Document:

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                                                                    EXHIBIT 10a1

                              SEVERANCE AGREEMENT

          AGREEMENT dated as of January 1, 2000 between FORTUNE BRANDS, INC., a
Delaware corporation (the "Company"), and THOMAS J. FLOCCO (the "Executive"),

                             W I T N E S S E T H :
                             -------------------

          WHEREAS, the Company has offered full-time employment to the Executive
with the assurance that the Executive will receive certain severance benefits in
the event the Company were to take certain actions resulting in the termination
of his employment; and

          WHEREAS, the Company has induced the Executive to join its full-time
employ by providing him with the assurance of receiving certain severance
benefits; 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 do hereby agree as follows:

          1. Termination of Employment.
             -------------------------

             (a)   Entitlement to Benefits.   If and only if during the term of
                   -----------------------
     this Agreement the Executive's employment with the Company is terminated by
     the
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     Company other than for Disability or Cause or by the Executive for Good
     Reason (each as defined in this Section l), the Executive shall be entitled
     to benefits as provided in Section 2. The Executive shall not be entitled
     to any benefits hereunder 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)  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.

          (c)  Cause.  Termination of employment by the Company for Cause shall
               -----
be deemed to have occurred only if (i) termination shall have been the result of
(A) an act or acts of dishonesty on the Executive's part constituting a felony
and intended to result directly or indirectly in substantial gain or personal
enrichment to him at the expense of the Company, or (B) the Executive's willful
and continued failure substantially to perform his duties and responsibilities
as an officer of the Company (other than

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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 three-quarters of the members of the Board of
Directors of the Company at a meeting thereof 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 the Executive was guilty of
conduct set forth above in clause (i)(A) or (i)(B) of this Section 1(c) 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 (l) as a result of bad judgment or negligence on his part, or
(2) without intent of gaining therefrom directly or indirectly a profit to which
the Executive was not legally entitled or (3) as a result of his good faith
belief that such act or failure to

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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.

          (d)  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 shall
indicate the specific termination provision in this Agreement relied upon and
shall set 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.

          (e)  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

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on which a Notice of Termination is given, (iii) if employment is terminated by
the Executive 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 as an officer of the Company; provided,
however, that, if within 30 days after any Notice of Termination is given the
party receiving the Notice of Termination notifies the other party that a
dispute exists concerning the termination, the Termination Date shall be the
date on which the dispute is finally determined, either by written agreement of
the parties or by a final judgment, order or decree of court of competent
jurisdiction (the time for appeal therefrom 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 not be so extended but shall be
the date determined under clauses (i) through (iv) of this Section 1(e).

          (f)  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 the Executive's express written consent, any material
     reduction in the aggregate duties, responsibilities and authority assigned
     to him

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     as of the date hereof, or the assignment to him of any duties,
     responsibilities or authority inconsistent with the duties,
     responsibilities and authority assigned to him as of the date hereof,
     except in connection with the termination of his employment as a result of
     his death or by the Company for Disability or Cause or by the Executive
     other than for Good Reason;

          (ii)  a reduction by the Company in the Executive's base salary as in
     effect on January 1, 2000 plus all increases therein subsequent thereto;

          (iii) the failure of the Company substantially to maintain and to
     continue the Executive's participation in the Company's benefit plans as in
     effect on January 1, 2000 and with all improvements therein subsequent
     thereto (other than those plans or improvements that have expired
     thereafter in accordance with their original terms), or the taking of any
     action which would materially reduce the Executive's benefits under any of
     such plans or deprive the Executive of any material fringe benefit enjoyed
     by him on January 1, 2000 or subsequently.  For the purposes hereof such
     benefit plans shall include, but not be limited to, the Incentive
     Compensation Plans, the Pension Plans, the Defined Contribution Plan and
     the Company's Long-Term Incentive Plan;

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          (iv)  the sum of the Executive's base salary and the amount paid to
     the Executive as incentive compensation under the Incentive Compensation
     Plans for any calendar year during the term hereof is less than 90% of the
     sum of the Executive's base salary and the amount paid to the Executive
     under the Incentive Compensation Plans for 2000 (deemed to be $175,000 for
     2000) or any subsequent year during the term hereof for which the sum of
     such amounts was greater; provided, however, that this paragraph shall not
     be applicable if the cause of the reduction of the sum of the Executive's
     base salary and incentive compensation is a failure of the Company to meet
     performance goals under the Incentive Compensation Plans;

           (v)  the failure of the Company to provide the Executive during each
     calendar year with a number of paid vacation days at least equal to the
     number of paid vacation days to which he was entitled at the date hereof
     plus any increases therein subsequent thereto;

          (vi)  any purported termination of the Executive's employment by the
     Company which is not effected pursuant to a Notice of Termination, and for
     purposes of this Agreement, no such purported termination shall be
     effective; or

          (vii) any failure of the Company to comply with and satisfy Section 7;
     provided, however, that

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     termination of employment by the Executive under clauses (iii) and (iv)
     above shall not be deemed to have occurred for Good Reason if the reason
     for the compensation reduction or failure of benefit plan coverage
     thereunder is due to a change in the individual elements of aggregate
     compensation, which change is applicable to officers of the Company
     generally, without a material reduction in aggregate compensation.

