As filed with the Securities and Exchange Commission on November 4, 1996
File No. 33-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
AMERICAN HOME PRODUCTS CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 13-2526821
(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization)
Five Giralda Farms, Madison, New Jersey 07940
(Address of Principal Executive Offices) (Zip Code)
AMERICAN HOME PRODUCTS CORPORATION
1996 STOCK INCENTIVE PLAN
(Full title of the plan)
LOUIS L. HOYNES, JR.
Senior Vice President and General Counsel
American Home Products Corporation
Five Giralda Farms
Madison, New Jersey 07940
(201) 660-5000
(Name, address and telephone number, including area code, of agent
for service)
CALCULATION OF REGISTRATION FEE
Proposed Proposed Amount of
Amount Maximum Maximum Registra-
to be Offering Price Aggregate tion
Registered per Share (1) Offering Price(1) Fee (1)
Title of Securities
to be Registered
Common Stock, par 30,000,000 $61.00 $1,830,000,000 $554,545
value $.33 1/3 par
share
(1) Estimated solely for the purpose of calculating the
registration fee on the basis of the average of the high and
low sales prices of such securities on the New York Stock
Exchange on November 1, 1996.
<PAGE>
Part I. INFORMATION REQUIRED IN THE
SECTION 10(a) PROSPECTUS
Item 1. Plan Information and Registrant Information and
Employee Plan Annual Information.
The information required by Part I is included in document (s)
sent or given to participants in the American Home Products Corporation
(the "Corporation") 1996 Stock Incentive Plan (the "Plan") pursuant to Rule
428(b)(1).
<PAGE>
PART II. INFORMATION REQUIRED IN THE
REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents filed with the Securities and Exchange
Commission (File No. 1-1225) are incorporated herein by reference:
(a) The Corporation's Annual Report on Form 10-K for the fiscal
year ended December 31, 1995;
(b) The Corporation's Quarterly Reports on Form 10-Q for the
quarters ended March 31, 1996, June 30, 1996 and September 30, 1996; and
(c) The description of Common Stock contained in the
Corporation's registration statement on Form 10/A, dated April 30, 1996,
filed with the Commission pursuant to Section 12 of the Securities
Exchange Act of 1934, as amended (the "1934 Act").
All reports and other documents subsequently filed by the
Corporation pursuant to Sections 13(a), 13(c) 14, and 15(d) of the 1934
Act as amended, prior to the filing of a post-effective amendment which
indicates that all securities offered hereby have been sold or which
deregisters all securities remaining unsold, shall be deemed to be
incorporated by reference in the Prospectus and to be a part thereof
from the date of filing of such reports and documents.
Any statement contained in a document incorporated or deemed
incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this registration statement to the extent
that a statement contained herein or in any other subsequently filed
document which also is incorporated or is deemed to be incorporated by
reference herein modified supersedes such statement. Any such statement
so modified or superseded shall not be deemed, except as so modified or
superseded, to constitute a part of this registration statement.
Item 4. Not Applicable.
Item 5. Interests of Named Experts and Counsel.
The consolidated financial statements of the Corporation and
subsidiary companies as of December 31, 1995 and 1994 and for each of
the years in the three-year period ended December 31, 1995 incorporated
by reference in this registration statement, have been audited by Arthur
Andersen LLP, independent public accountants, as indicated in their
reports with respect thereto, and are incorporated by reference in this
registration statement in reliance upon the authority of said firm as
experts in accounting and auditing in giving said reports.
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<PAGE>
Item 6. Indemnification of Directors and Officers
Section 145 of the Delaware Corporation Law and the Restated
Certificate of Incorporation of the Corporation contain provisions
covering indemnification of corporate directors and officers against
certain liabilities and expenses incurred as a result of proceedings
under the Securities Act of 1933, as amended (the "1933 Act") and the
1934 Act.
The Corporation provides indemnity insurance pursuant to which
officers and directors are indemnified or insured against liability and
loss under certain circumstances which may include liability or related
loss under the 1933 Act and the 1934 Act.
Item 7. Not Applicable.
Item 8. Exhibits
See Index to Exhibits on page II-6.
Item 9. Undertakings
A. Rule 415 Offering
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of
the 1933 Act.
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement; and
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement;
Provided, however, that paragraphs (1)(i) and (1)(ii) do not apply
if the registration statement is on Form S-8, and the information
required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the registrant
pursuant to section 13 or section 15(d) of the 1934 Act that are
incorporated by reference in the registration statement.
II-2
<PAGE>
(2) That, for the purpose of determining any liability under the
1933 Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and
the offering of such securities at the time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.
