Pfizer commercial retention agreement with NYC Industrial Development Agency

Pfizer agreed to retain 5,537 employees in New York City and to grow 1,000 additional jobs by June 30, 2005 in exchange for up to $47.5 million in sales tax, real estate tax, and energy cost breaks from the city and state. As of September 30, 2003, Pfizer had 5,582 employees in NYC.

According to Pfizer’s commercial retention agreement, the company must retain:

Employees above these base numbers count as "growth credit" employees. Once "growth credit" employees have been with the company for five years, they become part of the "base number" and are included in calculations to determine penalties for any layoffs or transfers.

If the “Base Employment Number” is reduced through layoffs, the following penalties apply:

Percent reduction below Base Employment Number

(Minimum number of employees laid off before and after 6/30/05)

Penalties

0% and 7%

(0 – 388 and 0 – 458)

No penalties

Between 7% and 15%

(389 – 831 and 459 – 981)

Permanent reduction in future benefits (not including growth credits). If reduction calculations exceed remaining benefits, company must pay IDA the difference.

More than 15%

(more than 830 and more than 981)

The IDA may, at its discretion, terminate all future benefits, cancel PILOT and Lease Agreements, cancel sales tax

letter, and divest from any interest in company property.

NOTE: No recapture penalty is applicable for layoffs. Recapture penalties would only apply to employment reductions resulting from company decision to move employees out of NYC to another location.