          2. Compensation Upon Termination.
             -----------------------------

          (a)  If the Executive's employment is terminated by the Company for
Disability or Cause or by the Executive other than for Good Reason, the Company
shall have no obligation to pay any compensation to the Executive under this
Agreement in respect of periods beginning on or 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 shall terminate the Executive's employment other
than for Disability or Cause or the Executive terminates his employment for Good
Reason, and the Executive executes a release and waiver of claims in the form
proposed by the Company, then the Company shall pay to

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the Executive as severance pay following the Termination Date the following
amounts:

            (i)   his full base salary which is unpaid through the Termination
     Date at the rate in effect on the date hereof plus any increases therein
     subsequent thereto;

            (ii)  an amount equal to the Executive's base salary shall continue
     to be paid at the rate in effect on the date hereof plus any increases
     therein subsequent thereto until the second anniversary of the Termination
     Date or, if the Executive's Normal Retirement Date (as defined in the
     Retirement Plan for Employees and Former Employees of Fortune Brands, Inc.
     (the "Retirement Plan")) occurs prior to the second anniversary of the
     Termination Date, then payment shall be made until the Executive's Normal
     Retirement Date, such payments to be made at the Company's regular payroll
     dates; and

            (iii) in lieu of any further incentive compensation awards, the
     greater of $175,000 and the amount awarded to the Executive under the
     Annual Executive Incentive Compensation Plan of the Company and any other
     plans or any arrangements of the Company and its affiliates providing for
     annual (but not long-term) incentive bonus payments (the "Incentive
     Compensation Plans") for the calendar year immediately preceding the year
     in which the Termination Date occurs (whether or not fully

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     paid) multiplied by the lesser of the number two and the number of years
     (and fraction thereof) from the Termination Date to the Executive's Normal
     Retirement Date, payable in two equal installments at the time awards are
     normally paid under the Annual Executive Incentive Compensation Plan; and

          (iv) in lieu of any further defined contribution plan allocations, 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 (the "Defined
     Contribution Plan"), including the Company 401(k) matching contribution
     thereto, and the profit-sharing provisions of the Supplemental Plan of
     Fortune Brands, Inc. (the "Supplemental Plan"), including the Company
     matching award related to the supplemental tax deferred amounts therein
     (but not less than $30,000) multiplied by the lesser of the number two and
     the number of years (and fraction thereof) from the Termination Date to the
     Executive's Normal Retirement Date, payable in two equal installments on
     the first two April 15ths following the Termination Date.

           (c)  If the Company shall terminate the Executive's employment other
than for Disability or Cause or

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the Executive terminates his employment for Good Reason, and the Executive
executes a release and waiver of claims in the form proposed by the Company, the
Company shall maintain in full force and effect, for the Executive's continued
benefit for a two-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 on the date hereof plus all
improvements therein subsequent thereto, 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, the Company shall arrange to provide him
with benefits 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 two-year period (or, if shorter, such additional
period until his Normal Retirement Date) after the Termination Date.

          (d)  If the Company shall terminate the Executive's employment other
than for Disability or Cause or the Executive terminates his employment for Good
Reason, and the Executive executes a release and waiver of claims in the form
proposed by the Company, then in addition to the

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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 (without regard to any amendment made
     subsequent to the date hereof which adversely affects in any manner the
     computation of the Executive's benefits) determined as if he were fully
     vested thereunder and had accumulated two additional years (or, if less,
     the number of years (and fraction thereof) from the Termination Date to the
     Executive's Normal Retirement Date) of Service thereunder (subsequent to
     his Termination Date) at his

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     rate of Actual Earnings in effect on the date hereof plus any increases
     subsequent thereto,

and where

             (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 hereof or subsequently.

For purposes of clause (i), the amounts payable pursuant to Sections 2(b)(ii)
and (iii) shall be considered as part of the Executive's Actual Earnings and
such amounts shall be deemed to represent two years (or, if less, the number of
years (and fraction thereof) from the Termination Date to the Executive's Normal
Retirement Date) of Actual Earnings for purposes of determining his highest
consecutive five year average rate of Actual Earnings. 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 hereunder which commence prior to age 60

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shall be reduced to reflect early commencement to the extent, if any, provided
in the Retirement Plan. All capitalized terms used in this Section 2(d) shall
have the same meaning as in the Retirement Plan as in effect on the date hereof,
unless otherwise defined herein or otherwise required by the context.

