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1.0.0.3 false Share-Based Payments false 1 $ false false Shares Standard http://www.xbrl.org/2003/instance shares xbrli 0 USD Standard http://www.xbrl.org/2003/iso4217 USD iso4217 0 USDperShare Divide http://www.xbrl.org/2003/iso4217 USD iso4217 http://www.xbrl.org/2003/instance shares xbrli 0 2 Share - Based Payments [Abstract] 0 pfe_ShareBasedPaymentsAbstract pfe false na duration string No definition available. false false false false false true false false false 1 false false 0 0 false false No definition available. false 3 Share-Based Payments [Text Block] 1 us-gaap_DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock us-gaap true na duration string No definition available. false false false false false false false false false 1 false false 0 0 15. Share-Based Payments Our compensation programs can include share-based payments. In 2009, 2008 and 2007, the primary share-based awards and their general terms and conditions are as follows:   <table cellpadding="0" style="BORDER-COLLAPSE: collapse" cellspacing="0" border="0" width="100%"> <tr> <td valign="top" align="left" width="1%">•</td> <td valign="top" width="1%"> </td> <td valign="top" align="left"> Stock options, which, when vested, entitle the holder to purchase a specified number of shares of Pfizer common stock at a price per share equal to the market price of Pfizer common stock on the date of grant. </td></tr></table>   <table cellpadding="0" cellspacing="0" style="BORDER-COLLAPSE: collapse" border="0" width="100%"> <tr> <td valign="top" align="left" width="1%">•</td> <td valign="top" width="1%"> </td> <td valign="top" align="left"> Restricted stock units (RSUs), which, when vested, entitle the holder to receive a specified number of shares of Pfizer common stock, including shares resulting from dividend equivalents paid on such RSUs. </td></tr></table>   <table cellpadding="0" cellspacing="0" style="BORDER-COLLAPSE: collapse" border="0" width="100%"> <tr> <td valign="top" align="left" width="1%">•</td> <td valign="top" width="1%"> </td> <td valign="top" align="left"> Performance share awards (PSAs) and performance-contingent share awards (PCSAs), which, when vested, entitle the holder to receive a number of shares of Pfizer common stock, within a range of shares from zero to a specified maximum, calculated using a non-discretionary formula that measures Pfizer’s performance relative to an industry peer group. Dividend equivalents accumulate on PSAs and are paid at the end of the vesting term in respect of any shares that are paid. </td></tr></table>   <table cellpadding="0" cellspacing="0" style="BORDER-COLLAPSE: collapse" border="0" width="100%"> <tr> <td valign="top" align="left" width="1%">•</td> <td valign="top" width="1%"> </td> <td valign="top" align="left"> Short-term incentive awards, which entitle the holder to receive a specified dollar value on the first anniversary of the grant date, based upon performance. At the election of the holder, such specified dollar value is paid: (i) in the case of senior management, all in RSUs, or half in RSUs and half in cash; and (ii) in the case of all other holders, all in RSUs, all in cash, or half in RSUs and half in cash. </td></tr></table>   <table cellpadding="0" cellspacing="0" style="BORDER-COLLAPSE: collapse" border="0" width="100%"> <tr> <td valign="top" align="left" width="1%">•</td> <td valign="top" width="1%"> </td> <td valign="top" align="left"> Stock appreciation rights (SARs), also referred to as Total Shareholder Return Units (TSRUs), which entitle the holder to receive, two years after the end of the vesting term, a number of shares of Pfizer common stock with a value equal to the difference between the defined settlement price and the closing market price of Pfizer common stock on the date of grant, plus accumulated dividend equivalents through the payment date. </td></tr></table> The Company’s shareholders approved the amendment and restatement of the 2004 Stock Plan at the Annual Meeting of Shareholders held on April 23, 2009. The primary purpose of the amendment was to increase the number of shares of common stock available for grants by 425 million shares. In addition, the amendment provided other changes including that the number of stock options, SARs or other performance-based awards that may be granted to any one individual during any 36-month period is limited to 8 million shares and that RSUs, PSAs and restricted stock grants count as two shares, while stock options and SARs count as one share, toward the maximums for the incremental 425 million shares. As of December 31, 2009, 499 million shares were available for award, which included 0.8 million shares available for award through February 13, 2010 under the Pharmacia Long-Term Incentive plan (the Pharmacia Plan). Such amounts do not include 41 million shares previously issuable but no longer available for award under the Pharmacia Plan, as amended and restated. The 2004 Stock Plan, as amended, is the only Pfizer plan under which equity-based compensation may currently be awarded to executives and other employees. The Company’s shareholders originally approved the 2004 Stock Plan at the Annual Meeting of Shareholders held on April 22, 2004, and, effective upon that approval, new stock option and other share-based awards could be granted only under the originally approved 2004 Stock Plan. As originally approved, the 2004 Stock Plan allowed a maximum of 3 million shares to be awarded to any employee per year and 475 million shares in total. RSUs, PSAs, PCSAs and restricted stock grants counted as three shares, while stock options and SARs counted as one share, toward the maximums under the Plan. In the past, we had various employee stock and incentive plans under which stock options and other share-based awards were granted. Stock options and other share-based awards that were granted under prior plans and were outstanding on April 22, 2004, continue in accordance with the terms of the respective plans. Although not required to do so, we have used authorized and unissued shares and, to a lesser extent, shares held in our Employee Benefit Trust and treasury stock to satisfy our obligations under these programs. A. Impact on Net Income The components of share-based compensation expense and the associated tax benefit follow:   <table cellspacing="0" cellpadding="0" align="center" border="0" width="100%"> <tr> <td width="72%"/> <td valign="bottom" width="6%"/> <td/> <td/> <td/> <td valign="bottom" width="6%"/> <td/> <td/> <td/> <td valign="bottom" width="7%"/> <td/> <td/> <td/> <td valign="bottom" width="3%"/> <td/></tr> <tr> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom">    </td> <td style="BORDER-TOP: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="center" colspan="10">YEAR ENDED DECEMBER 31,</td> <td style="BORDER-TOP: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"> </td> <td style="BORDER-TOP: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"> </td> <td style="BORDER-TOP: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td></tr> <tr> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">(MILLIONS OF DOLLARS)</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" bgcolor="#bfbfbf">    </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right" colspan="2" bgcolor="#bfbfbf">2009</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" bgcolor="#bfbfbf"> </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">    </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right" colspan="2">2008</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">    </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right" colspan="2">2007</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td></tr> <tr> <td valign="bottom">Stock option expense</td> <td valign="bottom" bgcolor="#bfbfbf">    </td> <td valign="bottom" bgcolor="#bfbfbf">$</td> <td valign="bottom" align="right" bgcolor="#bfbfbf">165</td> <td valign="bottom" nowrap="nowrap" bgcolor="#bfbfbf">  </td> <td valign="bottom">    </td> <td valign="bottom">$</td> <td valign="bottom" align="right">194</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">    </td> <td valign="bottom">$</td> <td valign="bottom" align="right">286</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom"> </td> <td valign="bottom"/></tr> <tr> <td valign="bottom">Restricted stock unit expense</td> <td valign="bottom" bgcolor="#bfbfbf">    </td> <td valign="bottom" bgcolor="#bfbfbf"> </td> <td valign="bottom" align="right" bgcolor="#bfbfbf">183</td> <td valign="bottom" nowrap="nowrap" bgcolor="#bfbfbf">  </td> <td valign="bottom">    </td> <td valign="bottom"> </td> <td valign="bottom" align="right">169</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">    </td> <td valign="bottom"> </td> <td valign="bottom" align="right">160</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom"> </td> <td valign="bottom"/></tr> <tr> <td valign="bottom">PSA and PCSA (expense reduction)/expense</td> <td valign="bottom" bgcolor="#bfbfbf">    </td> <td valign="bottom" bgcolor="#bfbfbf"> </td> <td valign="bottom" align="right" bgcolor="#bfbfbf">(17</td> <td valign="bottom" nowrap="nowrap" bgcolor="#bfbfbf">)   </td> <td valign="bottom">    </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(2</td> <td valign="bottom" nowrap="nowrap">) </td> <td valign="bottom">    </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(9</td> <td valign="bottom" nowrap="nowrap">) </td> <td valign="bottom"> </td> <td valign="bottom"/></tr> <tr> <td valign="bottom">Short-term incentive award expense</td> <td valign="bottom" bgcolor="#bfbfbf">    </td> <td valign="bottom" bgcolor="#bfbfbf"> </td> <td valign="bottom" align="right" bgcolor="#bfbfbf">1</td> <td valign="bottom" nowrap="nowrap" bgcolor="#bfbfbf">  </td> <td valign="bottom">    </td> <td valign="bottom"> </td> <td valign="bottom" align="right">13</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">    </td> <td valign="bottom"> </td> <td valign="bottom" align="right">—</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom"> </td> <td valign="bottom"/></tr> <tr> <td valign="bottom">TSRU expense</td> <td valign="bottom" bgcolor="#bfbfbf">    </td> <td valign="bottom" bgcolor="#bfbfbf"> </td> <td valign="bottom" align="right" bgcolor="#bfbfbf">15</td> <td valign="bottom" nowrap="nowrap" bgcolor="#bfbfbf">  </td> <td valign="bottom">    </td> <td valign="bottom"> </td> <td valign="bottom" align="right">10</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">    </td> <td valign="bottom"> </td> <td valign="bottom" align="right">—</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom"> </td> <td valign="bottom"/></tr> <tr> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">Directors’ compensation</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" bgcolor="#bfbfbf">    </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" bgcolor="#bfbfbf"> </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right" bgcolor="#bfbfbf">2</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap" bgcolor="#bfbfbf">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">    </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">—</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">    </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">—  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"> </td></tr> <tr> <td valign="bottom">Share-based payment expense</td> <td valign="bottom" bgcolor="#bfbfbf">    </td> <td valign="bottom" bgcolor="#bfbfbf"> </td> <td valign="bottom" align="right" bgcolor="#bfbfbf">349</td> <td valign="bottom" nowrap="nowrap" bgcolor="#bfbfbf">  </td> <td valign="bottom">    </td> <td valign="bottom"> </td> <td valign="bottom" align="right">384</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">    </td> <td valign="bottom"> </td> <td valign="bottom" align="right">437</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom"> </td> <td valign="bottom"/></tr> <tr> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">Tax benefit for share-based compensation expense</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" bgcolor="#bfbfbf">    </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" bgcolor="#bfbfbf"> </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right" bgcolor="#bfbfbf">(99</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap" bgcolor="#bfbfbf">) </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">    </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">(114</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">) </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">    </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">(141</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">) </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"> </td></tr> <tr> <td valign="bottom">Share-based payment expense, net of tax</td> <td valign="bottom" bgcolor="#bfbfbf">    </td> <td valign="bottom" bgcolor="#bfbfbf">$</td> <td valign="bottom" align="right" bgcolor="#bfbfbf">250</td> <td valign="bottom" nowrap="nowrap" bgcolor="#bfbfbf">  </td> <td valign="bottom">    </td> <td valign="bottom">$</td> <td valign="bottom" align="right">270</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">    </td> <td valign="bottom">$</td> <td valign="bottom" align="right">296</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom"> </td> <td valign="bottom"/></tr> <tr style="FONT-SIZE: 1px"> <td style="BORDER-TOP: #000000 3px double" valign="bottom" colspan="15"> </td></tr></table> Amounts capitalized as part of inventory cost were not significant. In 2009, 2008 and 2007, the impact of modifications under our cost-reduction initiatives to share-based awards was not significant. Generally, these modifications resulted in an acceleration of vesting, either in accordance with plan terms or at management’s discretion. B. Stock Options Stock options, which, when vested, entitle the holder to purchase a specified number of shares of Pfizer common stock at a price per share equal to the market price of Pfizer common stock on the date of grant, are accounted for using a fair-value-based method at the date of grant in the consolidated statements of income. The values determined through