American Home Products Corporation
                        Management Incentive Plan

       (As amended by the Board of Directors on February 6, 1997,
        subject to approval by stockholders on April 28, 1997.)  

I. Purpose

     The Management Incentive Plan (the "Plan") is maintained by
the Corporation primarily for the purpose of providing immediate
and deferred incentive compensation for a select group of
management and highly compensated employees and is designed to
provide for awards to selected key salaried employees in
executive, administrative, technical, professional or other
important capacities, who individually, or as members of a group,
contribute in a substantial degree to the success of the Company,
thus affording to them a means of participating in that success
and an incentive to contribute further to that success.  

II. Definitions

     The following words and phrases as used herein shall have
the meanings set forth below: 

     (1) "Company" shall mean American Home Products Corporation
(the Corporation), and any corporation, domestic or foreign, 50%
or more of whose share voting power is held, directly or
indirectly, by the Company. 

     (2) "Employee" shall mean any key salaried employee of the
Company whether or not an Officer or Director, including
individuals whose employment has terminated during the applicable
year by reason of death or retirement. 

     (3) "Committee" shall mean the Compensation and Benefits
Committee consisting of three or more Corporation Directors who
are not Employees. 

     (4) "Average Net Capital" shall mean the average of the
beginning and ending balances, shown in the Corporation's
Consolidated Balance Sheet, of the Stockholders' Equity and
funded debt. 

     (5) "Net Income" shall mean the "net income for year," after
taxes, shown in the Corporation's Consolidated Statement of
Income, adjusted, however, by adding any amount by which such net
income after taxes has been reduced by provision for awards under
the Plan. 

     (6) "Incentive Earnings" shall mean the excess of Net Income
for any year over the greater of (a) an amount equal to 12% of
Average Net Capital or b) an amount equal to $.375 multiplied by
the average number of shares of the Corporation's Common Stock
outstanding at the close of business on each day of the year
assuming full conversion of the Corporation's Preferred Stock.
The amount of Incentive Earnings shall be reported to the
Committee by the Corporation's Treasurer as promptly after the
close of the year as is practical; provided, however, that such
Incentive Earning's and awards based thereon shall be adjusted
downward, if necessary, to reflect the net income for the year
certified by the Corporation's independent public accountants as
adjusted as provided in II (5) above. In the event of stock
split, stock dividend or other relevant change in the
Corporation's capitalization, the Committee shall, subject to the
approval of the Board of Directors, appropriately adjust such
$.375 per share of the Corporation's Common Stock. 

     (7) "Award Fund" shall mean the amount, not in excess of 12%
of Incentive Earnings, which is recommended by the Committee and
approved by the Board of Directors as the maximum amount to be
used for awards under the Plan for the applicable year. Any
unawarded portion of the Award Fund shall not be available for
awards for subsequent years. 

III. Administration

     The Plan shall be administered by the Committee which may
make such determinations, make such awards and take such other
action in connection with the Plan as it deems necessary, taking
into consideration the recommendations of management. Such
determinations, awards and action shall be binding and conclusive
for all purposes and upon all persons unless and except to the
extent that the Board of Directors of the Company shall have
previously directed that all or specified types of action by the
Committee shall be subject to approval by the Board of Directors. 

IV. Eligibility 

     The individuals eligible to receive awards under the Plan
shall be such Employees as the Committee shall determine each
year.  

V. Awards 

     The Committee shall determine the awards to be made for any
year subject to the following: (1) the award amounts payable with
respect to any year to an Employee who for such year is the Chief
Executive Officer of the Corporation or one of the Corporation's
four other highest compensated officers (as determined in
accordance with Section 162(m) of the Internal Revenue Code of
1986, as amended) shall not exceed 3% of the Award Fund, and, (2)
the portion of the Award Fund remaining after the awards to the
Employees in (1) above shall be available for awards to other
Employees in such amounts as the Committee determines. In no
event, however, shall the amount of an award payable to any
Employee exceed the Employee's total compensation for the year,
excluding only any award under the Plan. Awards may be in whole
or in part (a) current and payable in cash ("Cash Award"), or (b)
deferred and conditional and payable (i) in cash ("Contingent
Cash Award") or (ii) in shares of the Corporation's Common Stock
("Contingent Stock Award"). The aggregate number of shares of the
Corporation's Common Stock which may be issued under the Plan
shall be 24,000,000 (plus the number of shares credited in
respect of dividends as hereinafter provided) and all such shares
shall be from Treasury Stock or from authorized and unissued
shares as the Board of Directors shall from time to time
determine. In the event of stock split, stock dividend or other
relevant change in the Corporation's capitalization, the
Committee shall, subject to the approval of the Board of
Directors, appropriately adjust such maximum number of shares. 

