AMERICAN HOME PRODUCTS CORPORATION AND SUBSIDIARIES SUPPLEMENTAL EMPLOYEE
SAVINGS PLAN
(as amended to July 1, 1997)
I. PURPOSE
The purpose of the Supplemental Employee Savings Plan ("the Plan") is to provide
a savings plan of deferred compensation for selected managers or highly
compensated employees in situations where part of such employees' compensation
falls outside of the IRS qualified savings plan. The Plan shall be implemented
by agreements entered into between the selected employees and their respective
employers which shall be either American Home Products Corporation ("AHP") or a
U.S. subsidiary thereof. The Plan shall be unfunded for tax purposes and for
purposes of the Employee Retirement Income Security Act of 1974, as amended
("ERISA") and shall be administered and interpreted in such manner as not to be
subject to the participation and vesting, the funding and the fiduciary
responsibility provisions of Title I of ERISA. Participants in the Plan have
the status of general unsecured creditors of their employers and the Plan
constitutes a mere promise by the employer to make benefit payments in the
future. The Plan shall be administered by the Savings Plan Committee (the
"Committee") which also administers the AHPC Savings Plan. The Committee shall
have sole discretion to determine which selected employees will be permitted to
participate in the Plan.
II. ADMINISTRATION
The Committee shall administer the Plan and shall have full authority to
determine all questions arising in connection with the Plan, including its
interpretation. The Committee's decisions shall be conclusive and binding on
all persons. The Committee may adopt rules and procedures to implement the
Plan.
III. PARTICIPATION
The Committee shall have discretion to determine which employees of AHP and its
subsidiaries may participate in the Plan. The Committee shall also have
discretion to determine when participation begins and terminates. At the
discretion of the Committee, a selected employee may begin or terminate
participation at any time by appropriate notice to the Committee. A letter
designating selection shall be issued to such employee by such employee's
employer. Such letter shall indicate the applicable salary for which the
employee may participate. When the agreement set forth at the end of the Plan
is executed by both the employee and the appropriate officer of the employer, it
shall become effective and the employee shall thereupon become a participant in
the Plan. An employee who accepts an offer to participate in the Plan agrees to
have from 1% to 6% of his or her applicable salary, as determined by the
Committee, reduced from salary otherwise payable in accordance with the terms
and conditions set forth in Article IV.
IV. PLAN FORMULA
(1). In General
Employee Salary Deferral Contributions, (1% to 6% of applicable salary) and
Matching Contributions (50% of the Salary Deferral Contributions as defined
in the Savings Plan, hereinafter referred to as "Salary Deferral
Contributions" and "Matching Contributions" respectively) may be made to
the Plan and the Plan may receive contributions of such amounts. Salary
Deferral Contributions shall be withheld from the respective employee's
salary and accounted for separately. Matching Contributions shall be
accounted for separately.
(2). Investments
Salary Deferral Contributions and Matching Contributions shall be adjusted
for investment experience in the same manner, as directed by the employee,
that would have resulted if these contributions were able to be invested as
Salary Deferral Contributions in the investment funds described in Section
6 of the Savings Plan which are set forth in Appendix A, as attached
hereto, and incorporated herein by reference.
(3). Valuation, Distributions and Vesting Etc.
The distribution of Salary Deferral Contributions and Matching Contributions
shall be in a lump sum in cash and the amount of the distribution shall be
determined in accordance with the investment performance under the applicable
provisions of the Savings Plan as if such amounts had actually been invested in
the same investment funds as set forth in Appendix A, as attached hereto, and
incorporated herein by reference. Distributions shall be made in accordance
with the provisions set forth in Section 7 of the Savings Plan, except that the
Committee may waive one or more of the requirements set forth therein. No
payments will be made under the Plan until the employee terminates employment by
death or otherwise, or is permanently disabled. Vesting shall be determined in
accordance with the same provisions set forth in the Savings Plan. Whatever
beneficiary designations were made pursuant to the Saving Plan shall also apply
to the Plan in the event of the Participant's death. Beneficiary designations
shall be made pursuant to the Plan and in accordance with the agreement between
the employer and the employee. Notwithstanding the provisions of this paragraph
IV(3), distributions will only be made on six (6) months prior notice and in any
event distributions will be made no sooner than the date on which the
distribution from the Savings Plan is made. Employee's foreign salary shall be
converted into U.S. dollars under guidelines adopted by the Committee.
V. FOREIGN LAW
This Plan shall be construed so that foreign law does not apply. If foreign law
should apply to a particular participant, participation in the Plan shall
terminate for such participant and such participant shall be appropriately
reimbursed for any Salary Deferral Contributions and Matching Contributions made
to the date of such termination.
VI. AMENDMENT AND TERMINATION
The Plan may be terminated or amended at any time by the Committee provided that
benefits vested prior to such termination or amendment shall remain unaffected.
VII. GOVERNING LAW AND CONSTRUCTION
The Plan shall be governed in accordance with the laws of the State of New York
except to the extent superseded by ERISA. The provisions of the Savings Plan
are hereby incorporated by reference to the extent that they are referred to
herein and to the extent that they do not conflict with the express provisions
of the Plan set forth above. The Plan shall be deemed to have been adopted
contemporaneously with the Savings Plan so that elections of savings percentages
made under the Savings Plan may be made effective at such election date under
the Plan. If any provision of the Plan is unenforceable due to operation of law
or is contrary to foreign law, such provision shall be severable and not affect
other portions of the Plan.
APPENDIX A - As Amended to July 1, 1997
INVESTMENT FUNDS AVAILABLE UNDER THE
SUPPLEMENTAL EMPLOYEE SAVINGS PLAN
The following funds shall be available for investment under the Supplemental
Employee Savings Plan:
1. the Interest Income Fund;
2. the Fidelity Balanced Fund;
3. the Spartan U.S. Equity Index Fund;
4. the Fidelity Magellan Fund;
5. the Fidelity International Growth & Income Fund;
6. the Fidelity Low-Price Stock Fund;
7. the Mas Value Portfolio; and
8. the AHPC Common Stock Fund