this fair-value-based method generally are amortized on an even basis over the vesting term into Cost of sales, Selling, informational and administrative expenses, and Research and development expenses, as appropriate. All employees may receive stock option grants. No stock options were awarded to senior and key management in 2009; however, stock options were awarded to certain other employees. Except for stock options awarded to two executive officers at the time they joined Pfizer, no stock options were awarded to senior and key management in 2008. In virtually all instances, stock options granted since 2005 vest after three years of continuous service from the grant date and have a contractual term of 10 years. In all cases, even for stock options that are subject to accelerated vesting upon voluntary retirement, stock options must be held for at least one year from the grant date before any vesting may occur. In the event of a divestiture or restructuring, options held by employees are immediately vested and are exercisable for a period from three months to their remaining term, depending on various conditions. </fon t> The fair-value-based method for valuing each stock option grant on the grant date uses, for virtually all grants, the Black-Scholes-Merton option-pricing model, which incorporates a number of valuation assumptions noted in the following table, shown at their weighted-average values:   <table cellpadding="0" cellspacing="0" align="center" border="0" width="100%"> <tr> <td width="70%"/> <td valign="bottom" width="7%"/> <td/> <td/> <td valign="bottom" width="6%"/> <td/> <td/> <td valign="bottom" width="6%"/> <td/> <td/> <td valign="bottom" width="4%"/> <td/></tr> <tr> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom">    </td> <td style="BORDER-TOP: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="center" colspan="7">YEAR ENDED DECEMBER 31,</td> <td style="BORDER-TOP: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"> </td> <td style="BORDER-TOP: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"> </td> <td style="BORDER-TOP: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td></tr> <tr> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" bgcolor="#bfbfbf">    </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right" bgcolor="#bfbfbf">2009</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" bgcolor="#bfbfbf"> </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">    </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">2008</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">    </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">2007</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td></tr> <tr> <td valign="bottom">Expected dividend yield(a)</td> <td valign="bottom" bgcolor="#bfbfbf">    </td> <td valign="bottom" align="right" bgcolor="#bfbfbf">4.90</td> <td valign="bottom" nowrap="nowrap" bgcolor="#bfbfbf">%   </td> <td valign="bottom">    </td> <td valign="bottom" align="right">5.54</td> <td valign="bottom" nowrap="nowrap">%   </td> <td valign="bottom">    </td> <td valign="bottom" align="right">4.49</td> <td valign="bottom" nowrap="nowrap">% </td> <td valign="bottom"> </td> <td valign="bottom"/></tr> <tr> <td valign="bottom">Risk-free interest rate(b)</td> <td valign="bottom" bgcolor="#bfbfbf">    </td> <td valign="bottom" align="right" bgcolor="#bfbfbf">2.69</td> <td valign="bottom" nowrap="nowrap" bgcolor="#bfbfbf">% </td> <td valign="bottom">    </td> <td valign="bottom" align="right">2.90</td> <td valign="bottom" nowrap="nowrap">% </td> <td valign="bottom">    </td> <td valign="bottom" align="right">4.69</td> <td valign="bottom" nowrap="nowrap">% </td> <td valign="bottom"> </td> <td valign="bottom"/></tr> <tr> <td valign="bottom">Expected stock price volatility(c)</td> <td valign="bottom" bgcolor="#bfbfbf">    </td> <td valign="bottom" align="right" bgcolor="#bfbfbf">41.36</td> <td valign="bottom" nowrap="nowrap" bgcolor="#bfbfbf">% </td> <td valign="bottom">    </td> <td valign="bottom" align="right">27.21</td> <td valign="bottom" nowrap="nowrap">% </td> <td valign="bottom">    </td> <td valign="bottom" align="right">21.28</td> <td valign="bottom" nowrap="nowrap">% </td> <td valign="bottom"> </td> <td valign="bottom"/></tr> <tr> <td valign="bottom">Expected term(d) (years)</td> <td valign="bottom" bgcolor="#bfbfbf">    </td> <td valign="bottom" align="right" bgcolor="#bfbfbf">6.0</td> <td valign="bottom" nowrap="nowrap" bgcolor="#bfbfbf">  </td> <td valign="bottom">    </td> <td valign="bottom" align="right">5.75</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">    </td> <td valign="bottom" align="right">5.75</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom"> </td> <td valign="bottom"/></tr> <tr style="FONT-SIZE: 1px"> <td style="BORDER-TOP: #000000 3px double" valign="bottom" colspan="12"> </td></tr></table>   <table cellpadding="0" cellspacing="0" style="BORDER-COLLAPSE: collapse" border="0" width="100%"> <tr> <td valign="top" align="left" width="1%">(a)</td> <td valign="top" align="left"> Determined using a constant dividend yield during the expected term of the option. </td></tr></table> <table cellpadding="0" cellspacing="0" style="BORDER-COLLAPSE: collapse" border="0" width="100%"> <tr> <td valign="top" align="left" width="1%">(b)</td> <td valign="top" align="left"> Determined using the interpolated yield on U.S. Treasury zero-coupon issues. </td></tr></table> <table cellpadding="0" cellspacing="0" style="BORDER-COLLAPSE: collapse" border="0" width="100%"> <tr> <td valign="top" align="left" width="1%">(c)</td> <td valign="top" align="left"> Determined using implied volatility, after consideration of historical volatility. </td></tr></table> <table cellpadding="0" cellspacing="0" style="BORDER-COLLAPSE: collapse" border="0" width="100%"> <tr> <td valign="top" align="left" width="1%">(d)</td> <td valign="top" align="left"> Determined using historical exercise and post-vesting termination patterns. </td></tr></table> The following table summarizes all stock option activity during 2009:   <table cellpadding="0" cellspacing="0" align="center" border="0" width="100%"> <tr> <td width="46%"/> <td valign="bottom" width="10%"/> <td/> <td/> <td valign="bottom" width="10%"/> <td/> <td/> <td valign="bottom" width="10%"/> <td/> <td valign="bottom" width="10%"/> <td/> <td/></tr> <tr> <td style="BORDER-TOP: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"> </td> <td style="BORDER-TOP: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">SHARES (THOUSANDS)</td> <td style="BORDER-TOP: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"> </td> <td style="BORDER-TOP: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"> </td> <td style="BORDER-TOP: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right" colspan="2">WEIGHTED-AVERAGE EXERCISE PRICE PER SHARE</td> <td style="BORDER-TOP: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"> </td> <td style="BORDER-TOP: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">WEIGHTED-AVERAGE REMAINING CONTRACTUAL TERM (YEARS)</td> <td style="BORDER-TOP: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"> </td> <td