the
time of the Warner-Lambert Stockholders Meeting or the Pfizer Stockholders
Meeting (each as defined in Section 5.1), contain any untrue statement
of a material fact or omit to state any material fact required to
be stated therein or necessary in order to make the statements therein,
in light of the circumstances under which they were made, not misleading.
The Form S-4 and the Joint Proxy Statement/Prospectus will comply
as to form in all material respects with the requirements of the
Exchange Act and the Securities Act and the rules and regulations
of the SEC thereunder.
(ii)
Notwithstanding the foregoing provisions of this Section 3.1(e),
no representation or warranty is made by Pfizer with respect to
statements made or incorporated by reference in the Form S-4 or
the Joint Proxy Statement/Prospectus based on information supplied
by Warner-Lambert for inclusion or incorporation by reference therein.
(f)
Board Approval. The
Board of Directors of Pfizer, by resolutions duly adopted by unanimous
vote at a meeting duly called and held and not subsequently rescinded
or modified in any way (the "Pfizer Board Approval"), has duly (i)
determined that this Agreement and the Merger are advisable and are
fair to and in the best interests of Pfizer and its stockholders,
(ii) approved this Agreement, the Merger, the Board Amendment, the
Pfizer Bylaw Amendment and the Share Issuance and (iii) recommended
that the stockholders of Pfizer approve the Share Issuance and adopt
the Board Amendment and directed that the Share Issuance and the Board
Amendment be submitted for consideration by Pfizer's stockholders
at the Pfizer Stockholders Meeting. The Pfizer Board Approval constitutes
approval of this Agreement and the Merger for purposes of Section
203 of the DGCL. To the knowledge of Pfizer, except for Section 203
of the DGCL (which has been rendered inapplicable), no state takeover
statute is applicable to this Agreement, the Merger or the other transactions
contemplated hereby.
(g)
Vote Required. The affirmative vote of at
least a majority of the votes cast by the holders of Pfizer Common
Stock, provided that the total votes cast represents a majority of
the outstanding shares of Pfizer Common Stock, is the only vote necessary
to approve the Share Issuance. The affirmative vote of the holders
of at least 80% of the outstanding shares of Pfizer Common Stock is
necessary to approve the Board Amendment.
(h)
Litigation; Compliance with Laws.
(i)
Except as disclosed in the Pfizer SEC Reports filed prior to the
date of this Agreement, there are no suits, actions or proceedings
(collectively "Actions") pending or, to the knowledge of Pfizer,
threatened, against or affecting Pfizer or any Subsidiary of Pfizer
which, in the aggregate, would reasonably be expected to have a
Material Adverse Effect on Pfizer, nor are there any judgments,
decrees, injunctions, rules or orders of any Governmental Entity
or arbitrator outstanding against Pfizer or any Subsidiary of Pfizer
which, in the aggregate, would reasonably be expected to have a
Material Adverse Effect on Pfizer.
(ii)
Except as disclosed in the Pfizer SEC Reports filed prior to the
date of this Agreement and except as, in the aggregate, would not
reasonably be expected to have a Material Adverse Effect on Pfizer,
Pfizer and its Subsidiaries hold all permits, licenses, variances,
exemptions, orders and approvals of all Governmental Entities which
are necessary for the operation of the businesses of Pfizer and
its Subsidiaries, taken as a whole (the "Pfizer Permits"). Pfizer
and its Subsidiaries are in compliance with the terms of the Pfizer
Permits, except where the failures to so comply, in the aggregate,
would not reasonably be expected to have a Material Adverse Effect
on Pfizer. Except as disclosed in the Pfizer SEC Reports filed prior
to the date of this Agreement, neither Pfizer nor any of its Subsidiaries
is in violation of, and Pfizer and its Subsidiaries have not received
any notices of violations with respect to, any laws, ordinances
or regulations of any Governmental Entity, except for violations
which, in the aggregate, would not reasonably be expected to have
a Material Adverse Effect on Pfizer.
(i)
Absence of Certain Changes or Events. Except for liabilities
incurred in connection with this Agreement or the transactions contemplated
hereby, except as disclosed in the Pfizer SEC Reports filed prior
to the date of this Agreement, and except as permitted by Section
4.1, since September 30, 1999, (i) Pfizer and its Subsidiaries have
conducted their business only in the ordinary course and (ii) there
has not been any action taken by Pfizer or any of its Subsidiaries
during the period from September 30,1999 through the date of this
Agreement that, if taken during the period from the date of this Agreement
through the Effective Time, would constitute a breach of Section 4.1.
Except as disclosed in the Pfizer SEC Reports filed prior to the date
of this Agreement, since December 31, 1998, there have not been any
changes, circumstances or events (including changes, circumstances
or events involving, impacting or related to development stage products
of Pfizer) which, in the aggregate, have had, or would reasonably
be expected to have, a Material Adverse Effect on Pfizer.
(j)
Environmental Matters. Except as, in the
aggregate, would not reasonably be expected to have a Material Adverse
Effect on Pfizer and except as disclosed in the Pfizer SEC Reports
filed prior to the date of this Agreement (i) the operations of Pfizer
and its Subsidiaries have been and are in compliance with all Environmental
Laws (as defined below), and with all licenses required by Environmental
Laws, (ii) there are no pending or, to the knowledge of Pfizer, threatened,
Actions under or pursuant to Environmental Laws against Pfizer or
its Subsidiaries or involving any real property currently or, to the
knowledge of Pfizer, formerly owned, operated or leased by Pfizer
or its Subsidiaries, (iii) Pfizer and its Subsidiaries are not subject
to any Environmental Liabilities (as defined below), and, to the knowledge
of Pfizer, no facts, circumstances or conditions relating to, arising
from, associated with or attributable to any real property currently
or, to the knowledge of Pfizer, formerly owned, operated or leased
by Pfizer or its Subsidiaries or operations thereon would reasonably
be expected to result in Environmental Liabilities, (iv) all real
property owned and, to the knowledge of Pfizer, all real property
operated or leased by Pfizer or its Subsidiaries is free of contamination
from Hazardous Material (as defined below) that would have an adverse
effect on human health or the environment and (v) there is not now,
nor, to the knowledge of Pfizer, has there been in the past, on, in
or under any real property owned, leased or operated by Pfizer or
any of its predecessors (A) any underground storage tanks regulated
pursuant to 40 C.F.R. Part 280 or delegated state programs, dikes
or impoundments containing more than a reportable quantity of Hazardous
Materials, (B) any friable asbestos-containing materials or (C) any
polychlorinated biphenyls.
As
used in this Agreement, "Environmental Laws" means any and all federal,
state, foreign, interstate, local or municipal laws, rules, orders,
regulations, statutes, ordinances, codes, decisions, injunctions,
orders, decrees, requirements of any Governmental Entity, any and
all common law requirements, rules and bases of liability regulating,
relating to or imposing liability or standards of conduct concerning
pollution, Hazardous Materials or protection of human health, safety
or the environment, as currently in effect and includes the Comprehensive
Environmental Response, Compensation and Liability Act, 42 U.S.C.
9601, et seq., the Hazardous Materials Transportation Act, 49 U.S.C.
1801, et seq., the Resource Conservation and Recovery Act, 42 U.S.C.
6901, et seq., the Clean Water Act, 33 U.S.C. 1251, et seq., the Clean
Air Act, 33 U.S.C. 2601, et seq., the Toxic Substances Control Act,
15 U.S.C. 2601, et seq., the Federal Insecticide, Fungicide and Rodenticide
Act, 7 U.S.C. 136, et seq., Occupational Safety and Health Act 29
U.S.C. 651, et seq. and the Oil Pollution Act of 1990, 33 U.S.C. 2701,
et seq., as such laws have been amended or supplemented, and the regulations
promulgated pursuant thereto, and all analogous state or local statutes.
As used in this Agreement, "Environmental Liabilities" with respect
to any person means any and all liabilities of or relating to such
person or any of its Subsidiaries (including any entity which is,
in whole or in part, a predecessor of such person or any of such Subsidiaries),
whether vested or unvested, contingent or fixed, actual or potential,
known or unknown, which (i) arise under or relate to matters covered
by Environmental Laws and (ii) relate to actions occurring or conditions
existing on or prior to the Closing Date. As used in this Agreement,
"Hazardous Materials" means any materials or wastes, defined, listed,
classified or regulated as hazardous, toxic, a pollutant, a contaminant
or dangerous in or under any Environmental Laws which includes petroleum,
petroleum products, friable asbestos, urea formaldehyde, radioactive
materials and polychlorinated biphenyls.
(k)
Intellectual Property. Except as, in the aggregate, would
not reasonably be expected to have a Material Adverse Effect on Pfizer
and except as disclosed in the Pfizer SEC Reports filed prior to the
date of the Agreement: (i) Pfizer and each of its Subsidiaries owns,
or is licensed to use (in each case, free and clear of any Liens),
all Intellectual Property (as defined below) used in or necessary
for the conduct of its business as currently conducted; (ii) the use
of any Intellectual Property by Pfizer and its Subsidiaries does not
infringe on or otherwise violate the rights of any Person and is in
accordance with any applicable license pursuant to which Pfizer or
any Subsidiary acquired the right to use any Intellectual Property;
(iii) to the knowledge of Pfizer, no Person is challenging, infringing
on or otherwise violating any right of Pfizer or any of its Subsidiaries
with respect to any Intellectual Property owned by and/or licensed
to Pfizer or its Subsidiaries; and (iv) neither Pfizer nor any of
its Subsidiaries has received any written notice or otherwise has
knowledge of any pending claim, order or proceeding with respect to
any Intellectual Property used by Pfizer and its Subsidiaries and
to its knowledge no Intellectual Property owned and/or licensed by
Pfizer or its Subsidiaries is being used or enforced in a manner that
would reasonably be expected to result in the abandonment, cancellation
or unenforceability of such Intellectual Property. For purposes of
this Agreement, "Intellectual Property" shall mean trademarks, service
marks, brand names, certification marks, trade dress and other indications
of origin, the goodwill associated with the foregoing and registrations
in any jurisdiction of, and applications in any jurisdiction to register,
the foregoing, including any extension, modification or renewal of
any such registration or application; inventions, discoveries and
ideas, whether patentable or not, in any jurisdiction; patents, applications
for patents (including, without limitation, divisions, continuations,
continuations in part and renewal applications), and any renewals,
extensions or reissues thereof, in any jurisdiction; nonpublic information,
trade secrets and confidential information and rights in any jurisdiction
to limit the use or disclosure thereof by any person; writings and
other works, whether copyrightable or not, in any jurisdiction; and
registrations or applications for registration of copyrights in any
jurisdiction, and any renewals or extensions thereof; any similar
intellectual property or proprietary rights.
(l)
Brokers or Finders. No agent, broker, investment
banker, financial advisor or other firm or Person is or will be entitled
to any broker's or finder's fee or any other similar commission or
fee in connection with any of the transactions contemplated by this
Agreement, based upon arrangements made by or on behalf of Pfizer,
except Lazard Freres & Co. LLC and Merrill Lynch & Co., each of whose
fees and expenses will be paid by Pfizer in accordance with Pfizer's
agreements with such firms, copies of which have been provided to
Warner-Lambert.
(m)
Opinions of Pfizer Financial Advisors. Pfizer has received
the opinions of Lazard Freres & Co. LLC and Merrill Lynch & Co., each
dated the date of this Agreement, to the effect that, as of such date,
the Exchange Ratio is fair to Pfizer, from a financial point of view,
copies of which opinions will be promptly delivered to Warner-Lambert.
(n)
Accounting Matters. To the knowledge of Pfizer, neither
Pfizer nor any of its affiliates has taken or agreed to take any action,
and no fact or circumstance is known to Pfizer, that would prevent
Pfizer from accounting for the Merger as a "pooling-of-interests"
under Opinion 16 of the Accounting Principles Board and applicable
SEC rules and regulations.
(o)
Taxes. Each of Pfizer and its Subsidiaries
has accurately filed all Tax Returns required to have been filed (or
extensions have been duly obtained) and has paid all Taxes required
to have been paid by it, except where failure to accurately file such
Tax Returns or pay such Taxes would not, in the aggregate, reasonably
be expected to have a Material Adverse Effect on Pfizer. For purposes
of this Agreement: (i) "Tax" (and, with correlative meaning, "Taxes")
means any federal, state, local or foreign income, gross receipts,
property, sales, use, license, excise, franchise, employment, payroll,
withholding, alternative or add on minimum, ad valorem, transfer or
excise tax, or any other tax, custom, duty, governmental fee or other
like assessment or charge of any kind whatsoever, together with any
interest or penalty, imposed by any governmental authority or any
obligation to pay Taxes imposed on any entity for which a party to
this Agreement is liable as a result of any indemnification provision
or other contractual obligation, and (ii) "Tax Return" means any return,
report or similar statement required to be filed with respect to any
Tax (including any attached schedules), including, without limitation,
any information return, claim for refund, amended return or declaration
of estimated Tax.
(p)
Certain Contracts. As of the date hereof, except as set forth
in the Pfizer SEC Reports filed prior to the date of this Agreement,
neither Pfizer nor any of its Subsidiaries is a party to or bound
by (i) any "material contracts" (as such term is defined in Item 601(b)(10)
of Regulation S-K of the SEC) or (ii) any non-competition agreements
or any other agreements or arrangements that limit or otherwise restrict
Pfizer or any of its Subsidiaries or any of their respective affiliates
or any successor thereto, or that would, after the Effective Time,
to the knowledge of Pfizer, limit or restrict Pfizer or any of its
affiliates (including the Surviving Corporation) or any successor
thereto, from engaging or competing in any line of business or in
any geographic area, which agreements or arrangements, in the aggregate,
would reasonably be expected to have a Material Adverse Effect on
Pfizer and its Subsidiaries (including the Surviving Corporation and
its Subsidiaries), taken together, after giving effect to the Merger.
(q)
Pfizer Stockholder Rights Plan. The Board of Directors of
Pfizer has amended the Pfizer Rights Agreement in accordance with
its terms to render it inapplicable to the transactions contemplated
by this Agreement. Pfizer has delivered to Warner-Lambert a true and
correct copy of the Pfizer Rights Agreement, as amended, in effect
as of execution and delivery of this Agreement.
(r)
Employee Benefit Plans. Except as disclosed in the Pfizer
SEC Reports, there are no Benefit Plans maintained by Pfizer covering
only Pfizer executive officers. Each Benefit Plan maintained by Pfizer
has been operated and administered in accordance with its terms and
applicable law, except where failure to do so would not reasonably
be expected to have a Material Adverse Effect on Pfizer. The execution
of this Agreement and the consummation of the Merger will not constitute
an event under any Benefit Plan maintained by Pfizer that will or
may result in any payment, acceleration, forgiveness of indebtedness,
vesting, distribution, increase in compensation or benefits or obligation
to fund benefits with respect to any Pfizer employee which, in the
aggregate, have had, or would reasonably be expected to have, a Material
Adverse Effect on Pfizer.
(s)
Labor Matters. Except where failure to comply would
not reasonably be expected to have a Material Adverse Effect on Pfizer,
Pfizer is and has been in compliance with all applicable laws of the
United States, or of any state or local government or any subdivision
thereof or of any foreign government respecting employment and employment
practices, terms and conditions of employment and wages and hours,
including, without limitation, ERISA, the Code, the Immigration Reform
and Control Act, the Worker Adjustment and Retraining Notification
Act (the "WARN Act"), any laws respecting employment discrimination,
sexual harassment, disability rights or benefits, equal opportunity,
plant closure issues, affirmative action, workers' compensation, employee
benefits, severance payments, continuation of health insurance ("COBRA"),
labor relations, employee leave issues, wage and hour standards, occupational
safety and health requirements and unemployment insurance and related
matters, and is not engaged in any unfair labor practices.
3.2 Representations
and Warranties of Warner-Lambert. Except as set forth in the Warner-Lambert
Disclosure Schedule delivered by Warner-Lambert to Pfizer prior to
the execution of this Agreement (the "Warner-Lambert Disclosure Schedule")
(each section of which qualifies the correspondingly numbered representation
and warranty or covenant), Warner-Lambert represents and warrants
to Pfizer as follows:
(a)
Organization, Standing and Power; Subsidiaries.
(i)
Each of Warner-Lambert and each of its Subsidiaries is duly organized,
validly existing and in good standing under the laws of its jurisdiction
of incorporation or organization, has the requisite power and authority
to own, lease and operate its properties and to carry on its business
as now being conducted, except where the failures to be so organized,
existing and in good standing or to have such power and authority,
in the aggregate, would not reasonably be expected to have a Material
Adverse Effect on Warner-Lambert, and is duly qualified and in good
standing to do business in each jurisdiction in which the nature
of its business or the ownership or leasing of its properties makes
such qualification necessary other than in such jurisdictions where
the failures so to qualify or to be in good standing in the aggregate
would not reasonably be expected to have a Material Adverse Effect
on Warner-Lambert. The copies of the certificate of incorporation
and bylaws of Warner-Lambert which were previously furnished or
made available to Pfizer are true, complete and correct copies of
such documents as in effect on the date of this Agreement.
(ii) Exhibit
21 to Warner-Lambert's Annual Report on Form 10K for the year ended
December 31, 1998 includes all the Subsidiaries of Warner-Lambert
which as of the date of this Agreement are Significant Subsidiaries
(as defined in Rule 1-02 of Regulation S-X of the SEC). All the
outstanding shares of capital stock of, or other equity interests
in, each such Significant Subsidiary have been validly issued and
are fully paid and non-assessable and are, except as set forth in
Exhibit 21, owned directly or indirectly by Warner-Lambert, free
and clear of all Liens and free of any other restriction (including
any restriction on the right to vote, sell or otherwise dispose
of such capital stock or other ownership interests), except for
restrictions imposed by applicable securities laws. Except as set
forth in the Warner-Lambert SEC Reports (as defined in Section 3.2(d))
filed prior to the date hereof, neither Warner-Lambert nor any of
its Subsidiaries directly or indirectly owns any equity or similar
interest in, or any interest convertible into or exchangeable or
exercisable for, any corporation, partnership, joint venture or
other business association or entity (other than Subsidiaries),
that is or would reasonably be expected to be material to Warner-Lambert
and its Subsidiaries taken as a whole.