     Insofar as the Committee has not predetermined the manner of
payment of awards, whether in terms of individuals or
classifications on the bases of age, salary, amount of award or
other criteria, the Committee may permit eligible Employees to
indicate a preference, which shall not be binding on the
Committee, within limits established by the Committee, that all
or any portion of an award be a Cash Award, a Contingent Cash
Award or a Contingent Stock Award.  

VI. Payment of Awards

(1) Cash Awards 
     The amount of each Cash Award shall be paid in cash as soon
as practicable after the close of the calendar year for which the
award is made. 
(2) Contingent Cash Awards
     The Company shall credit the amount of each Contingent Cash
Award to the Employee's Contingent Award Account and shall,
subject to the conditions of paragraph VI(4), pay the same out in
equal installments on the five succeeding anniversaries of the
date of the award.
(3) Contingent Stock Awards 
     (a) The amount of each Contingent Stock Award shall be used
to determine the largest full number of shares of the
Corporation's Common Stock which such amount would purchase at
the average closing market price of such Common Stock on the
Consolidated Transaction Reporting System for the last five
business days, on which at least one sale of such Common Stock
took place on such System, of the calendar year for which the
award is made. The Company shall credit the Employee's Contingent
Award Account as of the date of the award with the number of
shares so determined. At no time after such credit and prior to
the delivery of the shares so credited shall any of such shares
be earmarked for his or her account, nor shall he or she have any
of the rights of a stockholder with respect to such shares. Any
excess of the Contingent Stock Award remaining after such
computation of shares of stock shall be carried forward and
treated as an addition to any future award to the Employee;
provided, however, that any such excess remaining after
termination of the Employee's employment shall be paid to him or
her in cash at the time of the first delivery from his or her
Contingent Award Account.

     As of December 31 of each year, the Corporation shall
determine the amount of the dividends which would have been paid
during such calendar year with respect to the number of shares
credited in each Contingent Award Account at the record date for
each such dividend payment had the shares so credited then been
issued and outstanding. The Employee's Contingent Award Account
shall be credited with the largest full number of shares of the
Corporation's Common Stock purchasable with the above determined
amount at the average closing market price of such Common Stock
on the Consolidated Transaction Reporting System, for the last
five business days, on which at least one sale of such Common
Stock took place on such System, of the calendar year (such share
credits in respect of dividends shall not be deemed awards under
the Plan). The cash equivalent of any excess thereafter remaining
shall be carried forward and treated as an addition to the next
succeeding year's dividends on the shares credited to the
Employee's Contingent Award Account; provided, however, that the
cash equivalent of any such excess remaining after final delivery
from the Employee's Contingent Award Account shall be paid to him
or her in cash.

     In the event of stock split, stock dividend or other
relevant change in the Corporation's capitalization, the
Committee shall, subject to the approval of the Board of
Directors, appropriately adjust the shares of stock theretofore
credited to the Contingent Award Accounts.

     (b) The Company shall, subject to the conditions of
paragraph VI(4), deliver to the Employee the shares of stock
credited to his or her Contingent Award Account in approximately
equal installments as soon as practicable after the first day of
January of each of the five years following any termination of
his or her employment, unless the Committee shall otherwise
determine. 

     (c) Notwithstanding any other provisions hereof, the
Committee may in its absolute discretion provide, with respect to
any Contingent Stock Award made to any participant or
participants under the Plan, that in the event of any delivery of
shares of Common Stock by the Company pursuant to such Contingent
Stock Award, the number of such shares which the recipient
thereof shall be entitled to receive and which shall be delivered
by the Company shall be (i) the number of such shares which would
have been delivered in the absence of this paragraph VI(3)(c),
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 (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 date of authorization of
delivery by the Committee, or on such other reasonable basis for
determining fair market value as the Committee may from time to
time adopt. Notwithstanding any term or provision of this
paragraph VI(3)(c), in determining the total number of shares
authorized for issuance under the Plan pursuant to paragraph V
hereof and in calculating the limit set forth in paragraph V
hereof on the number of shares which may be awarded to any
individual Employee under the Plan, the reduction in the number
of shares effected by this paragraph VI(3)(c) shall not be taken
into account.  