style="BORDER-TOP: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right" colspan="2">AGGREGATE INTRINSIC VALUE(a) (MILLIONS)</td></tr> <tr> <td valign="top"> Outstanding, December 31, 2008</td> <td valign="bottom"> </td> <td valign="bottom" align="right">489,054</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">32.91</td> <td valign="bottom"> </td> <td valign="bottom"/> <td valign="bottom"> </td> <td valign="bottom"/> <td valign="bottom"/></tr> <tr> <td valign="bottom"> Granted</td> <td valign="bottom"> </td> <td valign="bottom" align="right">49,454</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">12.74</td> <td valign="bottom"> </td> <td valign="bottom"/> <td valign="bottom"> </td> <td valign="bottom"/> <td valign="bottom"/></tr> <tr> <td valign="bottom"> Exercised</td> <td valign="bottom"> </td> <td valign="bottom" align="right">(556</td> <td valign="bottom" nowrap="nowrap">) </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">12.70</td> <td valign="bottom"> </td> <td valign="bottom"/> <td valign="bottom"> </td> <td valign="bottom"/> <td valign="bottom"/></tr> <tr> <td valign="bottom"> Forfeited</td> <td valign="bottom"> </td> <td valign="bottom" align="right">(3,988</td> <td valign="bottom" nowrap="nowrap">) </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">21.55</td> <td valign="bottom"> </td> <td valign="bottom"/> <td valign="bottom"> </td> <td valign="bottom"/> <td valign="bottom"/></tr> <tr> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"> Canceled</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">(86,271</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">) </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">36.54</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"> </td></tr> <tr> <td valign="bottom">Outstanding, December 31, 2009</td> <td valign="bottom" bgcolor="#bfbfbf"> </td> <td valign="bottom" align="right" bgcolor="#bfbfbf">447,693</td> <td valign="bottom" nowrap="nowrap" bgcolor="#bfbfbf">  </td> <td valign="bottom" bgcolor="#bfbfbf"> </td> <td valign="bottom" bgcolor="#bfbfbf"> </td> <td valign="bottom" align="right" bgcolor="#bfbfbf">30.11</td> <td valign="bottom" bgcolor="#bfbfbf"> </td> <td valign="bottom" align="right" bgcolor="#bfbfbf">4.6</td> <td valign="bottom" bgcolor="#bfbfbf"> </td> <td valign="bottom" bgcolor="#bfbfbf">$</td> <td valign="bottom" align="right" bgcolor="#bfbfbf">259</td></tr> <tr> <td valign="bottom"> Vested and expected to vest(b), December 31, 2009</td> <td valign="bottom" bgcolor="#bfbfbf"> </td> <td valign="bottom" align="right" bgcolor="#bfbfbf">441,480</td> <td valign="bottom" nowrap="nowrap" bgcolor="#bfbfbf">  </td> <td valign="bottom" bgcolor="#bfbfbf"> </td> <td valign="bottom" bgcolor="#bfbfbf"> </td> <td valign="bottom" align="right" bgcolor="#bfbfbf">30.26</td> <td valign="bottom" bgcolor="#bfbfbf"> </td> <td valign="bottom" align="right" bgcolor="#bfbfbf">4.6</td> <td valign="bottom" bgcolor="#bfbfbf"> </td> <td valign="bottom" bgcolor="#bfbfbf">$</td> <td valign="bottom" align="right" bgcolor="#bfbfbf">246</td></tr> <tr> <td valign="bottom">Exercisable, December 31, 2009</td> <td valign="bottom" bgcolor="#bfbfbf"> </td> <td valign="bottom" align="right" bgcolor="#bfbfbf">318,808</td> <td valign="bottom" nowrap="nowrap" bgcolor="#bfbfbf">  </td> <td valign="bottom" bgcolor="#bfbfbf"> </td> <td valign="bottom" bgcolor="#bfbfbf"> </td> <td valign="bottom" align="right" bgcolor="#bfbfbf">34.20</td> <td valign="bottom" bgcolor="#bfbfbf"> </td> <td valign="bottom" align="right" bgcolor="#bfbfbf">3.2</td> <td valign="bottom" bgcolor="#bfbfbf"> </td> <td valign="bottom" bgcolor="#bfbfbf">$</td> <td valign="bottom" align="right" bgcolor="#bfbfbf">3</td></tr> <tr style="FONT-SIZE: 1px"> <td style="BORDER-TOP: #000000 3px double" valign="bottom" colspan="12"> </td></tr></table>   <table cellpadding="0" cellspacing="0" style="BORDER-COLLAPSE: collapse" border="0" width="100%"> <tr> <td valign="top" align="left" width="1%">(a)</td> <td valign="top" align="left"> Market price of underlying Pfizer common stock less exercise price. </td></tr></table> <table cellpadding="0" cellspacing="0" style="BORDER-COLLAPSE: collapse" border="0" width="100%"> <tr> <td valign="top" align="left" width="1%">(b)</td> <td valign="top" align="left"> The number of options expected to vest takes into account an estimate of expected forfeitures.</td></tr></table> The following table provides data related to all stock option activity:   <table cellspacing="0" cellpadding="0" align="center" border="0" width="100%"> <tr> <td width="70%"/> <td valign="bottom" width="5%"/> <td/> <td/> <td valign="bottom" width="7%"/> <td/> <td/> <td valign="bottom" width="7%"/> <td/> <td/> <td valign="bottom" width="2%"/> <td/></tr> <tr> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom">    </td> <td style="BORDER-TOP: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="center" colspan="8">YEAR ENDED DECEMBER 31,</td> <td style="BORDER-TOP: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"> </td> <td style="BORDER-TOP: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td></tr> <tr> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">(MILLIONS OF DOLLARS, EXCEPT PER STOCK OPTION AMOUNTS AND YEARS)</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" bgcolor="#bfbfbf">    </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right" colspan="2" bgcolor="#bfbfbf">2009</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">    </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right" colspan="2">2008</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">    </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right" colspan="2">2007</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td></tr> <tr> <td valign="bottom">Weighted-average grant date fair value per stock option</td> <td valign="bottom" bgcolor="#bfbfbf">    </td> <td valign="bottom" bgcolor="#bfbfbf">$</td> <td valign="bottom" align="right" bgcolor="#bfbfbf">3.30</td> <td valign="bottom">    </td> <td valign="bottom">$</td> <td valign="bottom" align="right">3.30</td> <td valign="bottom">    </td> <td valign="bottom">$</td> <td valign="bottom" align="right">4.11</td> <td valign="bottom"> </td> <td valign="bottom"/></tr> <tr> <td valign="bottom">Aggregate intrinsic value on exercise</td> <td valign="bottom" bgcolor="#bfbfbf">    </td> <td valign="bottom" bgcolor="#bfbfbf">$</td> <td valign="bottom" align="right" bgcolor="#bfbfbf">2</td> <td valign="bottom">    </td> <td valign="bottom">$</td> <td valign="bottom" align="right">9</td> <td valign="bottom">    </td> <td valign="bottom">$</td> <td valign="bottom" align="right">173</td> <td valign="bottom"> </td> <td valign="bottom"/></tr> <tr> <td valign="bottom">Cash received upon exercise</td> <td valign="bottom" bgcolor="#bfbfbf">    </td> <td valign="bottom" bgcolor="#bfbfbf">$</td> <td valign="bottom" align="right" bgcolor="#bfbfbf">7</td> <td valign="bottom">    </td> <td valign="bottom">$</td> <td valign="bottom" align="right">29</td> <td valign="bottom">    </td> <td valign="bottom">$</td> <td valign="bottom" align="right">532</td> <td