AMERICAN HOME PRODUCTS CORPORATION
RESTRICTED STOCK AWARD AGREEMENT
UNDER THE 1996 STOCK INCENTIVE PLAN
DATE: June 21, 2001
NUMBER OF SHARES UNDERLYING
RESTRICTED STOCK UNITS: 33,624
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Robert Essner
[address]
[address]
Under the terms and conditions of this Agreement and of the Company's
1996 Stock Incentive Plan (the "Plan"), a copy of which has been delivered to
you and is made a part hereof, the Company hereby awards to you Restricted
Stock units (the "Units") representing shares of the Company's common stock
(the "Common Stock") subject to the restrictions set forth in this Agreement
in the amount set forth above. Except as provided herein, the terms used in
this Agreement shall have the same meanings as in the Plan.
1. No Rights as Stockholders. No shares of the Company's Common Stock
represented by the Units will be earmarked for you or your account, you shall
not have any of the rights of a stockholder with respect to such shares and
you may not sell, transfer, assign, pledge, or otherwise encumber or dispose
of any Units until actual conversion of Units to Common Stock pursuant to
Paragraph 2 hereof. Upon issuance of shares of Common Stock as of the
Conversion Date (as defined herein), you will be the owner of record of such
shares of Common Stock and shall receive either (through book-entry form) a
credit to an account maintained on your behalf or a stock certificate
representing such shares of Common Stock and shall be entitled to all of the
rights of a stockholder of the Company, including the right to vote and to
receive dividends, subject to the provisions of Paragraph 4.
2. Conversion of Units to Common Stock. (a) Subject to Paragraph 3
hereof, on June 21, 2004 (the "Conversion Date") the Units shall be converted
to Common Stock, and the Company shall promptly issue either (through
book-entry form) a credit to an account maintained on your behalf or a stock
certificate representing such shares in accordance with Paragraph 3 below free
of any restrictive legend, other than as may be required by applicable state
or federal securities law, and either (i) delivered to you promptly or (ii) if
you have made or are deemed to have made the election under Paragraph 4,
contributed to the Restricted Stock Trust, (as defined herein) in which case
such shares shall be maintained in the Restricted Stock Trust and delivery
shall be deferred until after your Retirement (as defined under the Company's
1999 Stock Incentive Plan) in accordance with the election set forth on
Schedule A attached hereto, or if either (1) no such election is made or (2)
your employment with the Company is terminated prior to Retirement for any
reason (including death), delivery shall be made on the first business day of
the calendar year following your termination of employment or as otherwise
provided in the Trust Agreement.
(b) Notwithstanding any other provisions hereof, the number of
shares of Common Stock which shall be delivered to you pursuant to Paragraph
2(a) either directly or from the Restricted Stock Trust shall be (i) the
number of such shares which would have been delivered in the absence of this
Paragraph 2(b) minus (ii) the number of whole shares of Common Stock necessary
to satisfy the minimum federal, state and/or local income tax withholding
obligations which are imposed on the Company by applicable law in respect of
the delivery of such award as well as other withholding obligations (e.g.,
Social Security and Medicare) which may be due and payable under applicable
law on the Conversion Date whether or not delivery of such shares is deferred
under Paragraph 4 (and which may be satisfied by the reduction effected hereby
in the number of deliverable shares), it being understood that the value of
the shares referred to in clause (ii) above shall be determined, for the
purposes of satisfying such withholding obligations, on the basis of the
average of the high and low per share prices for the Common Stock as reported
on the Consolidated Transaction Reporting System on the designated date of
delivery, or on such other reasonable basis for determining fair market value
as the Committee may from time to time adopt.
3. Termination of Employment. (a) Subject to Section 7(f) of the Plan,
in the event of termination of your employment during the term of this
Agreement, except as provided in Paragraph 3(b) or 3(c) below, you shall
forfeit all rights to all Units subject to this Agreement which have not been
converted to Common Stock and this Agreement shall terminate with no further
force and effect; provided, however, that the Committee may provide for a
partial or complete exception to this requirement as it deems equitable in its
sole discretion.
