Exhibit 10.9

     
 
  INCENTIVE
 
  STOCK OPTION AGREEMENT

September 23, 2002

         
Company: [
  ]   Date(s) First Exercisable:
Date of Grant: [
  ]     [     ] — September 23, 2003
No. of Shares: [
  ]     [     ] — September 23, 2004
Option Price per Share[
  ]     [     ] — September 23, 2005

PERSONAL AND CONFIDENTIAL
[Name]
[Address]
Dear [       ]:
We are pleased to inform you that as a key employee of the company referred to
above you have been granted an Incentive Stock Option by the Compensation and
Stock Option Committee of the Board of Directors under the Fortune Brands, Inc.
1999 Long-Term Incentive Plan, as amended (the “Plan”).
By your signature, you agree that these options are granted under and governed
by the Plan and the September 2002 Incentive Stock Option Terms and Conditions
(the “Terms”), and acknowledge receipt of: (1) the Terms, (2) the Plan, (3) the
Plan Prospectus, (4) the 2002 Supplement to the Plan Prospectus and (5) Notice
of Exercise of Stock Option and Notice of Exercise of Limited Right forms.
As set forth in paragraph 1 of the Terms, a signed copy of this agreement must
be received by the Stock Plans Administrator at Fortune Brands, Inc., 300 Tower
Parkway, Lincolnshire, IL 60069 before 5:00 p.m. on the 60th day after the grant
date. Failure to do so will terminate this option.
Sincerely yours,
FORTUNE BRANDS, INC.

     
 
   
Senior Vice President — Strategy
  Signature of Employee
and Corporate Development
   
 
   
 
   
 
  Date

 

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

 

SEPTEMBER 2002
INCENTIVE STOCK OPTION
TERMS AND CONDITIONS
As a participant in the 1999 Long-Term Incentive Plan (the Plan), you will be
able to purchase shares of Common Stock of Fortune Brands, Inc. (Fortune)
provided that you accept your award as set forth in paragraph 1 below. Subject
to the terms and conditions below, the minimum amount, which may be purchased at
any one time, is 50 shares unless you have fewer remaining shares covered by
your option.
The date of the grant, the maximum number of shares the option entitles you to
purchase, the option price per share and the date or dates on which the option
will ordinarily be first exercisable are listed at the top of the agreement. The
option is intended (but not guaranteed) to be an incentive stock option within
the meaning of Section 422 of the Internal Revenue Code.
          1. Acceptance of Option. The option cannot be exercised unless you
sign the agreement and return it so that it is received by the Stock Plans
Administrator of Fortune, 300 Tower Parkway, Lincolnshire, Illinois (or to such
other person and place as Fortune may specify in writing), before 5:00 p.m.
Illinois time on the 60th day after the date of grant. If the Stock Plans
Administrator does not receive the signed agreement by this time, then the
option will terminate immediately. Your signing and delivering a copy of the
agreement to which these Terms and Conditions are attached will not commit you
to purchase any of the shares under the option but will indicate your acceptance
of the option upon these terms and conditions.
          2. Exercise.
          (a) Except as provided in this paragraph 2 and paragraphs 4, 5, 6 and
10, the option shall be exercisable during the period beginning on the date or
dates set forth under the heading “Date(s) First Exercisable” in the agreement
and ending ten years from the date of grant (its expiration date). During this
period, the option is exercisable in whole or in part from time to time in
amounts of not less than 50 shares (except that if you have fewer than 50 shares
remaining covered by the option, the option may be exercised for the full number
of remaining shares).
          (b) The option shall not become exercisable unless you remain employed
by Fortune or one of its subsidiaries for one year from the date of grant,
except in the event of your death and except as provided in paragraph 10.