     (4) Conditions of Payment of Contingent Awards 
     (a) In the event that the Employee is discharged for, or
after any other termination of employment is found while employed
by the Company to have engaged in, deliberate gross misconduct,
as determined by the Company, no further payment or delivery
shall thereafter be made in respect of his or her Contingent Cash
or Stock Awards and all his or her rights with respect to his or
her Contingent Cash or Stock Awards and all his or her rights
with respect to his or her Contingent Award Account shall
thereupon be forfeited.

     (b) In the event of termination of the Employee's employment
prior to his or her retirement for reasons other than death or
discharge for deliberate gross misconduct, as determined by the
Company, any unpaid installments of his or her Contingent Cash
Awards and any undelivered shares of stock from his or her
Contingent Award Account shall, subject to the conditions set
forth in paragraph (d) below, be paid or delivered to him or her
at the dates and in the installments originally determined.

     (c) In the event of the Employee's death, any unpaid
installments of his or her Contingent Cash Awards shall be paid
and any undelivered shares of stock from his or her Contingent
Award Account shall be paid or delivered at the dates and in the
installments originally determined, unless the Committee shall
otherwise determine, to or as directed by his or her legal
representative, or legatee or such other person designated by an
appropriate court as the person entitled to receive the same,
provided that the Employee was employed by the Company at the
time of his or her death or up to the date of his or her death
had complied with the conditions set forth in paragraph (d)
below. 

     (d) No payment of a Contingent Cash Award or delivery from a
Contingent Award Account shall be made to any Employee after
termination of employment unless he or she shall have to the date
fixed for such payment or delivery (i) refrained from becoming or
serving as an officer, director or employee of any individual,
partnership or corporation, or the the owner of a business, or a
member of a partnership which conducts a business in competition
with the Company or renders a service (including, without
limitations, advertising agencies and business consultants) to
competitors with any portion of the business of the Company, (ii)
made himself or herself available, if so requested by the
Company, at reasonable times and upon a reasonable basis to
consult with, supply information to, and otherwise cooperate
with, the Company and (iii) refrained from engaging in deliberate
action which, as determined by the Committee, causes substantial
harm to the interests of the Company. If these conditions are not
fulfilled, no further payment or delivery shall thereafter be
made with respect to the Employee's Contingent Cash or Stock
Awards and all his or her rights with respect to his or her
Contingent Award Account shall thereupon be forfeited.  

VII. Limitations

     No Employee, whether or not deemed eligible or offered an
opportunity to indicate a preference under the Plan, or other
person shall have any claim or right (legal, equitable or other)
to be granted an award under the Plan, and no Director, Officer,
Employee of the Company or any other person shall have the
authority to enter into any agreement with any person for the
making or payment of an award or to make any representation or
warranty with respect thereto. 

     No Employee to whom a Contingent Award has been made shall
have any rights to his or her Contingent Award Account other than
to receive the Contingent Award at the time and in the form
determined by the Committee, subject to the fulfillment of the
conditions prescribed herein, which right may not be assigned,
transferred or pledged during his or her lifetime.

     Neither the action of the Corporation in establishing the
Plan nor any action taken by it or by the Committee under the
provisions hereof, nor any provision of the Plan, shall be
construed as giving to any Employee the right to be retained in
the employ of the Company.  

VIII. Amendment, Suspension or Termination of the Plan in Whole
or in Part

     The Board of Directors may discontinue the Plan at any time
and may from time to time amend the terms of the Plan; provided,
however, that no such discontinuance or amendment shall adversely
affect any right or obligation with respect to any award
theretofore made, and no such amendment shall, without the
approval of stockholders, operate so as to increase the annual
amount of the Award Fund or increase the aggregate number of
shares of the Corporation's Common Stock that may be issued under
the Plan.  

IX. Construction

     The Plan shall be governed by and construed in accordance
with the laws of the State of New York.