          (e)  If the Company shall terminate the Executive's employment other
than for Disability or Cause or the Executive terminates his employment for Good
Reason, and the Executive executes a release and waiver of claims in the form
proposed by the Company, the Company shall pay to the Executive as additional
severance pay in a lump sum on the fifth day following the Termination Date an
amount, if any, equal to the nonvested portion of his account balances under the
Defined Contribution 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 shall terminate 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 Incentive Compensation Plans for the calendar year
     immediately

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     preceding the year in which the Termination Date occurs, payable at the
     time awards thereunder are normally paid; and

             (ii)  incentive compensation under the Incentive Compensation Plans
     for the calendar year in which the Termination Date occurs, payable at the
     time awards thereunder are normally paid, in an amount equal to the amount
     the Executive would have received thereunder for such period if he had been
     awarded an amount for the year in which the Termination Date occurs equal
     to the amount awarded to him for the calendar year immediately preceding
     the year in which the Termination Date occurs (provided that such incentive
     compensation shall be $175,000 if the Termination Date occurs in 2000),
     with such incentive compensation amount prorated for the portion of the
     year through the Termination Date.

The payments under this Section 2(f)(ii) will be reduced by the amount actually
paid to the Executive under the Incentive Compensation Plans for the calendar
year in which the Termination Date occurs.

          (g)  If the Company shall terminate the Executive's employment other
than for Disability or Cause or the Executive terminates his employment for Good
Reason and a dispute exists concerning the termination as set forth in Section
1(e), the Company shall continue to pay the Executive's full base salary through
the date finally

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determined to be the Termination Date as provided in Section 1(e).

          (h)  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.

          (i)  Subject to Section 2(j), this Agreement and the obligations of
the Company hereunder 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.

          (j)  Notwithstanding any other provision of this Agreement, (a) any
amount otherwise payable to the Executive pursuant to the agreement dated as of
September 1, 2000 between the Company and the Executive providing compensation
after termination of employment following a change in control of the Company
shall be reduced by the amount of any payments made by the Company to the
Executive under this Section 2, and (b) any benefits to which the Executive is
entitled under any Company severance pay program covering salaried employees
shall be reduced by benefits paid under Section 2(b)(ii) and (iii) of this
Agreement.

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          Section 3.  Confidential Information.
                      ------------------------

          (a)  The Executive acknowledges that given his high level position
     with the Company, he has had and will have access to highly confidential
     information of the Company and its affiliates, including, but not limited
     to, financial information, supply and service information, marketing
     information, personnel data, customer lists, business and financial plans
     and strategies, and product costs, sources and pricing. The Company and the
     Executive consider their relation to be one of high confidence with respect
     to all such information ("Confidential Trade Secrets"). Accordingly, the
     Executive agrees that during and for a period of eighteen (18) months after
     the termination of his employment with the Company, regardless of the
     reasons that such employment might end, the Executive will:

               (i)    hold all Confidential Trade Secrets in confidence and not
     discuss, communicate, disclose or transmit to others, or make any
     unauthorized copy of or use the Confidential Trade Secrets in any capacity,
     position or business unrelated to the Company;

               (ii)   use the Confidential Trade Secrets only in furtherance of
     proper Company employment related business reasons; and

               (iii)  take all reasonable action that the Company deems
     necessary and appropriate to prevent

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     unauthorized use or disclosure of or to protect the Company's interests in
     the Confidential Trade Secrets.

          (b)  It is understood and agreed that the Executive's obligations
under Section 3(a) do not extend to any knowledge or information which is or
hereafter may become available to the public or to competitors otherwise than by
disclosure by the Executive in breach of this Agreement nor to disclosure
compelled by judicial or administrative proceedings after the Executive
diligently tries to avoid each disclosure and affords the Company the
opportunity to obtain assurance that compelled disclosures will receive
confidential treatment.

          Section 4.  Loyalty.  The Executive further acknowledges that the
                      -------
loyalty and dedicated service of the Company's and its affiliates' employees is
critical to the Company's business. Accordingly, the Executive agrees that
during and after his employment by the Company, regardless of the reasons the
employment might end, he will not, without the prior written consent of the
Company, induce or attempt to induce any employee or agency representative of
the Company or any of its affiliates to leave the employment or representation
of the Company or of any affiliate. The Executive also agrees that during and
after his employment, he will not take any action, or make any statements, that
could discredit or disparage the Company or its affiliates, or its or their
officers, directors, employees or products.

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          Section 5.  Non-Competition.
                      ---------------

          (a)  The Executive acknowledges that the Company and its affiliates
have invested time and money in establishing or planning to establish one or
more aspects of its business throughout the United States, Canada, Mexico and
Europe. Therefore, the Executive agrees that during his employment by the
Company and for a period of eighteen (18) months after the termination of his
employment, the Executive will not, directly or indirectly, individually engage
in nor be competitively employed or retained by, or render any competing
services for, or be financially interested in, any firm or corporation engaged
in any business in the United States, Canada, Mexico or Europe which is directly
competitive with any significant business in which the Company or any of its
affiliates was engaged during the two-year period preceding the date the
Executive's employment terminates, including, but not limited to, any
significant business in which, during such two-year period, the Executive was
involved in the Company's or any affiliate's planning to enter such business.