B. Filings Incorporating Subsequent Exchange Act Documents by
Reference
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the 1933 Act , each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of
the 1934 Act (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to section 15(d) of the 1934 Act) that is
incorporated by reference in the registration statement shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
C. Filing of Registration Statement on Form S-8
Insofar as indemnification for liabilities arising under the 1933
Act may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions or otherwise, the
registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as
expressed in the 1933 Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other
than the payment by the registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered,
the registrant will, unless in the opinion of its counsel the matter has
been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the 1933 Act and will be governed by the
final adjudication of such issue.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it
meets all the requirements for filing on Form S-8 and has duly caused
this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Madison and State
of New Jersey, on this 31st day of October, 1996.
AMERICAN HOME PRODUCTS CORPORATION
(Registrant)
By: /s/ John R. Stafford
(John R. Stafford
Chairman of the Board, President and Chief
Executive Officer)
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below by the following persons in the
capacities and on the dates indicated.
Signature Title Date
Chairman of the Board October 31, 1996
President and Director -
/s/John R. Stafford Principal Executive Officer
(John R. Stafford)
Senior Executive Vice October 31, 1996
President and Director -
/s/Robert G. Blount Principal Financial Officer
(Robert G. Blount)
Vice President and Comp- October 31,1996
troller - Principal
/s/Paul J. Jones Accounting Officer
(Paul J. Jones)
/s/Clifford L. Alexander,
Jr. Director October 31, 1996
(Clifford L. Alexander, Jr.)
/s/Frank A. Bennack, Jr. Director October 31, 1996
(Frank A. Bennack, Jr.)
/s/Robin Chandler Duke Director October 31, 1996
(Robin Chandler Duke)
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<PAGE>
/s/John D. Feerick Director October 31, 1996
(John D. Feerick)
/s/Fred Hassan Director October 31, 1996
(Fred Hassan)
/s/John P. Mascotte/ Director October 31, 1996
(John P. Mascotte)
/s/Mary Lake Polan,
M.D., Ph.D. Director October 31, 1996
(Mary Lake Polan, M.D., Ph.D.)
/s/John R. Torell, III/ Director October 31, 1996
(John R. Torell, III)
Director October 31, 1996
(William Wrigley)
II-5
<PAGE>
INDEX TO EXHIBITS
Exhibit
Number Exhibit
4.1 Restated Certificate of Incorporation of the
Corporation, incorporated herein by reference
to Exhibit No. 3.1 of the Registrant's Form 10/A,
dated April 30, 1996.
4.2 By-laws of the Corporation, incorporated herein by
reference to Exhibit No. 3 of the Registrants
Quarterly Report on Form 10-Q for the quarter ended
March 31, 1996.
10 1996 Stock Incentive Plan
23 The consent of Arthur Andersen LLP
II-6
EXHIBIT 10
American Home Products Corporation
1996 STOCK INCENTIVE PLAN
(Approved by stockholders on April 23, 1996.)
Section 1. Purpose. The purpose of the 1996 Stock Incentive Plan (the
"Plan") is to provide favorable opportunities for officers and other key
employees of American Home Products Corporation (the "Company") and its
subsidiaries to acquire shares of Common Stock of the Company or to benefit
from the appreciation thereof. Such opportunities should provide an increased
incentive for these employees to contribute to the future success and
prosperity of the Company, thus enhancing the value of the stock for the
benefit of the stockholders, and increase the ability of the Company to
attract and retain individuals of exceptional skill upon whom, in large
measure, its sustained progress, growth and profitability depend.
Pursuant to the Plan, options to purchase the Company's Common Stock
("Options") and Stock Appreciation Rights may be granted and Restricted Stock
may be awarded by the Company. Options granted under the Plan may be either
incentive stock options, as defined in Section 422(b) of the Internal Revenue
Code of 1986, as amended (the "Code"), or options which do not meet the
requirements of said Section 422(b) of the Code, herein referred to as non-
qualified stock options.
It is intended, except as otherwise provided herein, that incentive
stock options may be granted under the Plan and that such incentive stock
options shall conform to the requirements of Section 422 and 424 of the Code
and to the provisions of this Plan and shall otherwise be as determined by the
Committee and, to the extent provided in the last sentence of Section 2
hereof, approved by the Board of Directors. The terms "subsidiaries" and
"subsidiary corporation" shall have the meanings given to them by Section 424
of the Code. All section references to the Code in this Plan are intended to
include any amendments or substitutions therefor subsequent to the adoption of
the Plan.
Section 2. Administration. The Plan shall be administered by the
Compensation and Benefits Committee (the "Committee") consisting of two or
more members of the Board of Directors of the Company, each of whom shall be
(i) a "disinterested person" within the meaning of Rule 16b-3 under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and (ii) an
"outside director" within the meaning of Section 162(m) of the Code. The
Committee shall have full authority to grant Options and Stock Appreciation
Rights, and make Restricted Stock awards, to interpret the Plan and to make
such rules and regulations and establish such procedures as it deems
appropriate for the administration of the Plan, taking into consideration the
recommendations of management. The decisions of the Committee 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 decisions of the Committee shall be
subject to approval by the Board of Directors.
<PAGE>
Section 3. Number of Shares. The total number of shares which may be
sold or awarded under the Plan and with respect to which Stock Appreciation
Rights may be exercised shall not exceed 15,000,000 shares of the Company's
Common Stock. Such number shall be, without further action, adjusted to
30,000,000 in accordance with Section 8 hereof upon the consummation of a two-
for-one stock split (in the form of a dividend) anticipated to occur in 1996.
The total number of shares which may be sold or awarded under the Plan to any
optionee (hereinafter defined), including shares for which Stock Appreciation
Rights may be exercised, shall not exceed 10% of such number, as and if
adjusted, over the life of the Plan. The shares may be authorized and
unissued or issued and
reacquired shares, as the Board of Directors from time to time may determine.
Shares with respect to which Options or Stock Appreciation Rights are not
exercised prior to termination of the Option and shares that are part of a
Restricted Stock award which are forfeited before the restrictions lapse shall
be available for Options and Stock Appreciation Rights thereafter granted and
for Restricted Stock thereafter awarded under the Plan, to the fullest extent
permitted by Rule 16b-3 under the Exchange Act (if applicable at the time).
Section 4. Participation. The Committee may, from time to time, select
and grant Options and Stock Appreciation Rights to officers (whether or not
directors) and other key employees of the Company and its subsidiaries
("optionees") and award Restricted Stock to officers (whether or not
directors) and other key employees of the Company and its subsidiaries and
shall determine the number of shares subject to each Option or award.
Section 5. Terms and Conditions of Options. The terms and conditions
of each Option and each Stock Appreciation Right shall be set forth in an
agreement or agreements between the Company and the optionee. Such terms and
conditions shall include the following as well as such other provisions, not
inconsistent with the Plan, as may be deemed advisable by the Committee:
(a) Number of Shares. The number of shares subject to the Option.
(b) Option Price. The option price per share (the "Option Price"),
which shall not be less than 100% of the fair market value of the Company's
Common Stock on the date the Option is granted. Fair market value shall be
deemed to be the mean between the highest and lowest sale prices of the Common
Stock on the Consolidated Transaction Reporting System on the date the Option
is granted.
(c) Date of Grant. Subject to previous directions of the Board of
Directors pursuant to the last sentence of Section 2, the date of grant of an
Option shall be the date when the Committee meets and awards such Option.
(d) Payment. The Option Price multiplied by the number of shares to
be purchased by exercise of the Option shall be paid upon the exercise
thereof. Unless the terms of an Option provide to the contrary, upon exercise,
the aggregate Option Price shall be payable by delivering to the Company (i)
cash equal to such aggregate Option Price, (ii) shares of the Company's Common
Stock owned by the grantee having a fair market value (determined in
accordance with Section 5(b)) at least equal to such aggregate Option Price,
(iii) a combination of any of the above methods which total to such aggregate
Option Price, or (iv) any other form of consideration which has been approved
by the Committee, including under any approved cashless exercise mechanism;
and payment of such aggregate Option Price by any such means shall be made and
received by the Company prior to the delivery of the shares as to which the
Option was exercised. The right to deliver in full or partial payment of such
Option Price any consideration other than cash shall be limited to such
frequency as the Committee shall determine in its absolute discretion. A
holder of an Option shall have none of the rights of a stockholder until the
shares are issued to him or her; provided that if an optionee exercises an
Option and the appropriate purchase
<PAGE>
price is received by the Company in accordance with this Section 5(d) prior to
any dividend record date, such optionee shall be entitled to receive the
dividends which would be paid on the shares subject to such exercise if such
shares were outstanding on such record date.
(e) Term of Options. Each Option granted pursuant to the Plan shall
be for the term specified in the applicable option agreement (the "Option
Agreement") subject to earlier termination in all cases as provided in
paragraph (g) of this Section.
