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Exhibit 10.61  


 
 

INCENTIVE STOCK OPTION
  TERMS AND CONDITIONS    
    


DATE
OF GRANT: SEPTEMBER 26, 2006 


As
a participant in the 2003 Long-Term Incentive Plan (the Plan), you will be able to purchase shares of Common Stock of Fortune Brands, Inc. (Fortune). 


The
date of 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 first be exercisable are
identified in the electronic, on-line grant acceptance process administered by the Plan's third party administrator (the Stock Plans Administrator). 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.    Exercise.



        (a)    Except
as provided in this paragraph 1 and paragraphs 3, 4, 5 and 9, the option shall be exercisable exercisable in three annual installments with
one-third of the shares covered by the grant becoming first exercisable on the first anniversary of the date of grant and an additional one-third becoming first exercisable on
each of the second and third anniversaries, respectively, and ending seven 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. 


        (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 9. 


        2.    Transferability
of Option.    The option shall not be transferable by you other than in the event of your death, except that it may
be transferred pursuant to an approved domestic relations order. During your lifetime the option shall be exercisable only by you unless it has been transferred pursuant to an approved domestic
relations order, in which case it may be exercisable only by the transferee. With respect to any transfer pursuant to a domestic relations order, such order must be approved in writing by the
committee of the Board of Directors of Fortune administering the Plan (the Committee), or the Secretary of the Committee. 


        3.    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 for three years after death or until its expiration date, whichever is earlier, provided that the option
may be exercised within one year from the date of your death even if this one-year period extends beyond the expiration date. 


        4.    Retirement;
Disability.    If your employment by Fortune or an entity in which Fortune has an equity interest terminates by reason
of disability or Retirement (as defined below), provided that you have remained in the employ of Fortune or 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 for three years after your employment terminates or until its expiration date, whichever is
earlier. For purposes of this paragraph, Retirement means either (a) termination of employment on or after attaining age 55 and completion of at least five years of service with Fortune or an
entity in which Fortune has an equity interest, provided that Retirement shall not include termination of employment by reason of failure to maintain work performance standards, violation of company
policies or dishonesty or other misconduct prejudicial to the company, or (b) retirement under Section 3(b) of the Fortune Brands, Inc. Supplemental Plan. 


        5.    Termination
of Employment.    If your employment by Fortune or an entity in which Fortune has an equity interest terminates other
than in the circumstances referred to in paragraphs 3 and 4, 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 9; provided that in no
event shall the option be exercisable after the expiration of seven years from the date of grant. For the purpose of these terms and conditions, your employment by an entity in which Fortune has an
equity interest shall be considered terminated on the date on which Fortune sells or otherwise divests its equity interest in your employer. 







 



        6.    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. 


        7.    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. 


        8.    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 as to the terms of any adjustment is binding and conclusive upon you and any other person who is entitled to exercise
the option. 


        9.    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 1(b), 3, 4 and 5, the provisions of this paragraph 9(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 seven years from its date of grant (except in the event of death as
provided in paragraph 3 above). 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 9(b) limits any rights otherwise provided in the event of your death, disability or Retirement (as defined in paragraph 4 above), or your right to exercise your
option following a termination of employment as provided in paragraph 5. 


        10.    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. 



        11.    Notice
of Exercise.    Subject to these terms and conditions, the option may be exercised either electronically through the
on-line process administered by the Stock Plans Administrator or by telephone via a Stock Plans Administrator customer service representative or an automated telephone system. When
providing notice of exercise, you must indicate the number of shares as to which the option is being exercised. If notice of exercise is not given to the Stock Plans Administrator (or other
person or entity designated by Fortune), by the applicable expiration date specified in paragraphs 3, 4, 5 and 9, the notice will be deemed null and void and of 


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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. 


        12.    Exercise
of Limited Right.    In the event a Limited Right referred to in paragraph 9 becomes exercisable, it shall be
exercised in whole or in part by giving notice of such exercise, in the manner described in paragraph 11, to the Stock Plans Administrator (or other person or entity 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 of
exercise, but not earlier than the date notice is actually provided to the Stock Plans Administrator in the manner described in paragraph 11. 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). 


        13.    Payment
of Option Price.    Except for a "cashless exercise" described below, payment in full of the option price must be received
by the Stock Plans Administrator by the date of exercise. 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 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 permitted under the "cashless exercise" process approved by
the Committee. 


        14.    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 11. 


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INCENTIVE STOCK OPTION TERMS AND CONDITIONS