(b) Capital Structure.
(i)
As of December 31, 1999, the authorized capital stock of Warner-Lambert
consisted of (A) 1,200,000,000 shares of Warner-Lambert Common Stock,
of which 862,047,037 shares were outstanding and 99,934,571 shares
were held in the treasury of Warner-Lambert and (B) 5,000,000 shares
of Preferred Stock, par value $1.00 per share, none of which were
outstanding and 400,000 shares of which have been designated Series
A Junior Participating Preferred Stock and reserved for issuance
upon exercise of the rights (the "Warner-Lambert Rights") distributed
to the holders of Warner-Lambert Common Stock pursuant to the Rights
Agreement dated as of March 25, 1997, between Warner-Lambert and
First Chicago Trust Company of New York (the "Warner-Lambert Rights
Agreement"). Since December 31, 1999 to the date of this Agreement,
there have been no issuances of shares of the capital stock of Warner-Lambert
or any other securities of Warner-Lambert other than issuances of
shares (and accompanying Warner-Lambert Rights) pursuant to options
or rights outstanding as of December 31, 1999 under the Benefit
Plans of Warner-Lambert. All issued and outstanding shares of the
capital stock of Warner-Lambert are duly authorized, validly issued,
fully paid and non-assessable, and no class of capital stock is
entitled to preemptive rights. There were outstanding as of December
31, 1999 no options, warrants or other rights to acquire capital
stock from Warner-Lambert other than (x) the Warner-Lambert Rights
and (y) options and other rights to acquire capital stock of Warner-Lambert
representing in the aggregate the right to purchase 71,520,520 shares
of Warner-Lambert Common Stock (collectively, the "Warner-Lambert
Stock Options") under the 1989 Stock Plan, the 1992 Stock Plan,
the 1996 Stock Plan and the Restricted Stock Plan for Directors
(collectively, the "Warner-Lambert Stock Option Plans"). Except
in connection with pre-employment grants of Warner-Lambert Stock
Options made in a manner consistent with past practice to purchase,
in the aggregate, not more than 5,000 shares of Warner-Lambert Common
Stock, Section 3.2(b) of the Warner-Lambert Disclosure Schedule
sets forth a complete and correct list, as of December 31, 1999,
of the number of shares of Warner-Lambert Common Stock subject to
Warner-Lambert Stock Options or other rights to purchase or receive
Warner-Lambert Common Stock granted under the Warner-Lambert Benefit
Plans or otherwise, the dates of grant and the exercise prices thereof.
Except in connection with pre-employment grants of Warner-Lambert
Stock Options made in a manner consistent with past practice to
purchase, in the aggregate, not more than 10,000 shares of Warner-Lambert
Common Stock, and except as set forth on Schedule 3.2(b)(i) of the
Warner-Lambert Disclosure Schedule, no options or warrants or other
rights to acquire capital stock from Warner-Lambert have been issued
or granted since December 31, 1999 to the date of this Agreement.
(ii) No
bonds, debentures, notes or other indebtedness of Warner-Lambert
having the right to vote on any matters on which stockholders may
vote ("Warner-Lambert Voting Debt") are issued or outstanding.
(iii)
Except as otherwise set forth in this Section 3.2(b), as of the
date of this Agreement, there are no securities, options, warrants,
calls, rights, commitments, agreements, arrangements or undertakings
of any kind to which Warner-Lambert or any of its Subsidiaries is
a party or by which any of them is bound obligating Warner-Lambert
or any of its Subsidiaries to issue, deliver or sell, or cause to
be issued, delivered or sold, additional shares of capital stock
or other voting securities of Warner-Lambert or any of its Subsidiaries
or obligating Warner-Lambert or any of its Subsidiaries to issue,
grant, extend or enter into any such security, option, warrant,
call, right, commitment, agreement, arrangement or undertaking.
As of the date of this Agreement, there are no outstanding obligations
of Warner-Lambert or any of its Subsidiaries to repurchase, redeem
or otherwise acquire any shares of capital stock of Warner-Lambert
or any of its Subsidiaries.
(c) Authority; No Conflicts.
(i) Warner-Lambert
has all requisite corporate power and authority to enter into this
Agreement and to consummate the transactions contemplated hereby,
subject in the case of the consummation of the Merger to the adoption
of this Agreement by the Required Warner-Lambert Vote (as defined
in Section 3.2(g)). The execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby have
been duly authorized by all necessary corporate action on the part
of Warner-Lambert, subject in the case of the consummation of the
Merger to the adoption of this Agreement by the Required Warner-Lambert
Vote. This Agreement has been duly executed and delivered by Warner-Lambert
and constitutes a valid and binding agreement of Warner-Lambert,
enforceable against it in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium and similar laws relating to or affecting creditors generally
or by general equity principles (regardless of whether such enforceability
is considered in a proceeding in equity or at law).
(ii)
The execution and delivery of this Agreement by Warner-Lambert
does not or will not, as the case may be, and the consummation by
Warner-Lambert of the Merger and the other transactions contemplated
hereby will not, conflict with, or result in a Violation pursuant
to: (A) any provision of the certificate of incorporation or bylaws
of Warner-Lambert or any material Subsidiary of Warner-Lambert or
(B) except as, in the aggregate, would not reasonably be expected
to have a Material Adverse Effect on Warner-Lambert or, subject
to obtaining or making the consents, approvals, orders, authorizations,
registrations, declarations and filings referred to in paragraph
(iii) below, any loan or credit agreement, note, mortgage, bond,
indenture, lease, benefit plan or other agreement, obligation, instrument,
permit, concession, franchise, license, judgment, order, decree,
statute, law, ordinance, rule or regulation applicable to Warner-Lambert
or any Subsidiary of Warner-Lambert or their respective properties
or assets.
(iii) No
consent, approval, order or authorization of, or registration, declaration
or filing with, any Governmental Entity is required by or with respect
to Warner-Lambert or any Subsidiary of Warner-Lambert in connection
with the execution and delivery of this Agreement by Warner-Lambert
or the consummation of the Merger and the other transactions contemplated
hereby, except the Necessary Consents and such consents, approvals,
orders, authorizations, registrations, declarations and filings
the failure of which to make or obtain, in the aggregate, would
not reasonably be expected to have a Material Adverse Effect on
Warner-Lambert.
(d) Reports and Financial Statements.
(i) Warner-Lambert
has filed all required registration statements, prospectuses, reports,
schedules, forms, statements and other documents required to be
filed by it with the SEC since January 1, 1998 (collectively, including
all exhibits thereto, the "Warner-Lambert SEC Reports"). No Subsidiary
of Warner-Lambert is required to file any form, report, registration
statement or prospectus or other document with the SEC. None of
the Warner-Lambert SEC Reports, as of their respective dates (and,
if amended or superseded by a filing prior to the date of this Agreement
or the Closing Date, then on the date of such filing), contained
or will contain any untrue statement of a material fact or omitted
or will omit to state a material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading. Each of the financial
statements (including the related notes) included in the Warner-Lambert
SEC Reports presents fairly, in all material respects, the consolidated
financial position and consolidated results of operations and cash
flows of Warner-Lambert and its consolidated Subsidiaries as of
the respective dates or for the respective periods set forth therein,
all in conformity with GAAP consistently applied during the periods
involved except as otherwise noted therein, and subject, in the
case of the unaudited interim financial statements, to the absence
of notes and normal and recurring year-end adjustments that have
not been and are not expected to be material in amount. All of such
Warner-Lambert SEC Reports, as of their respective dates (and as
of the date of any amendment to the respective Warner-Lambert SEC
Report), complied as to form in all material respects with the applicable
requirements of the Securities Act and the Exchange Act and the
rules and regulations promulgated thereunder.
(ii)
Except as disclosed in the Warner-Lambert SEC Reports filed
prior to the date hereof, since December 31, 1998, Warner-Lambert
and its Subsidiaries have not incurred any liabilities that are
of a nature that would be required to be disclosed on a balance
sheet of Warner-Lambert and its Subsidiaries or the footnotes thereto
prepared in conformity with GAAP, other than (A) liabilities incurred
in the ordinary course of business, or (B) liabilities that, in
the aggregate, would not reasonably be expected to have a Material
Adverse Effect on Warner-Lambert.
(e) Information Supplied.
(i) None
of the information supplied or to be supplied by Warner-Lambert
for inclusion or incorporation by reference in (A) the Form S-4
will, at the time the Form S-4 is filed with the SEC, at any time
it is amended or supplemented or at the time it becomes effective
under the Securities Act, contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein not misleading, and
(B) the Joint Proxy Statement/Prospectus will, on the date it is
first mailed to Warner-Lambert stockholders or Pfizer stockholders
or at the time of the Warner-Lambert Stockholders Meeting or the
Pfizer Stockholders Meeting, contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading. The
Form S-4 and the Joint Proxy Statement/Prospectus will comply as
to form in all material respects with the requirements of the Exchange
Act and the Securities Act and the rules and regulations of the
SEC thereunder.
(ii)
Notwithstanding the foregoing provisions of this Section 3.2(e),
no representation or warranty is made by Warner-Lambert with respect
to statements made or incorporated by reference in the Form S-4
or the Joint Proxy Statement/Prospectus based on information supplied
by Pfizer or Merger Sub for inclusion or incorporation by reference
therein.
(f)
Board Approval. The Board of Directors of Warner-Lambert,
by resolutions duly adopted by unanimous vote of those voting at a
meeting duly called and held and not subsequently rescinded or modified
in any way (the "Warner-Lambert Board Approval"), has duly (i) determined
that this Agreement and the Merger are advisable and are fair to and
in the best interests of Warner-Lambert and its stockholders, (ii)
approved this Agreement and the Merger and (iii) recommended that
the stockholders of Warner-Lambert adopt this Agreement and approve
the Merger and directed that this Agreement and the transactions contemplated
hereby be submitted for consideration by Warner-Lambert's stockholders
at the Warner-Lambert Stockholders Meeting. The Warner-Lambert Board
Approval constitutes approval of this Agreement and the Merger for
purposes of Section 203 of the DGCL. To the knowledge of Warner-Lambert,
except for Section 203 of the DGCL (which has been rendered inapplicable),
no state takeover statute is applicable to this Agreement, the Merger
or the other transactions contemplated hereby or thereby.
(g)
Vote Required. The affirmative vote of the holders of
a majority of the outstanding shares of Warner-Lambert Common Stock
to adopt this Agreement and approve the Merger (the "Required Warner-Lambert
Vote") is the only vote of the holders of any class or series of Warner-Lambert
capital stock necessary to adopt this Agreement and approve the Merger
and the other transactions contemplated hereby.
(h) Litigation; Compliance with Laws.
(i)
Except as disclosed in the Warner-Lambert SEC Reports filed prior
to the date of this Agreement, there are no Actions pending or,
to the knowledge of Warner-Lambert, threatened, against or affecting
Warner-Lambert or any Subsidiary of Warner-Lambert which, in the
aggregate, would reasonably be expected to have a Material Adverse
Effect on Warner-Lambert, nor are there any judgments, decrees,
injunctions, rules or orders of any Governmental Entity or arbitrator
outstanding against Warner-Lambert or any Subsidiary of Warner-Lambert
which, in the aggregate, would reasonably be expected to have a
Material Adverse Effect on Warner-Lambert.
(ii)
Except as disclosed in the Warner-Lambert SEC Reports filed prior
to the date of the Agreement and except as would, in the aggregate,
not reasonably be expected to have a Material Adverse Effect on
Warner-Lambert, Warner-Lambert and its Subsidiaries hold all permits,
licenses, variances, exemptions, orders and approvals of all Governmental
Entities necessary for the operation of the businesses of Warner-Lambert
and its Subsidiaries, taken as a whole (the "Warner-Lambert Permits").
Warner-Lambert and its Subsidiaries are in compliance with the terms
of the Warner-Lambert Permits, except where the failures to so comply,
in the aggregate, would not reasonably be expected to have a Material
Adverse Effect on Warner-Lambert. Except as disclosed in the Warner-Lambert
SEC Reports filed prior to the date of this Agreement, neither Warner-Lambert
nor its Subsidiaries is in violation of, and Warner-Lambert and
its Subsidiaries have not received any notices of violations with
respect to, any laws, ordinances or regulations of any Governmental
Entity, except for violations which, in the aggregate, would not
reasonably be expected to have a Material Adverse Effect on Warner-Lambert.
(i)
Absence of Certain Changes or Events. Except for
liabilities incurred in connection with this Agreement or the transactions
contemplated hereby, except as disclosed in the Warner-Lambert SEC
Reports filed prior to the date of this Agreement, except as permitted
by Section 4.2, since September 30, 1999, (i) Warner-Lambert and its
Subsidiaries have conducted their business only in the ordinary course
and (ii) there has not been any action taken by Warner-Lambert or
any of its Subsidiaries during the period from September 30, 1999
through the date of this Agreement that, if taken during the period
from the date of this Agreement through the Effective Time, would
constitute a breach of Section 4.2. Except as disclosed in the Warner-Lambert
SEC Reports filed prior to the date of this Agreement, since December
31, 1998, there have not been any changes, circumstances or events
(including changes, circumstances or events involving, impacting or
related to development stage products of Warner-Lambert) which, in
the aggregate, have had, or would reasonably be expected to have,
a Material Adverse Effect on Warner-Lambert.
(j)
Environmental Matters. Except as, in the aggregate,
would not reasonably be expected to have a Material Adverse Effect
on Warner-Lambert and except as disclosed in the Warner-Lambert SEC
Reports filed prior to the date of this Agreement, (i) the operations
of Warner-Lambert and its Subsidiaries have been and are in compliance
with all Environmental Laws and with all licenses required by Environmental
Laws, (ii) there are no pending or, to the knowledge of Warner-Lambert,
threatened, Actions under or pursuant to Environmental Laws against
Warner-Lambert or its Subsidiaries or involving any real property
currently or, to the knowledge of Warner-Lambert, formerly owned,
operated or leased by Warner-Lambert or its Subsidiaries, (iii) Warner-Lambert
and its Subsidiaries are not subject to any Environmental Liabilities
and, to the knowledge of Warner-Lambert, no facts, circumstances or
conditions relating to, arising from, associated with or attributable
to any real property currently or, to the knowledge of Warner-Lambert,
formerly owned, operated or leased by Warner-Lambert or its Subsidiaries
or operations thereon would reasonably be expected to result in Environmental
Liabilities, (iv) all real property owned and, to the knowledge of
Warner-Lambert, all real property operated or leased by Warner-Lambert
or its Subsidiaries is free of contamination from Hazardous Material
that would have an adverse effect on human health or the environment
and (v) there is not now, nor, to the knowledge of Warner-Lambert,
has there been in the past, on, in or under any real property owned,
leased or operated by Warner-Lambert or any of its predecessors (A)
any underground storage tanks, regulated pursuant to 40 C.F.R. Part
280 or delegated state programs, dikes or impoundments containing
more than a reportable quantity of Hazardous Materials, (B) any friable
asbestos-containing materials or (c) any polychlorinated biphenyls.
(k) Intellectual
Property. Except as, in the aggregate, would not reasonably be
expected to have a Material Adverse Effect on Warner-Lambert and except
as disclosed in the Warner-Lambert SEC Reports filed prior to the
date of this Agreement, (i) Warner-Lambert and each of its Subsidiaries
owns, or is licensed to use (in each case, free and clear of any Liens),
all Intellectual Property used in or necessary for the conduct of
its business as currently conducted; (ii) the use of any Intellectual
Property by Warner-Lambert and its Subsidiaries does not infringe
on or otherwise violate the rights of any Person and is in accordance
with any applicable license pursuant to which Warner-Lambert or any
Subsidiary acquired the right to use any Intellectual Property; (iii)
to the knowledge of Warner-Lambert, no Person is challenging, infringing
on or otherwise violating any right of Warner-Lambert or any of its
Subsidiaries with respect to any Intellectual Property owned by and/or
licensed to Warner-Lambert or its Subsidiaries; and (iv) neither Warner-Lambert
nor any of its Subsidiaries has received any written notice or otherwise
has knowledge of any pending claim, order or proceeding with respect
to any Intellectual Property used by Warner-Lambert and its Subsidiaries
and to its knowledge no Intellectual Property owned and/or licensed
by Warner-Lambert or its Subsidiaries is being used or enforced in
a manner that would reasonably be expected to result in the abandonment,
cancellation or unenforceability of such Intellectual Property.
(l)
Brokers or Finders. No agent, broker, investment banker, financial
advisor or other firm or Person is or will be entitled to any broker's
or finder's fee or any other similar commission or fee in connection
with any of the transactions contemplated by this Agreement, based
upon arrangements made by or on behalf of Warner-Lambert except Bear,
Stearns & Co. Inc. and Goldman Sachs & Co., whose fees and expenses
will be paid by Warner-Lambert in accordance with Warner-Lambert's
agreements with such firm, copies of which have been provided to Pfizer.
(m)
Opinions of Warner-Lambert Financial Advisor.
Warner-Lambert has received the opinions of Bear, Stearns & Co. Inc.
and Goldman Sachs & Co., dated the date of this Agreement, to the
effect that, as of such date, the Exchange Ratio is fair, from a financial
point of view, to the holders of Warner-Lambert Common Stock, copies
of which opinions will promptly be provided to Pfizer.
(n)
Accounting Matters. To the knowledge of Warner-Lambert,
neither Warner-Lambert nor any of its affiliates has taken or agreed
to take any action, and no fact or circumstance is known to Warner-Lambert,
that would prevent Pfizer from accounting for the Merger as a "pooling-of-interests"
under Opinion 16 of the Accounting Principles Board and applicable
SEC rules and regulations.
(o)
Taxes. Each of Warner-Lambert and its Subsidiaries
has accurately filed all Tax Returns required to have been filed (or
extensions have been duly obtained) and has paid all Taxes required
to have been paid by it, except where failure to accurately file such
Tax Returns or pay such Taxes would not, in the aggregate, reasonably
be expected to have a Material Adverse Effect on Warner-Lambert.
(p)
Certain Contracts. As of the date hereof,
except as set forth in the Warner-Lambert SEC Reports filed prior
to the date of this Agreement, neither Warner-Lambert nor any of its
Subsidiaries is a party to or bound by (i) any "material contracts"
(as such term is defined in Item 601(b)(10) of Regulation S-K of the
SEC) or (ii) any non-competition agreements or any other agreements
or arrangements that limit or otherwise restrict Warner-Lambert or
any of its Subsidiaries or any of their respective affiliates or any
successor thereto or that would, after the Effective Time, to the
knowledge of Warner-Lambert, limit or restrict Pfizer or any of its
affiliates (including the Surviving Corporation) or any successor
thereto, from engaging or competing in any line of business or in
any geographic area, which agreements or arrangements, in the aggregate,
would reasonably be expected to have a Material Adverse Effect on
Pfizer and its Subsidiaries (including the Surviving Corporation and
its Subsidiaries), taken together, after giving effect to the Merger.
(q)
Warner-Lambert Stockholder Rights Plan.
The Board of Directors of Warner-Lambert has amended the Warner-Lambert
Rights Agreement in accordance with its terms to render it inapplicable
to the transactions contemplated by this Agreement. Warner-Lambert
has delivered to Pfizer a true and correct copy of the Warner-Lambert
Rights Agreement, as amended, in effect as of execution and delivery
of this Agreement.
(r)
Employee Benefit Plans. Except as disclosed
in the Warner-Lambert SEC Reports, there are no Benefit Plans maintained
by Warner-Lambert covering only Warner-Lambert executive officers.
Each Benefit Plan maintained by Warner-Lambert has been operated and
administered in accordance with its terms and applicable law, except
where failure to do so would not reasonably be expected to have a
Material Adverse Effect on Warner-Lambert. The execution of this Agreement
and the consummation of the Merger will not constitute an event under
any Benefit Plan maintained by Warner-Lambert that will or may result
in any payment, acceleration, forgiveness of indebtedness, vesting,
distribution, increase in compensation or benefits or obligation to
fund benefits with respect to any Warner-Lambert Employee (US), Warner-Lambert
Employee (Non-US) or Warner-Lambert Employee (Collective Bargaining
Units) which, in the aggregate, have had, or would reasonably be expected
to have, a Material Adverse Effect on Warner-Lambert. Warner-Lambert's
Board of Directors has not declared an "other circumstance" to have
occurred within the meaning of Section 4.2(y) of Warner-Lambert's
Enhanced Severance Plan.
(s)
Labor Matters. Except where failure to comply would not reasonably
be expected to have a Material Adverse Effect on Warner-Lambert, Warner-Lambert
is and has been in compliance with all applicable laws of the United
States, or of any state or local government or any subdivision thereof
or of any foreign government respecting employment and employment
practices, terms and conditions of employment and wages and hours,
including, without limitation, ERISA, the Code, the Immigration Reform
and Control Act, the WARN Act, any laws respecting employment discrimination,
sexual harassment, disability rights or benefits, equal opportunity,
plant closure issues, affirmative action, workers' compensation, employee
benefits, severance payments, COBRA, labor relations, employee leave
issues, wage and hour standards, occupational safety and health requirements
and unemployment insurance and related matters, and is not engaged
in any unfair labor practices.
3.3 Representations
and Warranties of Pfizer and Merger Sub. Pfizer and
Merger Sub represent and warrant to Warner-Lambert as follows:
(a)
Organization. Merger Sub is a corporation
duly incorporated, validly existing and in good standing under the
laws of Delaware. Merger Sub is a direct wholly-owned subsidiary of
Pfizer.
(b)
Corporate Authorization. Merger Sub has all requisite corporate
power and authority to enter into this Agreement and to consummate
the transactions contemplated hereby. The execution, delivery and
performance by Merger Sub of this Agreement and the consummation by
Merger Sub of the transactions contemplated hereby have been duly
authorized by all necessary corporate action on the part of Merger
Sub. This Agreement has been duly executed and delivered by Merger
Sub and constitutes a valid and binding agreement of Merger Sub, enforceable
against it in accordance with its terms, except as such enforceability
may be limited by bankruptcy, insolvency, reorganization, moratorium
and other similar laws relating to or affecting creditors generally
or by general equity principles (regardless of whether such enforceability
is considered in a proceeding in equity or at law).
(c)
Non-Contravention. The execution, delivery
and performance by Merger Sub of this Agreement and the consummation
by Merger Sub of the transactions contemplated hereby do not and will
not contravene or conflict with the certificate of incorporation or
bylaws of Merger Sub.
(d)
No Business Activities. Merger Sub has not conducted
any activities other than in connection with the organization of Merger
Sub, the negotiation and execution of this Agreement and the consummation
of the transactions contemplated hereby. Merger Sub has no Subsidiaries.
ARTICLE IV
COVENANTS RELATING TO CONDUCT OF BUSINESS
4.1
Covenants of Pfizer. During the period from the date
of this Agreement and continuing until the Effective Time, Pfizer
agrees as to itself and its Subsidiaries that (except as expressly
contemplated or permitted by this Agreement or the Pfizer Disclosure
Schedule or as required by a Governmental Entity of competent jurisdiction
or to the extent that Warner-Lambert shall otherwise consent in writing,
which consent shall not be unreasonably withheld or delayed):
(a)
Ordinary Course.
(i) Pfizer
and its Subsidiaries shall carry on their respective businesses
in the usual, regular and ordinary course in all material respects,
in substantially the same manner as heretofore conducted, and shall
use all reasonable efforts to preserve intact their present lines
of business, maintain their rights and franchises and preserve their
relationships with customers, suppliers and others having business
dealings with them to the end that their ongoing businesses shall
not be impaired in any material respect at the Effective Time; provided,
however, that no action by Pfizer or its Subsidiaries with respect
to matters specifically addressed by any other provision of this
Section 4.1 shall be deemed a breach of this Section 4.1(a)(i) unless
such action would constitute a breach of one or more of such other
provisions.
(ii) Other
than in connection with acquisitions permitted by Section 4.1(e),
Pfizer shall not, and shall not permit any of its Subsidiaries to,
(A) enter into any new material line of business or (B) incur or
commit to any capital expenditures or any obligations or liabilities
in connection therewith other than capital expenditures and obligations
or liabilities in connection therewith incurred or committed to
in the ordinary course of business consistent with past practice
and which, together with all such expenditures incurred or committed
since January 1, 2000, are not in excess of the amounts set forth
in Section 4.1(a) of the Pfizer Disclosure Schedule.
(b)
Dividends; Changes in Share Capital. Pfizer
shall not, and shall not permit any of its Subsidiaries to, and shall
not propose to, (i) declare or pay any dividends on or make other
distributions in respect of any of its capital stock, except (A) the
declaration and payment of regular quarterly cash dividends not in
excess of $0.09 per share of Pfizer Common Stock with usual record
and payment dates for such dividends in accordance with past dividend
practice and (B) for dividends by wholly owned Subsidiaries of Pfizer,
(ii) split, combine or reclassify any of its capital stock or issue
or authorize or propose the issuance of any other securities in respect
of, in lieu of or in substitution for, shares of its capital stock,
except for any such transaction by a wholly owned Subsidiary of Pfizer
which remains a wholly owned Subsidiary after consummation of such
transaction or (iii) repurchase, redeem or otherwise acquire any shares
of its capital stock or any securities convertible into or exercisable
for any shares of its capital stock except for the purchase from time
to time by Pfizer of Pfizer Common Stock (and the associated Pfizer
Rights) in the ordinary course of business consistent with past practice
in connection with the Pfizer Benefit Plans and, subject to the restrictions
contained in Section 4.1(h) herein, except for the redemption or exchange
of Pfizer Rights in accordance with the Pfizer Rights Agreement or
repurchases of shares of Pfizer Common Stock up to $1.9 billion pursuant
to its previously announced repurchase program.
(c)
Issuance of Securities. Pfizer shall not, and shall
not permit any of its Subsidiaries to, issue, deliver or sell, or
authorize or propose the issuance, delivery or sale of, any shares
of its capital stock of any class, any Pfizer Voting Debt or any securities
convertible into or exercisable for, or any rights, warrants, calls
or options to acquire, any such shares or Pfizer Voting Debt, or enter
into any commitment, arrangement, undertaking or agreement with respect
to any of the foregoing, other than (i) the issuance of Pfizer Common
Stock (and the associated Pfizer Rights) upon the exercise of Pfizer
Stock Options or in connection with other stock-based benefit plans
outstanding on the date hereof, in each case in accordance with their
present terms or pursuant to Pfizer Stock Options or other stock based
awards granted pursuant to clause (ii) below, (ii) the granting of
Pfizer Stock Options or other stock based awards to acquire shares
of Pfizer Common Stock granted under stock based benefit plans outstanding
on the date hereof in the ordinary course of business consistent with
past practice not in excess of the amounts set forth in Section 4.1(c)
of the Pfizer Disclosure Schedule, (iii) issuances by a wholly owned
Subsidiary of Pfizer of capital stock to such Subsidiary's parent
or another wholly owned Subsidiary of Pfizer, (iv) pursuant to acquisitions
set forth on the Pfizer Disclosure Schedule or the financings therefor
or (v) issuances in accordance with the Pfizer Rights Agreement.
(d)
Governing Documents. Except to the extent required to comply
with their respective obligations hereunder or with applicable law,
Pfizer and Merger Sub shall not amend or propose to so amend their
respective certificates of incorporation, bylaws or other governing
documents.
(e)
No Acquisitions. Other than (i) acquisitions disclosed on
the Pfizer Disclosure Schedule and (ii) acquisitions for cash in existing
or related lines of business of Pfizer the fair market value of the
total consideration (including the value of indebtedness acquired
or assumed) for which does not exceed the amount specified in the
aggregate for all such acquisitions in Section 4.1(e) of the Pfizer
Disclosure Schedule and none of which acquisitions referred to in
this clause (ii) presents a material risk of making it more difficult
to obtain any approval or authorization required in connection with
the Merger under Regulatory Laws, Pfizer shall not, and shall not
permit any of its Subsidiaries to, acquire or agree to acquire by
merging or consolidating with, or by purchasing a substantial equity
interest in or a substantial portion of the assets of, or by any other
manner, any business or any corporation, partnership, association
or other business organization or division thereof or otherwise acquire
or agree to acquire any assets (other than the acquisition of assets
used in the operations of the business of Pfizer and its Subsidiaries
in the ordinary course, which assets do not constitute a business
unit, division or all or substantially all of the assets of the transferor);
provided, however, that the foregoing shall not prohibit (x) internal
reorganizations or consolidations involving existing Subsidiaries
of Pfizer or (y) the creation of new Subsidiaries of Pfizer organized
to conduct or continue activities otherwise permitted by this Agreement.
(f)
No Dispositions. Other than (i) internal
reorganizations or consolidations involving existing Subsidiaries
of Pfizer, (ii) dispositions referred to in Pfizer SEC Reports filed
prior to the date of this Agreement or (iii) as may be required by
or in conformance with law or regulation in order to permit or facilitate
the consummation of the transactions contemplated hereby or the transactions
disclosed in the Pfizer Disclosure Schedule, Pfizer shall not, and
shall not permit any of its Subsidiaries to, sell, lease or otherwise
dispose of, or agree to sell, lease or otherwise dispose of, any of
its assets (including capital stock of Subsidiaries of Pfizer but
excluding inventory in the ordinary course of business), if the fair
market value of the total consideration (including the value of the
indebtedness acquired or assumed) therefor exceeds the amount specified
in the aggregate for all such dispositions in Section 4.1(f) of the
Pfizer Disclosure Schedule.
(g)
Investments; Indebtedness. Pfizer shall not, and shall not
permit any of its Subsidiaries to, other than in connection with actions
permitted by Section 4.1(e), (i) make any loans, advances or capital
contributions to, or investments in, any other Person, other than
(x) by Pfizer or a Subsidiary of Pfizer to or in Pfizer or any Subsidiary
of Pfizer, (y) pursuant to any contract or other legal obligation
of Pfizer or any of its Subsidiaries existing at the date of this
Agreement or (z) in the ordinary course of business consistent with
past practice in an aggregate amount not in excess of the aggregate
amount specified in Section 4.1(g) of the Pfizer Disclosure Schedule
(provided that none of such transactions referred to in this clause
(z) presents a material risk of making it more difficult to obtain
any approval or authorization required in connection with the Merger
under Regulatory Laws) or (ii) create, incur, assume or suffer to
exist any indebtedness, issuances of debt securities, guarantees,
loans or advances not in existence as of the date of this Agreement
except pursuant to the credit facilities, indentures and other arrangements
in existence on the date of this Agreement or in the ordinary course
of business consistent with past practice, in each case as such credit
facilities, indentures and other arrangements may be amended, extended,
modified, refunded, renewed or refinanced after the date of this Agreement.
(h)
Pooling; Tax-Free Qualification. Pfizer
shall use its reasonable best efforts not to, and shall use its reasonable
best efforts not to permit any of its Subsidiaries to, take any action
(including any action otherwise permitted by this Section 4.1) that
would prevent or impede the Merger from qualifying as a "pooling of
interests" for accounting purposes or as a "reorganization" under
Section 368 of the Code.
(i) Compensation.
Other than as contemplated by Section 5.6 or by Section 4.1(c) or
4.1(i) of the Pfizer Disclosure Schedule, Pfizer shall not increase
the amount of compensation of any director, executive officer or employee,
make any increase in or commitment to increase any employee benefits,
issue any additional Pfizer Stock Options, adopt or make any commitment
to adopt any additional employee benefit plan or make any contribution,
other than regularly scheduled contributions, to any Pfizer Benefit
Plan and, in the case of any of the foregoing, except in the ordinary
course of business consistent with past practice or as required by
an existing agreement.
(j)
Accounting Methods; Income Tax Elections.
Except as disclosed in Pfizer SEC Reports filed prior to the date
of this Agreement, or as required by a Governmental Entity, Pfizer
shall not change its methods of accounting in effect at December 31,
1998, except as required by changes in GAAP as concurred in by Pfizer's
independent public accountants. Pfizer shall not (i) change its fiscal
year or (ii) make any material tax election, other than in the ordinary
course of business consistent with past practice.
(k)
Certain Agreements. Pfizer shall not, and
shall not permit any of its Subsidiaries to, enter into any agreements
or arrangements that limit or otherwise restrict Pfizer or any of
its Subsidiaries or any of their respective affiliates or any successor
thereto or that could, after the Effective Time, limit or restrict
Pfizer or any of its affiliates (including the Surviving Corporation)
or any successor thereto, from engaging or competing in any line of
business or in any geographic area which agreements or arrangements,
individually or in the aggregate, would reasonably be expected to
have a Material Adverse Effect on Pfizer and its Subsidiaries (including
the Surviving Corporation and its Subsidiaries), taken together, after
giving effect to the Merger.
(l)
No Related Actions. Pfizer will not, and
will not permit any of its Subsidiaries to, agree or commit to do
any of the foregoing.
4.2 Covenants
of Warner-Lambert. During the period from the date of this
Agreement and continuing until the Effective Time, Warner-Lambert
agrees as to itself and its Subsidiaries that (except as expressly
contemplated or permitted by this Agreement, the Warner-Lambert Disclosure
Schedule or as required by a Governmental Entity of competent jurisdiction
or to the extent that Pfizer shall otherwise consent in writing, which
consent shall not be unreasonably withheld or delayed):
(a)
Ordinary Course.
(i) Warner-Lambert
and its Subsidiaries shall carry on their respective businesses
in the usual, regular and ordinary course in all material respects,
in substantially the same manner as heretofore conducted, and shall
use all reasonable efforts to preserve intact their present lines
of business, maintain their rights and franchises and preserve their
relationships with customers, suppliers and others having business
dealings with them to the end that their ongoing businesses shall
not be impaired in any material respect at the Effective Time; provided,
however, that no action by Warner-Lambert or its Subsidiaries with
respect to matters specifically addressed by any other provision
of this Section 4.2 shall be deemed a breach of this Section 4.2(a)(i)
unless such action would constitute a breach of one or more of such
other provisions.
(ii) Other
than in connection with acquisitions permitted by Section 4.2(e),
Warner-Lambert shall not, and shall not permit any of its Subsidiaries
to, (A) enter into any licensing agreement, except for those licensing
agreements set forth on Section 4.2(a)(ii) of the Warner-Lambert
Disclosure Schedule and any such licensing agreements related to
the Schick, Tetra, Capsugel or Adams divisions of Warner-Lambert;
(B) enter into any new material line of business; (C) incur or commit
to any capital expenditures or any obligations or liabilities in
connection therewith other than Permitted Capital Expenditures (as
defined below) and obligations or liabilities in connection therewith,
or (D) with respect to the pharmaceutical and consumer healthcare
businesses (except Schick, Tetra, and Capsugel), enter into any
contract, agreement or other arrangement for the sale of inventories
or for the furnishing of services by Warner-Lambert or any of its
Subsidiaries which contract, agreement or other arrangement involves
expenditures in excess of $10 million or which may give rise to
commitments which may extend beyond twelve months from the date
of such contract, agreement or arrangement, unless such contract,
agreement or arrangement can be terminated by Warner-Lambert or
its Subsidiary, as the case may be, by giving less than 60 days'
notice and without incurring an obligation to pay any material premium
or penalty or suffering any other material detriment. As used herein,
a "Permitted Capital Expenditure" is a capital expenditure which
(i) is set forth on a Capital Expenditure Schedule to be delivered
by Warner-Lambert to Pfizer on or prior to February 28, 2000 to
the extent it is approved by Pfizer (which approval will not be
unreasonably withheld by Pfizer) or (ii) is (A) less than $10 million
in the case of any single expenditure or related series of expenditures
and (B) $100 million in the aggregate for all capital expenditures
incurred pursuant to this clause (ii) and not clause (i). Warner-Lambert
will deliver to Pfizer on a quarterly basis a schedule of actual
capital expenditures made.
(b)
Dividends; Changes in Share Capital. Warner-Lambert
shall not, and shall not permit any of its Subsidiaries to, and shall
not propose to, (i) declare or pay any dividends on or make other
distributions in respect of any of its capital stock, except (A) the
declaration and payment of regular quarterly cash dividends not in
excess of $.24 per share of Warner-Lambert Common Stock with usual
record and payment dates for such dividends in accordance with past
dividend practice and (B) for dividends by wholly owned Subsidiaries
of Warner-Lambert, (ii) split, combine or reclassify any of its capital
stock or issue or authorize or propose the issuance of any other securities
in respect of, in lieu of or in substitution for, shares of its capital
stock, except for any such transaction by a wholly owned Subsidiary
of Warner-Lambert which remains a wholly owned Subsidiary after consummation
of such transaction, or (iii) repurchase, redeem or otherwise acquire
any shares of its capital stock or any securities convertible into
or exercisable for any shares of its capital stock except for the
purchase from time to time by Warner-Lambert of Warner-Lambert Common
Stock (and the associated Warner-Lambert Rights) in the ordinary course
of business consistent with past practice in connection with the Warner-Lambert
Benefit Plans and except for the redemption or exchange of Warner-Lambert
Rights in accordance with the Warner-Lambert Rights Agreement.
(c)
Issuance of Securities. Warner-Lambert shall
not, and shall not permit any of its Subsidiaries to, issue, deliver
or sell, or authorize or propose the issuance, delivery or sale of,
any shares of its capital stock of any class, any Warner-Lambert Voting
Debt or any securities convertible into or exercisable for, or any
rights, warrants, calls or options to acquire, any such shares or
Warner-Lambert Voting Debt, or enter into any commitment, arrangement,
undertaking or agreement with respect to any of the foregoing, other
than (i) the issuance of Warner-Lambert Common Stock (and the associated
Warner-Lambert Rights) upon the exercise of Warner-Lambert Stock Options
or in connection with other stock-based benefits plans outstanding
on the date hereof, in each case in accordance with their present
terms or pursuant to Warner-Lambert Stock Options or other stock based
awards granted pursuant to clause (iii) below, (ii) issuances by a
wholly owned Subsidiary of Warner-Lambert of capital stock to such
Subsidiary's parent or another wholly owned subsidiary of Warner-Lambert,
(iii) the granting of Warner-Lambert Stock Options or other stock
based awards to acquire shares of Warner-Lambert Common Stock granted
under stock based benefit plans outstanding on the date hereof in
the ordinary course of business consistent with past practice not
in excess of the amounts set forth in Section 4.2(c) of the Warner-Lambert
Disclosure Schedule, (iv) pursuant to acquisitions set forth on the
Warner-Lambert Disclosure Schedule or the financings therefor or (v)
issuances in accordance with the Warner-Lambert Rights Agreement.
(d)
Governing Documents. Except to the extent
required to comply with its obligations hereunder or with applicable
law, Warner-Lambert shall not amend or propose to so amend its respective
certificates of incorporation, bylaws or other governing documents.
(e)
No Acquisitions. Other than (i) acquisitions
disclosed on the Warner-Lambert Disclosure Schedule and (ii) acquisitions
for cash in existing or related lines of business of Warner-Lambert
and its Subsidiaries, the fair market value of the total consideration
(including the value of indebtedness acquired or assumed) for which
does not exceed $25 million for any individual acquisition, or $100
million in the aggregate for all such acquisitions, and none of which
acquisitions referred to in this clause (ii) presents a material risk
of making it more difficult to obtain any approval or authorization
required in connection with the Merger under Regulatory Laws, Warner-Lambert
shall not, and shall not permit any of its Subsidiaries to, acquire
or agree to acquire by merging or consolidating with, or by purchasing
a substantial equity interest in or a substantial portion of the assets
of, or by any other manner, any business (including by acquisition
of assets) or any corporation, partnership, association or other business
organization or division thereof; provided, however, that the foregoing
shall not prohibit (x) internal reorganizations or consolidations
involving existing Subsidiaries of Warner-Lambert or (y) the creation
of new Subsidiaries of Warner-Lambert organized to conduct or continue
activities otherwise permitted by this Agreement.
(f)
No Dispositions. Other than (i) internal
reorganizations or consolidations involving existing Subsidiaries
of Warner-Lambert, (ii) dispositions referred to in Warner-Lambert
SEC Reports filed prior to the date of this Agreement or (iii) as
may be required by or in conformance with law or regulation in order
to permit or facilitate the consummation of the transactions contemplated
hereby or the transactions disclosed in the Warner-Lambert Disclosure
Schedule, Warner-Lambert shall not, and shall not permit any of its
Subsidiaries to, sell, lease or otherwise dispose of, or agree to
sell, lease or otherwise dispose of, any of its assets (including
capital stock of Subsidiaries of Warner-Lambert but excluding inventory
in the ordinary course of business), if the fair market value of the
total consideration (including the value of the indebtedness acquired
or assumed) therefor exceeds $25 million for any individual disposition,
or $100 million in the aggregate for all such dispositions.
(g)
Investments; Indebtedness. Warner-Lambert shall not, and shall
not permit any of its Subsidiaries to, other than in connection with
actions permitted by Section 4.2(e) and except for any indebtedness
incurred by Warner-Lambert or its Subsidiaries to finance or refinance
amounts due pursuant to Article VII of the Agreement and Plan of Merger,
dated as of November 3, 1999, among American Home Products Corporation,
Wolverine Sub Corp. and Warner-Lambert (the "AHP Merger Agreement"),
(i) make any loans, advances or capital contributions to, or investments
in, any other Person, other than (x) by Warner-Lambert or a Subsidiary
of Warner-Lambert to or in Warner-Lambert or any Subsidiary of Warner-Lambert,
(y) pursuant to any contract or other legal obligation of Warner-Lambert
or any of its Subsidiaries existing at the date of this Agreement
or (z) in the ordinary course of business consistent with past practice
in an aggregate amount not in excess of $250 million in the aggregate
(provided that none of such transactions referred to in this clause
(z) presents a material risk of making it more difficult to obtain
any approval or authorization required in connection with the Merger
under Regulatory Laws) or (ii) create, incur, assume or suffer to
exist any indebtedness, issuances of debt securities, guarantees,
loans or advances not in existence as of the date of this Agreement
except pursuant to the credit facilities, indentures and other arrangements
in existence on the date of this Agreement or in the ordinary course
of business consistent with past practice, in each case as such credit
facilities, indentures and other arrangements and other existing indebtedness
may be amended, extended, modified, refunded, renewed or refinanced
after the date of this Agreement.
(h)
Pooling; Tax-Free Qualification. Warner-Lambert shall use
its reasonable best efforts not to, and shall use its reasonable best
efforts not to permit any of its Subsidiaries to, take any action
(including any action otherwise permitted by this Section 4.2) that
would prevent or impede the Merger from qualifying as a "pooling of
interests" for accounting purposes or as a "reorganization" under
Section 368 of the Code.
(i)
Compensation. Other than as contemplated by Section 5.6 or
by Sections 4.2(c) or 4.2(i) of the Warner-Lambert Disclosure Schedule,
Warner-Lambert shall not increase the amount of compensation of any
director, executive officer or employee, make any increase in or commitment
to increase any employee benefits, issue any additional Warner-Lambert
Stock Options, adopt or make any commitment to adopt any additional
employee benefit plan or make any contribution, other than regularly
scheduled contributions, to any Warner-Lambert Benefit Plan and, in
the case of any of the foregoing, except in the ordinary course of
business consistent with past practice or as required by an existing
agreement.
(j)
Accounting Methods; Income Tax Elections. Except as
disclosed in Warner-Lambert SEC Reports filed prior to the date of
this Agreement, or as required by a Governmental Entity, Warner-Lambert
shall not change its methods of accounting in effect at December 31,
1998, except as required by changes in GAAP as concurred in by Warner-Lambert's
independent public accountants. Warner-Lambert shall not (i) change
its fiscal year or (ii) make any material tax election, other than
in the ordinary course of business consistent with past practice.
(k)
Certain Agreements. Warner-Lambert shall
not, and shall not permit any of its Subsidiaries to, enter into any
agreements or arrangements that limit or otherwise restrict Warner-Lambert
or any of its Subsidiaries or any of their respective affiliates or
any successor thereto, or that could, after the Effective Time, limit
or restrict Pfizer or any of its affiliates (including the Surviving
Corporation) or any successor thereto, from engaging or competing
in any line of business or in any geographic area which agreements
or arrangements, individually or in the aggregate, would reasonably
be expected to have a Material Adverse Effect on Pfizer and its Subsidiaries
(including the Surviving Corporation and its Subsidiaries), taken
together, after giving effect to the Merger.
(l) No
Related Actions. Warner-Lambert will not, and will not permit
any of its Subsidiaries to, agree or commit to any of the foregoing.
4.3
Governmental Filings. Each party shall (a)
confer on a regular and frequent basis with the other and (b) report
to the other (to the extent permitted by law or regulation or any
applicable confidentiality agreement) on operational matters. Warner-Lambert
and Pfizer shall file all reports required to be filed by each of
them with the SEC (and all other Governmental Entities) between the
date of this Agreement and the Effective Time and shall (to the extent
permitted by law or regulation or any applicable confidentiality agreement)
deliver to the other party copies of all such reports, announcements
and publications promptly after the same are filed.
4.4 Control
of Other Party's Business. Nothing contained in this Agreement
shall give Warner-Lambert, directly or indirectly, the right to control
or direct Pfizer's operations prior to the Effective Time. Nothing
contained in this Agreement shall give Pfizer, directly or indirectly,
the right to control or direct Warner-Lambert's operations prior to
the Effective Time. Prior to the Effective Time, each of Warner-Lambert
and Pfizer shall exercise, consistent with the terms and conditions
of this Agreement, complete control and supervision over its respective
operations.
ARTICLE V
ADDITIONAL AGREEMENTS
5.1
Preparation of Proxy Statement; Stockholders Meetings.
(a) As promptly as reasonably practicable following the date hereof,
Pfizer and Warner-Lambert shall prepare and file with the SEC mutually
acceptable proxy materials which shall constitute the Joint Proxy
Statement/Prospectus (such proxy statement/prospectus, and any amendments
or supplements thereto, the "Joint Proxy Statement/Prospectus") and
Pfizer shall prepare and file a registration statement on Form S-4
with respect to the issuance of Pfizer Common Stock in the Merger
(the "Form S-4"). The Joint Proxy Statement/Prospectus will be included
in and will constitute a part of the Form S-4 as Pfizer's prospectus.
The Form S-4 and the Joint Proxy Statement/Prospectus shall comply
as to form in all material respects with the applicable provisions
of the Securities Act and the Exchange Act and the rules and regulations
thereunder. Each of Pfizer and Warner-Lambert shall use reasonable
best efforts to have the Form S-4 declared effective by the SEC and
to keep the Form S-4 effective as long as is necessary to consummate
the Merger and the transactions contemplated thereby. Pfizer and Warner-Lambert
shall, as promptly as practicable after receipt thereof, provide the
other party copies of any written comments and advise the other party
of any oral comments, with respect to the Joint Proxy Statement/Prospectus
received from the SEC. Pfizer will provide Warner-Lambert with a reasonable
opportunity to review and comment on any amendment or supplement to
the Form S-4 prior to filing such with the SEC, and will provide Warner-Lambert
with a copy of all such filings made with the SEC. Notwithstanding
any other provision herein to the contrary, no amendment or supplement
(including by incorporation by reference) to the Joint Proxy Statement/Prospectus
or the Form S-4 shall be made without the approval of both parties,
which approval shall not be unreasonably withheld or delayed; provided,
that with respect to documents filed by a party which are incorporated
by reference in the Form S-4 or Joint Proxy Statement/Prospectus,
this right of approval shall apply only with respect to information
relating to the other party or its business, financial condition or
results of operations; and provided, further, that Pfizer, in connection
with a Change in the Pfizer Recommendation, and Warner-Lambert, in
connection with a Change in the Warner-Lambert Recommendation, may
amend or supplement the Joint Proxy Statement/Prospectus or Form S-4
(including by incorporation by reference) pursuant to a Qualifying
Amendment (as defined below) to effect such a Change, and in such
event, this right of approval shall apply only with respect to information
relating to the other party or its business, financial condition or
results of operations, and shall be subject to the right of each party
to have its Board of Directors' deliberations and conclusions to be
accurately described. A "Qualifying Amendment" means an amendment
or supplement to the Joint Proxy Statement/Prospectus or Form S-4
(including by incorporation by reference) to the extent it contains
(i) a Change in the Pfizer Recommendation or a Change in the Warner-Lambert
Recommendation (as the case may be), (ii) a statement of the reasons
of the Board of Directors of Pfizer or Warner-Lambert (as the case
may be) for making such Change in the Pfizer Recommendation or Change
in the Warner-Lambert Recommendation (as the case may be) and (iii)
additional information reasonably related to the foregoing. Pfizer
will use reasonable best efforts to cause the Joint Proxy Statements/Prospectus
to be mailed to Pfizer stockholders, and Warner-Lambert will use reasonable
best efforts to cause the Joint Proxy Statement/Prospectus to be mailed
to Warner-Lambert's stockholders, in each case after the Form S-4
is declared effective under the Securities Act. Pfizer shall also
take any action (other than qualifying to do business in any jurisdiction
in which it is not now so qualified or to file a general consent to
service of process) required to be taken under any applicable state
securities laws in connection with the Share Issuance and Warner-Lambert
shall furnish all information concerning Warner-Lambert and the holders
of Warner-Lambert Common Stock as may be reasonably requested in connection
with any such action. Each party will advise the other party, promptly
after it receives notice thereof, of the time when the Form S-4 has
become effective, the issuance of any stop order, the suspension of
the qualification of the Pfizer Common Stock issuable in connection
with the Merger for offering or sale in any jurisdiction, or any request
by the SEC for amendment of the Joint Proxy Statement/Prospectus or
the Form S-4. If at any time prior to the Effective Time any information
relating to Pfizer or Warner-Lambert, or any of their respective affiliates,
officers or directors, should be discovered by Pfizer or Warner-Lambert
which should be set forth in an amendment or supplement to any of
the Form S-4 or the Joint Proxy Statement/Prospectus so that any of
such documents would not include any misstatement of a material fact
or omit to state any material fact necessary to make the statements
therein, in light of the circumstances under which they were made,
not misleading, the party which discovers such information shall promptly
notify the other party hereto and, to the extent required by law,
rules or regulations, an appropriate amendment or supplement describing
such information shall be promptly filed with the SEC and disseminated
to the stockholders of Pfizer and Warner-Lambert.
(b)
Warner-Lambert shall duly take (subject to compliance with the provisions
of Section 3.1(e) and Section 3.2(e) (provided that Warner-Lambert
shall have used reasonable best efforts to ensure that such representations
are true and correct)) all lawful action to call, give notice of,
convene and hold a meeting of its stockholders on a date as soon as
reasonably practicable (the "Warner-Lambert Stockholders Meeting")
for the purpose of obtaining the Required Warner-Lambert Vote with
respect to the transactions contemplated by this Agreement and shall
take all lawful action to solicit the adoption of this Agreement by
the Required Warner-Lambert Vote; and the Board of Directors of Warner-Lambert
shall recommend adoption of this Agreement by the stockholders of
Warner-Lambert to the effect as set forth in Section 3.2(f) (the "Warner-Lambert
Recommendation"), and shall not withdraw, modify or qualify (or propose
to withdraw, modify or qualify) (a "Change") in any manner adverse
to Pfizer such recommendation or take any action or make any statement
in connection with the Warner-Lambert Stockholders Meeting inconsistent
with such recommendation (collectively, a "Change in the Warner-Lambert
Recommendation"); provided the foregoing shall not prohibit accurate
disclosure (and such disclosure shall not be deemed to be a Change
in the Warner-Lambert Recommendation) of factual information regarding
the business, financial condition or results of operations of Pfizer
or Warner-Lambert or the fact that an Acquisition Proposal has been
made, the identity of the party making such proposal or the material
terms of such proposal (provided, that the Board of Directors of Warner-Lambert
does not withdraw, modify or qualify (or propose to withdraw, modify
or qualify) in any manner adverse to Pfizer its recommendation) in
the Form S-4 or the Joint Proxy Statement/Prospectus or otherwise,
to the extent such information, facts, identity or terms is required
to be disclosed under applicable law; and, provided further, that
the Board of Directors of Warner-Lambert may make a Change in the
Warner-Lambert Recommendation (x) pursuant to Section 5.5 hereof or
(y) prior to the Warner-Lambert Stockholders Meeting if (i) the Board
of Directors of Warner-Lambert determines in good faith that a Material
Adverse Effect has occurred with respect to Pfizer and (ii) the Board
of Directors of Warner-Lambert determines in good faith that, by reason
of its determination in clause (i) the failure to effect such Change
in the Warner-Lambert Recommendation would create a substantial probability
of violating the fiduciary duties of the Warner-Lambert Board of Directors
under applicable law. Notwithstanding any Change in the Warner-Lambert
Recommendation, this Agreement shall be submitted to the stockholders
of Warner-Lambert at the Warner-Lambert Stockholders Meeting for the
purpose of adopting the Agreement and approving the Merger; provided
that this Agreement shall not be required to be submitted to the stockholders
of Warner-Lambert at the Warner-Lambert Stockholders Meeting if this
Agreement has been terminated pursuant to Section 7.1 hereof.