valign="bottom"> </td> <td valign="bottom"/></tr> <tr> <td valign="bottom">Tax benefits realized related to exercise</td> <td valign="bottom" bgcolor="#bfbfbf">    </td> <td valign="bottom" bgcolor="#bfbfbf">$</td> <td valign="bottom" align="right" bgcolor="#bfbfbf">1</td> <td valign="bottom">    </td> <td valign="bottom">$</td> <td valign="bottom" align="right">3</td> <td valign="bottom">    </td> <td valign="bottom">$</td> <td valign="bottom" align="right">54</td> <td valign="bottom"> </td> <td valign="bottom"/></tr> <tr> <td valign="bottom"> Total compensation cost related to nonvested stock options not yet recognized, pre-tax</td> <td valign="bottom" bgcolor="#bfbfbf">    </td> <td valign="bottom" bgcolor="#bfbfbf">$</td> <td valign="bottom" align="right" bgcolor="#bfbfbf">147</td> <td valign="bottom">    </td> <td valign="bottom">$</td> <td valign="bottom" align="right">159</td> <td valign="bottom">    </td> <td valign="bottom">$</td> <td valign="bottom" align="right">216</td> <td valign="bottom"> </td> <td valign="bottom"/></tr> <tr> <td valign="bottom"> Weighted-average period in years over which stock option compensation cost is expected to be recognized</td> <td valign="bottom" bgcolor="#bfbfbf">    </td> <td valign="bottom" bgcolor="#bfbfbf"> </td> <td valign="bottom" align="right" bgcolor="#bfbfbf">1.2</td> <td valign="bottom">    </td> <td valign="bottom"> </td> <td valign="bottom" align="right">1.1</td> <td valign="bottom">    </td> <td valign="bottom"> </td> <td valign="bottom" align="right">1.2</td> <td valign="bottom"> </td> <td valign="bottom"/></tr> <tr style="FONT-SIZE: 1px"> <td style="BORDER-TOP: #000000 3px double" valign="bottom" colspan="12"> </td></tr></table> C. Restricted Stock Units (RSUs) RSUs, which, when vested, entitle the holder to receive a specified number of shares of Pfizer common stock, including shares resulting from dividend equivalents paid on such RSUs, are accounted for using a fair-value-based method at the date of grant. For RSUs granted in 2009, 2008 and 2007, in virtually all instances, the units vest after three years of continuous service from the grant date and the values determined using the fair-value-based method are amortized on an even basis over the vesting term into Cost of sales, Selling, informational and administrative expenses and Research and development expenses, as appropriate. The value of each RSU grant is estimated on the grant date. The fair-value-based method utilizes the closing price of Pfizer common stock on the date of grant. The following table summarizes all RSU activity during 2009:   <table cellpadding="0" cellspacing="0" align="center" border="0" width="100%"> <tr> <td width="79%"/> <td valign="bottom" width="4%"/> <td/> <td/> <td valign="bottom" width="4%"/> <td/> <td/> <td valign="bottom" width="4%"/> <td/></tr> <tr> <td style="BORDER-TOP: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">SHARES (THOUSANDS)</td> <td style="BORDER-TOP: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"> </td> <td style="BORDER-TOP: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"> </td> <td style="BORDER-TOP: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right" colspan="2">WEIGHTED- AVERAGE GRANT DATE FAIR VALUE PER SHARE</td> <td style="BORDER-TOP: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"> </td> <td style="BORDER-TOP: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td></tr> <tr> <td valign="top"> Nonvested, December 31, 2008</td> <td valign="bottom">  </td> <td valign="bottom" align="right">28,964</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">24.47</td> <td valign="bottom"> </td> <td valign="bottom"/></tr> <tr> <td valign="top"> Granted</td> <td valign="bottom">  </td> <td valign="bottom" align="right">15,152</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">13.75</td> <td valign="bottom"> </td> <td valign="bottom"/></tr> <tr> <td valign="top"> Vested</td> <td valign="bottom">  </td> <td valign="bottom" align="right">(5,179</td> <td valign="bottom" nowrap="nowrap">) </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">25.25</td> <td valign="bottom"> </td> <td valign="bottom"/></tr> <tr> <td valign="top"> Reinvested dividend equivalents</td> <td valign="bottom">  </td> <td valign="bottom" align="right">1,656</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">15.39</td> <td valign="bottom"> </td> <td valign="bottom"/></tr> <tr> <td style="BORDER-BOTTOM: #000000 1px solid" valign="top"> Forfeited</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">(2,510</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">) </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">21.53</td> <td valign="bottom"> </td> <td valign="bottom"/></tr> <tr> <td valign="top"> Nonvested, December 31, 2009</td> <td valign="bottom" bgcolor="#bfbfbf">  </td> <td valign="bottom" align="right" bgcolor="#bfbfbf">38,083</td> <td valign="bottom" nowrap="nowrap" bgcolor="#bfbfbf">  </td> <td valign="bottom" bgcolor="#bfbfbf"> </td> <td valign="bottom" bgcolor="#bfbfbf"> </td> <td valign="bottom" align="right" bgcolor="#bfbfbf">19.90</td> <td valign="bottom" bgcolor="#bfbfbf"> </td> <td valign="bottom" bgcolor="#bfbfbf"/></tr> <tr style="FONT-SIZE: 1px"> <td style="BORDER-TOP: #000000 3px double" valign="bottom" colspan="9"> </td></tr></table> The following table provides data related to all RSU activity:   <table cellpadding="0" cellspacing="0" align="center" border="0" width="100%"> <tr> <td width="75%"/> <td valign="bottom" width="6%"/> <td/> <td/> <td/> <td valign="bottom" width="5%"/> <td/> <td/> <td/> <td valign="bottom" width="5%"/> <td/> <td/> <td valign="bottom" width="3%"/> <td/></tr> <tr> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom">    </td> <td style="BORDER-TOP: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="center" colspan="10">YEAR ENDED DECEMBER 31,</td> <td style="BORDER-TOP: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"> </td> <td style="BORDER-TOP: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td></tr> <tr> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">(MILLIONS OF DOLLARS EXCEPT YEARS)</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" bgcolor="#bfbfbf">    </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right" colspan="2" bgcolor="#bfbfbf">2009</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" bgcolor="#bfbfbf"> </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right" colspan="2">2008</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right" colspan="2">2007</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td></tr> <tr> <td valign="bottom">Total fair-value-based amount of shares vested</td> <td valign="bottom" bgcolor="#bfbfbf">    </td> <td valign="bottom" bgcolor="#bfbfbf">$</td> <td valign="bottom" align="right" bgcolor="#bfbfbf">131</td> <td valign="bottom" nowrap="nowrap" bgcolor="#bfbfbf">     </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">119</td> <td valign="bottom" nowrap="nowrap">     </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">146</td> <td valign="bottom"> </td> <td valign="bottom"/></tr> <tr> <td valign="bottom">Total