(f) Exercise of Option. Options granted under the Plan may be
exercised during the period and in accordance with the conditions set forth in
the Plan and the applicable Option Agreement; provided, however, that (i) no
option granted under the Plan may be exercisable earlier than the later of (A)
one year from the date of grant or (B) the date on which the optionee
completes two years of continuous employment with the Company or one or more
of its subsidiaries and (ii) in the event of an optionee's death, Retirement
(as defined below) or Disability (as defined below), any options held by such
optionee shall become exercisable on his or her Retirement date, the date his
or her employment terminates on account of Disability or the date of his or
her death provided he or she has been in the continuous employment of the
Company or one or more of its subsidiaries for at least two years at such
time. No Option may be exercised after it is terminated as provided in
paragraph (g) of this Section, and no Option may be exercised unless the
optionee, except as provided in paragraph (g) of this Section, is then
employed by the Company or any of its subsidiaries and shall have been
continuously employed by the Company or one or more of such subsidiaries since
the date of the grant of his or her Option. Non-qualified stock options and
incentive stock options may be exercised regardless of whether or not other
Options granted to the optionee pursuant to the Plan are outstanding or
whether or not other stock options granted to the optionee pursuant to any
other plan are outstanding.
(g) Termination of Options. An Option, to the extent not validly
exercised, shall terminate upon the occurrence of the first of the following
events:
(i) On the date specified in the Option Agreement;
(ii) Three years after the date of termination of the optionee's
employment by the Company or its subsidiaries due to "Retirement"
(defined as termination of full time employment on or after the
earliest retirement age under any qualified retirement plan of the
Company or its subsidiaries which covers the optionee, or age 55
with 5 continuous years of such employment if there is no such
plan) or "Disability" (defined as disability for purposes of at
least one qualified retirement plan or long term disability plan
maintained by the Company or its subsidiaries in which the
optionee participates), during which three year period the
optionee may exercise the Option to the extent he or she was
entitled to exercise it at the time of such termination or such
shorter period as may be provided in the Option Agreement;
(iii) Three years after the date of the optionee's death during which
three year period the Option may be exercised by the optionee's
legal representative or legatee or such other person designated by
an appropriate court as the person entitled to exercise such
Option to the extent the optionee was entitled to exercise it at
the time of his or her death;
<PAGE>
(iv) Three months after termination by the Company or one of its
subsidiaries of the optionee's employment for any reason other
than death, Retirement, Disability or deliberate gross misconduct,
determined in the sole discretion of the Committee, during which
three month period the Option may be exercised by the optionee to
the extent the optionee was entitled to exercise it at the time of
such termination;
(v) Concurrently with the time of termination by the Company or one of
its subsidiaries of the optionee's employment for deliberate gross
misconduct, determined in the sole discretion of the Committee
(for purposes only of this subparagraph (v) an Option shall be
deemed to be exercised when the optionee has received the stock
certificate representing the shares for which the Option was
exercised); or
(vi) Concurrently with the time of termination by the employee of his
or her employment with the Company or one of its subsidiaries for
reasons other than Retirement, Disability or death.
Notwithstanding the above, no Option shall be exercisable after
termination of employment unless the optionee shall have, during the
entire time period in which his or her Options are exercisable, (a)
refrained from becoming or serving as an officer, director, partner or
employee of any individual proprietorship, partnership or corporation,
or 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 limitation, advertising agencies and business
consultants) to competitors with any portion of the business of the
Company, (b) 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 (c) 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, the optionee shall
forfeit all rights to any unexercised Option as of the date of the
breach of the condition.
Notwithstanding the provisions of subparagraphs (ii) and (iii) of
this Section 5(g), an Option granted under the Plan to an optionee who
dies or terminates employment due to Retirement or Disability before
this Plan is approved by the stockholders of the Company, to the extent
not validly exercised, shall terminate three years after the date the
Plan is approved by the stockholders of the Company.
(h) Non-transferability of Options and Stock Appreciation Rights.
Options and Stock Appreciation Rights shall not be transferable by the
optionee other than by will or the laws of descent and distribution, and
Options and Stock Appreciation Rights shall during his or her lifetime be
exercisable only by the optionee; provided, however, that the Committee may,
in its sole discretion, allow for transfer of Options (other than incentive
stock options, unless such transferability would not adversely affect
incentive stock option tax treatment) to other persons or entities, subject to
such conditions or limitations as it may establish to ensure that transactions
with respect to Options intended to be exempt from Section 16(b) of the
Exchange Act pursuant to Rule 16b-3 under the Exchange Act do not fail to
maintain such exemption as a result of the Committee causing Options to be
transferrable, or for other purposes; provided further, however, that for any
Option that is transferred, other than by the laws of descent and
distribution, any related Stock Appreciation Right shall be extinguished.
(i) Applicable Laws or Regulations. The Company's obligation to sell
and deliver stock under the Option is subject to such compliance as the
Company deems necessary or advisable with federal and state laws, rules and
regulations.
<PAGE>
(j) Limitations on Incentive Stock Options. To the extent that the
aggregate fair market value of the Company's Common Stock, determined at the
time of grant in accordance with the provisions of Section 5(b), with respect
to which incentive stock options granted under this or any other Plan of the
Company are exercisable for the first time by an optionee during any calendar
year exceeds $100,000, or such other amount as may be permitted under the
Code, such excess shall be considered non-qualified stock options.
