Exhibit 10.20
AMERICAN HOME PRODUCTS CORPORATION
RESTRICTED STOCK PERFORMANCE AWARD AGREEMENT
UNDER THE 1993 STOCK INCENTIVE PLAN
DATE: [ ]
NUMBER OF SHARES SUBJECT
TO TARGET AWARD: [ ]
______________________________
[Address]
Under the terms and conditions of this Agreement and of the
Company's 1993 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 meetings of the
Committee to be held within 60 days after the end of each of the
current year and the two immediately succeeding years or at such
other time or times as the Committee in its discretion deems
appropriate, the Committee shall compare the EPS (as defined
below) for such year with the EPS Target (as defined below) for
such year (the date on which each such determination is made
being referred to herein as a "Conversion Date"). If, on the
date of such meeting, the Committee determines that, with respect
to the preceding year:
(i) EPS is less than 90% of the EPS Target, then all
rights with respect to one-third of the Target Award (the
"Annual Target Amount") 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 Annual Target Amount shall be
converted into Restricted Stock and all rights with respect
to the remaining portion of such Annual Target Amount 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 Annual Target Amount shall be
converted into Restricted Stock; and
(iv) EPS is greater than 105% of the EPS Target, then
Units representing the entire Annual Target Amount shall be
converted into Restricted Stock and you shall be entitled to
receive an additional grant of Restricted Stock representing
25% of the Annual Target Amount (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, (i) the Annual
Target Amount shall be rounded up or down (A) to the nearest
whole number for the first two years and (B) for the third year
to equal, together with the Annual Target Amounts for the first
two years, the Target Award; and (ii) 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" for any year means the earnings or net
income per share of common stock of the Company for such
year, 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 $4.62 for 1995 and, for
1996 and 1997, shall be the amount established by the
Committee at a meeting to be held no later than March 1 of
each such year; 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 each Conversion Date the
shares of Restricted Stock into which Units shall be converted on
such date, 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 any
year in which a Conversion Date occurs, then you will be deemed
to have made the election under Paragraph 4(a) above to have the
Restricted Stock into which Units shall be converted on such date
and thereafter 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 last
Conversion Date with respect to a Bonus Award made on the final
Conversion Date), 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 May 25,
1995, 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, ______________________________, hereby make an election to defer
(PRINT NAME)
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 any year in which a 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: ____________________________