          (b)  The restriction in Section 5(a) shall not apply to

               (i)  the purchase by the Executive of stock not to exceed 5% of
     the outstanding shares of capital stock of any corporation whose securities
     are listed on any national securities exchange; or

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               (ii)   the employment of the Executive by a non-competitive
     subsidiary or non-competitive affiliated entity of a competitor of the
     Company or any affiliate upon written consent of the Company, which consent
     shall not unreasonably be withheld.

          (c)  The Executive also agrees that for a period of eighteen (18)
months after the termination of his employment with the Company he will not
solicit business from nor directly or indirectly cause others to solicit
business that competes with the Company's or any affiliate's line of products
from any entities which have been customers of the Company during the
Executive's employment or which were targeted as potential customers during
Executive's employment.

          Section 6.  Remedies.  The Executive recognizes and agrees:
                      --------

          (a)  that the covenants and restrictions in Sections 3, 4 and 5 of
this Agreement are reasonable and valid and all defenses to the strict
enforcement thereof by the Company are waived by the Executive to the full
extent permitted by law. In the event, however, that a court of competent
jurisdiction should determine in any case that the enforcement of any provision
contained in such paragraphs would not be reasonable, it is intended that
enforcement of a provision which is determined by such court to be reasonable
shall be given effect; and

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          (b)  that a breach of the covenants and restrictions in Sections 3, 4
and 5 of this Agreement would result in irreparable harm to the Company which
could not be compensated by money damages alone. Accordingly, the Executive
agrees that should there be a breach of any or all of these provisions or a
threatened breach, the Company shall be entitled to cease paying amounts under
Section 2 and to offset any amounts it owes to Executive against any damage that
it has suffered as a result of the breach of any of the covenants and
restrictions in Sections 3, 4 and 5 and, in addition to its other remedies, to
an order enjoining any such breach or threatened breach without bond. In
addition, the Executive agrees that, in the event he breaches any of the
covenants or restrictions in Sections 3, 4 or 5 of this Agreement, he will
promptly repay to the Company upon demand of the Company any amounts paid to him
pursuant to Section 2. The Executive further agrees that he will reimburse the
Company for its attorney fees and costs incurred in pursuing any action to
enforce these provisions.

          7. 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

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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
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.

          8.  Term.  This Agreement shall continue in full force and effect
              ----
until the third anniversary of the date that notice of termination of this
Agreement is given by the Company to the Executive or by the Executive to the
Company.

          9.  Notice.  Any notice, demand or other communication required or
              ------
permitted under this Agreement shall be effective only if it is in writing and
delivered

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personally or sent by registered or certified mail, return receipt requested,
postage prepaid, addressed as follows:

          If to the Company:

               Fortune Brands, Inc.
               300 Tower Parkway
               Lincolnshire, Illinois  60069
               Attention:  Secretary

          If to the Executive:

               Thomas J. Flocco
               256 Sheridan Road
               Winnetka, Illinois  60093

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.

          10.  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 hereto at any time of any breach by the other
party hereto of, 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

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of reference only and shall not in any way affect the meaning or interpretation
of this Agreement.

          11.  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.

          12.  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.

          13.  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.

         IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed by its duly authorized officer and

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the Executive has hereunto set his hand as of the date first above written.

                                  FORTUNE BRANDS, INC.

                                  By_____________________________
                                    Anne C. Linsdau
                                    Vice President-Human Resources
ATTEST:

_________________________
       Secretary

                                    _________________________
                                    Thomas J. Flocco

                                       25<PAGE>

                                                                    EXHIBIT 10b1

                      [Letterhead of Fortune Brands, Inc.]

                                                               September 1, 2000

Mr. Thomas J. Flocco
256 Sheridan Road
Winnetka, Illinois  60093

          Re:  Compensation Agreement
               ----------------------

Dear Mr. Flocco:

          This letter will evidence the agreement of Fortune Brands, Inc. (the
"Company") to make the payments and provide the benefits hereafter described in
the event of a termination of your employment following a change in control of
the Company. The Company considers the establishment and maintenance of a sound
and vital management to be essential to protecting and enhancing its best
interests and those of its stockholders. In this connection, 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. Accordingly, 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, including yourself, to their assigned duties without
distraction in the face of the potentially disruptive circumstances arising from
the possibility of a change in control.

          The Company must, of course, remain free to effect changes in
management and terminate employment. However, in order to induce you to join and
remain in the
<PAGE>

Mr. Thomas J. Flocco                                           September 1, 2000

employ of the Company, this letter agreement sets forth the severance benefits
which the Company agrees will be provided to you in the event your employment
with the Company is terminated subsequent to a Change in Control (as defined
below) under the circumstances described below. You shall also be entitled to
any Gross-Up Payment provided by the last section hereof with respect to the
exercise of stock options, performance awards, limited rights and other awards
under the Company's Long-Term Incentive Plan and any successor plans whether or
not your employment is terminated. 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 Act"), as in effect on February 28, 2000) 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 February
28, 2000) 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 February 28, 2000 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

                                       2
<PAGE>

Mr. Thomas J. Flocco                                           September 1, 2000

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 February 28,
2000)), 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.

          1.   Termination Following Change in Control.  If and only if a Change
               ---------------------------------------
in Control of the Company shall have occurred and if at the time of the Change
in Control you shall be an officer of the Company, you shall be entitled to the
benefits provided in Section 2 hereof upon the subsequent termination of your
employment after such Change in Control, unless such termination is as a result
of your death or by the Company for Disability or Cause or by you other than for
Good Reason, as set forth below.

          (a)  Disability.  Termination of employment by the Company for
               ----------
Disability hereunder shall be deemed to have occurred only if, as a result of
your incapacity due to physical or mental illness, you shall have been absent
from your duties with the Company on a full-time basis

                                       3
<PAGE>

Mr. Thomas J. Flocco                                           September 1, 2000

for 180 consecutive days and, within 30 days after Notice of Termination (as
hereinafter defined) is given to you by the Company, you shall not have returned
to the full-time performance of your duties.

          (b)  Cause.  Termination of employment by the Company for Cause shall
               -----
be deemed to have occurred only if (i) termination shall have been the result of
(A) an act or acts of dishonesty on your part constituting a felony and intended
to result directly or indirectly in substantial gain or personal enrichment to
you at the expense of the Company, or (B) your willful and continued failure
substantially to perform your duties as an officer of the Company as such duties
exist at the time of a Change in Control (other than any such failure resulting
from your incapacity due to physical or mental illness), after a demand for
substantial performance is delivered to you by the Board of Directors which
specifically identifies the manner in which the Board believes that you have not
substantially performed your duties and you are given a reasonable time after
such demand substantially to perform your duties, and (ii) there shall have been
delivered to you a copy of a resolution duly adopted by the affirmative vote of
not less than three-quarters of the entire membership of the Board of Directors
at a meeting of the Board called and held for the purpose (after reasonable
notice to you and an opportunity for you, together with your counsel, to be
heard before the Board), finding that in the good faith opinion of the Board you
were guilty of conduct set forth above in clause (i)(A) or (i)(B) of this
sentence and specifying the particulars thereof in detail. Your 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 (i) was done or
omitted to be done (A) as a result of bad judgment or negligence on your part,
or (B) without intent of gaining therefrom directly or indirectly a profit to
which you were not legally entitled or (C) as a result of your good faith belief
that such act or failure to act was not opposed to the interests of the Company,
or (ii) is an act or failure to act in respect of which you meet 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'

                                       4
<PAGE>

Mr. Thomas J. Flocco                                           September 1, 2000

liability insurance of the Company, in each case as in effect at the time of
such act or failure to act.

          (c)  Good Reason.  Termination of employment by you for Good Reason
               -----------
shall be deemed to have occurred only if you terminate your employment for any
of the following reasons:

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

          (ii)  a reduction by the Company in your base salary as in effect at
     the time of a Change in Control plus all increases therein subsequent
     thereto;

          (iii) the failure of the Company substantially to maintain and to
     continue your participation in the Company's benefit plans as in effect at
     the time of a Change in Control and with all improvements therein
     subsequent thereto (other than those plans or improvements that have
     expired thereafter in accordance with their original terms), or the taking
     of any action which would materially reduce your benefits under any of such
     plans or deprive you of any material fringe benefit enjoyed by you at the
     time of a Change in Control. For the purposes hereof 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(d)) (including the supplemental profit-sharing and supplemental
     tax deferred and related Company matching award provisions thereof),
     Retirement Savings Plan (as defined in Section 2(e)) (including the tax
     deferred and related Company

                                       5
<PAGE>

Mr. Thomas J. Flocco                                           September 1, 2000

     matching contributions thereof) and Long-Term Incentive Plan;

             (iv)   the target bonus awarded by the Compensation and Stock
     Option Committee of the Company to you under the Annual Executive Incentive
     Compensation Plan of the Company subsequent to a Change in Control is less
     than such amount last awarded to you prior to a Change in Control ($175,000
     if a Change in Control occurs prior to your first award under the Annual
     Executive Incentive Compensation Plan of the Company);

             (v)    the sum of your base salary and amount paid to you 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 your base salary and
     the amount awarded (whether or not fully paid) to you as incentive
     compensation under the Annual Executive Incentive Compensation Plan of the
     Company for the calendar year prior to the Change in Control or any
     subsequent calendar year in which the sum of such amounts was greater (your
     incentive compensation for this purpose shall be deemed to be $175,000
     prior to the first payment of incentive compensation to you under the
     Annual Executive Incentive Compensation Plan of the Company);

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

             (vii)  the failure of the Company to provide you with a number of
     paid vacation days at least equal to the number of paid vacation days to
     which you were entitled at the time of a Change in Control plus any
     increases therein subsequent thereto;

             (viii) any purported termination of your employment which is not
     effected pursuant to a

                                       6
<PAGE>

Mr. Thomas J. Flocco                                           September 1, 2000

     Notice of Termination satisfying the requirements of subsection (d) of this
     Section 1 (and, if applicable, subsection (b) of this Section 1), and for
     purposes of this Agreement, no such purported termination shall be
     effective; or

             (ix)  your good faith determination that due to a Change in Control
     you are not able effectively to discharge your duties.

             (d)   Notice of Termination. Any termination by the Company
                   ---------------------
pursuant to subsections (a) or (b) of this Section 1 or by you pursuant to
subsection (c) of this Section 1 shall be communicated by Notice of Termination
to the other party hereto. For purposes of this Agreement, a "Notice of
Termination" shall mean a notice in writing which shall indicate the specific
termination provision in this Agreement relied upon and shall set forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of your employment under the provision so indicated.

             (e)   Termination Date.  "Termination Date" shall mean (i) if
                   ----------------
employment is terminated because of your death, the date of your death, (ii) if
employment is terminated for Disability, 30 days after Notice of Termination is
given (provided that you shall not have returned to the performance of your
duties on a full-time basis during such 30-day period), (iii) if employment is
terminated for Good Reason, the date specified in the Notice of Termination, and
(iv) if employment is terminated for Cause or any other reason, the date on
which a Notice of Termination is given; 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 on which the dispute is
finally determined, either by written agreement of the parties or by a final
judgment, order or decree of court of competent jurisdiction (the time for
appeal therefrom 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 not be so extended but shall be the date determined under
clauses (i) through (iv) of this subsection 1(e).

                                       7
<PAGE>

Mr. Thomas J. Flocco                                           September 1, 2000

          2.  Compensation Upon Termination.
              -----------------------------

          (a)  If your employment is terminated as a result of your death or for
Disability or Cause subsequent to a Change in Control, the Company shall have no
obligation to pay any compensation to you under this Agreement, but this
Agreement shall have no effect on any other obligation the Company may have to
pay you compensation to which you may otherwise be entitled.

          (b)  If the Company shall terminate your employment other than for
Disability or Cause or if you shall terminate your employment for Good Reason
subsequent to a Change in Control, then the Company shall pay to you as
severance pay in a lump sum on the fifth day following the Termination Date the
following amounts:

          (i)  your full base salary and your accrued but unpaid vacation pay
     through the Termination Date at the rate in effect at the time of a Change
     in Control plus any increases therein subsequent thereto; and

          (ii) in lieu of any further salary payments, annual incentive
     compensation awards or defined contribution plan allocations to you for
     periods subsequent to the Termination Date, an amount equal to the product
     of (A) the sum of (1) your annual base salary at the rate in effect at the
     time of a Change in Control plus any increases therein subsequent thereto,
     plus (2) the greatest of $175,000, the amount that was paid to you under
     the Annual Executive Incentive Compensation Plan of the Company (as in
     effect at the time of a Change in Control) for the year immediately
     preceding the year in which the Change in Control occurs (but, for any such
     immediately preceding year as to which the award has not been determined
     and paid at the time of the Change in Control, not less than the amount
     that you would have received if you had been paid the same amount as for
     the last year prior to the Change in Control for which an award was
     actually paid) and the amount paid to you under such Annual Executive
     Incentive Compensation Plan for the year immediately preceding the year in
     which a Notice of Termination is given, plus (3) the greater of the amount
     that was allocated to your account from

                                       8
<PAGE>

Mr. Thomas J. Flocco                                           September 1, 2000

     contributions made by the Company under the Retirement Savings Plan (as
     defined in Section 2(e)) (including the Company 401(k) matching
     contribution thereunder) and the supplemental profit-sharing provisions
     (including the Company matching award related to the supplemental tax
     deferred amounts therein) of the Supplemental Plan (as defined in Section
     2(d)), each as in effect at the time of a Change in Control, for the year
     immediately preceding the year in which the Change in Control occurs and
     that amount that would have been required to be so allocated to you
     (assuming that you elected the maximum employee contribution) under each
     such plan for the year immediately preceding the year in which a Notice of
     Termination is given, multiplied by (B) the number three.

In the event the Notice of Termination is given prior to your first full year's
allocation under the Retirement Savings Plan, the amount in (ii)(A)(3) above
shall be $30,000.

