Exhibit 10.32
AMERICAN HOME PRODUCTS CORPORATION
RESTRICTED STOCK PERFORMANCE AWARD AGREEMENT
UNDER THE [Year]STOCK INCENTIVE PLAN
DATE: [Date]
NUMBER OF SHARES SUBJECT
TO TARGET AWARD: [ ]
______________________________
[Name/Address]
Under the terms and conditions of this Agreement and of the Company's
[Year] 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 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 (the "Target Award"). Upon the satisfaction by the Company of
certain performance criteria as described in Paragraph 3 of this Agreement,
the Units will be converted into shares of the Company's Common Stock
entitling the holder to all of the rights of a stockholder as described herein
but subject to the restrictions set forth in this Agreement (the "Restricted
Stock"). Except as provided herein, the terms used in this Agreement shall
have the same meanings as in the Plan.
1. Rights as Stockholders. During the period from the date of this
Agreement through the Conversion Date (as defined herein), no shares of the
Company's Common Stock represented by the Units will be earmarked for you or
your account nor shall you have any of the rights of a stockholder with
respect to such shares. Upon issuance of the Restricted Stock as of the
Conversion Date, you will be the owner of record of the shares of Common Stock
represented by the Restricted Stock and shall be entitled to all of the rights
of a stockholder of the Company, including the right to vote and the right to
receive dividends, subject to the restrictions stated in this Agreement and
referred to in the legend described in Paragraph 7 below. If you receive any
additional shares by reason of being the holder of Restricted Stock under this
Agreement, all the additional shares shall be subject to the provisions of
this Agreement and all certificates evidencing ownership of the additional
shares shall bear the legend.
2. Restricted Period. During the period from the date of this
Agreement through the date which is three years after such date (the
"Restricted Period"), you may not sell, transfer, assign, pledge, or otherwise
encumber or dispose of any Units or Restricted Stock granted hereunder.
3. Conversion to Restricted Stock. (a) At a meeting of the Committee
to be held within 60 days after the end of [second year] or at such other time
or times as the Committee in its discretion deems appropriate, the Committee
shall compare the EPS (as defined below) with the EPS Target (as defined
below). If, on the date of such meeting (the "Conversion Date"), the
Committee determines that:
(i) EPS is less than 90% of the EPS Target, then all rights with
respect to the Target Award shall thereupon be forfeited;
(ii) EPS is greater than or equal to 90% of the EPS Target and less
than or equal to 95% of the EPS Target, then Units representing
75% of the Target Award shall be converted into Restricted Stock
and all rights with respect to the remaining portion of such
Target Award shall thereupon be forfeited;
(iii) EPS is greater than 95% of the EPS Target and less than or equal
to 105% of the EPS Target, then Units representing the entire
Target Award shall be converted into Restricted Stock; and
(iv) EPS is greater than 105% of the EPS Target, then Units
representing the entire Target Award shall be converted into
Restricted Stock and you shall be entitled to receive an
additional grant of Restricted Stock representing 25% of the
Target Award (a "Bonus Award"); such additional grant to be made
by the Committee at such meeting.
(b) Notwithstanding anything to the contrary contained in this
Agreement, Units shall be converted into Restricted Stock in whole numbers of
shares only and, if necessary, the calculations based upon such amounts in
subparagraphs 3(a)(ii) and 3(a)(iv) above shall be rounded up or down to the
nearest whole number.
(c) As used in this Agreement, the term:
(i) "EPS" means the earnings or net income per share of common stock
of the Company for 1998, adjusted to exclude the effect of
extraordinary or unusual items of income or expense, all as
determined in good faith by the Committee acting in its sole
discretion.
(ii) "EPS Target" shall be the amount established by the Committee at a
meeting to be held no later than March 1, 1998; provided, however,
that if for any reason the Committee shall determine that the EPS
Target is no longer a practicable or appropriate measure of
financial performance, the Committee may take action to substitute
another financial measure as it deems appropriate under the
circumstances.