Notwithstanding anything in the Plan to the contrary, any incentive
stock option granted to any individual who, at the time of grant, is the
owner, directly or indirectly, of stock possessing more than ten percent (10%)
of the total combined voting power of all classes of stock of the Company or
any subsidiary thereof, shall (i) have a term not exceeding five years from
the date of grant and (ii) shall have an option price per share of not less
than 110% of the fair market value of the Company's Common Stock on the date
the incentive stock option is granted (determined in accordance with the last
sentence of Section 5(b)).
Section 6. Stock Appreciation Rights.
(a) The Committee may, in its sole discretion, from time to time grant
Stock Appreciation Rights to certain optionees in connection with any Option
granted under this Plan and in connection with Options granted under the 1990
and 1993 Stock Incentive Plans and under the 1985 Stock Option Plan. Stock
Appreciation Rights may be granted either at the time of the grant of an
Option under the Plan or at any time thereafter during the term of the Option,
provided such Stock Appreciation Rights may also be granted with respect to
outstanding Options under the 1990 and 1993 Stock Incentive Plans and the 1985
Stock Option Plan. Stock Appreciation Rights may be granted with respect to
all or part of the stock under a particular Option.
(b) Stock Appreciation Rights shall entitle the holder of the related
Option, upon exercise, in whole or in part, of the Stock Appreciation Rights,
to receive payment in the amount and form determined pursuant to subparagraph
(iii) of paragraph (c) of this Section 6. Stock Appreciation Rights may be
exercised only to the extent that the related Option has not been exercised.
The exercise of Stock Appreciation Rights shall result in a pro rata surrender
of the related Option to the extent that the Stock Appreciation Rights have
been exercised.
(c) Stock Appreciation Rights shall be subject to such terms and
conditions which are not inconsistent with the Plan as shall from time to time
be approved by the Committee and reflected in the applicable Option Agreement
(or in a separate document, which shall be considered for purposes of the Plan
to be incorporated into and part of the applicable Option Agreement), and to
the following terms and conditions.
(i) Stock Appreciation Rights shall be exercisable at such time or
times and to the extent, but only to the extent, that the Option
to which they relate shall be exercisable.
(ii) Subject to Section 9, Stock Appreciation Rights and any Options to
which they relate shall in no event be exercisable during the
first six months after the date of grant; provided that this
limitation shall apply only to persons who are subject to Section
16(b) of the Exchange Act.
(iii) Upon exercise of Stock Appreciation Rights, the holder thereof
shall be entitled to elect to receive therefor payment in the form
of shares of the Company's Common Stock (rounded down to the next
whole number so no fractional shares are issued), cash or any
combination thereof in an amount equal in value to the difference
between the Option Price per share and the fair market value per
share of Common
<PAGE>
Stock on the date of exercise multiplied by the number of shares
in respect of which the Stock Appreciation Rights shall have been
exercised, subject to any limitation on such amount which the
Committee may in its discretion impose at the time of grant of the
Stock Appreciation Rights. Such election as to the form of
payment shall be subject to the consent of the Committee which
consent or disapproval may be given at any time after the election
to which it relates. The fair market value of Common Stock shall
be deemed to be the mean between the highest and lowest sale
prices of the Common Stock on the Consolidated Transaction
Reporting System on the date the Stock Appreciation Right is
exercised or if no transaction on the Consolidated Transaction
Reporting System occurred on such date, then on the last preceding
day on which a transaction did take place.
(iv) Any exercise of Stock Appreciation Rights by an officer or
director subject to Section 16(b) of the Exchange Act, as well as
any election by such officer or director as to the form of payment
of Stock Appreciation Rights (Common Stock, cash or any
combination thereof), which election is subject to the consent of
the Committee in its sole discretion as provided in subparagraph
(iii) hereof, shall be made during the ten-day period beginning on
the third business day following the release for publication of
any quarterly or annual statement of sales and earnings by the
Company and ending on the twelfth business day following the date
of such release. In the event that such a director or officer
exercises a Stock Appreciation Right for cash or stock pursuant to
this Section 6 during a "window period" as provided in Rule 16b-3
under the Exchange Act, the day on which such right is effectively
exercised shall be that day, if any, during such "window period"
which is designated by the Committee in its discretion for all
such exercises by such individuals during such period. If no such
day is designated, the day of effective exercise shall be
determined in accordance with normal administrative practices of
the Plan. This clause (iv) shall cease to apply at the discretion
of the Committee if any amendment or Securities and Exchange
Commission interpretation of such Rule 16b-3 makes the application
of this clause (iv) unnecessary to exempt the grant and/or
exercise of Stock Appreciation Rights from the application of
Section 16(b) of the Exchange Act.