          (c) If the Company shall terminate your employment other than for
Disability or Cause or if you shall terminate your employment for Good Reason
subsequent to a Change in Control, the Company shall maintain in full force and
effect, for your continued benefit for a three year period after the Termination
Date, all employee life, health, accident, disability, medical and other
employee welfare benefit plans, programs or arrangements in which you were
participating immediately prior to the date of the Change in Control plus all
improvements therein subsequent thereto, provided that your continued
participation is possible under the terms and provisions of such plans,
programs, and arrangements. In the event that your participation in any such
plan, program or arrangement is barred, the Company shall arrange to provide you
with benefits substantially similar to those which you would have been entitled
to receive under such plan, program or arrangement if you had remained a
participant for such additional three year period. At the end of the period of
coverage, you shall have the option to have assigned to you at no cost and with
no apportionment of prepaid premiums any assignable insurance policy owned by
the Company which relates specifically to you. In the event a Change in Control
occurs prior to your eligibility to

                                       9
<PAGE>

Mr. Thomas J. Flocco                                           September 1, 2000

participate in any such plan, you shall be deemed for purposes of this paragraph
to be participating in those plans that cover Senior Vice Presidents of this
Company generally.

          (d)  If the Company shall terminate your employment other than for
Disability or Cause or if you shall terminate your employment for Good Reason
subsequent to a Change in Control, then in addition to the retirement benefits
to which you are entitled under the Retirement Plan for Employees and Former
Employees of Fortune Brands, Inc. (the "Qualified Plan"), if any, the
Supplemental Plan of Fortune Brands, Inc. (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 you 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 you monthly beginning at
the earliest date payments commence under 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 you would have
     been entitled under the terms of each of the Pension Plans in which you
     were an active participant at the date of a Change in Control (without
     regard to any amendment made subsequent to a Change in Control which
     adversely affects in any manner the computation of your benefits)
     determined as if you were fully vested thereunder and had accumulated three
     additional years of Service thereunder (subsequent to your Termination
     Date) at your rate of Actual Earnings in effect on the date of a Change in
     Control plus any increases subsequent thereto,

and where

          (ii) equals the sum of the aggregate monthly amounts of pension
     payments (determined as a straight life annuity) to which you are entitled
     under the terms of each of the Pension Plans in

                                       10
<PAGE>

Mr. Thomas J. Flocco                                           September 1, 2000

     which you were an active participant at the date of a Change in Control.

For purposes of clause (i), the term "Actual Earnings" as used with reference to
any of such Pension Plans shall include amounts paid to you pursuant to
subsections (b)(ii)(A)(1) and (2) and (b)(ii)(B) of this Section 2 and such
amounts shall be deemed to represent three years of Actual Earnings for purposes
of determining your highest consecutive five year average rate of Actual
Earnings. The supplemental pension benefits determined under this subsection
2(d) shall be payable by the Company to you and your contingent annuitant, if
any, in the same manner and as long as your pension benefits under the
Supplemental Plan and shall be adjusted actuarially to reflect payment in a form
other than a straight life annuity. Benefits hereunder which commence prior to
age 60 shall be reduced to reflect early commencement to the extent, if any,
provided in the Qualified Plan. All defined terms used in this subsection 2(d)
shall have the same meaning as in the Qualified Plan, unless otherwise defined
herein or otherwise required by the context.

          (e)  If the Company shall terminate your employment other than for
Disability or Cause or if you shall terminate your employment for Good Reason
subsequent to a Change in Control, the Company shall pay to you as additional
severance pay in a lump sum on the fifth day following the Termination Date an
amount, if any, equal to the nonvested portion of your account balances under
the Fortune Brands Retirement Savings Plan (the "Retirement Savings Plan").

          (f)  If the Company shall terminate your employment other than for
Disability or Cause or if you shall terminate your employment for Good Reason
subsequent to a Change in Control and a dispute exists concerning the
termination as set forth in subsection (e) of Section 1, the Company shall
continue to pay your full base salary through the date the dispute is finally
resolved as provided in subsection (e) of Section 1.

          (g)  You 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

                                       11
<PAGE>

Mr. Thomas J. Flocco                                           September 1, 2000

reduced by any compensation earned by you as the result of employment by another
employer after the Termination Date or by any other compensation.

          (h)  In the event the Termination Date occurs within less than three
years prior to your Normal Retirement Date (as defined in the Qualified Plan),
the multiplier "three" in subsection (b)(ii)(B) of this Section 2 and the three
year period referred to in subsections (c) and (d) of this Section 2 shall be
changed so that they shall each 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.

          (i)  Any benefits to which you are entitled under any Company
severance pay program covering salaried employees shall be reduced by benefits
paid under Section 2(b)(ii).  Any benefits to which you are entitled under
Section 2 shall be reduced by the amount of any payments made to you pursuant to
the Severance Agreement dated as of January 1, 2000 between you and the Company.