(c)
Pfizer shall duly take (subject to compliance with the provisions
of Section 3.2(e) and Section 3.1(e) (provided that Pfizer shall have
used reasonable best efforts to ensure that such representation is
true and correct)) all lawful action to call, give notice of, convene
and hold a meeting of its stockholders on a date as soon as reasonably
practicable (the "Pfizer Stockholders Meeting") for the purpose of
obtaining the Pfizer Stockholder Approval and shall take all lawful
action to solicit the approval of the Share Issuance and adoption
of the Board Amendment and the Board of Directors of Pfizer shall
recommend approval of the Share Issuance and adoption of the Board
Amendment by the stockholders of Pfizer to the effect as set forth
in Section 3.1(f) (the "Pfizer Recommendation"), and shall not Change
in any manner adverse to Warner-Lambert such recommendation or take
any action or make any statement in connection with the Pfizer Stockholders
Meeting inconsistent with such recommendation (collectively, a "Change
in the Pfizer Recommendation"); provided the foregoing shall not prohibit
accurate disclosure (and such disclosure shall not be deemed to be
a Change in the Pfizer Recommendation) of factual information regarding
the business, financial condition or operations of Pfizer or Warner-Lambert
or the fact that an Acquisition Proposal has been made, the identity
of the party making such proposal or the material terms of such proposal
(provided, that the Board of Directors of Pfizer does not withdraw,
modify or qualify (or propose to withdraw, modify or qualify) in any
manner adverse to Warner-Lambert its recommendation) in the Form S-4
or the Joint Proxy Statement/Prospectus or otherwise, to the extent
such information, facts, identity or terms is required to be disclosed
under applicable law; and, provided, further, that the Board of Directors
of Pfizer may make a Change in the Pfizer Recommendation (x) pursuant
to Section 5.5 hereof or (y) prior to the Pfizer Stockholders Meeting
if (i) the Board of Directors of Pfizer determines in good faith that
a Material Adverse Effect has occurred with respect to Warner-Lambert
and (ii) the Board of Directors of Pfizer determines in good faith
that, by reason of its determination in clause (i) the failure to
effect such Change in the Pfizer Recommendation would create a substantial
probability of violating the fiduciary duties of the Pfizer Board
of Directors under applicable law. Notwithstanding any Change in the
Pfizer Recommendation, a proposal to approve the Share Issuance and
the Board Amendment shall be submitted to the stockholders of Pfizer
at the Pfizer Stockholders Meeting for the purpose of obtaining the
Pfizer Stockholder Approval; provided that this Agreement shall not
be required to be submitted to the stockholders of Pfizer at the Pfizer
Stockholders Meeting if this Agreement has been terminated pursuant
to Section 7.1 hereof.
(d)
For purposes of this Agreement, a Change in the Warner-Lambert
Recommendation shall be deemed to include, without limitation, a recommendation
by the Warner-Lambert Board of Directors of a third party Acquisition
Proposal with respect to Warner-Lambert and a Change in the Pfizer
Recommendation shall be deemed to include, without limitation, a recommendation
by the Pfizer Board of Directors of a third party Acquisition Proposal
with respect to Pfizer.
5.2
Pfizer Board of Directors; Executive Officers; Headquarters; Warner-Lambert
Name. At or prior to the Effective Time, Pfizer will use its
reasonable best efforts to (i) reconstitute the board of directors
of Pfizer in accordance with Section 1.5(b), Section 1.6(b) and Section
1.7, and (ii) reconstitute the committees of Board of Directors of
Pfizer in accordance with the letter referenced in Section 1.7. The
headquarters of Pfizer will remain in New York, New York and Pfizer
will maintain such other offices as provided in the letter referenced
in Section 1.7.
(b)
Following the Effective Time, Pfizer shall preserve and perpetuate
the names "Warner-Lambert" and "Parke-Davis" as a divisional name
and a trade name, respectively, in accordance with the letter referenced
in Section 1.7.
5.3 Access
to Information/Employees. (a) Upon reasonable
notice, each party shall (and shall cause its Subsidiaries to) afford
to the officers, employees, accountants, counsel, financial advisors
and other representatives of the other party reasonable access during
normal business hours, during the period prior to the Effective Time,
to all its properties, books, contracts, commitments, records, officers
and employees and, during such period, such party shall (and shall
cause its Subsidiaries to) furnish promptly to the other party (a)
a copy of each report, schedule, registration statement and other
document filed, published, announced or received by it during such
period pursuant to the requirements of Federal or state securities
laws, as applicable (other than documents which such party is not
permitted to disclose under applicable law), and (b) all other information
concerning it and its business, properties and personnel as such other
party may reasonably request (including consultation on a regular
basis with respect to litigation matters); provided, however, that
either party may restrict the foregoing access to the extent that
(i) any law, treaty, rule or regulation of any Governmental Entity
applicable to such party requires such party or its Subsidiaries to
restrict or prohibit access to any such properties or information
or (ii) the information is subject to confidentiality obligations
to a third party. Any such information obtained pursuant to this Section
5.3 ("Confidential Information") will be used solely for the purpose
of consideration or performance of the transactions contemplated by
this Agreement or any other agreement related hereto and will be kept
confidential by the party obtaining such information and all persons
obtaining such information on such party's behalf or who obtain such
information from such party. Confidential Information shall not include
information that (A) is or becomes generally available to the public
other than as a result of disclosure by a party or its Representatives,
or (B) is or becomes available to a party (other than the disclosing
party) or its Representatives that is not known by the non-disclosing
party to have any obligation not to disclose such information. Notwithstanding
the foregoing, Confidential Information may be disclosed by a party
(x) to its directors, officers, employees, representatives (including,
without limitation, financial advisors, attorneys and accountants)
or agents (collectively "Representatives") who need to know such information
if the party informs such Representatives of the confidential nature
of such information and directs them to treat such information confidentially
and to use such information for no purpose other than as specifically
permitted by the Agreement and (y) if the party is legally required
to make such disclosure as a result of a court order, subpoena or
similar legal duress, provided that prior to such disclosure, the
disclosing party gives to the other party prompt written notice of
its receipt of such order or subpoena or similar document so that
the other party has a reasonable opportunity prior to disclosure to
obtain a protective order (if disclosure of Confidential Information
is so required, the disclosing party shall disclose only that portion
of such information that is so required and shall assist the other
party in obtaining protective orders or undertakings that confidential
treatment will be accorded to any such information furnished). In
the event of termination of this Agreement, each party will promptly
return to the other party all Confidential Information in its possession
(including all written materials prepared or supplied by or on its
behalf containing or reflecting any Confidential Information) and
will not retain any copies, extracts or other reproductions in whole
or in part of any Confidential Information. Any work papers, memoranda
or other writings prepared by a party or its Representatives derived
from or incorporating any Confidential Information shall be destroyed
promptly upon termination of this Agreement, with such destruction
confirmed to the other party in writing. Any oral Confidential Information
will continue to be subject to the terms of this Section 5.3. Each
party shall be responsible for the breach of the terms of this Section
5.3 by its Representative. Any investigation by Pfizer or Warner-Lambert
shall not affect the representation and warranties of Warner-Lambert
and Pfizer, as the case may be.
(b)
After the date hereof Pfizer and Warner-Lambert shall
establish a mechanism reasonably acceptable to both parties by which
Pfizer will be permitted, prior to the Effective Time and subject
to applicable law, to communicate directly with Warner-Lambert employees
regarding employee related matters after the Effective Time.
5.4 Reasonable
Best Efforts.
(a)
Subject to the terms and conditions of this Agreement,
each party will use its reasonable best efforts to take, or cause
to be taken, all actions and to do, or cause to be done, all things
necessary, proper or advisable under this Agreement and applicable
laws and regulations to consummate the Merger and the other transactions
contemplated by this Agreement as soon as practicable after the date
hereof, including (i) preparing and filing as promptly as practicable
all documentation to effect all necessary applications, notices, petitions,
filings, tax ruling requests and other documents and to obtain as
promptly as practicable all consents, waivers, licenses, orders, registrations,
approvals, permits, tax rulings and authorizations necessary or advisable
to be obtained from any third party and/or any Governmental Entity
in order to consummate the Merger or any of the other transactions
contemplated by this Agreement and (ii) taking all reasonable steps
as may be necessary to obtain all such material consents, waivers,
licenses, registrations, permits, authorizations, tax rulings, orders
and approvals. In furtherance and not in limitation of the foregoing,
each party hereto agrees to make an appropriate filing of a Notification
and Report Form pursuant to the HSR Act and any other Regulatory Law
(as defined below) with respect to the transactions contemplated hereby
as promptly as practicable after the date hereof and to supply as
promptly as practicable any additional information and documentary
material that may be requested pursuant to the HSR Act and any other
Regulatory Law and to take all other actions necessary to cause the
expiration or termination of the applicable waiting periods under
the HSR Act as soon as practicable. Nothing in this Agreement shall
require any of Pfizer and its Subsidiaries or Warner-Lambert and its
Subsidiaries to sell, hold separate or otherwise dispose of or conduct
their business in a specified manner, or agree to sell, hold separate
or otherwise dispose of or conduct their business in a specified manner,
or permit the sale, holding separate or other disposition of, any
assets of Pfizer, Warner-Lambert or their respective Subsidiaries
or the conduct of their business in a specified manner, whether as
a condition to obtaining any approval from a Governmental Entity or
any other Person or for any other reason, if such sale, holding separate
or other disposition or the conduct of their business in a specified
manner is not conditioned on the Closing or, in the aggregate, would
reasonably be expected to have a Material Adverse Effect on Pfizer
and its Subsidiaries (including the Surviving Corporation and its
Subsidiaries), taken together, after giving effect to the Merger.
(b) Each of Pfizer and Warner-Lambert shall, in connection
with the efforts referenced in Section 5.4(a) obtain all requisite
material approvals and authorizations for the transactions contemplated
by this Agreement under the HSR Act or any other Regulatory Law, use
its reasonable best efforts to (i) cooperate in all respects with
each other in connection with any filing or submission and in connection
with any investigation or other inquiry, including any proceeding
initiated by a private party, (ii) promptly inform the other party
of any communication received by such party from, or given by such
party to, the Antitrust Division of the Department of Justice (the
"DOJ"), the Federal Trade Commission (the "FTC") or any other Governmental
Entity and of any material communication received or given in connection
with any proceeding by a private party, in each case regarding any
of the transactions contemplated hereby, and (iii) permit the other
party to review any communication given by it to, and consult with
each other in advance of any meeting or conference with, the DOJ,
the FTC or any such other Governmental Entity or, in connection with
any proceeding by a private party, with any other Person, and to the
extent appropriate or permitted by the DOJ, the FTC or such other
applicable Governmental Entity or other Person, give the other party
the opportunity to attend and participate in such meetings and conferences.
For purposes of this Agreement, "Regulatory Law" means the Sherman
Act, as amended, Council Regulation No. 4064/89 of the European Community,
as amended (the "EC Merger Regulation") the Clayton Act, as amended,
the HSR Act, the Federal Trade Commission Act, as amended, and all
other federal, state and foreign, if any, statutes, rules, regulations,
orders, decrees, administrative and judicial doctrines and other laws
that are designed or intended to prohibit, restrict or regulate (i)
foreign investment or (ii) actions having the purpose or effect of
monopolization or restraint of trade or lessening of competition.
(c) Subject to the terms and conditions of this Agreement,
in furtherance and not in limitation of the covenants of the parties
contained in Sections 5.4(a) and 5.4(b), if any administrative or
judicial action or proceeding, including any proceeding by a private
party, is instituted (or threatened to be instituted) challenging
any transaction contemplated by this Agreement as violative of any
Regulatory Law, each of Pfizer and Warner-Lambert shall cooperate
in all respects with each other and use its respective reasonable
best efforts, including without limitation, selling, holding separate
or otherwise disposing of or conducting their business in a specified
manner, or agreeing to sell, hold separate or otherwise dispose of
or conduct their business in a specified manner or permitting the
sale, holding separate or other disposition of, any assets of Pfizer,
Warner-Lambert or their respective Subsidiaries or the conducting
of their business in a specified manner, in order to contest and resist
any such action or proceeding and to have vacated, lifted, reversed
or overturned any decree, judgment, injunction or other order, whether
temporary, preliminary or permanent, that is in effect and that prohibits,
prevents or restricts consummation of the transactions contemplated
by this Agreement. Notwithstanding the foregoing or any other provision
of this Agreement, nothing in this Section 5.4 shall limit a party's
right to terminate this Agreement pursuant to Article VII; provided
that the foregoing is subject in all respects to the last sentence
of Section 5.4(a).
(d)
If any objections are asserted with respect to the transactions contemplated
hereby under any Regulatory Law or if any suit is instituted by any
Governmental Entity or any private party challenging any of the transactions
contemplated hereby as violative of any Regulatory Law, each of Pfizer
and Warner-Lambert shall use its reasonable best efforts to resolve
any such objections or challenge as such Governmental Entity or private
party may have to such transactions under such Regulatory Law so as
to permit consummation of the transactions contemplated by this Agreement.
5.5 Acquisition
Proposals. Without limitation on any of such party's other
obligations under this Agreement (including under Article IV hereof),
each of Pfizer and Warner-Lambert agrees that neither it nor any of
its Subsidiaries nor any of the officers and directors of it or its
Subsidiaries shall, and that it shall use its reasonable best efforts
to cause its and its Subsidiaries' employees, agents and representatives
(including any investment banker, attorney or accountant retained
by it or any of its Subsidiaries) not to, directly or indirectly,
initiate, solicit, encourage or knowingly facilitate (including by
way of furnishing information) any inquiries or the making of any
proposal or offer with respect to a merger, reorganization, share
exchange, consolidation, business combination, recapitalization, liquidation,
dissolution or similar transaction involving it, or any purchase or
sale of the consolidated assets (including without limitation stock
of Subsidiaries) of such party and its Subsidiaries, taken as a whole,
having an aggregate value equal to 10% or more of the market capitalization
of such party, or any purchase or sale of, or tender or exchange offer
for, 10% or more of the equity securities of such party (any such
proposal or offer (other than a proposal or offer made by the other
party or an affiliate thereof) being hereinafter referred to as an
"Acquisition Proposal"). Each of Pfizer and Warner-Lambert further
agrees that neither it nor any of its Subsidiaries nor any of the
officers and directors of it or its Subsidiaries shall, and that it
shall use its reasonable best efforts to cause its and its Subsidiaries'
employees, agents and representatives (including any investment banker,
attorney or accountant retained by it or any of its Subsidiaries)
not to, directly or indirectly, have any discussion with or provide
any confidential information or data to any Person relating to an
Acquisition Proposal, or engage in any negotiations concerning an
Acquisition Proposal, or knowingly facilitate any effort or attempt
to make or implement an Acquisition Proposal or accept an Acquisition
Proposal. Notwithstanding anything in this Agreement to the contrary,
each of Pfizer and Warner-Lambert or its respective Board of Directors
shall be permitted to (A) to the extent applicable, comply with Rule
14d-9 and Rule 14e-2 promulgated under the Exchange Act with regard
to an Acquisition Proposal, (B) effect a Change in the Pfizer or Warner-Lambert
Recommendation, as the case may be, or (C) engage in any discussions
or negotiations with, or provide any information to, any Person in
response to an unsolicited bona fide written Acquisition Proposal
by any such Person, if and only to the extent that, in any such case
as is referred to in clause (B) or (C), (i) its Stockholders Meeting
shall not have occurred, (ii) (x) in the case of clause (B) above
such change is permitted by clause (y) of the second proviso of the
first sentence of Section 5.1(b) or Section 5.1(c), as the case may
be, or it has received an unsolicited bona fide written Acquisition
Proposal from a third party and its Board of Directors concludes in
good faith that such Acquisition Proposal constitutes a Superior Proposal
(as defined in Section 8.11) and (y) in the case of clause (C) above,
its Board of Directors concludes in good faith that there is a reasonable
likelihood that such Acquisition Proposal could result in a Superior
Proposal, (iii) prior to providing any information or data to any
Person in connection with an Acquisition Proposal by any such Person,
its Board of Directors receives from such Person an executed confidentiality
agreement containing terms at least as stringent as those contained
in Section 5.3 and (iv) prior to providing any information or data
to any Person or entering into discussions or negotiations with any
Person, such party notifies the other party promptly of such inquiries,
proposals or offers received by, any such information requested from,
or any such discussions or negotiations sought to be initiated or
continued with, any of its representatives indicating, in connection
with such notice, the name of such Person and the material terms and
conditions of any inquiries, proposals or offers. Each of Pfizer and
Warner-Lambert agrees that it will promptly keep the other party informed
of the status and terms of any such proposals or offers and the status
and terms of any such discussions or negotiations. Each of Pfizer
and Warner-Lambert agrees that it will, and will cause its officers,
directors and representatives to, immediately cease and cause to be
terminated any activities, discussions or negotiations existing as
of the date of this Agreement with any parties conducted heretofore
with respect to any Acquisition Proposal. Each of Pfizer and Warner-Lambert
agrees that it will use reasonable best efforts to promptly inform
its directors, officers, key employees, agents and representatives
of the obligations undertaken in this Section 5.5. Nothing in this
Section 5.5 shall (x) permit Pfizer or Warner-Lambert to terminate
this Agreement (except as specifically provided in Article VII hereof)
or (y) affect any other obligation of Pfizer or Warner-Lambert under
this Agreement.