(d) To the extent that Stock Appreciation Rights shall be exercised,
the Option in connection with which such Stock Appreciation Rights shall have
been granted shall be deemed to have been exercised for the purpose of the
maximum limitations set forth in the Plan under which such Options shall have
been granted. Any shares of Common Stock which are not purchased due to the
surrender in whole or in part of an Option pursuant to this Section 6 shall
not be available for granting further Options under the Plan.
Section 6A. Deferral.
(a) Notwithstanding anything herein to the contrary, an optionee may
elect, at the discretion of, and in accordance with rules which may be
established by, the Committee, to defer delivery of the proceeds of exercise
of an unexercised Option or the corresponding Stock Appreciation Right,
provided such election is irrevocable and is made (i) at least six months
prior to the date that such Option or the corresponding Stock Appreciation
Right otherwise would expire and (ii) at least one month prior to the date
such Option or the corresponding Stock Appreciation Right is exercised (or
such shorter period as may be determined by the Committee). Upon such
exercise, the amount deferred shall be equal in value to the difference
between the Option Price per share and the fair market value per share of the
Common Stock on the date of exercise (determined in accordance with Section
5(b)), multiplied by the number of shares covered by such exercise and in
respect of which the optionee shall have made the
<PAGE>
deferral election, and shall be credited to an account in the name of the
optionee on the books and records of the Company (a "Deferred Compensation
Account") at the date of exercise. A separate Deferred Compensation Account
shall be maintained with respect to each Option or corresponding Stock
Appreciation Right subject to an effective deferral election.
(b) Interest shall be credited on amounts in the Deferred Compensation
Account from the date of exercise of the Option or the corresponding Stock
Appreciation Right to the date of payment, at the rate of interest determined
by the Committee and communicated to the optionees. The value of an
optionee's Deferred Compensation Account shall be payable in a lump sum cash
payment or in annual installments over a period not to exceed 10 years or as
otherwise determined by the Committee. At the time an optionee makes such
deferral election, the optionee shall elect the form of payment and date for
lump sum payment or commencement of annual payments of the Deferred
Compensation Account, with such date at least one year subsequent to the date
of exercise of the Option or corresponding Stock Appreciation Right, but not
later than the date of the optionee's termination of employment with Company.
Notwithstanding any election by an optionee, in the event of Disability or
death of the optionee, the optionee's Deferred Compensation Account shall be
paid within 90 days in the form of a single lump sum.
(c) Notwithstanding the deferred payment date elected by the optionee,
the Committee may, in its discretion, allow for early payment of an optionee's
Deferred Compensation Account in the event of an "unforeseeable emergency."
For this purpose, an unforeseeable emergency shall be defined as an
unanticipated emergency that is caused by an event beyond the control of the
optionee and that would result in severe financial hardship to the optionee if
early withdrawal were not permitted. Any withdrawal on account of an
unforeseeable emergency must be limited to the amount necessary to meet the
emergency. The above provisions regarding a withdrawal upon an unforeseeable
emergency shall be interpreted in accordance with published revenue
procedures, regulations, releases or interpretations. In addition, Deferred
Compensation Accounts may be distributed on an accelerated basis in the
discretion of the Committee.
(d) Optionees have the status of general unsecured creditors of the
Company with respect to their Deferred Compensation Accounts, and such
accounts constitute a mere promise by the Company to make payments with
respect thereto.
(e) An optionee's right to benefit payments under the Plan with
respect to the Deferred Compensation Accounts may not be anticipated,
alienated, sold, transferred, assigned, pledged, encumbered, attached or
garnished by creditors of the optionee or the optionee's beneficiary and any
attempt to do so shall be void.
Section 7. Restricted Stock Performance Awards. The Committee may, in
its sole discretion, from time to time, make awards of shares of the Company's
Common Stock or awards of units representing shares of the Company's Common
Stock, up to 2,000,000 shares in the aggregate (such number to be adjusted
without further action to 4,000,000 in accordance with Section 8 hereof upon
the consummation of the stock split referred to in Section 3), to such
officers and other key employees of the Company and its subsidiaries in such
quantity, and on such terms, conditions and restrictions (whether based on
performance standards, periods of service or otherwise) as the Committee shall
establish ("Restricted Stock"). The terms, conditions and restrictions of any
Restricted Stock award made under this Plan shall be set forth in an agreement
or agreements between the Company and the recipient of the award.
(a) Issuance of Restricted Stock. The Committee shall determine the
manner in which Restricted Stock shall be held during the period it is subject
to restrictions.