 

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

 

          3. Transferability of Option. The option shall not be transferable by
you except in the event of your death. During your lifetime the option shall be
exercisable only by you.
          4. Death. If your employment by Fortune or a subsidiary terminates by
reason of your death, the option may immediately be exercised in full and shall
continue to be exercisable in full until its expiration date.
          5. Retirement. If your employment by Fortune or a subsidiary
terminates by reason of disability or retirement under a retirement plan of
Fortune or a subsidiary (provided that you have remained in the employ of
Fortune or of one its subsidiaries for one year from the date of grant), the
option shall become immediately exercisable in full and shall continue to be
exercisable in full until its expiration date.
          6. Termination of Employment. If your employment by Fortune or a
subsidiary terminates other than in the circumstances referred to in paragraphs
4 and 5, any portion of the option that is not yet exercisable shall not
thereafter become exercisable and any portion of the option that is exercisable
shall terminate and cease to be exercisable three months from the date of your
termination from employment, except as otherwise provided in paragraph 10;
provided that in no event shall the option be exercisable after the expiration
of ten years from the date of grant. For the purpose of the Agreement, your
employment by a subsidiary of Fortune shall be considered terminated on the date
that your employer is no longer a subsidiary (as defined in the Plan) of
Fortune.
          7. Stock Exchange Listing. Fortune is not obligated to deliver any
shares until they have been listed on each stock exchange on which Fortune’s
common stock is listed and until Fortune is satisfied that all applicable laws
and regulations have been met. Fortune agrees to use its best efforts to list
the shares and meet all legal requirements so that the shares can be delivered.
No fractional shares will be delivered.
          8. Transfer of Employment; Leave of Absence. For the purposes of your
option, (a) if you transfer between Fortune and a subsidiary or from one
subsidiary to another subsidiary, without an intervening period, it will not be
considered a termination of employment and (b) any leave of absence granted in
writing will not constitute an interruption in your employment.
          9. Adjustments.
          (a) In the event of any merger, consolidation, stock or other non-cash
dividend, extraordinary cash dividend, split-up, spin-off, combination or
exchange of shares, reorganization or recapitalization or change in
capitalization, or any other similar

2

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

 

corporate event, the number and kind of shares that are subject to the option
and the option price per share immediately prior to such event may be
proportionately and appropriately adjusted, without increase or decrease in the
aggregate option price.
          (b) The determination of the committee of the Board of Directors of
Fortune administering the Plan (the Committee) as to the terms of any adjustment
is binding and conclusive upon you and any other person who is entitled to
exercise the option.
          10. Change in Control of Fortune.
          (a) In the event of a Change in Control (as defined in the attached
Plan), your option, if it is not then immediately exercisable in full and
provided that it has not expired, shall become immediately exercisable in full
and shall remain exercisable in full. In addition, under certain circumstances
as described in Section 12(b) of the attached Plan, you may have the right to
receive cash instead of exercising your option. This right, called a Limited
Right, may be automatically exercised under certain circumstances described in
the attached Plan. You will be informed of any Change in Control.
          (b) Notwithstanding paragraphs 2(b), 4, 5 and 6, the provisions of
this paragraph 10(b) will be applicable in the event of a termination of your
employment during the 60-day period following a Change in Control. Your option
shall not terminate or cease to be exercisable as a result of the termination of
your employment during this period, but shall be exercisable in full throughout
it; provided, however, that in no event shall your option be exercisable after
ten years from its date of grant. However, in the event that on the date of
termination you have not held your option for more than six (6) months, the
preceding sentence shall apply only if your employment has been terminated other
than for just cause (as defined below) or you have voluntarily terminated your
employment for certain reasons: (i) because you in good faith believe that as a
result of the Change in Control you are unable effectively to discharge your
duties or the duties of the position you occupied immediately prior to the
Change in Control, or (ii) because of a reduction in your aggregate compensation
or in your aggregate benefits below that in effect immediately prior to the
Change in Control. For purposes of this paragraph, termination shall be for
“just cause” only if it is based on fraud, misappropriation or embezzlement on
your part which results in a final conviction of a felony. Nothing in this
paragraph 10(b) limits any rights otherwise provided in the event of your death,
disability or retirement under a retirement plan of Fortune or its subsidiary,
or your right to exercise your option following a termination of employment as
provided in paragraph 6.

3

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

 

          11. Stockholder Rights. Neither you nor any other person shall have
any rights of a stockholder as to shares under the option until, after proper
exercise of the option, such shares shall have been recorded on Fortune’s
official stockholder records as having been issued or transferred.
          12. Notice of Exercise. Subject to these terms and conditions, the
option may be exercised, by a written notice of exercise on a form approved by
the Committee that (i) is signed by the person or persons exercising the option,
(ii) is delivered to the Stock Plans Administrator of Fortune, 300 Tower
Parkway, Lincolnshire, Illinois (or to such other person and place as Fortune
may specify in writing), (iii) signifies election to exercise the option as
indicated in the notice of exercise, (iv) states the number of shares as to
which the option is being exercised, and (v) unless otherwise provided in the
notice of exercise, is accompanied by payment in full of the option price of
such shares. The notice of exercise may be delivered by facsimile transmission.
Any notice of exercise delivered as required by this paragraph will be effective
only in accordance with the provisions of and to the extent set forth in the
notice of exercise. If a properly executed notice of exercise is not delivered
to the Stock Plans Administrator (or other person designated by Fortune), by the
applicable expiration date specified in paragraphs 4, 5, 6 and 10, the notice
will be deemed null and void and of no effect. If notice of exercise of the
option is given by a person other than you, Fortune may require as a condition
to exercising the option that appropriate proof of the right of such person to
exercise the option be submitted to Fortune. Certificates for any shares
purchased upon exercise will be issued and delivered as soon as practicable.
          13. Exercise of Limited Right. In the event a Limited Right referred
to in paragraph 10 becomes exercisable, it shall be exercised in whole or in
part by giving written notice of such exercise, on a form approved by the
Committee, to the Stock Plans Administrator (or other person designated by
Fortune). No written notice is required if the Limited Right is automatically
exercised as provided in Section 12(b) of the attached Plan. The exercise will
be effective as of the date specified in the notice of exercise, but not earlier
than the date the notice is actually received by the Stock Plans Administrator.
The notice must be actually received by the Stock Plans Administrator by no
later than the close of business on the last day of the applicable Limited Right
Exercise Period, as defined in the attached Plan (or the date the related option
expires, whichever is earlier).
          14. Payment of Option Price. You may pay the option price for shares
(i) in cash, (ii) by the delivery of shares of Fortune Common Stock that have
been held by you for at least one year and that have a total market value equal
to the option price, or (iii) by a combination of cash and such shares that have
been held by you for a period of at least one year and that have a total market
value which, together with such cash, equals the option price. The “market
value” of shares or per share of Fortune Common Stock as of any date means the
value determined by reference to the closing price of a share of

4

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

 

Fortune Common Stock as finally reported on the New York Stock Exchange for the
trading day next preceding such date. You may also pay the option price from the
proceeds of the sale of shares covered by the option, called a cashless
exercise, to the extent provided in the notice of exercise referred to in
paragraph 12.
          15. Tax Withholding. You agree to notify the Stock Plans Administrator
in the event the shares acquired by you upon exercise of any portion of your
option are sold or otherwise disposed of within one year from the date of
exercise. If and to the extent Federal income tax withholding (and state and
local income tax withholding, if applicable) may be required by the Company in
respect of taxes on income realized by you upon or after exercise of any portion
of the option, or upon disposition of the shares acquired thereby, the Company
may withhold such required amounts from your future paychecks or may require
that you deliver to the Company the amounts to be withheld. In addition, you may
pay the minimum required Federal income tax withholding (and state and local
income tax withholding, if applicable) by electing either to have the Company
withhold a portion of the shares of Common Stock otherwise issuable upon
exercise of the option, or to deliver other shares of Common Stock owned by you,
in either case having a fair market value (on the date that the withholding
amount is to be determined) of the minimum amount required to be withheld,
provided that the election shall be irrevocable and shall be subject to such
rules as the Committee may adopt. You may also arrange to have any tax (or
taxes) paid directly to the Company on your behalf from the proceeds of the sale
of Common Stock to the extent provided in the notice of exercise referred to in
paragraph 12.

5

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

 

     
 
  INCENTIVE
 
  STOCK OPTION AGREEMENT

September 29, 2003

         
Company: [
  ]   Date(s) First Exercisable:
Date of Grant: [
  ]     [     ] — September 29, 2004
No. of Shares: [
  ]     [     ] — September 29, 2005
Option Price per Share: [
  ]     [     ] — September 29, 2006

PERSONAL AND CONFIDENTIAL
[Name]
[Address]
Dear [      ]:
We are pleased to inform you that as a key employee of the company referred to
above you have been granted an Incentive Stock Option by the Compensation and
Stock Option Committee of the Board of Directors under the Fortune Brands, Inc.
1999 Long-Term Incentive Plan, as amended (the “Plan”).
By your signature, you agree that these options are granted under and governed
by the Plan and the September 2003 Incentive Stock Option Terms and Conditions
(the “Terms”), and acknowledge receipt of: (1) the Terms, (2) the Plan, (3) the
Plan Prospectus, (4) the April 29, 2003 Supplement to the Plan Prospectus and
(5) Notice of Exercise of Stock Option and Notice of Exercise of Limited Right
forms.
As set forth in paragraph 1 of the Terms, a signed copy of this agreement must
be received by the Stock Plans Administrator at Fortune Brands, Inc., 300 Tower
Parkway, Lincolnshire, IL 60069 before 5:00 p.m. on the 60th day after the grant
date. Failure to do so will terminate this option.
Sincerely yours,
FORTUNE BRANDS, INC.

     
 
   
Senior Vice President — Strategy
  Signature of Employee
and Corporate Development
   
 
   
 
   
 
  Date

 

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

 

SEPTEMBER 2003
INCENTIVE STOCK OPTION
TERMS AND CONDITIONS
As a participant in the 1999 Long-Term Incentive Plan (the Plan), you will be
able to purchase shares of Common Stock of Fortune Brands, Inc. (Fortune)
provided that you accept your award as set forth in paragraph 1 below. Subject
to the terms and conditions below, the minimum amount, which may be purchased at
any one time, is 50 shares unless you have fewer remaining shares covered by
your option.
The date of the grant, the maximum number of shares the option entitles you to
purchase, the option price per share and the date or dates on which the option
will ordinarily be first exercisable are listed at the top of the agreement. The
option is intended (but not guaranteed) to be an incentive stock option within
the meaning of Section 422 of the Internal Revenue Code.
          1. Acceptance of Option. The option cannot be exercised unless you
sign the agreement and return it so that it is received by the Stock Plans
Administrator of Fortune, 300 Tower Parkway, Lincolnshire, Illinois (or to such
other person and place as Fortune may specify in writing), before 5:00 p.m.
Illinois time on the 60th day after the date of grant. If the Stock Plans
Administrator does not receive the signed agreement by this time, then the
option will terminate immediately. Your signing and delivering a copy of the
agreement to which these Terms and Conditions are attached will not commit you
to purchase any of the shares under the option but will indicate your acceptance
of the option upon these terms and conditions.
          2. Exercise.
          (a) Except as provided in this paragraph 2 and paragraphs 4, 5, 6 and
10, the option shall be exercisable during the period beginning on the date or
dates set forth under the heading “Date(s) First Exercisable” in the agreement
and ending ten years from the date of grant (its expiration date). During this
period, the option is exercisable in whole or in part from time to time in
amounts of not less than 50 shares (except that if you have fewer than 50 shares
remaining covered by the option, the option may be exercised for the full number
of remaining shares).
          (b) The option shall not become exercisable unless you remain employed
by Fortune or one of its subsidiaries for one year from the date of grant,
except in the event of your death and except as provided in paragraph 10.

 

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

 

          3. Transferability of Option. The option shall not be transferable by
you except in the event of your death. During your lifetime the option shall be
exercisable only by you.
          4. Death. If your employment by Fortune or an entity in which Fortune
has an equity interest terminates by reason of your death, the option may
immediately be exercised in full and shall continue to be exercisable in full
until its expiration date.
          5. Retirement. If your employment by Fortune or an entity in which
Fortune has an equity interest terminates by reason of disability or retirement
under a retirement plan of Fortune or an entity in which it has an equity
interest (provided that you have remained in the employ of Fortune or of an
entity in which Fortune has an equity interest for one year from the date of
grant), the option shall become immediately exercisable in full and shall
continue to be exercisable in full until its expiration date.
          6. Termination of Employment. If your employment by Fortune or a
entity in which Fortune has an equity interest terminates other than in the
circumstances referred to in paragraphs 4 and 5, any portion of the option that
is not yet exercisable shall not thereafter become exercisable and any portion
of the option that is exercisable shall terminate and cease to be exercisable
three months from the date of your termination from employment, except as
otherwise provided in paragraph 10; provided that in no event shall the option
be exercisable after the expiration of ten years from the date of grant. For the
purpose of the Agreement, your employment by an entity in which Fortune has an
equity interest shall be considered terminated on the date on Fortune sells or
otherwise divests its equity interest in your employer.
          7. Stock Exchange Listing. Fortune is not obligated to deliver any
shares until they have been listed on each stock exchange on which Fortune’s
common stock is listed and until Fortune is satisfied that all applicable laws
and regulations have been met. Fortune agrees to use its best efforts to list
the shares and meet all legal requirements so that the shares can be delivered.
No fractional shares will be delivered.
          8. Transfer of Employment; Leave of Absence. For the purposes of your
option, (a) if you transfer between Fortune and an entity in which Fortune has
an equity interest or from one entity in which Fortune has an equity interest to
another entity in which Fortune has an equity interest, without an intervening
period, it will not be considered a termination of employment, and (b) any leave
of absence granted in writing will not constitute an interruption in your
employment.

2

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

 

          9. Adjustments.
          (a) In the event of any merger, consolidation, stock or other non-cash
dividend, extraordinary cash dividend, split-up, spin-off, combination or
exchange of shares, reorganization or recapitalization or change in
capitalization, or any other similar corporate event, the number and kind of
shares that are subject to the option and the option price per share immediately
prior to such event may be proportionately and appropriately adjusted, without
increase or decrease in the aggregate option price.
          (b) The determination of the committee of the Board of Directors of
Fortune administering the Plan (the Committee) as to the terms of any adjustment
is binding and conclusive upon you and any other person who is entitled to
exercise the option.
          10. Change in Control of Fortune.
          (a) In the event of a Change in Control (as defined in the attached
Plan), your option, if it is not then immediately exercisable in full and
provided that it has not expired, shall become immediately exercisable in full
and shall remain exercisable in full. In addition, under certain circumstances
as described in Section 12(b) of the attached Plan, you may have the right to
receive cash instead of exercising your option. This right, called a Limited
Right, may be automatically exercised under certain circumstances described in
the attached Plan. You will be informed of any Change in Control.
          (b) Notwithstanding paragraphs 2(b), 4, 5 and 6, the provisions of
this paragraph 10(b) will be applicable in the event of a termination of your
employment during the 60-day period following a Change in Control. Your option
shall not terminate or cease to be exercisable as a result of the termination of
your employment during this period, but shall be exercisable in full throughout
it; provided, however, that in no event shall your option be exercisable after
ten years from its date of grant. However, in the event that on the date of
termination you have not held your option for more than six (6) months, the
preceding sentence shall apply only if your employment has been terminated other
than for just cause (as defined below) or you have voluntarily terminated your
employment for certain reasons: (i) because you in good faith believe that as a
result of the Change in Control you are unable effectively to discharge your
duties or the duties of the position you occupied immediately prior to the
Change in Control, or (ii) because of a reduction in your aggregate compensation
or in your aggregate benefits below that in effect immediately prior to the
Change in Control. For purposes of this paragraph, termination shall be for
“just cause” only if it is based on fraud, misappropriation or embezzlement on
your part which results in a final conviction of a felony. Nothing in this
paragraph 10(b) limits any rights otherwise provided in the event of your death,
disability or retirement under a retirement plan of Fortune or an entity in

3

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

 

which Fortune has an equity interest, or your right to exercise your option
following a termination of employment as provided in paragraph 6.
          11. Stockholder Rights. Neither you nor any other person shall have
any rights of a stockholder as to shares under the option until, after proper
exercise of the option, such shares shall have been recorded on Fortune’s
official stockholder records as having been issued or transferred.
          12. Notice of Exercise. Subject to these terms and conditions, the
option may be exercised, by a written notice of exercise on a form approved by
the Committee that (i) is signed by the person or persons exercising the option,
(ii) is delivered to the Stock Plans Administrator of Fortune, 300 Tower
Parkway, Lincolnshire, Illinois (or to such other person and place as Fortune
may specify in writing), (iii) signifies election to exercise the option as
indicated in the notice of exercise, (iv) states the number of shares as to
which the option is being exercised, and (v) unless otherwise provided in the
notice of exercise, is accompanied by payment in full of the option price of
such shares. The notice of exercise may be delivered by facsimile transmission.
Any notice of exercise delivered as required by this paragraph will be effective
only in accordance with the provisions of and to the extent set forth in the
notice of exercise. If a properly executed notice of exercise is not delivered
to the Stock Plans Administrator (or other person designated by Fortune), by the
applicable expiration date specified in paragraphs 4, 5, 6 and 10, the notice
will be deemed null and void and of no effect. If notice of exercise of the
option is given by a person other than you, Fortune may require as a condition
to exercising the option that appropriate proof of the right of such person to
exercise the option be submitted to Fortune. Certificates for any shares
purchased upon exercise will be issued and delivered as soon as practicable.
          13. Exercise of Limited Right. In the event a Limited Right referred
to in paragraph 10 becomes exercisable, it shall be exercised in whole or in
part by giving written notice of such exercise, on a form approved by the
Committee, to the Stock Plans Administrator (or other person designated by
Fortune). No written notice is required if the Limited Right is automatically
exercised as provided in Section 12(b) of the attached Plan. The exercise will
be effective as of the date specified in the notice of exercise, but not earlier
than the date the notice is actually received by the Stock Plans Administrator.
The notice must be actually received by the Stock Plans Administrator by no
later than the close of business on the last day of the applicable Limited Right
Exercise Period, as defined in the attached Plan (or the date the related option
expires, whichever is earlier).
          14. Payment of Option Price. You may pay the option price for shares
(i) in cash, (ii) by the delivery of shares of Fortune Common Stock that have
been held by you for at least one year and that have a total market value equal
to the option price, or (iii) by a combination of cash and such shares that have
been held by you for a period of

4

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

 

at least one year and that have a total market value which, together with such
cash, equals the option price. The “market value” of shares or per share of
Fortune Common Stock as of any date means the value determined by reference to
the closing price of a share of Fortune Common Stock as finally reported on the
New York Stock Exchange for the trading day next preceding such date. You may
also pay the option price from the proceeds of the sale of shares covered by the
option, called a cashless exercise, to the extent provided in the notice of
exercise referred to in paragraph 12.
          15. Tax Withholding. You agree to notify the Stock Plans Administrator
in the event the shares acquired by you upon exercise of any portion of your
option are sold or otherwise disposed of within one year from the date of
exercise. If and to the extent Federal income tax withholding (and state and
local income tax withholding, if applicable) may be required by the Company in
respect of taxes on income realized by you upon or after exercise of any portion
of the option, or upon disposition of the shares acquired thereby, the Company
may withhold such required amounts from your future paychecks or may require
that you deliver to the Company the amounts to be withheld. In addition, you may
pay the minimum required Federal income tax withholding (and state and local
income tax withholding, if applicable) by electing either to have the Company
withhold a portion of the shares of Common Stock otherwise issuable upon
exercise of the option, or to deliver other shares of Common Stock owned by you,
in either case having a fair market value (on the date that the withholding
amount is to be determined) of the minimum amount required to be withheld,
provided that the election shall be irrevocable and shall be subject to such
rules as the Committee may adopt. You may also arrange to have any tax (or
taxes) paid directly to the Company on your behalf from the proceeds of the sale
of Common Stock to the extent provided in the notice of exercise referred to in
paragraph 12.

5