Document:

American Home Products Corporation

                            MANAGEMENT INCENTIVE PLAN

     (Approved by stockholders on April 28, 1997 and as amended by the Board of
Directors through May 20, 1999)

                                   I. Purpose

         The Management Incentive Plan (the "Plan") is maintained by the
Corporation primarily for the purpose of providing immediate and deferred
incentive compensation for a select group of management and highly compensated
employees and is designed to provide for awards to selected key salaried
employees in executive, administrative, technical, professional or other
important capacities, who individually, or as members of a group, contribute in
a substantial degree to the success of the Company, thus affording to them a
means of participating in that success and an incentive to contribute further to
that success.

                                 II. Definitions

         The following words and phrases as used herein shall have the meanings
set forth below:

         (1) "Company" shall mean American Home Products Corporation (the
Corporation), and any corporation, domestic or foreign, 50% or more of whose
share voting power is held, directly or indirectly, by the Company.

         (2) "Employee" shall mean any key salaried employee of the Company
whether or not an Officer or Director, including individuals whose employment
has terminated during the applicable year by reason of death or retirement.

         (3) "Committee" shall mean the Compensation and Benefits Committee
consisting of three or more Corporation Directors who are not Employees.

         (4) "Average Net Capital" shall mean the average of the beginning and
ending balances, shown in the Corporation's Consolidated Balance Sheet, of the
Stockholders' Equity and funded debt.

         (5) "Net Income" shall mean the "net income for year," after taxes,
shown in the Corporation's Consolidated Statement of Income, adjusted, however,
by adding any amount by which such net income after taxes has been reduced by
provision for awards under the Plan.

         (6) "Incentive Earnings" shall mean the excess of Net Income for any
year over the greater of (a) an amount equal to 12% of Average Net Capital or b)
an amount equal to $.1875 multiplied by the average number of shares of the
Corporation's Common Stock outstanding at the close of business on each day of
the year assuming full conversion of the Corporation's Preferred Stock. The
amount of Incentive Earnings shall be reported to the Committee by the
Corporation's Treasurer as promptly after the close of the year as is practical;
provided, however, that such Incentive Earning's and awards based thereon shall
be adjusted downward, if necessary, to reflect the net income for the year
certified by the Corporation's independent public accountants as adjusted as
provided in II (5) above. In the event of stock split, stock dividend or other
relevant change in the Corporation's capitalization, the Committee shall,
subject to the approval of the Board of Directors, appropriately adjust such
$.1875 per share of the Corporation's Common Stock.

         (7) "Award Fund" shall mean the amount, not in excess of 12% of
Incentive Earnings, which is recommended by the Committee and approved by the
Board of Directors as the maximum amount to be used for awards under the Plan
for the applicable year. Any unawarded portion of the Award Fund shall not be
available for awards for subsequent years.

         (8) "Normal Retirement Date" shall have the same meaning as set forth
in the American Home Products Corporation Retirement Plan - United States.

                               III. Administration

         The Plan shall be administered by the Committee which may make such
determinations, make such awards and take such other action in connection with
the Plan as it deems necessary, taking into consideration the recommendations of
management. Such determinations, awards and action 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 action by the Committee shall be subject to approval
by the Board of Directors.

                                 IV. Eligibility

         The individuals eligible to receive awards under the Plan shall be such
Employees as the Committee shall determine each year.

                                    V. Awards

         The Committee shall determine the awards to be made for any year
subject to the following: (1) the award amounts payable with respect to any year
to an Employee who for such year is the Chief Executive Officer of the
Corporation or one of the Corporation's four other highest compensated officers
(as determined in accordance with Section 162(m) of the Internal Revenue Code of
1986, as amended) shall not exceed 3% of the Award Fund, and, (2) the portion of
the Award Fund remaining after the awards to the Employees in (1) above shall be
available for awards to other Employees in such amounts as the Committee
determines. In no event, however, shall the amount of an award payable to any
Employee exceed the Employee's total compensation for the year, excluding only
any award under the Plan. Awards may be in whole or in part (a) current and
payable in cash ("Cash Award"), or (b) deferred and conditional and payable (i)
in cash ("Contingent Cash Award") or (ii) in shares of the Corporation's Common
Stock ("Contingent Stock Award"). The aggregate number of shares of the
Corporation's Common Stock which may be issued under the Plan shall be
48,000,000 (plus the number of shares credited in respect of dividends as
hereinafter provided) and all such shares shall be from Treasury Stock or from
authorized and unissued shares as the Board of Directors shall from time to time
determine. In the event of stock split, stock dividend or other relevant change
in the Corporation's capitalization, the Committee shall, subject to the
approval of the Board of Directors, appropriately adjust such maximum number of
shares.

         Insofar as the Committee has not predetermined the manner of payment of
awards, whether in terms of individuals or classifications on the basis of age,
salary, amount of award or other criteria, the Committee may permit eligible
Employees to indicate a preference, which shall not be binding on the Committee,
within limits established by the Committee, that all or any portion of an award
be a Cash Award, a Contingent Cash Award or a Contingent Stock Award.

                              VI. Payment of Awards

(1) Cash Awards

         The amount of each Cash Award shall be paid in cash as soon as
practicable after the close of the calendar year for which the award is made.

(2) Contingent Cash Awards

         The Company shall credit the amount of each Contingent Cash Award to
the Employee's Contingent Award Account and shall, subject to the conditions of
paragraph VI(4), pay the same out in equal installments on the five succeeding
anniversaries of the date of the award.

(3) Contingent Stock Awards

         (a) The amount of each Contingent Stock Award shall be used to
determine the number of shares of the Corporation's Common Stock (including
fractional shares) which such amount would purchase at the average closing
market price of such Common Stock on the Consolidated Transaction Reporting
System for the last five business days, on which at least one sale of such
Common Stock took place on such System, of the calendar year for which the award
is made. The Company shall credit the Employee's Contingent Award Account as of
the date of the award with the number of shares so determined. At no time after
such credit and prior to the delivery of the shares so credited shall any of
such shares be earmarked for his or her account, nor shall he or she have any of
the rights of a stockholder with respect to such shares.

         As of December 31 of each year, the Corporation shall determine the
amount of the dividends which would have been paid during such calendar year
with respect to the number of shares credited in each Contingent Award Account
at the record date for each such dividend payment had the shares so credited
then been issued and outstanding. The Employee's Contingent Award Account shall
be credited with the number of shares of the Corporation's Common Stock
(including fractional shares) purchasable with the above determined amount at
the average closing market price of such Common Stock on the Consolidated
Transaction Reporting System, for the last five business days, on which at least
one sale of such Common Stock took place on such System, of the calendar year
(such share credits in respect of dividends shall not be deemed awards under the
Plan).

         In the event of stock split, stock dividend or other relevant change in
the Corporation's capitalization, the Committee shall, subject to the approval
of the Board of Directors, appropriately adjust the shares of stock theretofore
credited to the Contingent Award Accounts.

         (b) The Company shall, subject to the conditions of paragraph VI(4),
deliver to the Employee the shares of stock credited to his or her Contingent
Award Account in approximately equal installments as soon as practicable after
the first day of January of each of the five years following any termination of
his or her employment, unless the Committee shall otherwise determine.
Notwithstanding the foregoing, certain Employees, at the discretion of the
Committee, may elect to defer commencement of such installments beyond the date
of their retirement to any year occurring no later than ten years following the
Employee's Normal Retirement Date, but in no event beyond the date of a
regularly scheduled meeting of the Committee to be held within the first sixty
(60) days of the year in which the tenth anniversary of such Employee's Normal
Retirement Date occurs. Provided, however, in no event shall the installments
extend beyond the date of the Committee meeting described in the foregoing
sentence.

         (c) Notwithstanding any other provisions hereof, the Committee may in
its absolute discretion provide, with respect to any Contingent Stock Award made
to any participant or participants under the Plan, that in the event of any
delivery of shares of Common Stock by the Company pursuant to such Contingent
Stock Award, the number of such shares which the recipient thereof shall be
entitled to receive and which shall be delivered by the Company shall be (i) the
number of such shares which would have been delivered in the absence of this
paragraph VI(3)(c), 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 date
of authorization of delivery by the Committee, or on such other reasonable basis
for determining fair market value as the Committee may from time to time adopt.
Notwithstanding any term or provision of this paragraph VI(3)(c), in determining
the total number of shares authorized for issuance under the Plan pursuant to
paragraph V hereof and in calculating the limit set forth in paragraph V hereof
on the number of shares which may be awarded to any individual Employee under
the Plan, the reduction in the number of shares effected by this paragraph
VI(3)(c) shall not be taken into account.

(4) Conditions of Payment of Contingent Awards

         (a) In the event that the Employee is discharged for, or after any
other termination of employment is found while employed by the Company to have
engaged in, deliberate gross misconduct, as determined by the Company, no
further payment or delivery shall thereafter be made in respect of his or her
Contingent Cash or Stock Awards and all his or her rights with respect to his or
her Contingent Cash or Stock Awards and all his or her rights with respect to
his or her Contingent Award Account shall thereupon be forfeited.

         (b) In the event of termination of the Employee's employment prior to
his or her retirement for reasons other than death or discharge for deliberate
gross misconduct, as determined by the Company, any unpaid installments of his
or her Contingent Cash Awards and any undelivered shares of stock from his or
her Contingent Award Account shall, subject to the conditions set forth in
paragraph (d) below, be paid or delivered to him or her at the dates and in the
installments originally determined.

         (c) In the event of the Employee's death, any unpaid installments of
his or her Contingent Cash Awards shall be paid and any undelivered shares of
stock from his or her Contingent Award Account shall be paid or delivered at the
dates and in the installments originally determined, unless the Committee shall
otherwise determine, to or as directed by his or her legal representative, or
legatee or such other person designated by an appropriate court as the person
entitled to receive the same, provided that the Employee was employed by the
Company at the time of his or her death or up to the date of his or her death
had complied with the conditions set forth in paragraph (d) below.

         (d) No payment of a Contingent Cash Award or delivery from a Contingent
Award Account shall be made to any Employee after termination of employment
unless he or she shall have to the date fixed for such payment or delivery (i)
refrained from becoming or serving as an officer, director or employee of any
individual, 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 limitations, advertising agencies and
business consultants) to competitors with any portion of the business of the
Company, (ii) 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 (iii) 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, no further payment or delivery shall thereafter be made with respect
to the Employee's Contingent Cash or Stock Awards and all his or her rights with
respect to his or her Contingent Award Account shall thereupon be forfeited.

                                VII. Limitations

         No Employee, whether or not deemed eligible or offered an opportunity
to indicate a preference under the Plan, or other person shall have any claim or
right (legal, equitable or other) to be granted an award under the Plan, and no
Director, Officer, Employee of the Company or any other person shall have the
authority to enter into any agreement with any person for the making or payment
of an award or to make any representation or warranty with respect thereto.

         No Employee to whom a Contingent Award has been made shall have any
rights to his or her Contingent Award Account other than to receive the
Contingent Award at the time and in the form determined by the Committee,
subject to the fulfillment of the conditions prescribed herein, which right may
not be assigned, transferred or pledged during his or her lifetime.

         Neither the action of the Corporation in establishing the Plan nor any
action taken by it or by the Committee under the provisions hereof, nor any
provision of the Plan, shall be construed as giving to any Employee the right to
be retained in the employ of the Company.

         VIII. Amendment, Suspension or Termination of the Plan in Whole or in
Part

         The Board of Directors may discontinue the Plan at any time and may
from time to time amend the terms of the Plan; provided, however, that no such
discontinuance or amendment shall adversely affect any right or obligation with
respect to any award theretofore made, and no such amendment shall, without the
approval of stockholders, operate so as to increase the annual amount of the
Award Fund or increase the aggregate number of shares of the Corporation's
Common Stock that may be issued under the Plan.

                                IX. Construction

         The Plan shall be governed by and construed in accordance with the laws
of the State of New York.AMERICAN HOME PRODUCTS CORPORATION

                             STOCK OPTION AGREEMENT

                           FOR NON-EMPLOYEE DIRECTORS

                              (Transferable Option)

                         UNDER STOCK OPTION PLAN FOR NON-EMPLOYEE DIRECTORS

[Name and address]       DATED:

                         OPTION PRICE: [Insert Fair Market Value on Grant Date]

                         NON-QUALIFIED STOCK OPTION SHARES:  [3,000]

1. Under the terms and conditions of this Agreement and of the American
Home Products Corporation (the "Company") Stock Option Plan for Non-Employee
Directors (the "Plan"), a copy of which is attached hereto and incorporated
herein by reference, the Company hereby grants to the undersigned Optionee an
option or options (together, the "Option") to purchase the number of shares of
the Company's Common Stock as specified above ("Option Shares") at the option
price specified above. Capitalized terms not otherwise defined herein have the
meanings assigned to them in the Plan.

2. This Option may be exercised as provided in Sections 7 and 8 of the
Plan.

3. This Option shall expire upon the date that is ten years from the date
of grant or earlier as provided in Section 8(b) of the Plan.

4. This Option may be exercised by sending the Treasurer of the Company an
option exercise notice indicating the number of Option Shares for which the
Option is to be exercised subject to the provisions of Sections 7(a) and 7(b) of
the Plan, and the form in which the certificates are to be registered for Option
Shares purchased in the name of the Optionee (or a permitted Transferee (as
defined in paragraph 5, below), or in the Optionee's name and that of another
person(s) as joint tenants with the right of survivorship). This notice shall be
accompanied by payment of the purchase price calculated pursuant to and in the
form set forth in Section 7(c) of the Plan.

5. This Option is not transferable or assignable other than by will or by
the laws of descent and distribution and may be exercised during the Optionee's
lifetime only by the Optionee except that the Optionee may irrevocably transfer
all or a portion of the Options to (i) the spouse (current or former), children,
stepchildren, grandchildren or step-grandchildren of the Optionee ("Immediate
Family Members"), (ii) a trust or trusts for the exclusive benefit of such
Immediate Family Members, (iii) a general or limited partnership or other entity
in which such Immediate Family Members are the only partners or beneficial
owners, or (iv) any other party permitted by the Committee under the Stock
Incentive Plan, provided that, except as set forth in the Stock Incentive Plan,
(x) there may be no consideration for any such transfer, (y) the Optionee
submits to the Company an Option Transfer Form duly completed and executed by
the Optionee and the Transferee in the form attached as Exhibit A hereto, and
(z) subsequent transfers shall be prohibited except by will or the laws of
descent and distribution. Following transfer, any such Option shall continue to
be subject to the same terms and conditions as were applicable immediately prior
to transfer, provided that for purposes of the Plan the term "Optionee" shall be
deemed to include a permitted transferee hereunder (the "Transferee"), and
provided, further, that (i) the provisions of Section 8 of the Plan with respect
to the Optionee's death, disability, retirement or other termination of service
as a member of the Board shall continue to be applied with respect to the
Optionee, and following any such events, the transferred Option shall be
exercisable by the Transferee only to the extent, and for the periods specified
in the Plan, and (ii) the cashless exercise program which may be referred to
under the Stock Incentive Plan shall not apply to the Transferee unless
specifically permitted by the Committee.

6. After the Optionee's death, the Option may be exercised only by the
Optionee's legal representative or legatee or such other person designated by an
appropriate court as the person entitled to make such exercise or, subject to
paragraph 5 above, by other Transferees. The Option may be exercised after the
Optionee's death by any permitted distributee or the Transferee only to the
extent that the Optionee was entitled to exercise it at the time of the
Optionee's death.

7. Subject to the express provisions of the Plan, this Agreement and the
Plan are to be interpreted and administered by the Committee or any successor
thereto, whose determination will be final.

8. This Agreement shall be governed by the laws of the State of Delaware
and in accordance with such federal law as may be applicable.

                                          AMERICAN HOME PRODUCTS CORPORATION
                                          /S/ John R. Stafford
                                          Chairman of the Board

Accepted and agreed to:

---------------------------------------

Optionee's Signature

---------------------------------------

Optionee's Social Security Number

<PAGE>
                                                                  EXHIBIT A

                              OPTION TRANSFER FORM

Reference is made to the Stock Option Agreement, dated _____________________
(the "Agreement"), under which American Home Products Corporation (the
"Company") granted to the undersigned transferor ("Optionee") non-qualified
stock options covering _________________ shares of the Company's Common Stock
under the Stock Option Plan for Non-Employee Directors (the "Plan"). Capitalized
terms used herein without definition are used as defined in the Agreement and
the Plan. The Optionee hereby transfers non-qualified stock options covering
__________________ shares of the Company's Common Stock (the "Options") granted
under the Plan pursuant to the Agreement to the following transferee (the
"Transferee"):

_____________________
Name of person or entity

_____________________
Social security or tax ID number

_____________________
Type of entity (if applicable)

_____________________
Relationship to Optionee

_____________________
Address

The Optionee and, by its execution of this form, the Transferee, hereby
represent and warrant to the Company that the Transferee is a permitted
transferee in accordance with paragraph 5 of the Agreement and under Section
12(d) of the Plan. It is understood and agreed by Optionee and Transferee that
(i) the Committee shall be entitled, in its sole discretion, to determine
whether such transfer is in accordance with such requirements, and (ii) the
Company and the Committee shall be under no obligation to notify the Transferee
of the termination date of any Option transferred hereunder.

The Transferee hereby agrees, subject to paragraph 5 of the Agreement, to be
bound by all of the terms, conditions and limitations set forth in the Agreement
and the Plan binding upon the Optionee under the Agreement, and specifically
understands that (i) the provisions of Section 8 of the Plan with respect to the
Optionee's death, disability, retirement or other termination of service as a
member of the Board shall continue to be applied with respect to the Optionee,
and following any such events, the transferred Options shall be exercisable by
the Transferee only to the extent, and for the periods specified in the Plan,
and (ii) the Options may not, without the consent of the Committee, be
transferred by the Transferee except by will or pursuant to the laws of descent
and distribution. The Transferee understands and acknowledges that any shares of
Common Stock purchased by the Transferee pursuant to the Options may not be
registered under the Securities Act of 1933, as amended, and that such shares
may contain a restrictive legend in substantially the form as set forth below
(in addition to any legend required under applicable state securities laws):

         THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
         1933. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED
         IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO
         THE SECURITIES UNDER SUCH ACT OR AN OPINION OF COUNSEL SATISFACTORY TO
         THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED OR UNLESS SOLD
         PURSUANT TO RULE 144 OF SUCH ACT.

In order to enforce the foregoing, the Company may impose stop-transfer
instructions with respect to such securities until such time as the Company is
reasonably satisfied that such restrictions are no longer applicable to the sale
of such securities.

The Optionee further represents and warrants to the Company and the Transferee
that (i) Optionee has delivered to the Transferee a copy of the Agreement and
the Plan, (ii) Optionee has consulted with qualified income and estate tax
advisors in determining to transfer the Options to the Transferee or waives any
such requirement to do so, and (iii) Optionee has considered and understands
each of the following:

         1.       The transfer to the Transferee is irrevocable.

         2.       Optionee will not control the exercise of the Options
                  once they have been transferred.

         3.       Optionee is assuming all of the risks and possible
                  consequences associated with the transfer of the Options, and
                  acknowledges that the Company and its representatives are not
                  responsible or liable for any tax, penalty, judgment or
                  outcome resulting from the transfer of the Options.

OPTIONEE:                                   TRANSFEREE:

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Date:                                       Date:

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