<PAGE>
(b) Stockholder Rights. Beginning on the date of grant of the
Restricted Stock award and subject to the execution of the award agreement by
the recipient of the award and subject to the terms, conditions and
restrictions of the award agreement, the Committee shall determine to what
extent the recipient of the award has the rights of a stockholder of the
Company including, but not limited to, whether or not the employee receiving
the award has the right to vote the shares or to receive dividends or dividend
equivalents.
(c) Restriction on Transferability. None of the shares or units of a
Restricted Stock award may be assigned or transferred, pledged or sold prior
to their delivery to a recipient or, in the case of a recipient's death, to
the recipient's legal representative or legatee or such other person
designated by an appropriate court; provided, however, that the Committee may,
in its sole discretion, allow for transfer of shares or units of a Restricted
Stock Award to other persons or entities.
(d) Delivery of Shares. Upon the satisfaction of the terms,
conditions and restrictions contained in the Restricted Stock award agreement
or the release from the terms, conditions and restrictions of a Restricted
Stock award agreement, as determined by the Committee, the Company shall
deliver, as soon as practicable, to the recipient of the award (or permitted
transferee), or in the case of his or her death to his or her legal
representative or legatee or such other person designated by an appropriate
court, a stock certificate for the
appropriate number of shares of the Company's Common Stock, free of all such
restrictions, except for any restrictions that may be imposed by law.
(e) Forfeiture of Restricted Stock. Subject to Section 7(f), all of
the restricted shares or units with respect to a Restricted Stock award shall
be forfeited and all rights of the recipient with respect to such restricted
shares or units shall terminate unless the recipient continues to be employed
by the Company or its subsidiaries until the expiration of the forfeiture
period and the satisfaction of any other conditions set forth in the award
agreement.
(f) Waiver of Forfeiture Period. Notwithstanding any other provisions
of the Plan, the Committee may, in its sole discretion, waive the forfeiture
period and any other conditions set forth in any award agreement under certain
circumstances (including the death, Disability or Retirement of the recipient
of the award or a material change in circumstances arising after the date of
an award) and subject to such terms and conditions (including forfeiture of a
proportionate number of the restricted shares) as the Committee shall deem
appropriate.
Section 8. Adjustment in Event of Change in Stock. Subject to Section
9, in the event of stock split, stock dividend, cash dividend (other than a
regular cash dividend), combination of shares, merger, or other relevant
change in the Company's capitalization, the Committee shall, subject to the
approval of the Board of Directors, appropriately adjust the number and kind
of shares available for issuance under the Plan, the number, kind and Option
Price of shares subject to outstanding Options and Stock Appreciation Rights
and the number and kind of shares subject to outstanding Restricted Stock
awards; provided, however, that to the extent permitted in the case of
incentive stock options by Sections 422 and 424 of the Code, in the event that
the outstanding shares of Common Stock of the Company are increased or
decreased or changed into or exchanged for a different number or kind of
shares or other securities of the Company or of another corporation, through
reorganization, merger, consolidation, liquidation, recapitalization,
reclassification, stock split-up, combination of shares or dividend,
appropriate adjustment in the number and kind of shares as to which Options
may be granted and as to which Options or portions thereof then unexercised
shall be exercisable, and in the Option Price thereof, shall be made to the
end that the proportionate number of shares or other securities as to which
Options may be granted and the optionee's proportionate interests under
outstanding Options shall be maintained as before the occurrence of such
event;
<PAGE>
provided, that any such adjustment in shares subject to outstanding Options
(including any adjustments in the Option Price) shall be made in such manner
as not to constitute a modification as defined by subsection (h)(3) of Section
424 of the Code; and provided, further, that, in the event of an adjustment in
the number or kind of shares under a Restricted Stock award pursuant to this
Section 8, any new shares or units issued to a recipient of a Restricted Stock
award shall be subject to the same terms, conditions and restrictions as the
underlying Restricted Stock award for which the adjustment was made.
Section 9. Effect of a Change of Control.
(a) For purposes of this Section 9, "Change in Control" shall, unless
the Board of Directors of the Company otherwise directs by resolution adopted
prior thereto or, in the case of a particular award, the applicable award
agreement states otherwise, be deemed to occur if (i) any "person" (as that
term is used in Sections 13 and 14(d)(2) of the Exchange Act) other than a
Permitted Holder (as defined below) is or becomes the beneficial owner (as
that term is used in Section 13(d) of the Exchange Act), directly or
indirectly, of 50% or more of either the outstanding shares of Common Stock or
the combined voting power of the Company's then outstanding voting securities
entitled to vote generally, (ii) during any period of two consecutive years,
individuals who constitute the Board of Directors of the Company at the
beginning of such period cease for any reason to constitute at least a
majority thereof, unless the election or the nomination for election by the
Company's stockholders of each new director was approved by a
vote of at least three-quarters of the directors then still in office who were
directors at the beginning of the period or (iii) the Company undergoes a
liquidation or dissolution or a sale of all or substantially all of the assets
of the Company. No merger, consolidation or corporate reorganization in which
the owners of the combined voting power of the Company's then outstanding
voting securities entitled to vote generally prior to said combination, own
50% or more
of the resulting entity's outstanding voting securities shall, by itself, be
considered a Change in Control. As used herein, "Permitted Holder" means (i)
the Company, (ii) any corporation, partnership, trust or other entity
controlled by the Company and (iii) any employee benefit plan (or related
trust) sponsored or maintained by the Company or any such controlled entity.