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
deposit as of the Conversion Date the shares of Restricted Stock, issuable
hereunder, together with a stock power to be executed by you, to an account in
your name in the Restricted Stock Trust (as defined below) by completing the
form set forth on 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 5(a)(i) 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 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 Restricted Stock issuable hereunder deposited into 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; and
(ii) "Restricted Stock Trust" means the trust fund established or to be
established by a trust agreement (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) until your termination of employment for any reason or as
otherwise provided in the Trust Agreement, such trust fund to be
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. Delivery of Shares of Common Stock. (a) Subject to Paragraphs 4
and 9 of this Agreement, as soon as practicable after the Restricted Period
(or six months after the Conversion Date with respect to a Bonus Award) all
shares of Restricted Stock granted hereunder shall be cancelled and replaced
with certificates representing Common Stock free of any restrictive legend
other than as may be required by applicable state or federal securities law,
such certificates to be either (i) delivered to you promptly or (ii) if you
have made or are deemed to have made the election under Paragraph 4 above,
deposited on your behalf in the Restricted Stock Trust, in which case delivery
of such shares shall be deferred as provided in the Trust Agreement until 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 5(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
5(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 (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. Any other
withholding obligations (e.g. Social Security and Medicare) with respect to
such award will be satisfied by separate arrangements between the Company and
you but will not in any event involve a reduction in the number of shares that
you are to receive.
6. Termination of Employment. (a) Subject to Section 7(f) of the
Plan, in the event of your termination of employment during the Restricted
Period for any reason other than death, disability or retirement, you shall
forfeit all rights to all Units and Restricted Stock granted hereunder and you
agree (i) to assign, transfer, and deliver the Restricted Stock to the Company
and (ii) that you shall cease to be a shareholder of the Company with respect
to such shares, provided, the Committee may provide for a partial or complete
exception to this requirement as it deems equitable in its sole discretion.
(b) In the event that your employment is terminated due to death,
disability or retirement, vesting of all shares of Restricted Stock covered by
the Target Award and any related Bonus Award and delivery of the shares of
Common Stock of the Company represented thereby 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, on the terms and, subject to the conditions of this
Agreement, including Paragraph 3 above.
7. Legend on Certificates. Each certificate evidencing ownership of
Restricted Stock issued during the Restricted Period shall bear the following
legend:
"These shares have been issued or transferred subject to a Restricted
Stock Performance Award and are subject to substantial restrictions,
including a prohibition against transfer and a provision requiring
transfer of these shares to the Company without payment in the event of
termination of the employment of the registered owner under certain
circumstances all as more particularly set forth in a Restricted Stock
Performance Award Agreement dated [Date], a copy of which is on file
with the Company."
8. Miscellaneous. This Agreement may not be amended except in
writing and neither the existence of the Plan and this Agreement nor the
Target Award granted hereby shall create any right to continue to be employed
by the Corporation or its subsidiaries and your employment will continue to be
at will and terminable at will by the Corporation. In the event of a conflict
between this Agreement and the Plan, the Plan shall govern.
9. 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 Corporation shall not be
obligated to cause to be delivered any Restricted Stock or shares of Common
Stock of the Company represented thereby pursuant to this Agreement unless and
until the Company is advised by its counsel that the issuance and delivery of
such certificates is in compliance with all applicable laws and regulations of
governmental authority. The Corporation 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 certificates to comply with any such law or
regulation.
(b) If you are subject to Section 16 of the Securities Exchange Act of
1934, as amended (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. In addition,
the Committee in its discretion may cause the Company to retain custody of the
certificates representing the Common Stock to be delivered under Paragraph 5
above so long as necessary or appropriate to ensure that any minimum holding
period under Rule 16b-3 is satisfied.
AMERICAN HOME PRODUCTS CORPORATION
By: ______________________________
Corporate Treasurer
Accepted and agreed to:
____________________________________ _______________________
Name (Please Print) Social Security Number
____________________________________ _______________________
Signature Date of Birth
SCHEDULE A
ELECTION FORM
(To Be Completed in Conjunction with Your
Restricted Stock Performance Award Agreement)
I, (PRINT NAME) , hereby make an election to defer distribution of all
shares of Restricted Stock and to cause the Company to deposit such shares to an
account in my name in the Restricted Stock Trust (with any dividends thereon to
be reinvested under the AHPC Master Investment Plan) together with a stock power
to be executed by me.
See Note Below
This election shall be irrevocable upon execution of the Agreement.
_________________________________
Signature of Executive
Dated: ______________________________________________________
Witnessed: __________________________________________________
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.
___________________________________________________________________________
Beneficiary (ies)
___________________________________________________________________________
Contingent Beneficiary (ies)
_____________________________
Signature of Executive
Dated: ______________________________________________________
Witnessed: __________________________________________________