5.6
Employee Benefits Matters. (a) Warner-Lambert
Employees (US). Following the Effective Time, Pfizer shall
comply with the terms of, or cause the Surviving Corporation to comply
with the terms of, all Warner-Lambert Benefit Plans and related funding
arrangements in accordance with their respective terms. Nothing herein
shall require Pfizer to continue any particular Benefit Plan or prevent
the amendment or termination thereof; provided, however, that Pfizer
shall not take any action (by way of amendment, termination or otherwise)
which is in violation of the terms of any Benefit Plan or applicable
law. Subject to the first two sentences of this Section 5.6(a), from
and after the Effective Time until the first anniversary of the Effective
Time, Pfizer shall provide compensation and employee benefits under
Benefit Plans (as defined in Section 8.11) to the employees and former
employees of Warner-Lambert and its Subsidiaries who are employed
in the United States (including Puerto Rico) and employees designated
by Warner-Lambert as "foreign service colleagues" (the "Warner-Lambert
Employees (US)") that are substantially comparable in the aggregate
to those provided to such persons pursuant to the Warner-Lambert Benefit
Plans in effect immediately prior to the date hereof. The term "Warner-Lambert
Employees (US)" shall not include Warner-Lambert Employees (Non-US)
or Warner-Lambert Employees (Collective Bargaining Units). With respect
to any Benefit Plans in which any Warner-Lambert Employees (US) first
become eligible to participate, on or after the Effective Time, Pfizer
shall: (A) waive all pre-existing conditions exclusions and waiting
periods with respect to participation and coverage requirements applicable
to Warner-Lambert Employees (US) under any Pfizer plans in which such
employees may be eligible to participate after the Effective Time,
except to the extent that such pre-existing conditions exclusions
or waiting periods apply to changes made by the employee under the
terms of the Pfizer plans on the same basis as would apply to a Pfizer
employee making a similar change; (B) provide each Warner-Lambert
Employee (US) with credit for any co-payments and deductibles paid
prior to the Effective Time (to the same extent such credit was given
under the analogous Benefit Plan prior to the Effective Time) in satisfying
any applicable deductible or out-of-pocket requirements under any
Pfizer plans in which such employees may be eligible to participate
after the Effective Time; and (C) recognize all service of the Warner-Lambert
Employees (US) with Warner-Lambert and its Subsidiaries for all purposes
(including, without limitation, purposes of eligibility to participate,
vesting credit, entitlement to benefits, and benefit accrual) in any
Pfizer plan in which such employees may be eligible to participate
after the Effective Time, to the extent such service is taken into
account under the applicable Pfizer plan; provided, that the foregoing
shall not apply to the extent it would result in duplication of benefits
under multiple plans or would result in benefit accruals under multiple
defined benefit pension plans with respect to the same period of service
without offset for benefits accrued under a predecessor defined benefit
pension plan. Warner-Lambert's board of directors will not declare
an "other circumstance" to have occurred within the meaning of Section
4.2(y) of Warner-Lambert's Enhanced Severance Plan. During the period
from the date of this Agreement and continuing until the Effective
Time, Warner-Lambert agrees as to itself and its Subsidiaries that
neither Warner-Lambert nor any of its Subsidiaries shall take or cause
to be taken any action that would constitute an "Activation Event"
(as defined in Section 4.2 of Warner-Lambert's Enhanced Severance
Plan), other than in the ordinary course of business.
(b)
Warner-Lambert Employees (Non-US). From and after the
Effective Time until the first anniversary of the Effective Time,
Pfizer shall provide compensation and employee benefits to the employees
and former employees of Warner-Lambert and its Subsidiaries who are
employed outside the United States (other than any such employee who
is a Warner-Lambert Employee (US)) ("Warner-Lambert Employees (Non-US)")
that are substantially comparable, in the aggregate, to those provided
to such persons immediately prior to the date hereof, subject to:
such modifications as are necessary to comply with applicable laws
of the foreign countries and their political subdivisions; and applicable
labor agreements. Nothing herein shall serve to extend any benefits
under any plans maintained for the benefit of Warner-Lambert Employees
(US) to any person who is not a Warner-Lambert Employee (US). The
term Warner-Lambert Employees (Non-US) shall not include Warner-Lambert
Employees (US) or Warner-Lambert Employees (Collective Bargaining
Units).
(c)
Warner-Lambert Employees (Collective Bargaining Units).
The terms and conditions of employment of Warner-Lambert employees
and former employees who are covered by the Agreement between Parke-Davis
Warner-Lambert Company and the International Union of Operating Engineers,
Local 547-A, B, C, E, H -AFL-CIO, dated April 1, 1998 or the Agreement
between Warner-Lambert Company and the Paper, Allied-Industrial, Chemical
and Energy Workers International Union, AFL- CIO and its Local Union
No. 2-670, dated May 1, 1999 or any other collective bargaining agreements
between Warner-Lambert or its Subsidiaries and any other collective
bargaining unit ("Warner-Lambert Employees (Collective Bargaining
Units)"), are contained, and shall be as explicitly set forth, in
such agreements. The term Warner-Lambert Employees (Collective Bargaining
Units) shall not include Warner-Lambert Employees (US) or Warner-Lambert
Employees (Non-US).
5.7 Fees
and Expenses. Subject to Section 5.15 and Section 7.2, whether
or not the Merger is consummated, all Expenses incurred in connection
with this Agreement and the transactions contemplated hereby shall
be paid by the party incurring such Expenses, except (a) if the Merger
is consummated, the Surviving Corporation or its relevant Subsidiary
shall pay, or cause to be paid, any and all property or transfer taxes
imposed on Warner-Lambert or its Subsidiaries and (b) Expenses incurred
in connection with the filing, printing and mailing of the Joint Proxy
Statement/Prospectus, which shall be paid by Pfizer. As used in this
Agreement, "Expenses" includes all out-of-pocket expenses (including,
without limitation, all fees and expenses of counsel, accountants,
investment bankers, experts and consultants to a party hereto and
its affiliates) incurred by a party or on its behalf in connection
with or related to the authorization, preparation, negotiation, execution
and performance of this Agreement and the transactions contemplated
hereby, including the preparation, printing, filing and mailing of
the Joint Proxy Statement/Prospectus and the solicitation of stockholder
approvals and all other matters related to the transactions contemplated
hereby.
5.8 Directors'
and Officers' Indemnification and Insurance. The Surviving
Corporation shall, and Pfizer shall cause the Surviving Corporation
to, (i) indemnify and hold harmless, and provide advancement of expenses
to, all past and present directors, officers and employees of Warner-Lambert
and its Subsidiaries (in all of their capacities) (a) to the same
extent such persons are indemnified or have the right to advancement
of expenses as of the date of this Agreement by Warner-Lambert pursuant
to Warner-Lambert's certificate of incorporation, bylaws and indemnification
agreements, if any, in existence on the date hereof with any directors,
officers and employees of Warner-Lambert and its Subsidiaries and
(b) without limitation to clause (a), to the fullest extent permitted
by law, in each case for acts or omissions occurring at or prior to
the Effective Time (including for acts or omissions occurring in connection
with the approval of this Agreement and the consummation of the transactions
contemplated hereby), (ii) include and cause to be maintained in effect
in the Surviving Corporation's (or any successor's) certificate of
incorporation and bylaws for a period of six years after the Effective
Time, the current provisions regarding elimination of liability of
directors, indemnification of officers, directors and employees and
advancement of expenses contained in the certificate of incorporation
and bylaws of Warner-Lambert and (iii) cause to be maintained for
a period of six years after the Effective Time the current policies
of directors' and officers' liability insurance and fiduciary liability
insurance maintained by Warner-Lambert (provided that the Surviving
Corporation (or any successor) may substitute therefor policies of
at least the same coverage and amounts containing terms and conditions
which are, in the aggregate, no less advantageous to the insured)
with respect to claims arising from facts or events that occurred
on or before the Effective Time. The obligations of the Surviving
Corporation under this Section 5.8 shall not be terminated or modified
in such a manner as to adversely affect any indemnitee to whom this
Section 5.8 applies without the consent of such affected indemnitee
(it being expressly agreed that the indemnitees to whom this Section
5.8 applies shall be third party beneficiaries of this Section 5.8).
5.9
Public Announcements. Pfizer and Warner-Lambert shall use
reasonable best efforts to develop a joint communications plan and
each party shall use reasonable best efforts (i) to ensure that all
press releases and other public statements with respect to the transactions
contemplated hereby shall be consistent with such joint communications
plan, and (ii) unless otherwise required by applicable law or by obligations
pursuant to any listing agreement with or rules of any securities
exchange, to consult with each other before issuing any press release
or, to the extent practical, otherwise making any public statement
with respect to this Agreement or the transactions contemplated hereby.
In addition to the foregoing, except to the extent disclosed in or
consistent with the Joint Proxy Statement/Prospectus in accordance
with the provisions of Section 5.1, neither Pfizer nor Warner-Lambert
shall issue any press release or otherwise make any public statement
or disclosure concerning the other party or the other party's business,
financial condition or results of operations without the consent of
the other party, which consent shall not be unreasonably withheld
or delayed.
5.10
Accountant's Letters. (a) Pfizer shall use reasonable
best efforts to cause to be delivered to Warner-Lambert two letters
from Pfizer's independent public accountants, one dated approximately
the date on which the Form S-4 shall become effective and one dated
the Closing Date, each addressed to Pfizer and Warner-Lambert, in
form reasonably satisfactory to Warner-Lambert and customary in scope
for comfort letters delivered by independent public accountants in
connection with registration statements similar to the Form S-4. Pfizer
shall use reasonable best efforts to cause to be delivered to Warner-Lambert
a copy of a letter from Pfizer's independent accountants, dated approximately
the date the Form S-4 is declared effective and as of the Closing
Date, stating that accounting for the Merger as a pooling-of-interests
under Opinion 16 of the Accounting Principles Board and applicable
SEC rules and regulations is appropriate if the Merger is closed and
consummated as contemplated by this Agreement.
(b)
Warner-Lambert shall use reasonable best efforts to cause
to be delivered to Pfizer two letters from Warner-Lambert's independent
public accountants, one dated approximately the date on which the
Form S-4 shall become effective and one dated the Closing Date, each
addressed to Warner-Lambert and Pfizer, in form reasonably satisfactory
to Pfizer and customary in scope for comfort letters delivered by
independent public accountants in connection with registration statements
similar to the Form S-4. Warner-Lambert shall use reasonable best
efforts to cause to be delivered to Pfizer a copy of a letter from
Warner-Lambert's independent public accountants, addressed to Warner-Lambert,
dated approximately the date the Form S-4 is declared effective and
as of the Closing Date, stating that they concur with Warner-Lambert's
conclusion that, as of the date of their report, no conditions exist
that would preclude Warner-Lambert's ability to be a party in a business
combination to be accounted for as a pooling-of-interests.
(c)
Following execution of this Agreement, each of Pfizer
and Warner-Lambert shall use reasonable best efforts to cause the
transactions contemplated by this Agreement, including the Merger,
to be accounted for as a pooling-of-interests under Opinion 16 of
the Accounting Principles Board and applicable SEC rules and regulations,
and such accounting treatment to be accepted by the SEC.
5.11
Listing of Shares of Pfizer Common Stock. Pfizer
shall use its reasonable best efforts to cause the shares of Pfizer
Common Stock to be issued in the Merger and the shares of Pfizer Common
Stock to be reserved for issuance upon exercise of the Warner-Lambert
Stock Options to be approved for listing on the NYSE, subject to official
notice of issuance, prior to the Closing Date.
5.12 Dividends.
After the date of this Agreement, each of Pfizer and Warner-Lambert
shall coordinate with the other the payment of dividends with respect
to the Pfizer Common Stock and Warner-Lambert Common Stock and the
record dates and payment dates relating thereto, it being the intention
of the parties hereto that holders of Pfizer Common Stock and Warner-Lambert
Common Stock shall not receive two dividends, or fail to receive one
dividend, for any single calendar quarter with respect to their shares
of Pfizer Common Stock and/or Warner-Lambert Common Stock or any shares
of Pfizer Common Stock that any such holder receives in exchange for
such shares of Warner-Lambert Common Stock in the Merger.
5.13
Affiliates. (a) Not less than 45 days
prior to the Effective Time, Warner-Lambert shall deliver to Pfizer
a letter identifying all persons who, in the judgment of Warner-Lambert,
may be deemed at the time this Agreement is submitted for adoption
by the stockholders of Warner-Lambert, "affiliates" of Warner-Lambert
for purposes of Rule 145 under the Securities Act or for purposes
of qualifying the Merger for pooling-of-interests accounting treatment
under Opinion 16 of the Accounting Principles Board and applicable
SEC rules and regulations, and such list shall be updated as necessary
to reflect changes from the date thereof. Warner-Lambert shall use
reasonable best efforts to cause each person identified on such list
to deliver to Pfizer not less than 30 days prior to the Effective
Time, a written agreement substantially in the form attached as Exhibit
5.13 hereto (an "Affiliate Agreement"). Not less than 45 days prior
to the Effective Time, Pfizer shall deliver to Warner-Lambert a letter
identifying all persons who, in the judgment of Pfizer, may be deemed
"affiliates" of Pfizer for purposes of qualifying the Merger for pooling-of-interests
accounting treatment under Opinion 16 of the Accounting Principles
Board and applicable SEC rules and regulations, and such list shall
be updated as necessary to reflect changes from the date hereof. Pfizer
shall use reasonable best efforts to cause each person identified
on such list to deliver to Warner-Lambert not less than 30 days prior
to the Effective Time, a written agreement including the substance
of paragraphs 1(B) and 2 of Exhibit 5.13 hereto.
(b)
Pfizer shall use its reasonable best efforts to publish no later
than 90 days after the end of the first month after the Effective
Time in which there are at least 30 days of post-Merger combined operations
(which month may be the month in which the Effective Time occurs),
combined sales and net income figures as contemplated by and in accordance
with the terms of SEC Accounting Series Release No. 135.
5.14 Section
16 Matters. Prior to the Effective Time, Pfizer and Warner-Lambert
shall take all such steps as may be required to cause any dispositions
of Warner-Lambert Common Stock (including derivative securities with
respect to Warner-Lambert Common Stock) or acquisitions of Pfizer
Common Stock (including derivative securities with respect to Pfizer
Common Stock) resulting from the transactions contemplated by Article
I or Article II of this Agreement by each individual who is subject
to the reporting requirements of Section 16(a) of the Exchange Act
with respect to Warner-Lambert, to be exempt under Rule 16b-3 promulgated
under the Exchange Act, such steps to be taken in accordance with
the No-Action Letter dated January 12, 1999, issued by the SEC to
Skadden, Arps, Slate, Meagher & Flom LLP.
5.15 Lipitor
Arrangements. (a) In the event that this
Agreement is terminated under circumstances which constitute a Warner-Lambert
Termination Event (as defined in this Section 5.15), then, upon termination
of this Agreement, Pfizer and Warner-Lambert shall, and shall cause
their respective affiliates to, promptly enter into (i) the Third
Amendment to the Collaboration Agreement in the form of Exhibit 5.15(a)
hereto, (ii) the Third Amendment to the International Co-Promotion
Agreement in the form of Exhibit 5.15(b) hereto, and (iii) the Letter
Agreement relating to the Norvasc/Lipitor combination product in the
form of Exhibit 5.15(c) hereto (collectively, the "Lipitor Agreements").
(b)
In the event that (i) this Agreement is terminated under circumstances
which constitute a Pfizer Termination Event (as defined in this Section
5.15), or (ii) the Merger is consummated, then in each case, Pfizer
and Warner-Lambert (and their respective affiliates) shall not enter
into the Lipitor Agreements.
(c)
In the event that this Agreement is terminated under circumstances
which constitute a Neutral Termination Event (as defined in this Section
5.15), then Pfizer shall have the right for ten Business Days following
the date of termination of this Agreement (the "Election Period")
to notify Warner-Lambert in writing (an "Election Notice") that Pfizer
will enter into the Lipitor Agreements in accordance with the following
provisions. Promptly following receipt of such Election Notice by
Warner-Lambert, Pfizer and Warner-Lambert shall, and shall cause their
respective affiliates to, enter into the Lipitor Agreements and, concurrently
with the execution and delivery of such Lipitor Agreements by the
parties thereto, Pfizer shall pay Warner-Lambert a cash amount equal
to $1.333 billion, such payment to be made by wire transfer of immediately
available funds. If Warner-Lambert does not receive an Election Notice
from Pfizer during the Election Period, then Pfizer's right to enter
into the Lipitor Agreements pursuant to this Section 5.15 shall terminate
and be of no further force and effect.
(d)
From the date hereof until the earlier of (i) the Effective
Time, (ii) termination of this Agreement in circumstances which constitute
a Pfizer Termination Event or (iii) expiration of the Election Period
without Warner-Lambert receiving an Election Notice from Pfizer following
termination of this Agreement in circumstances which constitute a
Neutral Termination Event, Warner-Lambert agrees not to, and agrees
that its affiliates will not (i) exercise any rights under Section
14.02(a) and Section 14.02(b) of the Collaboration Agreement to terminate
such agreement or (ii) exercise any rights under Section 14.02(a)
and Section 14.02(b) of the International Co-Promotion Agreement to
terminate such agreement.
(e)
A "Warner-Lambert Termination Event" shall mean (i) a
termination of this Agreement pursuant to Section 7.1(b) herein if,
at the time of termination, the closing conditions set forth in any
of Section 6.2(a), Section 6.2(b) or Section 6.2(e) herein are not
satisfied but all other conditions set forth in Article VI shall be
satisfied at such time, (ii) a termination of this Agreement pursuant
to Section 7.1(d) herein (provided that the basis for termination
is the failure of Warner-Lambert's stockholders to adopt this Agreement
and approve the Merger at a vote duly taken) or, following a Change
in the Warner-Lambert Recommendation by reason of a Superior Proposal
with respect to Warner-Lambert, a termination of this Agreement pursuant
to Section 7.1(e), unless, in either case, (A) at the time of the
event giving rise to the right of termination, a Material Adverse
Effect with respect to Pfizer or a Change in the Pfizer Recommendation
following the making of a proposal for a Business Combination with
respect to Pfizer has occurred, or (B) Pfizer's stockholders have
failed to approve the Share Issuance at a vote duly taken, (iii) a
termination by Pfizer of this Agreement pursuant to Section 7.1(g)
herein, and (iv) a termination by Warner-Lambert pursuant to Section
7.1(i) herein; provided that no Warner-Lambert Termination Event shall
be deemed to have occurred pursuant to any of the preceding clauses
if, at the time of termination, Pfizer shall be in breach of any of
its representations, warranties, covenants, obligations or agreements
contained in this Agreement which breach would entitle Warner-Lambert
to terminate this Agreement pursuant to Section 7.1(g).
(f)
A "Pfizer Termination Event" shall mean (i) a termination of this
Agreement pursuant to Section 7.1(b) herein if, at the time of termination,
the closing conditions set forth in any of Section 6.3(a) or Section
6.3(b) herein are not satisfied but all other conditions set forth
in Article VI shall be satisfied at such time, (ii) a termination
of this Agreement pursuant to Section 7.1(d) herein (provided that
the basis for termination is the failure of Pfizer's stockholders
to approve the Share Issuance at a vote duly taken) or, following
a Change in the Pfizer Recommendation by reason of a Superior Proposal
with respect to Pfizer, a termination of this Agreement pursuant to
Section 7.1(f), unless, in either case, (A) at the time of the event
giving rise to the right of termination, a Material Adverse Effect
with respect to Warner-Lambert or a Change in the Warner-Lambert Recommendation
following the making of a proposal for a Business Combination with
respect to Warner-Lambert has occurred, or (B) Warner-Lambert's stockholders
have failed to adopt this Agreement and approve the Merger at a vote
duly taken, (iii) a termination by Warner-Lambert of this Agreement
pursuant to Section 7.1(g) herein, and (iv) a termination by Pfizer
pursuant to Section 7.1(j) herein; provided that no Pfizer Termination
Event shall be deemed to have occurred pursuant to any of the preceding
clauses if, at the time of termination, Warner-Lambert shall be in
breach of any of its representations, warranties, covenants, obligations
or agreements contained in this Agreement which breach would entitle
Pfizer to terminate this Agreement pursuant to Section 7.1(g).
(g)
A "Neutral Termination Event" shall mean termination of this Agreement
pursuant to Section 7.1 herein which is neither a Warner-Lambert Termination
Event nor a Pfizer Termination Event. Notwithstanding anything herein
to the contrary, a termination of this Agreement shall be a Neutral
Termination Event if the Merger cannot be accounted for as a pooling-of-interests
and there shall not have been any breach of either Section 4.1(h)
or Section 4.2(h) herein.
(h)
"Collaboration Agreement" shall mean the Collaboration Agreement,
effective as of June 28, 1996, between Warner-Lambert and Pfizer,
as amended from time to time.
(i)
"International Co-Promotion Agreement" shall mean the
International Co-Promotion Agreement, effective as of June 28, 1996,
between Warner-Lambert and Pfizer, as amended from time to time.
ARTICLE VI
CONDITIONS PRECEDENT
6.1 Conditions
to Each Party's Obligation to Effect the Merger. The respective
obligations of Warner-Lambert, Pfizer and Merger Sub to effect the
Merger are subject to the satisfaction or waiver on or prior to the
Closing Date of the following conditions:
(a)
Stockholder Approval. (i) Warner-Lambert
shall have obtained the Required Warner-Lambert Vote in connection
with the adoption of this Agreement by the stockholders of Warner-Lambert
and (ii) Pfizer shall have obtained the stockholder approval of the
Share Issuance by the stockholders of Pfizer.
(b)
No Injunctions or Restraints, Illegality.
No Laws shall have been adopted or promulgated, and no temporary restraining
order, preliminary or permanent injunction or other order issued by
a court or other Governmental Entity of competent jurisdiction shall
be in effect, (i) having the effect of making the Merger illegal or
otherwise prohibiting consummation of the Merger or (ii) which otherwise,
individually or in the aggregate, would reasonably be expected to
have a Material Adverse Effect on Pfizer and its Subsidiaries (including
the Surviving Corporation and its Subsidiaries), taken together after
giving effect to the Merger.
(c)
HSR Act; EC Merger Regulation. The waiting
period (and any extension thereof) applicable to the Merger under
the HSR Act shall have been terminated or shall have expired and approval
of the Merger of the European Commission shall have been obtained
pursuant to the EC Merger Regulation.
(d)
Governmental and Regulatory Approvals. Other than the
filing provided for under Section 1.3 and filings pursuant to the
HSR Act and EC Merger Regulation (which are addressed in Section 6.1(c)),
all consents, approvals and actions of, filings with and notices to
any Governmental Entity required of Pfizer, Warner-Lambert or any
of their Subsidiaries to consummate the Merger, the Share Issuance
and the other transactions contemplated hereby, the failure of which
to be obtained or taken, individually or in the aggregate, would reasonably
be expected to have a Material Adverse Effect on Pfizer and its Subsidiaries
(including the Surviving Corporation and its Subsidiaries), taken
together after giving effect to the Merger, shall have been obtained;
provided, however, that the provisions of this Section 6.1(d) shall
not be available to any party whose failure to fulfill its obligations
pursuant to Section 5.4 shall have been the cause of, or shall have
resulted in, the failure to obtain such consent or approval. No consents,
approvals, actions, filings or notices related to any antitrust requirements
of any jurisdiction, except as set forth in Section 6.1(c) hereof,
shall be a condition of closing under this Section 6.1(d).
(e)
NYSE Listing. The shares of Pfizer Common
Stock to be issued in the Merger and such other shares to be reserved
for issuance in connection with the Merger shall have been approved
for listing on the NYSE, subject to official notice of issuance.
(f)
Effectiveness of the Form S-4. The Form S-4 shall have been
declared effective by the SEC under the Securities Act. No stop order
suspending the effectiveness of the Form S-4 shall have been issued
by the SEC and no proceedings for that purpose shall have been initiated
or threatened by the SEC.
(g)
Pooling. Warner-Lambert shall have
received and delivered to Pfizer and Pfizer's independent public accountants,
two letters from its independent public accountants, dated approximately
the date the Form S-4 is declared effective and as of the Closing
Date, stating that they concur with Warner-Lambert's conclusions that,
as of the date of such letters, no conditions exist that would preclude
Warner-Lambert's ability to be a party in a business combination to
be accounted for as a pooling-of-interests. Pfizer shall have received
and delivered to Warner-Lambert, two letters from its independent
public accountants, dated approximately the date the Form S-4 is declared
effective and as of the Closing Date, stating that accounting for
the Merger as a pooling-of-interests under Opinion 16 of the Accounting
Principles Board and applicable SEC rules and regulations is appropriate
if the Merger is closed and consummated as contemplated by this Agreement.
6.2 Additional
Conditions to Obligations of Pfizer and Merger Sub. The obligations
of Pfizer and Merger Sub to effect the Merger are subject to the satisfaction
of, or waiver by Pfizer, on or prior to the Closing Date of the following
conditions:
(a)
Representations and Warranties. Each of
the representations and warranties of Warner-Lambert set forth in
this Agreement that is qualified as to Material Adverse Effect shall
be true and correct, and each of the representations and warranties
of Warner-Lambert set forth in this Agreement that is not so qualified
shall be true and correct in all material respects, in each case as
of the date of this Agreement and as of the Closing Date as though
made on and as of the Closing Date (except to the extent in either
case that such representations and warranties speak as of another
date), and Pfizer shall have received a certificate of the chief executive
officer and the chief financial officer of Warner-Lambert to such
effect.
(b)
Performance of Obligations of Warner-Lambert. Warner-Lambert
shall have performed or complied with all agreements and covenants
required to be performed by it under this Agreement at or prior to
the Closing Date that are qualified as to Material Adverse Effect
and shall have performed or complied in all material respects with
all other agreements and covenants required to be performed by it
under this Agreement at or prior to the Closing Date that are not
so qualified, and Pfizer shall have received a certificate of the
chief executive officer and the chief financial officer of Warner-Lambert
to such effect.
(c)
Tax Opinion. Pfizer shall have
received from Cadwalader, Wickersham & Taft, counsel to Pfizer, on
or before the date the Form S-4 shall become effective and, subsequently,
on the Closing Date, a written opinion dated as of such dates substantially
in the form of Exhibit 6.2(c)(1). In rendering such opinion, counsel
to Pfizer shall be entitled to rely upon information, representations
and assumptions provided by Pfizer and Warner-Lambert substantially
in the form of Exhibits 6.2(c)(2) and 6.2(c)(3) (allowing for such
amendments to the representations as counsel to Pfizer deems reasonably
necessary).
(d)
Warner-Lambert Rights Agreement.
No Stock Acquisition Date or Distribution Date (as such terms are
defined in the Warner-Lambert Rights Agreement) shall have occurred
pursuant to the Warner-Lambert Rights Agreement.
(e)
Governmental Inquiry. No event
or circumstance shall have occurred relating to any governmental review
or inquiry concerning any product or business practice which is likely
to result in a Material Adverse Effect on Warner-Lambert or its prospects.
6.3 Additional
Conditions to Obligations of Warner-Lambert. The
obligations of Warner-Lambert to effect the Merger are subject to
the satisfaction of, or waiver by Warner-Lambert, on or prior to the
Closing Date of the following additional conditions:
(a)
Representations and Warranties. Each
of the representations and warranties of Pfizer set forth in this
Agreement that is qualified as to Material Adverse Effect shall be
true and correct, and each of the representations and warranties of
Pfizer set forth in this Agreement that is not so qualified shall
be true and correct in all material respects, in each case as of the
date of this Agreement and as of the Closing Date as though made on
and as of the Closing Date (except to the extent in either case that
such representations and warranties speak as of another date), and
Warner-Lambert shall have received a certificate of the chief executive
officer and the chief financial officer of Pfizer to such effect.
(b)
Performance of Obligations of Pfizer. Pfizer shall
have performed or complied with all agreements and covenants required
to be performed by it under this Agreement at or prior to the Closing
Date that are qualified as to Material Adverse Effect and shall have
performed or complied in all material respects with all other agreements
and covenants required to be performed by it under this Agreement
at or prior to the Closing Date that are not so qualified, and Warner-Lambert
shall have received a certificate of the chief executive officer and
the chief financial officer of Pfizer to such effect.
(c)
Tax Opinion. Warner-Lambert
shall have received from Skadden, Arps, Slate, Meagher & Flom LLP,
counsel to Warner-Lambert, on or before the date the Form S-4 shall
become effective and, subsequently, on the Closing Date, a written
opinion dated as of such dates substantially in the form of Exhibit
6.3(c)(1). In rendering such opinion, counsel to Warner-Lambert shall
be entitled to rely upon information, representations and assumptions
provided by Pfizer and Warner-Lambert substantially in the form of
Exhibits 6.2(c)(2) and 6.2(c)(3) (allowing for such amendments to
the representations as counsel to Warner-Lambert deems reasonably
necessary).
(d)
Pfizer Rights Agreement. No
Stock Acquisition Date or Distribution Date (as such terms are defined
in the Pfizer Rights Agreement) shall have occurred pursuant to the
Pfizer Rights Agreement.
ARTICLE VII
TERMINATION AND AMENDMENT
7.1 Termination.
This Agreement may be terminated at any time prior to the Effective
Time, by action taken or authorized by the Board of Directors of the
terminating party or parties, and except as provided below, whether
before or after approval of the matters presented in connection with
the Merger by the stockholders of Warner-Lambert or Pfizer:
(a)
By mutual written consent of Pfizer and Warner-Lambert;
(b)
By either Warner-Lambert or Pfizer, if the Effective Time shall not
have occurred on or before December 31, 2000 (the "Termination Date");
provided, however, that the right to terminate this Agreement under
this Section 7.1(b) shall not be available to any party whose failure
to fulfill any obligation under this Agreement (including without
limitation such party's obligations set forth in Section 5.4) has
been the cause of, or resulted in, the failure of the Effective Time
to occur on or before the Termination Date and provided further that
if on the Termination Date the conditions to Closing set forth in
Sections 6.1(c) or 6.1(d) shall not have been fulfilled but all other
conditions to Closing shall be fulfilled or shall be capable of being
fulfilled then the Termination Date shall be automatically extended
to March 31, 2001;
(c)
By either Warner-Lambert or Pfizer, if any Governmental
Entity (i) shall have issued an order, decree or ruling or taken any
other action (which the parties shall have used their reasonable best
efforts to resist, resolve or lift, as applicable, in accordance with
Section 5.4) permanently restraining, enjoining or otherwise prohibiting
the transactions contemplated by this Agreement, and such order, decree,
ruling or other action shall have become final and nonappealable or
(ii) shall have failed to issue an order, decree or ruling or to take
any other action (which order, decree, ruling or other action the
parties shall have used their reasonable best efforts to obtain, in
accordance with Section 5.4), in the case of each of (i) and (ii)
which is necessary to fulfill the conditions set forth in Sections
6.1(c) and (d), as applicable, and such denial of a request to issue
such order, decree, ruling or take such other action shall have become
final and nonappealable; provided, however, that the right to terminate
this Agreement under this Section 7.1(c) shall not be available to
any party whose failure to comply with Section 5.4 has been the cause
of such action or inaction;
(d)
By either Warner-Lambert or Pfizer, if the approvals of
the stockholders of either Pfizer or Warner-Lambert contemplated by
this Agreement (other than the Board Amendment) shall not have been
obtained by reason of the failure to obtain the required vote at a
duly held meeting of stockholders or of any adjournment thereof at
which the vote was taken;
(e)
By Pfizer, if Warner-Lambert shall have failed to make
the Warner-Lambert Recommendation or effected a Change in the Warner-Lambert
Recommendation (or resolved to take any such action), whether or not
permitted by the terms hereof, or shall have materially breached its
obligations under this Agreement by reason of a failure to call the
Warner-Lambert Stockholders Meeting in accordance with Section 5.1(b);
(f)
By Warner-Lambert, if Pfizer shall have failed to make
the Pfizer Recommendation or effected a Change in the Pfizer Recommendation
(or resolved to take any such action), whether or not permitted by
the terms hereof, or shall have materially breached its obligations
under this Agreement by reason of a failure to call the Pfizer Stockholders
Meeting in accordance with Section 5.1(c);
(g)
By either Pfizer or Warner-Lambert, if there shall have
been a breach by the other of any of its representations, warranties,
covenants or obligations contained in this Agreement, which breach
would result in the failure to satisfy the conditions set forth in
Section 6.2(a) or Section 6.2(b) (in the case of a breach by Warner-Lambert)
or Section 6.3(a) or Section 6.3(b) (in the case of a breach by Pfizer),
and in any such case such breach shall be incapable of being cured
or, if capable of being cured, shall not have been cured within 30
days after written notice thereof shall have been received by the
party alleged to be in breach;
(h)
[Intentionally omitted]
(i)
By Warner-Lambert, if the Board of Directors of Warner-Lambert authorizes
Warner-Lambert to enter into a written agreement concerning a transaction
that the Board of Directors of Warner-Lambert has determined is a
Superior Proposal; provided, that Warner-Lambert shall not terminate
this Agreement pursuant to this Section 7.1(i) and enter into a definitive
agreement for a Business Combination until the expiration of five
(5) Business Days following Pfizer's receipt of written notice advising
Pfizer that Warner-Lambert has received a Superior Proposal specifying
the material terms and conditions of such Superior Proposal (and including
a copy thereof with all accompanying documentation, if in writing),
identifying the person making such Superior Proposal and stating whether
Warner-Lambert intends to enter into a definitive agreement for a
Business Combination. After providing such notice, Warner-Lambert
shall provide a reasonable opportunity to Pfizer during such period
to make such adjustments in the terms and conditions of this Agreement
as would enable Warner-Lambert to proceed with the Merger on such
adjusted terms;
(j)
By Pfizer, if the Board of Directors of Pfizer authorizes Pfizer to
enter into a written agreement concerning a transaction that the Board
of Directors of Pfizer has determined is a Superior Proposal; provided,
that Pfizer shall not terminate this Agreement pursuant to this Section
7.1(j) and enter into a definitive agreement for a Business Combination
until the expiration of five (5) Business Days following Warner-Lambert's
receipt of written notice advising Warner-Lambert that Pfizer has
received a Superior Proposal specifying the material terms and conditions
of such Superior Proposal (and including a copy thereof with all accompanying
documentation, if in writing), identifying the person making such
Superior Proposal and stating whether Pfizer intends to enter into
a definitive agreement for a Business Combination. After providing
such notice, Pfizer shall provide a reasonable opportunity to Warner-Lambert
during such period to make such adjustments in the terms and conditions
of this Agreement as would enable Pfizer to proceed with the Merger
on such adjusted terms; or
(k)
By either Pfizer or Warner-Lambert, if the Joint Proxy
Statement/Prospectus (reflecting pooling of interests accounting treatment)
had not been mailed to stockholders of Warner-Lambert and Pfizer on
or prior to September 30, 2000, provided that this right of termination
is not available to any party which has not used its reasonable best
efforts to cause such Joint Proxy Statement/Prospectus to be so mailed.
7.2 Effect
of Termination. (a) In the event of termination
of this Agreement by either Warner-Lambert or Pfizer as provided in
Section 7.1, this Agreement shall forthwith become void and there
shall be no liability or obligation on the part of Pfizer or Warner-Lambert
or their respective officers or directors except with respect to Section
3.1(l), Section 3.2(l), Section 5.3, Section 5.7, Section 5.15, this
Section 7.2 and Article VIII, which provisions shall survive such
termination, and except that, notwithstanding anything to the contrary
contained in this Agreement, neither Pfizer nor Warner-Lambert shall
be relieved or released from any liabilities or damages arising out
of its willful material breach of this Agreement.