(b) Except to the extent reflected in a particular award agreement, in
the event of a Change of Control:
(i) notwithstanding any vesting schedule, or any other limitation on
exercise or vesting, with respect to an award of Options, Stock
Appreciation Rights or Restricted Stock, such Options or Stock
Appreciation Rights shall become immediately exercisable with
respect to 100 percent of the shares subject thereto, and the
restrictions shall expire immediately with respect to 100 percent
of such Restricted Stock award; and
(ii) the Committee may, in its discretion and upon at least 10 days
advance notice to the affected persons, cancel any outstanding
Options, Stock Appreciation Rights or Restricted Stock awards and
pay to the holders thereof, in cash, the value of such awards
based upon the highest price per share of Company Common Stock
received or to be received by other stockholders of the Company in
connection with the Change of Control.
Section 10. Amendment and Discontinuance. The Board of Directors of
the Company may from time to time amend or revise the terms of the Plan, or
may discontinue the Plan at any time as permitted by law, provided, however,
that such amendment shall not (except as provided in Section 8), without
further approval of the stockholders, (i) increase the aggregate number of
shares with respect to which awards may be made under the Plan; (ii) change
the manner of determining the Option Price (other than determining the fair
market value of the
<PAGE>
Common Stock to conform with applicable provisions of the Code or regulations
and interpretations thereunder); (iii) extend the term of the Plan or the
maximum period during which any Option may be exercised or (iv) make any other
change which, in the absence of stockholder approval, would cause awards
granted under the Plan which are then outstanding, or which may be granted in
the future, to fail to meet the exemptions provided by Rule 16b-3 under the
Exchange Act and Section 162(m) of the Code. No amendments, revision or
discontinuance of the Plan shall, without the consent of an optionee or a
recipient of a Restricted Stock award, in any manner adversely affect his or
her rights under any Option theretofore granted under the Plan.
Section 11. Effective Date and Duration. The Plan was adopted by the
Board of Directors of the Company on January 25, 1996, subject to approval by
the stockholders of the Company at a meeting to be held in April 1996.
Neither the Plan nor any Option or Stock Appreciation Right or Restricted
Stock award shall become binding until the Plan is approved by a vote of the
stockholders in a manner which complies with Rule 16b-3 promulgated pursuant
to the Exchange Act and Sections 162(m) and 422(b)(1) of the Code. No Option
may be granted and no stock may be awarded under the Plan before January 25,
1996 nor after January 24, 2006.
Section 12. Tax Withholding. Notwithstanding any other provision of
the Plan, the Company or its subsidiaries, as appropriate, shall have the
right to deduct from all awards under the Plan cash and/or stock, valued at
fair market value on the date of payment in accordance with Section 5(b), in
an amount necessary to satisfy all federal, state or local taxes as required
by law to be withheld with respect to such awards. In the case of awards paid
in the Company's Common Stock, the optionee or permitted transferee may be
required to pay to the Company or a subsidiary thereof, as appropriate, the
amount of any such taxes which the Company or subsidiary is required to
withhold, if any, with respect to such stock. Subject in particular cases to
the disapproval of the Committee, the Company may accept shares of the
Company's Common Stock of equivalent fair market value in payment of such
withholding tax obligations if the optionee elects to make payment in such
manner.
Section 13. Construction and Conditions. The Plan and Options,
Restricted Stock awards, and Stock Appreciation Rights granted thereunder
shall be governed by and construed in accordance with the laws of the State of
Delaware and in accordance with such federal law as may be applicable.
Neither the existence of the Plan nor the grant of any Options or Stock
Appreciation Rights or awards of Restricted Stock pursuant to the Plan shall
create in any optionee the right to continue to be employed by the Company or
its subsidiaries. Employment shall be "at will" and shall be terminable "at
will" by the Company or employee with or without cause. Any oral statements
or promises to the contrary are not binding upon the Company or the employee.
EXHIBIT 23
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation by reference in this registration statement of our reports dated
January 24, 1996 included in American Home Products Corporation's Form 10-K
for the year ended December 31, 1995 and to all references to our Firm
included in this registration statement.
ARTHUR ANDERSEN LLP
Roseland, New Jersey
October 31, 1996
