Robert J. Polzer - 01 Jan 2022 Form 3 Insider Report for Zoetis Inc. (ZTS)

Footnote F1

Represents 6,725.7436 phantom stock units. These phantom stock units, which were acquired pursuant to the Zoetis Supplemental Savings Plan, are settled in cash following the reporting person's separation from service and may be transferred by the reporting person into an alternative investment fund at any time, provided Zoetis may limit the timing, frequency and permissibility of transfers from one investment fund to another at any time.

Footnote F2

Each phantom stock unit represents a fraction of a phantom share of Zoetis common stock, plus a small amount of cash-equivalent investments (the cash-equivalent investments typically represent around 5% of the total value of the phantom stock unit). Accordingly, the value of each phantom stock unit is determined by reference to the market value of Zoetis common stock and the value of the cash-equivalent investments.

Footnote F3

Represents restricted stock units granted pursuant to the Zoetis Inc. 2013 Equity and Incentive Plan, and dividend equivalent units automatically issued thereon (each an "RSU" and collectively, "RSUs"). Restricted stock units vest and are settled in shares of Zoetis common stock on the third anniversary of the date of grant, subject to the reporting person's continued service through such vesting date and subject to earlier vesting and settlement upon certain specific events. Dividend equivalent units vest and are settled in shares of Zoetis common stock on the third anniversary of the date of grant of the underlying restricted stock units, subject to the reporting person's continued service through such vesting date and subject to earlier vesting and settlement upon certain specific events.

Footnote F4

Each RSU will vest and be settled in shares of Zoetis Inc. common stock on the third anniversary of the date of grant, subject to the reporting person's continued service through such vesting date and subject to earlier vesting and settlement upon certain specific events.

Footnote F5

Not applicable.

Footnote F6

The RSUs vest as follows: 434.6496 RSUs will vest on February 12, 2022; 279.6623 RSUs will vest on February 11, 2023; 249.9694 RSUs will vest on February 10, 2024.

Footnote F7

Each RSU represents a contingent right to receive one share of Zoetis Inc. common stock.

Footnote F8

Stock options (right to buy Zoetis Inc. common stock) granted pursuant to the Zoetis Inc. 2013 Equity and Incentive Plan. The options vest on the third anniversary of the date of grant.

Footnote F9

Each option vests on the third anniversary of the date of grant.

Footnote F10

Each option expires on the tenth anniversary of the date of grant.

Footnote F11

1,721 options granted February 12, 2019 at an exercise price of $87.51 per option; 1,179 options granted February 11, 2020 at an exercise price of $144.03 per option; 1,057 options granted February 10, 2021 at an exercise price of $160.62 per option.