What is a 'blackout period' in this context?

A blackout period, as defined by Sarbanes-Oxley Act Section 306(a) and SEC Regulation BTR, is a period during which directors and executive officers of a company are temporarily restricted from buying, selling, or otherwise transferring any equity securities of the company that they hold in their employee benefit plans. This is typically triggered when a significant percentage of plan participants are also restricted from trading.

Why is Pfizer implementing a potential blackout period?

Pfizer is implementing a potential blackout period because it is conducting an exchange offer for its Zoetis Inc. shares. If a substantial portion (50% or more) of participants in Pfizer's employee savings and retirement plans elect to exchange their Pfizer shares held within those plans as part of the Zoetis offer, it triggers the legal requirement for a blackout period on trading for Pfizer's directors and Section 16 officers.

Who is affected by this blackout period?

The blackout period affects Pfizer's directors and officers who are subject to Section 16 of the Securities Exchange Act of 1934. These individuals will be prohibited from trading Pfizer shares or derivative securities, with an exception allowing them to participate in the Zoetis exchange offer with their holdings in the company's stock funds.

When is the blackout period expected to occur?

Pfizer anticipates that the blackout period, if it is imposed, will begin on June 14, 2013, at 4 p.m. Eastern Daylight time. It is expected to end during the week of July 5, 2013, assuming the exchange offer is not extended.

PFE 8-K SEC Disclosure — May 29, 2013

Summary

Pfizer Inc. filed an 8-K on May 29, 2013, to report a temporary suspension of trading under its employee benefit plans, commonly known as a "blackout period." This action is a result of Pfizer's offer to exchange up to 400,985,000 shares of its Class A common stock in Zoetis Inc. for Pfizer common stock. The potential blackout is triggered if 50% or more of the participants in Pfizer's individual retirement and savings plans direct their shares to be exchanged in the Zoetis offer. This blackout period, if imposed, will restrict Pfizer's directors and Section 16 officers from trading in Pfizer shares or related derivative securities. The purpose of this restriction is to comply with Section 306(a) of the Sarbanes-Oxley Act and SEC Regulation BTR, which aim to protect against insider trading during periods of significant plan participant activity. The anticipated blackout period is expected to commence on June 14, 2013, and conclude around July 5, 2013, though these dates are subject to change based on the duration of the exchange offer.

Key Highlights

1Pfizer Inc. announced a potential trading blackout period for its directors and Section 16 officers.
2The blackout is related to an exchange offer involving up to 400,985,000 shares of Zoetis Inc. Class A common stock.
3If 50% or more of U.S. plan participants direct their shares to be exchanged, the blackout will be imposed.
4The restriction complies with Sarbanes-Oxley Act Section 306(a) and SEC Regulation BTR.
5During the blackout, directors and officers will be restricted from trading Pfizer shares or related derivatives, with an exception for participating in the Zoetis exchange offer.
6The anticipated blackout period is expected to run from June 14, 2013, to approximately July 5, 2013.
7Information regarding the actual blackout dates can be obtained from Pfizer's Vice President and Corporate Secretary.

PFIZER INC 8-K Report, Temporary Suspension of Trading Under Employee Benefit Plans (May 29, 2013)

Summary

Key Highlights

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