(b)
In the event that this Agreement is terminated pursuant
to Section 7.1 herein under circumstances which constitute either
a Pfizer Termination Event or a Neutral Termination Event, then Pfizer
shall pay to Warner-Lambert not later than three Business Days after
the date of such termination an amount in cash equal to $1.8 billion
(the "Pfizer Termination Fee"). In the event this Agreement is terminated
pursuant to Section 7.1 herein (a) under circumstances which constitute
a Warner-Lambert Termination Event under clauses (ii) or (iv) of the
definition thereof (including the proviso to Section 5.15(e)) and
(b) at the time of the event giving rise to the right of termination
there shall be pending a Superior Proposal with respect to Warner-Lambert,
then Warner-Lambert shall pay to Pfizer not later than three Business
Days after the date of such termination an amount in cash equal to
$500 million (the "Warner-Lambert Termination Fee").
(c)
If Warner-Lambert receives the Pfizer Termination Fee
pursuant to Section 7.2(b) and within twelve months following termination
of this Agreement Warner-Lambert enters into a definitive agreement
with a third party with respect to a Business Combination, then Warner-Lambert
shall repay to Pfizer, without any interest thereon, not later than
three Business Days after the date of entering into such definitive
agreement, the Pfizer Termination Fee, provided that Warner-Lambert
shall not be obligated to repay to Pfizer the Pfizer Termination Fee
if (A) Pfizer terminates this Agreement pursuant to Section 7.1(j)
herein, (B) (I) Warner-Lambert terminates this Agreement pursuant
to Section 7.1(f) herein and (II) Pfizer's Board of Directors shall
have, prior to termination, effected a Change in the Pfizer Recommendation
following the making of a proposal for a Business Combination with
respect to Pfizer that continued to be pending at the time of the
event giving rise to the right of termination, (C) (I) either Warner-Lambert
or Pfizer terminates this Agreement pursuant to Section 7.1(d) herein
(provided the basis for such termination is the failure of Pfizer's
stockholders to approve the Share Issuance) and (II) a proposal for
a Business Combination with respect to Pfizer had been made prior
to such vote and continued to be outstanding at the time of the event
giving rise to the right of termination, or (D) at the time of termination
of this Agreement, Pfizer had breached its representations, warranties,
covenants or obligations under this Agreement which breach entitles
Warner-Lambert to terminate this Agreement pursuant to Section 7.1(g).
If Pfizer receives the Warner-Lambert Termination Fee pursuant to
Section 7.2(b) and within twelve months following termination of this
Agreement Pfizer enters into a definitive agreement with a third party
with respect to a Business Combination, then Pfizer shall repay to
Warner-Lambert, without any interest thereon, not later than three
Business Days after the date of entering into such definitive agreement,
the Warner-Lambert Termination Fee, provided that Pfizer shall not
be obligated to repay to Warner-Lambert the Warner-Lambert Termination
Fee if (A) Warner-Lambert terminates this Agreement pursuant to Section
7.1(i) herein, (B) (I) Pfizer terminates this Agreement pursuant to
Section 7.1(e) herein and (II) Warner-Lambert's Board of Directors
shall have, prior to termination, effected a Change in the Warner-Lambert
Recommendation following the making of a proposal for a Business Combination
with respect to Warner-Lambert that continued to be pending at the
time of the event giving rise to the right of termination, (C) (I)
either Warner-Lambert or Pfizer terminates this Agreement pursuant
to Section 7.1(d) herein (provided the basis for such termination
is the failure of Warner-Lambert's stockholders adopt this Agreement
and approve the Merger) and (II) a proposal for a Business Combination
with respect to Warner-Lambert had been made prior to such vote and
continued to be outstanding at the time of the event giving rise to
the right of termination, or (D) at the time of termination of this
Agreement, Warner-Lambert had breached its representations, warranties,
covenants or obligations under this Agreement which breach entitles
Pfizer to terminate this Agreement pursuant to Section 7.1(g).
(d)
For the purposes of this Section 7.2, "Business Combination" means
with respect to Warner-Lambert or Pfizer, as the case may be, (i)
a merger, reorganization, consolidation, share exchange, business
combination, recapitalization, liquidation, dissolution or similar
transaction involving such party as a result of which either (A) such
party's stockholders prior to such transaction (by virtue of their
ownership of such party's shares) in the aggregate cease to own at
least 60% of the voting securities of the entity surviving or resulting
from such transaction (or the ultimate parent entity thereof) or,
regardless of the percentage of voting securities held by such stockholders,
if any Person shall beneficially own, directly or indirectly, at least
40% of the voting securities of such ultimate parent entity, or (B)
the individuals comprising the board of directors of such party prior
to such transaction do not constitute a majority of the board of directors
of such ultimate parent entity, (ii) a sale, lease, exchange, transfer
or other disposition of at least 40% of the assets of such party and
its Subsidiaries, taken as a whole, in a single transaction or a series
of related transactions, or (iii) the acquisition, directly or indirectly,
by a Person of beneficial ownership of 40% or more of the common stock
of such party whether by merger, consolidation, share exchange, business
combination, tender or exchange offer or otherwise (other than a merger,
reorganization, consolidation, share exchange, business combination,
recapitalization, liquidation, dissolution or similar transaction
upon the consummation of which such party's stockholders would in
the aggregate beneficially own greater than 60% of the voting securities
of such Person).
(e) All payments under this Section 7.2 and Section 5.15
shall be made by wire transfer of immediately available funds to an
account designated by the party entitled to receive such payment.
7.3 Amendment.
This Agreement may be amended by the parties hereto, by action taken
or authorized by their respective Boards of Directors, at any time
before or after approval of the matters presented in connection with
the Merger by the stockholders of Warner-Lambert and Pfizer, but,
after any such approval, no amendment shall be made which by law or
in accordance with the rules of any relevant stock exchange requires
further approval by such stockholders without such further approval.
This Agreement may not be amended except by an instrument in writing
signed on behalf of each of the parties hereto.
7.4
Extension; Waiver. At any time prior to the
Effective Time, the parties hereto, by action taken or authorized
by their respective Boards of Directors, may, to the extent legally
allowed, (i) extend the time for the performance of any of the obligations
or other acts of the other parties hereto, (ii) waive any inaccuracies
in the representations and warranties contained herein or in any document
delivered pursuant hereto and (iii) waive compliance with any of the
agreements or conditions contained herein. Any agreement on the part
of a party hereto to any such extension or waiver shall be valid only
if set forth in a written instrument signed on behalf of such party.
The failure of any party to this Agreement to assert any of its rights
under this Agreement or otherwise shall not constitute a waiver of
those rights.
ARTICLE VIII
GENERAL PROVISIONS
8.1
Non-Survival of Representations, Warranties and Agreements.
None of the representations, warranties, covenants and other
agreements in this Agreement or in any instrument delivered pursuant
to this Agreement, including any rights arising out of any breach
of such representations, warranties, covenants and other agreements,
shall survive the Effective Time, except for those covenants and agreements
contained herein and therein (including Section 5.8) that by their
terms apply or are to be performed in whole or in part after the Effective
Time and this Article VIII.
8.2
Notices. All notices and other communications
hereunder shall be in writing and shall be deemed duly given (a) on
the date of delivery if delivered personally, or by telecopy or telefacsimile,
upon confirmation of receipt, (b) on the first Business Day following
the date of dispatch if delivered by a recognized next-day courier
service, or (c) on the tenth Business Day following the date of mailing
if delivered by registered or certified mail, return receipt requested,
postage prepaid. All notices hereunder shall be delivered as set forth
below, or pursuant to such other instructions as may be designated
in writing by the party to receive such notice:
(a) if
to Pfizer or Merger Sub, to:
Pfizer
Inc.
235
East 42nd Street
New
York, New York 10017
Fax:
(212)
Attention: Paul S. Miller, Esq.
with
a copy to:
Cadwalader,
Wickersham & Taft
100
Maiden Lane
New
York, New York 10038
Fax:
(212) 504-6666
Attention:
Dennis J. Block, Esq.
Louis J. Bevilacqua, Esq.
(b) if
to Warner-Lambert to:
Warner-Lambert Company
201 Tabor Road
Morris Plains, New Jersey 07950
Fax: (973) 631-7704
Attention: Gregory L. Johnson, Esq.
with
a copy to:
Skadden,
Arps, Slate, Meagher & Flom LLP
919
Third Avenue
New York, New York 10022
Fax: (212) 735-2000
Attention: Peter A. Atkins,
Esq.
Lou R. Kling, Esq.
Eileen T. Nugent, Esq.
Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, New York 10019
Fax: (212) 403-2000
Attention: Richard D. Katcher,
Esq.
Steven A. Cohen, Esq.
8.3 Interpretation.
When a reference is made in this Agreement to Sections, Exhibits
or Schedules, such reference shall be to a Section of or Exhibit or
Schedule to this Agreement unless otherwise indicated. The table of
contents and headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation
of this Agreement. Whenever the words "include", "includes" or "including"
are used in this Agreement, they shall be deemed to be followed by
the words "without limitation.
8.4
Counterparts. This Agreement may be executed in one
or more counterparts, all of which shall be considered one and the
same agreement and shall become effective when one or more counterparts
have been signed by each of the parties and delivered to the other
party, it being understood that both parties need not sign the same
counterpart.
8.5
Entire Agreement; No Third Party Beneficiaries. This
Agreement, the Confidentiality Agreement, the letter referenced in
Section 1.7, the letters between the General Counsels of the parties
dated the date hereof and the other agreements of the parties referred
to herein constitute the entire agreement and supersede all prior
agreements and understandings, both written and oral, among the parties
with respect to the subject matter hereof. (b) This Agreement shall
be binding upon and inure solely to the benefit of each party hereto,
and nothing in this Agreement, express or implied, is intended to
or shall confer upon any other Person any right, benefit or remedy
of any nature whatsoever under or by reason of this Agreement, other
than Section 5.8 (which is intended to be for the benefit of the Persons
covered thereby and may be enforced by such Persons). For purposes
of clarity, nothing in Section 5.6 is intended to confer upon any
Warner-Lambert Employee (US), Warner-Lambert Employee (Non-US) or
Warner-Lambert Employee (Collective Bargaining Units), any benefits
under any benefits plan, programs, policies or other arrangements,
including, but not limited to, the right to employment or continued
employment with Pfizer for any period by reason of this Agreement.
8.6
Governing Law. This Agreement shall be governed
and construed in accordance with the laws of the State of Delaware
(without giving effect to choice of law principles thereof).
8.7
Severability. If any term or other
provision of this Agreement is invalid, illegal or incapable of being
enforced by any law or public policy, all other terms and provisions
of this Agreement shall nevertheless remain in full force and effect
so long as the economic or legal substance of the transactions contemplated
hereby is not affected in any manner materially adverse to any party.
Upon such determination that any term or other provision is invalid,
illegal or incapable of being enforced, the parties hereto shall negotiate
in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in an acceptable manner
in order that the transactions contemplated hereby are consummated
as originally contemplated to the greatest extent possible.
8.8
Assignment. Neither this Agreement
nor any of the rights, interests or obligations hereunder shall be
assigned by any of the parties hereto, in whole or in part (whether
by operation of law or otherwise), without the prior written consent
of the other party, and any attempt to make any such assignment without
such consent shall be null and void, except that Merger Sub may assign,
in its sole discretion, any or all of its rights, interests and obligations
under this Agreement to any direct wholly owned Subsidiary of Pfizer
without the consent of Warner-Lambert, but no such assignment shall
relieve Merger Sub of any of its obligations under this Agreement.
Subject to the preceding sentence, this Agreement will be binding
upon, inure to the benefit of and be enforceable by the parties and
their respective successors and assigns.
8.9 Submission
to Jurisdiction; Waivers. Each of Pfizer and Warner-Lambert
irrevocably agrees that any legal action or proceeding with respect
to this Agreement or for recognition and enforcement of any judgment
in respect hereof brought by the other party hereto or its successors
or assigns may be brought and determined in the Chancery or other
Courts of the State of Delaware, and each of Pfizer and Warner-Lambert
hereby irrevocably submits with regard to any such action or proceeding
for itself and in respect to its property, generally and unconditionally,
to the nonexclusive jurisdiction of the aforesaid courts. Each of
Pfizer and Warner-Lambert hereby irrevocably waives, and agrees not
to assert, by way of motion, as a defense, counterclaim or otherwise,
in any action or proceeding with respect to this Agreement, (a) any
claim that it is not personally subject to the jurisdiction of the
above-named courts for any reason other than the failure to lawfully
serve process (b) that it or its property is exempt or immune from
jurisdiction of any such court or from any legal process commenced
in such courts (whether through service of notice, attachment prior
to judgment, attachment in aid of execution of judgment, execution
of judgment or otherwise), and (c) to the fullest extent permitted
by applicable law, that (i) the suit, action or proceeding in any
such court is brought in an inconvenient forum, (ii) the venue of
such suit, action or proceeding is improper and (iii) this Agreement,
or the subject matter hereof, may not be enforced in or by such courts.
8.10
Enforcement. The parties agree that irreparable
damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms.
It is accordingly agreed that the parties shall be entitled to specific
performance of the terms hereof, this being in addition to any other
remedy to which they are entitled at law or in equity.
8.11
Definitions. As used in this Agreement:
(a) "beneficial ownership" or "beneficially own" shall
have the meaning under Section 13(d) of the Exchange Act and the rules
and regulations thereunder.
(b)
"Benefit Plans" means, with respect to any Person, each employee benefit
plan, program, arrangement and contract (including, without limitation,
any "employee benefit plan," as defined in Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA") and any
bonus, deferred compensation, stock bonus, stock purchase, restricted
stock, stock option, employment, termination, stay agreement or bonus,
change in control and severance plan, program, arrangement and contract)
in effect on the date of this Agreement or disclosed on the Warner-Lambert
Disclosure Schedule or the Pfizer Disclosure Schedule, as the case
may be, to which such Person or its Subsidiary is a party, which is
maintained or contributed to by such Person, or with respect to which
such Person could incur material liability under Section 4069, 4201
or 4212(c) of ERISA.
(c)
"Board of Directors" means the Board of Directors of any
specified Person and any committees thereof.
(d)
"Business Day" means any day on which banks are not required
or authorized to close in the City of New York.
(e)
"Confidentiality Agreement" means the Mutual Confidentiality
Agreement, dated January 26, 2000, between Pfizer and Warner-Lambert.
(f)
"known" or "knowledge" means, with respect to any party,
the knowledge of such party's executive officers after reasonable
inquiry.
(g)
"Material Adverse Effect" means, with respect to any entity
any event, change, circumstance or effect that is or is reasonably
likely to be materially adverse to (i) the business, financial condition
or results of operations of such entity and its Subsidiaries taken
as a whole, other than any event, change, circumstance or effect relating
(x) to the economy or financial markets in general or (y) in general
to the industries in which such entity operates and not specifically
relating to (or having the effect of specifically relating to or having
a materially disproportionate effect (relative to most other industry
participants) on) such entity or (ii) the ability of such entity to
consummate the transactions contemplated by this Agreement. All references
to Material Adverse Effect on Pfizer or its Subsidiaries contained
in this Agreement shall be deemed to refer solely to Pfizer and its
Subsidiaries without including its ownership of Warner-Lambert and
its Subsidiaries after the Merger.
(h)
"the other party" means, with respect to Warner-Lambert,
Pfizer and means, with respect to Pfizer, Warner-Lambert.
(i)
"Person" means an individual, corporation, limited liability
company, partnership, association, trust, unincorporated organization,
other entity or group (as defined in the Exchange Act).
(j)
"Subsidiary" when used with respect to any party means any corporation
or other organization, whether incorporated or unincorporated, (i)
of which such party or any other Subsidiary of such party is a general
partner (excluding partnerships, the general partnership interests
of which held by such party or any Subsidiary of such party do not
have a majority of the voting interests in such partnership) or (ii)
at least a majority of the securities or other interests of which
having by their terms ordinary voting power to elect a majority of
the Board of Directors or others performing similar functions with
respect to such corporation or other organization is directly or indirectly
owned or controlled by such party or by any one or more of its Subsidiaries,
or by such party and one or more of its Subsidiaries.
(k)
"Superior Proposal" means with respect to Pfizer or Warner-Lambert,
as the case may be, a written proposal made by a Person other than
either such party which is for (I) (i) a merger, reorganization, consolidation,
share exchange, business combination, recapitalization, liquidation,
dissolution or similar transaction involving such party as a result
of which either (A) such party's stockholders prior to such transaction
(by virtue of their ownership of such party's shares) in the aggregate
cease to own at least 60% of the voting securities of the entity surviving
or resulting from such transaction (or the ultimate parent entity
thereof) or (B) the individuals comprising the board of directors
of such party prior to such transaction do not constitute a majority
of the board of directors of such ultimate parent entity, (ii) a sale,
lease, exchange, transfer or other disposition of at least 40% of
the assets of such party and its Subsidiaries, taken as a whole, in
a single transaction or a series of related transactions, or (iii)
the acquisition, directly or indirectly, by a Person of beneficial
ownership of 40% or more of the common stock of such party whether
by merger, consolidation, share exchange, business combination, tender
or exchange offer or otherwise (other than a merger, consolidation,
share exchange, business combination, tender or exchange offer or
other transaction upon the consummation of which such party's stockholders
would in the aggregate beneficially own greater than 60% of the voting
securities of such Person), and which is (II) otherwise on terms which
the Board of Directors of such party in good faith concludes (after
consultation with its financial advisors and outside counsel), taking
into account, among other things, all legal, financial, regulatory
and other aspects of the proposal and the Person making the proposal,
(i) would, if consummated, result in a transaction that is more favorable
to its stockholders (in their capacities as stockholders), from a
financial point of view, than the transactions contemplated by this
Agreement and (ii) is reasonably capable of being completed; provided
that clause (II)(i) of this definition shall not apply with respect
to a proposal for Pfizer.
IN WITNESS
WHEREOF, Pfizer, Merger Sub and Warner-Lambert have caused this
Agreement to be signed by their respective officers thereunto duly
authorized, all as of the date first written above.
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