(b) Notwithstanding Paragraph 3(a) above, in the event that your
employment is terminated due to death, Disability (as defined under the
Company's 1999 Stock Incentive Plan) or Retirement, conversion of all Units
and delivery of the shares of Common Stock represented thereby (subject to any
applicable tax withholding as described in Paragraph 2(b) above) will be made
to you or your designated beneficiary or your legal representative, legatee or
such other person designated by an appropriate court as entitled to receive
the same, as the case may be, in accordance with Paragraph 2(a) and, subject
to Paragraphs 2(a) and 4, such shares of Common Stock shall be free and clear
of all restrictions, other than as may be required by applicable state or
federal securities law.
(c) Notwithstanding Paragraph 3(a) above, in the event that your
employment is terminated either (i) by the Company without conduct by you
constituting Cause (as defined herein) or (ii) by you under circumstances
constituting Good Reason (as defined herein), conversion of all Units and
delivery of the shares of Common Stock represented thereby will be made to you
as soon as practicable and such shares of Common Stock shall be free and clear
of all restrictions, other than as may be required by applicable state or
federal securities law, and subject to any applicable tax withholding as
described in Paragraph 2(b) above. As used herein, (A) "Cause" shall mean (1)
the conviction of, or plea of guilty or nolo contendere to, a felony or (2) the
willful engaging in gross misconduct which is materially and demonstrably
injurious to the Company; and (B) "Good Reason" shall mean the occurrence,
without your express written consent, of any of the following circumstances (not
cured within a reasonable period of time after written notice thereof by you to
the Company): (A) a reduction in your annual base salary; (B) a substantial
diminution in the nature or status of your responsibilities from those in effect
as of the date hereof; or (C) the relocation of your place of business to a
location more than 100 miles from Madison, New Jersey without the benefit of the
Company's standard relocation package.
4. Restricted Stock Trust. (a) Subject to Paragraph 4(b) below, you are
eligible to make a one-time irrevocable election to cause the Company to
contribute as of the Conversion Date the shares of Common Stock into which
Units shall be converted on such date to the Restricted Stock Trust (as
defined below) by completing the form set forth on Schedule A attached hereto
wherein such shares of stock shall be held, subject to claims of the Company's
creditors, until delivery to you in accordance with Schedule A attached
hereto. Subject to Paragraph 4(b), below, if you do not make such election,
such shares shall be delivered to you as provided in Paragraph 2 of this
Agreement.
(b) Notwithstanding anything to the contrary contained in this
Agreement, if you are or, in the judgment of the Committee, are expected to be
a Named Executive Officer (as herein defined) with respect to the year in
which the Conversion Date occurs, then you will be deemed to have made the
election under Paragraph 4(a) above to have the Common Stock into which Units
shall be converted on such date contributed to the Restricted Stock Trust.
(c) For purposes of this Agreement:
(i) "Named Executive Officer" shall mean the Chief Executive
Officer of the Company or any of the four highest compensated
officers (other than the Chief Executive Officer of the Company)
whose total compensation payable is required to be reported to
shareholders under the Securities Exchange Act of 1934, as
amended (the "1934 Act"); and
(ii) "Restricted Stock Trust" means the trust fund
established under the Restricted Stock Trust Agreement dated as
of April 20, 1994 (the "Trust Agreement") to accommodate the
deferral of delivery of shares of Common Stock represented by
Units and/or Restricted Stock (and dividends paid thereon) as
provided in Paragraph 2(a)(ii) of this Agreement, which trust
fund is subject to the claims of the Company's general creditors
under federal and state law in the event of insolvency of the
Company as described in the Trust Agreement.
5. Miscellaneous. This Agreement may not be amended except in writing
and neither the existence of the Plan nor this Agreement shall create any
right to continue to be employed by the Company or its subsidiaries and your
employment will continue to be at will and terminable at will by the Company.