compensation cost related to nonvested RSU awards not yet recognized, pre-tax</td> <td valign="bottom" bgcolor="#bfbfbf">    </td> <td valign="bottom" bgcolor="#bfbfbf">$</td> <td valign="bottom" align="right" bgcolor="#bfbfbf">198</td> <td valign="bottom" nowrap="nowrap" bgcolor="#bfbfbf">  </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">257</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">254</td> <td valign="bottom"> </td> <td valign="bottom"/></tr> <tr> <td valign="bottom">Weighted-average period in years over which RSU cost is expected to be recognized</td> <td valign="bottom" bgcolor="#bfbfbf">    </td> <td valign="bottom" bgcolor="#bfbfbf"> </td> <td valign="bottom" align="right" bgcolor="#bfbfbf">1.3</td> <td valign="bottom" nowrap="nowrap" bgcolor="#bfbfbf">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">1.5</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">2.1</td> <td valign="bottom"> </td> <td valign="bottom"/></tr> <tr style="FONT-SIZE: 1px"> <td style="BORDER-TOP: #000000 3px double" valign="bottom" colspan="14"> </td></tr></table> D. Performance Share Awards (PSAs) and Performance-Contingent Share Awards (PCSAs) PSAs and PCSAs are awarded to senior and key management. PSAs in 2009, 2008, 2007 and 2006, and PCSAs in earlier years entitle the holder to receive, at the end of a vesting term, a number of shares of our common stock within a specified range of shares, calculated using a non-discretionary formula that measures our performance relative to an industry peer group. PSAs are accounted for using a fair-value-based method at the date of grant in the consolidated statements of income beginning with grants in 2006. Further, PSAs generally are amortized on an even basis over the vesting term into Cost of sales, Selling, informational and administrative expenses and Research and development expenses, as appropriate. PCSAs, which have not been awarded since 2005, are accounted for using the intrinsic value method in the consolidated statements of income. Senior and other key member s of management may receive PSA grants and were eligible to receive PCSA grants. In most instances, PSA grants vest after three years, and PCSA grants vest after five years of continuous service from the grant date. In certain instances, PCSA grants vest over two to four years of continuous service from the grant date. The vesting terms are equal to the contractual terms. PSA grants made in 2009, 2008, 2007 and 2006 vest and are paid based on a non-discretionary formula that measures our performance using relative total shareholder return over a performance period relative to an industry peer group. If our minimum performance in the measure is below the threshold level relative to the peer group, then no shares are paid. PCSA grants, which were all made prior to 2006, vest and are paid based on a non-discretionary formula that measures our performance using relative total shareholder return and relative change in diluted EPS over a performance period relative to an industry peer group. If our minimum performance is below the threshold level relative to the peer group, then no shares will be paid. We measure PSA grants using a fair-value-based amount, which is derived from a Monte Carlo simulation model, times the target number of shares. The target number of shares is determined by reference to the fair value of share-based awards to similar employees in the industry peer group. We measure PCSA grants at intrinsic value whereby the probable award is allocated over the term of the award, and then the resultant shares are adjusted to the fair value of our common stock at each accounting period until the date of payment. The weighted-average assumptions used in the valuation of PSAs are as follows:   <table cellspacing="0" cellpadding="0" align="center" border="0" width="100%"> <tr> <td width="80%"/> <td valign="bottom" width="5%"/> <td/> <td/> <td valign="bottom" width="4%"/> <td/> <td/> <td valign="bottom" width="5%"/> <td/> <td/></tr> <tr> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom">    </td> <td style="BORDER-TOP: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="center" colspan="7">YEAR ENDED DECEMBER 31,</td> <td style="BORDER-TOP: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"> </td></tr> <tr> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" bgcolor="#bfbfbf">    </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right" bgcolor="#bfbfbf">2009</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" bgcolor="#bfbfbf"> </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">    </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">2008</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">    </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">2007</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"> </td></tr> <tr> <td valign="bottom">Risk-free interest rate</td> <td valign="bottom" bgcolor="#bfbfbf">    </td> <td valign="bottom" align="right" bgcolor="#bfbfbf">1.95</td> <td valign="bottom" nowrap="nowrap" bgcolor="#bfbfbf">%   </td> <td valign="bottom">    </td> <td valign="bottom" align="right">2.05</td> <td valign="bottom" nowrap="nowrap">% </td> <td valign="bottom">    </td> <td valign="bottom" align="right">4.68</td> <td valign="bottom" nowrap="nowrap">% </td></tr> <tr> <td valign="bottom">Expected Pfizer stock price volatility</td> <td valign="bottom" bgcolor="#bfbfbf">    </td> <td valign="bottom" align="right" bgcolor="#bfbfbf">40.40</td> <td valign="bottom" nowrap="nowrap" bgcolor="#bfbfbf">% </td> <td valign="bottom">    </td> <td valign="bottom" align="right">27.21</td> <td valign="bottom" nowrap="nowrap">% </td> <td valign="bottom">    </td> <td valign="bottom" align="right">21.28</td> <td valign="bottom" nowrap="nowrap">% </td></tr> <tr> <td valign="bottom">Average peer stock price volatility</td> <td valign="bottom" bgcolor="#bfbfbf">    </td> <td valign="bottom" align="right" bgcolor="#bfbfbf">36.30</td> <td valign="bottom" nowrap="nowrap" bgcolor="#bfbfbf">% </td> <td valign="bottom">    </td> <td valign="bottom" align="right">32.13</td> <td valign="bottom" nowrap="nowrap">% </td> <td valign="bottom">    </td> <td valign="bottom" align="right">18.85</td> <td valign="bottom" nowrap="nowrap">% </td></tr> <tr> <td valign="bottom">Contractual term in years</td> <td valign="bottom" bgcolor="#bfbfbf">    </td> <td valign="bottom" align="right" bgcolor="#bfbfbf">3</td> <td valign="bottom" nowrap="nowrap" bgcolor="#bfbfbf">  </td> <td valign="bottom">    </td> <td valign="bottom" align="right">3</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">    </td> <td valign="bottom" align="right">3</td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr style="FONT-SIZE: 1px"> <td style="BORDER-TOP: #000000 3px double" valign="bottom" colspan="9"> </td> <td> </td></tr></table>   The following table summarizes all PSA and PCSA activity during 2009, with the shares granted representing the maximum award that could be achieved:   <table cellpadding="0" cellspacing="0" align="center" border="0" width="100%"> <tr> <td width="78%"/> <td valign="bottom" width="7%"/> <td/> <td/> <td