Exhibit 10.24
AMERICAN HOME PRODUCTS CORPORATION
SPECIAL RESTRICTED STOCK PERFORMANCE AWARD AGREEMENT
UNDER THE 1996 STOCK INCENTIVE PLAN
AS OF: JANUARY 28, 1999
NUMBER OF SHARES SUBJECT
TO TARGET AWARD FOR 1999: 8,500
FOR 2000: 8,500
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Five Giralda Farms
Madison, New Jersey 07940
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 units (the
"Units") representing shares of the Company's Common Stock (the "Common Stock")
for 1999 and 2000, respectively, subject to the restrictions set forth in this
Agreement, in the amounts set forth above (each a "Target Award"). Upon the
satisfaction by the Company of the performance criteria as described in
Paragraph 3 of this Agreement, the Units will be converted into shares of the
Company's Common Stock entitling you 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 any 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 shares of Restricted Stock as of a Conversion
Date, you will be the owner of record of the shares of Common Stock represented
by such Restricted 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 you 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 and subject to the
additional provisions of Paragraph 4. 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. Except as set forth in Section 5 or 6(b), during
the period from the date of this Agreement through the date on which the
Committee determines whether performance targets have been met for 2000 (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) Except if this Agreement is
earlier terminated in accordance with its terms, at meetings of the Committee to
be held within 60 days after the end of each of 1999 and 2000, respectively, or
at such other time or times as the Committee in its discretion deems
appropriate, the Committee shall compare the IBT (as defined below) for the
preceding year with the Target IBT (as defined below) for such year (the date on
which each such determination is made being referred to herein as a "Conversion
Date") and, if the Committee determines for such year that:
(i) IBT is less than 90% of the Target IBT, then all
rights with respect to the Target Award for such year
(the "Annual Target Amount") shall thereupon be
forfeited;
(ii) IBT is greater than or equal to 90% of the Target IBT
and less than 95% of the Target IBT, 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) IBT is greater than or equal to 95% of the Target IBT
and less than 105% of the Target IBT, then Units
representing the entire Annual Target Amount shall be
converted into Restricted Stock; and
(iv) IBT is greater than or equal to 105% of the Target
IBT, 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, shall be rounded up or down for each such year.
(c) As used in this Agreement, the term:
(i) "IBT" for any year means the net income before income
taxes of the Company's Agricultural Products Division
as determined in accordance with the Company's Master
Accounting Manual on a basis that is consistent with
past practice, such determination to be made in good
faith by the Committee acting in its sole discretion.
(ii) "Target IBT" means, for each of 1999 and 2000,
the amounts set forth on Exhibit I hereto.
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 Restricted Stock, issuable
hereunder, 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
under the terms of Paragraph 5 herein. 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 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 stockholders 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 5(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. Delivery of Shares of Common Stock. (a) Subject to Paragraphs 4 and
9 of this Agreement, as soon as practicable after the Restricted Period, all
shares of Restricted Stock (and any Bonus Award) granted hereunder shall be
canceled and in replacement thereof you shall receive either (through book-entry
form) a credit to an account maintained on your behalf or a stock certificate
representing the Common Stock free of any restrictive legend other than as may
be required by applicable state or federal securities law, such Common Stock to
be either (i) so delivered to you promptly or (ii) if you have made or are
deemed to have made the election under Paragraph 4 above, contributed to the
Restricted Stock Trust, in which case such shares shall be maintained in the
Restricted Stock Trust and delivery shall be deferred until after your
Retirement 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 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 as well as other withholding obligations (e.g., Social Security and
Medicare) which may be due and payable under applicable law as of the lapse of
the Restricted Period as defined in Paragraph 2, 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.
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 stockholder 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 Disability
or Retirement, or in the event of your death, 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 and Paragraphs 10 and
11 below.
7. Legend. Each book-entry or 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 Special
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
Special Restricted Stock Performance Award Agreement dated as of
January 28, 1999, 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 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 is in compliance
with all applicable laws and regulations of governmental authority. The
Corporation shall in no event be obligated 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 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. 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.
10. Sale of the Agricultural Products Division. Notwithstanding
anything to the contrary herein, in the event of a sale or other divestiture by
the Company of the Agricultural Products Division prior to December 31, 1999,
the Target Award for 2000 will be canceled and the Target Award for 1999 will be
subject to conversion to Restricted Stock in the sole discretion of the
Committee based upon the determination by the Committee as to whether and to
what extent the performance criteria would have (assuming that the divestiture
transaction had not occurred) been satisfied. In the event of any such
transaction occurring during 2000, no change shall be made with respect to the
Award for 1999 and the Target Award for 2000 will be subject to conversion to
Restricted Stock in the sole discretion of the Committee based upon the
determination by the Committee as to whether and to what extent the performance
criteria would have (assuming that the divestiture transaction had not occurred)
been satisfied.
11. Change of Control. Notwithstanding Section 9 of the Plan, upon a
Change in Control (as defined in the Plan), (A) the date upon and after which
the Units will be converted to shares of Restricted Stock (or Common Stock free
from restriction) will not be accelerated and (B) the Units (or shares of
Restricted Stock) will not be cashed out, in each case unless and until the
Committee provides otherwise. Furthermore, you hereby waive all rights under the
Severance Agreement entered into by and between you and the Company and approved
by the Board on January 29, 1998 (the "Severance Agreement") to receive an
amount in respect of the Units (or shares of Restricted Stock) in the event that
this Agreement is terminated or such Units (or shares of Restricted Stock) are
forfeited upon termination of your employment following a Change in Control (as
defined in the Severance Agreement) to which you would otherwise be entitled
thereunder.
AMERICAN HOME PRODUCTS CORPORATION
By:
Corporate 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
Special Restricted Stock Performance 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 5(b) of the Special Restricted Stock Performance 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 Master Investment Plan).
See Note Below
I, _______________________, hereby make an election to receive, after
Retirement, a distribution of such number of shares in the Restricted Stock
Trust to which I am entitled in substantially equal annual installments over a
period not to exceed ten years as follows, subject to the provisions of the
Agreement, including Paragraph 5, thereof (provided, however, that in the event
of my death all remaining installments shall be accelerated and promptly
distributed):
Circle the number of annual installments:
2 3 4 5 6 7 8 9 10
These elections shall be irrevocable upon execution of the Agreement.
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Signature of Executive
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Dated:
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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.
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Beneficiary (ies)
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Contingent Beneficiary (ies)
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Signature of Executive
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Dated:
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Witnessed: