Exhibit 10.1

FORM OF

CHANGE IN CONTROL AGREEMENT

AGREEMENT dated as of                      between FORTUNE BRANDS, INC., a
Delaware corporation (the “Company”), and                      (the
“Executive”),

W I T N E S S E T H:

WHEREAS, the Executive is currently employed by the Company and has throughout
his period of employment rendered valuable service to the Company;

WHEREAS, the Company recognizes that, as is the case with many publicly held
corporations, the possibility of a change in control may exist and that, in the
event action is taken to bring about a change in control, uncertainty and
questions may arise among management that could result in the distraction or
departure of management personnel to the detriment of the Company and its
stockholders; and

WHEREAS, the Company has determined that appropriate steps should be taken to
reinforce and encourage the continued attention and dedication of senior members
of the Company’s management to their assigned duties without distraction in the
face of the potentially disruptive circumstances arising from the possibility of
a change in control; and

WHEREAS, the Executive desires to continue in full-time employment with the
Company, but desires to be provided with the assurance of receiving certain
severance benefits in the event the Company were to take certain actions
resulting in the termination of his employment following a change in control;
and

WHEREAS, the Company and the Executive desire to enter into this Agreement to
set forth the terms and conditions of such severance benefits;

NOW, THEREFORE, in consideration of the premises and of the mutual agreements
hereinafter contained, the parties agree as follows:

1. Termination Following Change in Control.

(a) Entitlement to Benefits. If and only if a Change in Control (as defined in
this Section 1) of the Company occurs and if subsequent to such Change in
Control and during the term of this Agreement the Executive’s employment with
the Company is terminated by the Company other than for Disability or Cause or
by the Executive for Good Reason (as defined in this Section 1), the Executive
shall be entitled to benefits as provided in Section 2. The Executive shall not
be entitled to any benefits under this Agreement in the event his employment
with the Company is terminated as a result of his death, by the Company for
Disability or Cause or by the Executive other than for Good Reason.

(b) Change in Control. For purposes of this Agreement, a “Change in Control”
shall be deemed to have occurred if (i) any person (as that term is used in
Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the
“Exchange

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Act”) as in effect on the date of this Agreement) is or becomes the beneficial
owner (as that term is used in Section 13(d) of the Exchange Act, and the rules
and regulations promulgated thereunder, as in effect on the date of this
Agreement) of 20% or more of the combined voting power of the then outstanding
voting securities entitled to vote generally in the election of directors
(“Voting Securities”) of the Company, excluding, however, the following: (A) any
acquisition directly from the Company, other than an acquisition by virtue of
the exercise of a conversion privilege unless the security being so converted
was itself acquired directly from the Company, (B) any acquisition by the
Company, (C) any acquisition by an employee benefit plan (or related trust)
sponsored or maintained by the Company or entity controlled by the Company, or
(D) any acquisition pursuant to a transaction that complies with clauses (A),
(B) and (C) of clause (iii) below, (ii) more than 50% of the members of the
Board of Directors of the Company shall not be Continuing Directors (which term,
as used herein, means the directors of the Company (A) who were members of the
Board of Directors of the Company on the date hereof or (B) who subsequently
became directors of the Company and who were elected or designated to be
candidates for election as nominees of the Board of Directors, or whose election
or nomination for election by the Company’s stockholders was otherwise approved,
by a vote of a majority of the Continuing Directors then on the Board of
Directors but shall not include, in any event, any individual whose initial
assumption of office occurs as a result of either an actual or threatened
election contest (as such terms are used in Rule 14(a)-11 of Regulation 14A
promulgated under the Exchange Act) or other actual or threatened solicitation
of proxies or consents by or on behalf of a person other than the Board of
Directors), (iii) the Company shall be merged or consolidated with, or, in any
transaction or series of transactions, substantially all of the business or
assets of the Company shall be sold or otherwise acquired by, another
corporation or entity unless, as a result thereof, (A) the stockholders of the
Company immediately prior thereto shall beneficially own, directly or
indirectly, at least 60% of the combined Voting Securities of the surviving,
resulting or transferee corporation or entity (including, without limitation, a
corporation that as a result of such transaction owns the Company or all or
substantially all of the Company’s assets either directly or through one or more
subsidiaries) (“Newco”) immediately thereafter in substantially the same
proportions as their ownership immediately prior to such corporate transaction,
(B) no person beneficially owns (as such terms are used in Sections 13(d) and
14(d) of the Exchange Act, and the rules and regulations promulgated thereunder
(as in effect on the date hereof), directly or indirectly, 20% or more of the
combined Voting Securities of Newco immediately after such corporate transaction
except to the extent that such ownership of the Company existed prior to such
corporate transaction and (C) more than 50% of the members of the Board of
Directors of Newco shall be Continuing Directors or (iv) the stockholders of the
Company approve a complete liquidation or dissolution of the Company.

(c) Disability. Termination of employment by the Company for Disability
hereunder shall be deemed to have occurred only if, as a result of the
Executive’s incapacity due to physical or mental illness, the Executive shall
have been absent from his duties with the Company on a full-time basis for 180
consecutive days and, within 30 days after Notice of Termination (as defined in
Section 1(d)) is given to the Executive by the Company, the Executive shall not
have returned to the full-time performance of his duties.

(d) Cause. Termination of employment by the Company shall be deemed to be for
Cause only if (i) termination shall have been the result of (A) an act or acts
of dishonesty

 

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on the Executive’s part that results in Executive being indicted for a felony,
or (B) the Executive’s willful and continued failure substantially to perform
his duties and responsibilities as an officer of the Company (other than any
such failure resulting from his incapacity due to physical or mental illness)
after a demand for substantial performance is delivered to the Executive by the
Board of Directors of the Company which specifically identifies the manner in
which such Board believes that the Executive has not substantially performed his
duties and the Executive is given a reasonable time after such demand
substantially to perform his duties, and (ii) there shall have been delivered to
the Executive a copy of a resolution duly adopted by the affirmative vote of not
less than two-thirds (2/3) of the members of the Board of Directors of the
Company at a meeting called and held for the purpose (after reasonable notice to
the Executive and an opportunity for him, together with his counsel, to be heard
before such Board), finding that in the good faith opinion of the Board of
Directors of the Company that the Executive was guilty of conduct set forth
above in clause (i)(A) or (i)(B) of this Section 1(d) and specifying the
particulars thereof in detail. The Executive’s employment shall in no event be
considered to have been terminated by the Company for Cause if the act or
failure to act upon which such termination is based (x) was done or omitted to
be done (1) as a result of bad judgment or negligence on his part, or (2) as a
result of his good faith belief that such act or failure to act was in or was
not opposed to the interests of the Company, or (y) is an act or failure to act
in respect of which the Executive meets the applicable standard of conduct
prescribed for indemnification or reimbursement or payment of expenses under the
By-laws of the Company or the laws of the state of its incorporation or the
directors’ and officers’ liability insurance of the Company, in each case as in
effect at the time of such act or failure to act.

(e) Notice of Termination. Any termination by the Company for Disability or
Cause shall be communicated by Notice of Termination to the Executive and any
termination by the Executive for Good Reason shall be communicated by Notice of
Termination to the Company. For purposes of this Agreement, a “Notice of
Termination” shall mean a notice in writing which indicates the specific
termination provision in this Agreement relied upon and sets forth in reasonable
detail the facts and circumstances claimed to provide a basis for termination of
the Executive’s employment under the provision so indicated.

(f) Termination Date. As used herein, “Termination Date” shall mean (i) if
employment is terminated by the Company for Disability, 30 days after Notice of
Termination is given (provided that the Executive shall not have returned to the
performance of his duties on a full-time basis during such 30-day period),
(ii) if employment is terminated by the Company for Cause, the date on which a
Notice of Termination is given, (iii) if employment is terminated for Good
Reason, the date specified in the Notice of Termination, and (iv) if employment
is terminated for any other reason, the date on which the Executive ceases to
perform his duties for the Company; provided, however, that, if within 30 days
after any Notice of Termination is given the party receiving such Notice of
Termination notifies the other party that a dispute exists concerning the
termination, the Termination Date shall be the date finally determined to be the
Termination Date, either by written agreement of the parties or by a final
judgment, order or decree of court of competent jurisdiction (the time for
appeal having expired and no appeal having been perfected); provided further,
however, that if the dispute is resolved in favor of the Company, the
Termination Date shall be the date determined under clauses (i) through (iv) of
this Section 1(f) .

 

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(g) Good Reason. Termination of employment by the Executive for Good Reason
shall be deemed to have occurred only if the Executive terminates his employment
and provides a Notice of Termination to the Company prior to such date for any
of the following reasons:

(i) without Executive’s express written consent, the assignment to Executive of
any duties inconsistent with his positions, duties, responsibilities and status
with the Company at the time of a Change in Control, or a change in Executive’s
reporting responsibilities, titles or offices as in effect at the time of a
Change in Control, or any removal of him from, or any failure to re-elect
Executive to, any of such positions, except in connection with the termination
of his employment as a result of Executive’s death or by the Company for
Disability or Cause or by Executive other than for Good Reason;

(ii) a reduction by the Company in Executive’s then current base salary;

(iii) the failure of the Company substantially to maintain and to continue
Executive’s participation in the Company’s benefit plans as in effect at the
time of a Change in Control and with all subsequent improvements (other than
those plans or improvements that have expired in accordance with their original
terms), or the taking of any action which would materially reduce Executive’s
benefits under any of such plans or deprive him of any material fringe benefit
enjoyed by Executive at the time of a Change in Control. Such benefit plans
shall include, but not be limited to, the provisions for incentive compensation
under the Annual Executive Incentive Compensation Plan of the Company and the
Company’s Retirement Plan, Supplemental Plan (as defined in Section 2(b)(i))
(including the supplemental profit-sharing of the Supplemental Plan), the
Fortune Brands Retirement Savings Plan (including the tax deferred and related
Company matching contributions) and Long-Term Incentive Plan;

(iv) the target bonus awarded by the Compensation and Stock Option Committee of
the Company to Executive under the Annual Executive Incentive Compensation Plan
of the Company subsequent to a Change in Control is less than such amount last
awarded to Executive prior to a Change in Control;

(v) the sum of the Executive’s base salary and amount paid to him as incentive
compensation under the Annual Executive Incentive Compensation Plan of the
Company for the calendar year in which the Change in Control occurs or any
subsequent year is less than the sum of the Executive’s base salary and the
amount awarded (whether or not fully paid) to him as incentive compensation
under the Annual Executive Incentive Compensation Plan of the Company for the
for the calendar year prior to the Change in Control or any subsequent calendar
year in which the sum of such amounts was greater;

(vi) the relocation of the offices at which Executive is employed to a location
more than 35 miles from his location at the time of a Change in Control or the
Company requiring Executive to be based anywhere other than at such offices,
except for required travel on the Company’s business to an extent substantially
consistent with Executive’s business travel obligations at the time of a Change
in Control;

 

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(vii) the failure of the Company to provide Executive with a number of paid
vacation days at least equal to the number of paid vacation days to which
Executive is entitled at the time of Change in Control;

(viii) any purported termination of Executive’s employment which is not effected
pursuant to a Notice of Termination satisfying the requirements of subsection
(e) of this Section 1 (and, if applicable, subsection (d) of this Section 1),
and for purposes of this Agreement, no such purported termination shall be
effective; or

(ix) Executive’s good faith determination that due to a Change in Control he is
not able effectively to discharge his duties.

2. Compensation Upon Termination.

(a) If the Executive’s employment is terminated by the Company for Disability or
Cause or by the Executive for other than Good Reason, the Company shall have no
obligation to pay any compensation to the Executive under this Agreement in
respect of periods beginning on and after the Termination Date, but this
Agreement shall have no effect on any other obligation the Company may have to
pay the Executive compensation to which he may otherwise be entitled.

(b) If the Company terminates the Executive’s employment other than for
Disability or Cause, or if the Executive terminates his employment for Good
Reason, then in addition to the Company paying the Executive his base salary and
accrued but unpaid vacation pay through the Termination Date, the Company shall
pay to the Executive as severance pay in a lump sum on the eighth day following
the date the Executive delivers (and does not revoke) an executed release of
claims in the form attached hereto as Exhibit A (as such release is updated from
time to time to reflect legal requirements) an amount equal to

(i) the product of 2.99 times the sum of:

(A) his annual base salary at the rate in effect on the date of Change in
Control, plus

(B) his target annual bonus under the Annual Executive Incentive Compensation
Plan in effect in the calendar year in which the Termination Date occurs, plus

(C) the amount that would have been required to be allocated to the Executive’s
account (assuming that he elected the maximum employee contribution) for the
year immediately preceding the year in which the Termination Date occurs under
the Fortune Brands Retirement Savings Plan, including the Company 401(k)
matching contribution, and the profit-sharing provisions of the Supplemental
Plan of Fortune Brands, Inc. (the “Supplemental Plan”); and

 

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(ii) legal fees and expense incurred by Executive in order to obtain or enforce
any right or benefit provided by this Agreement.

In the event the Termination Date occurs within less than three years prior
to the Executive’s Normal Retirement Date (as defined in the Retirement Plan),
the multiplier “2.99” in subsection (b)(i) of this Section 2 shall be changed
so that it shall equal the number of whole years and fraction thereof or
fraction of a year that will elapse between the Termination Date and Normal
Retirement Date.

(c) If the Company terminates the Executive’s employment other than for
Disability or Cause, or if the Executive terminates his employment for Good
Reason, the Company shall maintain in full force and effect, for the Executive’s
continued benefit for a three (3) year period (or, if shorter, the period until
his Normal Retirement Date) after the Termination Date, all employee life,
health, accident, disability, medical and other employee welfare benefit plans,
programs or arrangements in which he was participating immediately prior to the
Termination Date, provided that his continued participation is possible under
the terms and provisions of such plans, programs and arrangements. In the event
that the Executive’s participation in any such plan, program or arrangement is
barred (or the provision of health or medical benefits would result in taxable
income to Executive for coverage beyond the maximum applicable continuation
coverage period under the Consolidated Omnibus Budget Reconciliation Act of
1985), the Company shall arrange to provide him with benefits (or cash
equivalent thereof) substantially similar to those which he would have been
entitled to receive under such plan, program or arrangement if he had remained a
participant for such additional three (3) year period (or, if shorter, such
additional period until his Normal Retirement Date) after the Termination Date.

(d) If the Company terminates the Executive’s employment other than for
Disability or Cause, or if the Executive terminates his employment for Good
Reason, then in addition to the retirement benefits to which the Executive is
entitled under the Retirement Plan, the Supplemental Plan and any other defined
benefit pension plan maintained by the Company or any affiliate, and any other
program, practice or arrangement of the Company or any affiliate to provide the
Executive with a defined pension benefit after termination of employment, and
any successor plans thereto (all such plans being collectively referred to
herein as the “Pension Plans”), the Company shall pay the Executive monthly
beginning at the earliest date that payments commence under any of the Pension
Plans an amount equal to the excess of (i) over (ii) below where

(i) equals the sum of the aggregate monthly amounts of pension payments
(determined as a straight life annuity) to which the Executive would have been
entitled under the terms of each of the Pension Plans in which he was an active
participant as of the Termination Date determined as if he were fully vested
thereunder and had accumulated three (3) additional years (or, if less, the
fraction of a year from the Termination Date to the Executive’s Normal
Retirement Date) of age and Service thereunder (subsequent to his Termination
Date) at his rate of Compensation in effect on the date of a Change in Control
plus any increases subsequent thereto, and where

 

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(ii) equals the sum of the aggregate monthly amounts of pension payments
(determined as a straight life annuity) to which the Executive is entitled under
the terms of each of the Pension Plans in which he was an active participant at
the date of the Change in Control.

For purposes of clause (i), the amounts payable pursuant to Sections 2(b)(i)(A)
and (B) shall be considered as part of the Executive’s Compensation and such
amounts shall be deemed to represent three (3) years (or, if less, the fraction
of a year from the Termination Date to the Executive’s Normal Retirement Date)
of Compensation for purposes of determining his highest consecutive five year
average rate of Compensation. The supplemental pension benefits determined under
this Section 2(d) shall be payable by the Company to the Executive and his
contingent annuitant, if any, or to the Executive’s surviving spouse as a
spouse’s benefit if the Executive dies prior to commencement of benefits under
this Agreement, in the same manner and for as long as his pension benefits under
the Supplemental Plan and shall be adjusted actuarially to reflect payment in a
form other than a straight life annuity. Benefits which commence prior to the
age at which benefits may be paid without actuarial reduction for early payment
under the Retirement Plan shall be actuarially reduced to reflect early
commencement to the extent, if any, provided in the Retirement Plan as if the
Executive’s Termination Date were an Early Retirement Date. In the event that an
employee grantor trust (“Grantor Trust”) has been established among the Company,
the Executive and a Trustee, the Company shall provide the additional pension
benefits payable under this Section 2(d) in the same manner as Supplemental Plan
benefits are provided after termination of employment to executives with Grantor
Trusts and shall be calculated using the same assumptions as used to provide
Supplemental Plan benefits. All capitalized terms used in this Section 2(d) have
the same meaning as in the Retirement Plan as in effect on the date of this
Agreement, unless otherwise defined herein or otherwise required by the context.

(e) If the Company terminates the Executive’s employment other than for
Disability or Cause, or the Executive terminates his employment for Good Reason,
the Company shall pay to the Executive as additional severance pay in a lump sum
on the eighth day following the date the Executive delivers an executed release
of claims in the form attached hereto as Exhibit A (as such release is updated
from time to time to reflect legal requirements) following the Termination Date
an amount, if any, equal to the nonvested portion of his account balances under
the Fortune Brands Retirement Savings Plan and the defined contribution plan of
any affiliate of the Company in which there is maintained for him an account
balance which is not fully vested.

(f) If the Company terminates the Executive’s employment other than for
Disability or Cause, or the Executive terminates his employment for Good Reason,
the Executive shall be entitled to the following as incentive compensation
through the Termination Date:

(i) the unpaid portion of the amount awarded to him as incentive compensation
under the Annual Executive Incentive Compensation Plan for the calendar year
immediately preceding the year in which the Termination Date occurs, payable at
the time annual incentive awards are normally paid; and

 

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(ii) incentive compensation under the Annual Executive Incentive Compensation
Plan for the calendar year in which the Termination Date occurs, payable at the
time annual incentive awards are normally paid, in an amount equal the
Executive’s target percentage prorated for the portion of the year through the
Termination Date.

(g) If the Company terminates Executive’s employment other than for Disability
or Cause or if the Executive terminates his employment for Good Reason
subsequent to a Change in Control and a dispute exists concerning the
termination as set forth in subsection (f) of Section 1, the Company shall
continue to pay Executive’s full base salary through the date the dispute is
resolved.

(h) If the Executive is a “specified employee” of the Company (as defined in
Treasury Regulation Section 1.409A – 1(i)) and if amounts payable under this
Section 2 are not on account of an “involuntary separation from service” (as
defined in Treasury Regulation Section 1.409A – 1(m)), amounts that would
otherwise have been paid during the six (6)-month period immediately following
the Termination Date shall be paid on the first regular payroll date immediately
following the six (6)-month anniversary of the Termination Date.

(i) The Executive shall not be required to mitigate the amount of any payment
provided for in this Section 2 by seeking other employment or otherwise, nor
shall the amount of any payment provided for in this Section 2 be reduced by any
compensation earned by the Executive as the result of employment by another
employer after the Termination Date or by any other compensation.

(j) Subject to Section 2(k), this Agreement and the obligations of the Company
under it shall not be in derogation of any other obligations of the Company not
set forth herein to pay any compensation or to pay or provide any benefit to the
Executive.

(k) Any benefits to which the Executive is entitled under the Company’s
severance pay program covering salaried or executive employees generally shall
be reduced by benefits paid under Section 2(b)(i) (A) and (B). Any benefits to
which the Executive is entitled under Section 2 shall be reduced by the amount
of any benefits provided or payments made to him pursuant to the Severance
Agreement dated as of                      between the Executive and the
Company. This Agreement supersedes any prior change in control agreement with
the Executive.

3. Successors; Binding Agreement.

(a) The Company shall require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of the
business or assets of the Company, and any parent company thereof, by agreement
or agreements in form and substance satisfactory to the Executive, expressly to
assume and agree to perform this Agreement, and in the case of any such parent
company expressly to guarantee and agree to cause the performance of this
Agreement, in the same manner and to the same extent as the Company would be
required to perform it if no such succession had taken place. As used in this
Agreement, “Company” shall mean the Company as defined in the first sentence of
this

 

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Agreement and any successor to all or substantially all its business or assets
or which otherwise becomes bound by all the terms and provisions of this
Agreement, whether by the terms hereof, by operation of law or otherwise.

(b) This Agreement is personal to the Executive and without the prior written
consent of the Company shall not be assignable by the Executive otherwise than
by will or the laws of descent and distribution. This Agreement shall inure to
the benefit of and be enforceable by the Executive and his personal or legal
representatives and successors in interest under this Agreement.

4. Term. This Agreement may be terminated by the Company as of a date set forth
in a notice to Executive given at any time at least six months prior to the
execution of a definitive agreement which would lead to a Change in Control,
provided that if a Change in Control occurs within such six month period
subsequent to the delivery of the notice of termination of this Agreement by the
Company, then this Agreement shall continue in effect in accordance with its
terms notwithstanding such notice. This Agreement shall terminate on the third
anniversary of any Change in Control unless a Notice of Termination shall have
been given prior thereto and provided further that, notwithstanding anything to
the contrary in this Agreement, the provisions of this Agreement shall also
continue in effect notwithstanding such notice if the notice is given at the
instance or suggestion of a third party following commencement of discussions
with the Company that ultimately result in a Change in Control.

5. Notice. Any notice, demand or other communication required or permitted under
this Agreement shall be effective only if it is in writing and delivered
personally or sent by registered or certified mail, return receipt requested,
postage prepaid, addressed as follows:

If to the Company:

Fortune Brands, Inc.

520 Lake Cook Road

Deerfield, Illinois 60015

Attention: Secretary

If to the Executive:

At the address most recently on file with the Company

or to such other address as either party may designate by notice to the other
and shall be deemed to have been given as of the date so personally delivered or
mailed.

6. Miscellaneous. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware. This Agreement cannot be
modified or any term or condition waived in whole or in part except by a writing
signed by the party against whom enforcement of the modification or waiver is
sought. No waiver by either party at any time of any breach of this Agreement by
the other party, or compliance with, any condition or provision of this
Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time. The headings in this Agreement are included for convenience of
reference only and shall not in any way affect the meaning or interpretation of
this Agreement.

 

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7. Separability. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement.

8. Counterparts. This Agreement may be executed in any number of counterparts,
each of which so executed shall be deemed to be an original, and such
counterparts will together constitute but one Agreement.

9. Withholding of Taxes. The Company may withhold from any benefits payable
under this Agreement all federal, state, city or other taxes as shall be
required pursuant to any law or governmental regulation or ruling.

10. Excise Taxes. In the event that Executive becomes entitled to payments under
Section 2 of this Agreement, or as a result of the exercise, or acceleration of
the exercisability, of stock options or performance awards, or the exercise of
limited rights or other awards under the Company’s Long-Term Incentive Plan or
any successor plan, or any other payments or benefits received or treated as
having been received by Executive in connection with a change in the ownership
or effective control of the Company or in the ownership of a substantial portion
of its assets within the meaning of Section 280G(b)(2)(A) of the Internal
Revenue Code of 1986, as amended (the “Code”) (whether pursuant to the terms of
this Agreement or any other plan, arrangement or agreement with the Company, any
person whose actions result in such a change or any person affiliated with the
Company or such person) (“the Agreement Payments”), if any of the Agreement
Payments will be subject to the tax (the “Excise Tax”) imposed by Section 4999
of the Code, the Company shall pay to Executive, if his employment has
terminated, on the eighth day following the date the Executive delivers (and
does not revoke) an executed release of claims in the form attached to this
Agreement as Exhibit A (as such release is updated from time to time to reflect
legal requirements) (or if Executive’s employment has not terminated, on the
fifth day following the receipt of the Agreement Payment) an additional amount
(the “Gross-Up Payment”) such that the net amount retained by Executive after
deduction of any Excise Tax on the Agreement Payments and any federal, state and
local income tax and Excise Tax upon the payment provided for by this
Section 10, shall be equal to the Agreement Payments. For purposes of
determining whether payments or benefits of the types referred to in the
preceding sentence are Agreement Payments and whether any of the Agreement
Payments will be subject to the Excise Tax and the amount of such Excise Tax,
(i) any such payments or benefits received or to be received by Executive shall
be treated as “parachute payments” within the meaning of Section 280G(b)(2) of
the Code, and all “excess parachute payments” within the meaning of
Section 280G(b)(1) of the Code shall be treated as subject to the Excise Tax,
unless in the opinion of tax counsel selected by one of the “Big 4” independent
registered public accounting firms and acceptable to Executive such other
payments or benefits (in whole or in part) do not constitute parachute payments,
or such excess parachute payments (in whole or in part) represent reasonable
compensation for services actually rendered within the meaning of
Section 280G(b)(4) of the Code in excess of the base amount within the meaning
of Section 280G(b)(3) of the Code, or are otherwise not subject to the Excise
Tax, (ii) the amount of the Agreement Payments which shall be treated as subject
to the Excise Tax shall be equal to

 

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the lesser of (A) the total amount of the Agreement Payments or (B) the amount
of excess parachute payments within the meaning of Section 280G(b)(1) of the
Code (after applying clause (i), above), and (iii) the value of any non-cash
benefits or any deferred payment or benefit shall be determined by one of the
“Big 4” independent registered public accounting firms in accordance with the
principles of Sections 280G(d)(3) and (4) of the Code. Notwithstanding the
foregoing provisions of this Section 10, if it shall be determined that
Executive is entitled to the Gross-Up Payment, but that the value of the
Agreement Payments does not exceed 330% of the base amount (as defined in
Section 280G(d)(3) of the Code), then, subject to the following sentence, no
Gross-Up Payment shall be made to Executive and the amounts payable under this
Agreement shall be reduced so that the value of the Agreement Payments, in the
aggregate, equals one dollar less than 300% of the base amount. The reduction
described in the preceding sentence shall apply only if the value of the
reduction is equal to or less than 30% of the Executive’s base salary as of the
Change in Control; otherwise there shall be no reduction and the Executive will
be entitled to the Gross-Up Payment. The reduction of the amounts payable under
this Agreement, if applicable, shall be made in such a manner as to maximize the
value of all Agreement Payments actually made to Executive. For purposes of
determining the amount of the Gross-Up Payment, the Executive shall be deemed to
pay federal income taxes at the highest marginal rate of federal income taxation
in the calendar year in which the Gross-Up Payment is to be made and state and
local income taxes at the highest marginal rate of taxation in the state and
locality of Executive’s residence on the Termination Date, net of the maximum
reduction in federal income taxes which could be obtained from deduction of such
state and local taxes. The Gross-Up Payment required in respect of Agreement
Payments other than under Section 2 of this Agreement shall be payable whether
or not Executive’s employment terminates. In the event that the Excise Tax is
subsequently determined to be less than the amount taken into account hereunder
at the time of Executive’s termination of employment, the Executive shall repay
to the Company at the time that the amount of such reduction in Excise Tax is
finally determined the portion of the Gross-Up Payment attributable to such
reduction (plus the portion of the Gross-Up Payment attributable to the Excise
Tax and federal and state and local income tax imposed on the Gross-Up Payment
being repaid by him if such repayment results in a reduction in Excise Tax
and/or a federal and state and local income tax deduction) plus interest on the
amount of such repayment at the rate provided in Section 1274(b)(2)(B) of the
Code. In the event that the Excise Tax and any interest or penalties in respect
thereof is determined to exceed the amount taken into account hereunder
(including by reason of any payment the existence or amount of which cannot be
determined at the time of the Gross-Up Payment), the Company shall make an
additional gross-up payment in respect of such excess (plus any interest or
penalties payable with respect to such excess) at the time that the amount of
such excess is finally determined.

11. Section 409A. Notwithstanding anything in the foregoing to the contrary, in
the event that any amounts payable (or benefits provided) under this Agreement
are subject to the provisions of Section 409A of the Code, to the extent
determined necessary, the parties agree to amend this Agreement in the least
restrictive manner necessary to avoid imposition of any additional tax or income
recognition on Executive under Section 409A of the Code, the final Treasury
Regulations and other Internal Revenue Service guidance thereunder. In addition,
to the extent necessary to comply with Code Section 409A, references to
termination of employment (and similar phrases) in this Agreement shall be
interpreted in a manner that is consistent with the term “separation from
service” under Code Section 409A(a) (2) (A) (i) and final Treasury Regulations
and other Internal Revenue Service guidance thereunder.

 

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IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by a
duly authorized officer and attested to and the Executive has set his hand as of
the date first above written.

 

        FORTUNE BRANDS, INC.     By:  

 

    Name:  

 

    Its:  

 

ATTEST:

     

 

     

Secretary

         

 

    Executive

 

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