valign="bottom" width="7%"/> <td/> <td/></tr> <tr> <td style="BORDER-TOP: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">SHARES (THOUSANDS)</td> <td style="BORDER-TOP: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"> </td> <td style="BORDER-TOP: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"> </td> <td style="BORDER-TOP: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right" colspan="2">WEIGHTED- AVERAGE GRANT DATE FAIR VALUE PER SHARE</td></tr> <tr> <td valign="bottom">Nonvested, December 31, 2008</td> <td valign="bottom">  </td> <td valign="bottom" align="right">7,892</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">23.52</td></tr> <tr> <td valign="bottom"> Granted</td> <td valign="bottom">  </td> <td valign="bottom" align="right">2,388</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">12.43</td></tr> <tr> <td valign="bottom"> Vested</td> <td valign="bottom">  </td> <td valign="bottom" align="right">(2,025</td> <td valign="bottom" nowrap="nowrap">) </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">18.77</td></tr> <tr> <td valign="bottom"> Forfeited</td> <td valign="bottom">  </td> <td valign="bottom" align="right">(2,479</td> <td valign="bottom" nowrap="nowrap">) </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">19.09</td></tr> <tr> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"> Modifications(a)</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">342</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">15.05</td></tr> <tr> <td valign="bottom">Nonvested, December 31, 2009</td> <td valign="bottom" bgcolor="#bfbfbf">  </td> <td valign="bottom" align="right" bgcolor="#bfbfbf">6,118</td> <td valign="bottom" nowrap="nowrap" bgcolor="#bfbfbf">  </td> <td valign="bottom" bgcolor="#bfbfbf"> </td> <td valign="bottom" bgcolor="#bfbfbf"> </td> <td valign="bottom" align="right" bgcolor="#bfbfbf">23.07</td></tr> <tr style="FONT-SIZE: 1px"> <td style="BORDER-TOP: #000000 3px double" valign="bottom" colspan="7"> </td></tr></table>   <table cellpadding="0" cellspacing="0" style="BORDER-COLLAPSE: collapse" border="0" width="100%"> <tr> <td valign="top" align="left" width="1%">(a)</td> <td valign="top" align="left"> Modifications include pro-ration of the awards for service to the date of termination for 13 former employees in 2009. The modifications were made at the discretion of the Senior Vice President of Worldwide Human Resources, or her designee for 2009. There was no incremental cost related to the modifications. </td></tr></table> The following table provides data related to all PSA and PCSA activity:   <table cellpadding="0" cellspacing="0" align="center" border="0" width="100%"> <tr> <td width="72%"/> <td valign="bottom" width="7%"/> <td/> <td/> <td valign="bottom" width="9%"/> <td/> <td/> <td valign="bottom" width="9%"/> <td/> <td/></tr> <tr> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom">    </td> <td style="BORDER-TOP: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="center" colspan="8">YEAR ENDED DECEMBER 31,</td></tr> <tr> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">(MILLIONS OF DOLLARS, EXCEPT YEARS)</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" bgcolor="#bfbfbf">    </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right" colspan="2" bgcolor="#bfbfbf">2009</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">    </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right" colspan="2">2008</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">    </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right" colspan="2">2007</td></tr> <tr> <td valign="bottom">Total intrinsic value of vested PSA/PCSA shares</td> <td valign="bottom" bgcolor="#bfbfbf">    </td> <td valign="bottom" bgcolor="#bfbfbf">$</td> <td valign="bottom" align="right" bgcolor="#bfbfbf">37</td> <td valign="bottom">    </td> <td valign="bottom">$</td> <td valign="bottom" align="right">15</td> <td valign="bottom">    </td> <td valign="bottom">$</td> <td valign="bottom" align="right">46</td></tr> <tr> <td valign="bottom">Total compensation cost related to nonvested PSA grants not yet recognized, pre-tax</td> <td valign="bottom" bgcolor="#bfbfbf">    </td> <td valign="bottom" bgcolor="#bfbfbf">$</td> <td valign="bottom" align="right" bgcolor="#bfbfbf">17</td> <td valign="bottom">    </td> <td valign="bottom">$</td> <td valign="bottom" align="right">20</td> <td valign="bottom">    </td> <td valign="bottom">$</td> <td valign="bottom" align="right">15</td></tr> <tr> <td valign="bottom">Weighted-average period in years over which PSA cost is expected to be recognized</td> <td valign="bottom" bgcolor="#bfbfbf">    </td> <td valign="bottom" bgcolor="#bfbfbf"> </td> <td valign="bottom" align="right" bgcolor="#bfbfbf">2</td> <td valign="bottom">    </td> <td valign="bottom"> </td> <td valign="bottom" align="right">2</td> <td valign="bottom">    </td> <td valign="bottom"> </td> <td valign="bottom" align="right">2</td></tr> <tr style="FONT-SIZE: 1px"> <td style="BORDER-TOP: #000000 3px double" valign="bottom" colspan="10"> </td></tr></table> E. Total Shareholder Return Units (TSRUs) Total Shareholder Return Units (TSRUs) (formerly known as Stock Appreciation Rights (SARs)) are awarded to senior and key management. TSRUs entitle the holders to receive, two years after the end of a three-year vesting term, a number of shares of our common stock with a value equal to the difference between the defined settlement price and the grant price, plus the dividends accumulated during the five-year term. The settlement price is the average closing price of Pfizer common stock during the 20 trading days ending on the fifth anniversary of the grant; the grant price is the closing price of Pfizer common stock on the date of the grant. The TSRUs are automatically settled on the fifth anniversary of the grant but vest on the third anniversary of the grant, after which time there no longer is a risk of forfeiture. TSRUs are accounted for using a fair-value-based method at the date of grant in the consolidated statements of income and generally are amortized on an even basis over the vesting term into Cost of sales, Selling, informational and administrative expenses and Research and development expenses, as appropriate. The fair-value-based method for valuing the TSRUs uses the Monte Carlo simulation model. The model incorporates a number of valuation assumptions noted in the following table, shown at their weighted-average values:   <table cellpadding="0" cellspacing="0" align="center" border="0" width="100%"> <tr> <td width="78%"/> <td valign="bottom" width="8%"/> <td/> <td/> <td valign="bottom" width="8%"/> <td/> <td/></tr> <tr> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom" bgcolor="#bfbfbf">  </td> <td style="BORDER-TOP: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid" rowspan="2" valign="bottom" align="center" bgcolor="#bfbfbf"> TSRUs 2009</td> <td style="BORDER-TOP: #000000 1px solid" rowspan="2" valign="bottom" bgcolor="#bfbfbf"> </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom"> </td> <td