In the event of a conflict between this Agreement and the Plan, the Plan shall
govern.
6. Compliance With Laws. (a) This Agreement shall be governed by the
laws of the state of Delaware and any applicable laws of the United States.
Notwithstanding anything herein to the contrary, the Company shall not be
obligated to cause to be delivered any shares of Common Stock pursuant to this
Agreement unless and until the Company is advised by its counsel that the
issuance of such shares either (through book-entry form) by a credit to an
account maintained on your behalf or by delivery of certificates representing
such is in compliance with all applicable laws and regulations. The Company
shall in no event be obliged to register any securities pursuant to the
Securities Act of 1933 (as now in effect or as hereafter amended) or to take
any other action in order to cause the issuance and delivery of such shares
either (through book-entry form) by a credit to an account maintained on your
behalf or by delivery of certificates representing such shares to comply with
any such law or regulation.
(b) If you are subject to Section 16 of the 1934 Act,
transactions under the Plan and this Agreement are intended to comply with all
applicable conditions of Rule 16b-3 or its successors under the 1934 Act. To
the extent any provision of the Plan, this Agreement or action by the
Committee involving you is deemed not to comply with an applicable condition
of Rule 16b-3, such provision or action shall be deemed null and void as to
you, to the extent permitted by law and deemed advisable by the Committee.
Moreover, in the event the Plan and/or this Agreement does not include a
provision required by Rule 16b-3 to be stated therein, such provision (other
than one relating to eligibility requirements or the price and amount of
awards as applicable) shall be deemed automatically to be incorporated by
reference into the Plan and/or this Agreement insofar as you are concerned,
with such incorporation to be deemed effective as of the effective date of
such Rule 16b-3 provision.
AMERICAN HOME PRODUCTS CORPORATION
By: ______________________________
Vice President and Treasurer
Accepted and agreed to:
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Name (Please Print) Social Security Number
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Signature Date of Birth
SCHEDULE A
ELECTION FORM
(To Be Completed in Conjunction with Your
Restricted Stock Award Agreement)
I, ___________________, hereby make an election to defer distribution of all
shares of Common Stock less those shares necessary to satisfy any applicable
withholding obligation under Paragraph 2(b) of the Restricted Stock Award
Agreement (the "Agreement") and to cause the Company to contribute such shares
to the Restricted Stock Trust (with any dividends thereon to be reinvested
under the AHPC Investor Services Program).
See Note Below
I, , hereby make an election to receive a distribution of such number of
shares in the Restricted Stock Trust under the Agreement to which I am
entitled in substantially equal annual installments over a period not to
exceed ten years as follows commencing, at the time indicated by my election
as set forth below, subject to the provisions of the Agreement, including
Paragraph 2, thereof (provided, however, that in the event of my death all
remaining installments shall be accelerated and distributed promptly):
Circle the number of annual installments:
2 3 4 5 6 7 9 10
Indicate your election:
Commencing after: ___ Retirement (as defined in the 1999 Stock Incentive
Plan)
___ Specific date to commence distribution after my
Retirement Date but in no event shall any annual
installment be made after the tenth anniversary of my
Normal Retirement Date (age 65). Indicate specific
date: ____________________
month/day/year
These elections shall be irrevocable upon execution of the Agreement.
Signature of Executive
Dated:
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Witnessed:
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NOTE:1. If you are or are expected to be a Named Executive Officer with respect
to the year in which the Conversion Date occurs, you will be deemed to have
elected deferred distribution hereunder.
Beneficiary Designation
In the event of my death, I designate the following beneficiary (ies) to
receive any shares of the Company's Common Stock to be distributed to me or
which have been deferred on my behalf to the Restricted Stock Trust under this
Agreement together with any dividends thereon.
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Beneficiary (ies)
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Contingent Beneficiary (ies)
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Signature of Executive
Dated: ______________________________________________________
Witnessed: ___________________________________________________