style="BORDER-TOP: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid" rowspan="2" valign="bottom" align="center"> TSRUs 2008</td> <td style="BORDER-TOP: #000000 1px solid" rowspan="2" valign="bottom"> </td></tr> <tr> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" bgcolor="#bfbfbf">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"> </td></tr> <tr> <td valign="bottom">Expected dividend yield(a)</td> <td valign="bottom" bgcolor="#bfbfbf">  </td> <td valign="bottom" align="right" bgcolor="#bfbfbf">4.55</td> <td valign="bottom" nowrap="nowrap" bgcolor="#bfbfbf">% </td> <td valign="bottom"> </td> <td valign="bottom" align="right">5.54</td> <td valign="bottom" nowrap="nowrap">% </td></tr> <tr> <td valign="bottom">Risk-free interest rate(b)</td> <td valign="bottom" bgcolor="#bfbfbf">  </td> <td valign="bottom" align="right" bgcolor="#bfbfbf">2.35</td> <td valign="bottom" nowrap="nowrap" bgcolor="#bfbfbf">% </td> <td valign="bottom"> </td> <td valign="bottom" align="right">2.77</td> <td valign="bottom" nowrap="nowrap">% </td></tr> <tr> <td valign="bottom">Expected stock price volatility(c)</td> <td valign="bottom" bgcolor="#bfbfbf">  </td> <td valign="bottom" align="right" bgcolor="#bfbfbf">36.92</td> <td valign="bottom" nowrap="nowrap" bgcolor="#bfbfbf">% </td> <td valign="bottom"> </td> <td valign="bottom" align="right">27.21</td> <td valign="bottom" nowrap="nowrap">% </td></tr> <tr> <td valign="bottom">Expected term(d) (years)</td> <td valign="bottom" bgcolor="#bfbfbf">  </td> <td valign="bottom" align="right" bgcolor="#bfbfbf">5.00</td> <td valign="bottom" nowrap="nowrap" bgcolor="#bfbfbf">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">5.00</td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr style="FONT-SIZE: 1px"> <td style="BORDER-TOP: #000000 3px double" valign="bottom" colspan="6"> </td> <td> </td></tr></table>   <table cellpadding="0" cellspacing="0" style="BORDER-COLLAPSE: collapse" border="0" width="100%"> <tr> <td valign="top" align="left" width="1%">(a)</td> <td valign="top" align="left"> Determined using a constant dividend yield during the expected term of the TSRU. </td></tr></table> <table cellpadding="0" cellspacing="0" style="BORDER-COLLAPSE: collapse" border="0" width="100%"> <tr> <td valign="top" align="left" width="1%">(b)</td> <td valign="top" align="left"> Determined using the interpolated yield on U.S. Treasury zero-coupon issues. </td></tr></table> <table cellpadding="0" cellspacing="0" style="BORDER-COLLAPSE: collapse" border="0" width="100%"> <tr> <td valign="top" align="left" width="1%">(c)</td> <td valign="top" align="left"> Determined using implied volatility, after consideration of historical volatility. </td></tr></table> <table cellpadding="0" cellspacing="0" style="BORDER-COLLAPSE: collapse" border="0" width="100%"> <tr> <td valign="top" align="left" width="1%">(d)</td> <td valign="top" align="left"> Determined using the contractual term.</td></tr></table> The following summarizes all TSRU activity during 2009:   <table cellspacing="0" cellpadding="0" align="center" border="0" width="100%"> <tr> <td width="74%"/> <td valign="bottom" width="9%"/> <td/> <td/> <td valign="bottom" width="9%"/> <td/> <td/></tr> <tr> <td style="BORDER-TOP: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">SHARES (THOUSANDS)</td> <td style="BORDER-TOP: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"> </td> <td style="BORDER-TOP: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"> </td> <td style="BORDER-TOP: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right" nowrap="nowrap" colspan="2">WEIGHTED- AVERAGE GRANT DATE VALUE PER SHARE</td></tr> <tr> <td valign="top"> Nonvested, December 31, 2008</td> <td valign="bottom">  </td> <td valign="bottom" align="right">2,756</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">22.49</td></tr> <tr> <td valign="top"> Granted</td> <td valign="bottom">  </td> <td valign="bottom" align="right">6,365</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">14.62</td></tr> <tr> <td valign="top"> Vested</td> <td valign="bottom">  </td> <td valign="bottom" align="right">(47</td> <td valign="bottom" nowrap="nowrap">) </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">18.02</td></tr> <tr> <td style="BORDER-BOTTOM: #000000 1px solid" valign="top"> Forfeited</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">(393</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">) </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">16.12</td></tr> <tr> <td valign="top"> Nonvested, December 31, 2009</td> <td valign="bottom" bgcolor="#bfbfbf">  </td> <td valign="bottom" align="right" bgcolor="#bfbfbf">8,681</td> <td valign="bottom" nowrap="nowrap" bgcolor="#bfbfbf">  </td> <td valign="bottom" bgcolor="#bfbfbf"> </td> <td valign="bottom" bgcolor="#bfbfbf"> </td> <td valign="bottom" align="right" bgcolor="#bfbfbf">17.04</td></tr> <tr style="FONT-SIZE: 1px"> <td style="BORDER-TOP: #000000 3px double" valign="bottom" colspan="7"> </td></tr></table> The following table provides data related to all TSRU activity:   <table cellpadding="0" cellspacing="0" align="center" border="0" width="100%"> <tr> <td width="79%"/> <td valign="bottom" width="7%"/> <td/> <td/> <td valign="bottom" width="8%"/> <td/> <td/></tr> <tr> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"> </td> <td style="BORDER-TOP: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="center" colspan="5">YEAR ENDED DECEMBER 31,</td></tr> <tr> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">(MILLIONS OF DOLLARS, EXCEPT PER TSRU AMOUNTS AND YEARS)</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" bgcolor="#bfbfbf"> </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="center" colspan="2" bgcolor="#bfbfbf">2009</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="center" colspan="2">2008</td></tr> <tr> <td valign="top"> Weighted-average grant date fair value per TSRU</td> <td valign="bottom" bgcolor="#bfbfbf"> </td> <td valign="bottom" bgcolor="#bfbfbf">$</td> <td valign="bottom" align="right" bgcolor="#bfbfbf">4.26</td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">5.54</td></tr> <tr> <td valign="top"> Total compensation cost related to nonvested TSRU grants not yet recognized, pre-tax</td> <td valign="bottom" bgcolor="#bfbfbf"> </td> <td valign="bottom" bgcolor="#bfbfbf">$</td> <td valign="bottom" align="right" bgcolor="#bfbfbf">23</td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">9</td></tr> <tr> <td valign="top"> Weighted-average period in years over which TSRU cost is expected to be recognized</td> <td valign="bottom" bgcolor="#bfbfbf"> </td> <td valign="bottom" bgcolor="#bfbfbf"> </td> <td valign="bottom" align="right" bgcolor="#bfbfbf">2.1</td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">2.2</td></tr> <tr style="FONT-SIZE: 1px"> <td style="BORDER-TOP: #000000 3px double" valign="bottom" colspan="7"> </td></tr></table> 15. Share-Based Payments Our compensation programs can include share-based payments. In 2009, 2008 and 2007, the primary share-based awards and their general false false No definition available. No authoritative reference available. false false 1 2 false UnKnown UnKnown UnKnown false true