          (j)  If the Company shall terminate your employment other than for
Disability or Cause or if you shall terminate your employment for Good Reason
subsequent to a Change in Control, the Company shall pay to you as incentive
compensation for the period through the Termination Date:

               (i)  the unpaid portion of the amount awarded to you as incentive
             compensation under the Company's Annual Executive Incentive
             Compensation Plan for the calendar year immediately preceding the
             year in which the Termination Date occurs (but, for any such
             immediately preceding year as to which the award has not been
             determined and paid, not less than the amount that you would have
             received if you had been awarded the same amount paid to you for
             the most recent year for which an award was actually paid) in a
             lump sum on the fifth day following the Termination Date; and

               (ii) incentive compensation under the Company's Annual Executive
             Incentive

                                       12
<PAGE>

Mr. Thomas J. Flocco                                           September 1, 2000

             Compensation Plan (as in effect at the time of a Change in Control)
             for the calendar year in which the Termination Date occurs, in an
             amount equal to the amount you would have received thereunder if
             you had been awarded an amount for the year in which your
             Termination Date occurs equal to the amount paid to you for the
             year immediately preceding the year in which the Change in Control
             occurs (but, for any such immediately preceding year as to which
             the award has not been determined and paid, not less than the
             amount that you would have received if you had been paid the same
             amount for the year immediately preceding the year in which the
             Change in Control occurs as the amount awarded to you for the last
             year prior to the Change in Control for which an award was actually
             paid) or, if greater, the amount awarded to you for the year
             immediately preceding the year in which a Notice of Termination is
             given, with such incentive compensation amount prorated for the
             portion of the year through the Termination Date and paid at the
             time awards thereunder are paid under the terms of such Annual
             Executive Incentive Compensation Plan as in effect immediately
             prior to the Change in Control. In the event the Notice of
             Termination is given prior to your first full year's award under
             the Annual Executive Incentive Compensation Plan, the incentive
             compensation amount in this clause (ii) shall be $175,000, which
             amount shall then be subject to proration as set forth in the
             immediately preceding sentence.

The payments under this Section 2(j)(ii) shall be reduced by the amount actually
paid to you under the Annual Executive Incentive Compensation Plan for the
calendar year in which the Termination Date occurs.

          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

                                       13
<PAGE>

Mr. Thomas J. Flocco                                           September 1, 2000

of the business or assets of the Company, by agreement in form and substance
satisfactory to you, expressly to assume and agree to perform 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. Failure of the Company to
obtain such agreement prior to the effectiveness of any such succession shall be
a breach of this Agreement and shall entitle you to compensation from the
Company in the same amount and on the same terms as you would be entitled to
hereunder if you had given Notice of Termination for Good Reason as of the day
immediately before such succession became effective and had specified that day
in the Notice of Termination. As used in this Agreement, "Company" shall mean
the Company as defined in the first sentence of this 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 shall inure to the benefit of and be enforceable
by you and your personal or legal representatives and successors in interest
under this Agreement.

          4.  Termination.  This Agreement may be terminated by the Company as
              -----------
of a date set forth in a notice to you given at any time at least six months
prior 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 or your
ceasing to have at the time of a Change in Control the status as an officer of
the Company required by Section 1 hereof (whether by change of title,
termination of employment or otherwise) if the notice is given or you cease to
have such status at the instance or suggestion of a third party following
commencement of discussions

                                       14
<PAGE>

Mr. Thomas J. Flocco                                           September 1, 2000

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 to the respective addresses set forth on
the first page of this Agreement, provided that all notices to the Company shall
be directed to the Secretary of 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 constitutes the entire
              -------------
understanding of the parties relating to the subject matter hereof and
supersedes all prior agreements, understandings and representations, whether
oral or written, relating to the subject matter hereof. 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 hereto at any time of any breach by the other
party hereto of, 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.

          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.

                                       15
<PAGE>

Mr. Thomas J. Flocco                                           September 1, 2000

          10.  Non-assignability.  This Agreement is personal in nature and
               -----------------
neither of the parties hereto shall, without the consent of the other, assign or
transfer this Agreement or any rights or obligations hereunder, except as
provided in Section 3 hereof. Without limiting the foregoing, your right to
receive payments hereunder shall not be assignable or transferable, whether by
pledge, creation of a security interest or otherwise, other than a transfer by
your will or by the laws of descent or distribution, and in the event of any
attempted assignment or transfer contrary to this Section 10 the Company shall
have no liability to pay any amount so attempted to be assigned or transferred.

          11.  Excise Taxes.  In the event that you become 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 you 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 you on the fifth day
following the Termination Date (or if your 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 you 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
11, 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

                                       16
<PAGE>

Mr. Thomas J. Flocco                                           September 1, 2000

Excise Tax, (i) any such payments or benefits received or to be received by you
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 PricewaterhouseCoopers LLP and
acceptable to you 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 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 PricewaterhouseCoopers LLP in
accordance with the principles of Sections 280G(d)(3) and (4) of the Code. For
purposes of determining the amount of the Gross-Up Payment, you 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 your 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 your 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 your termination of employment, you 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 you
if such repayment results in a reduction in Excise Tax and/or a federal and

                                       17
<PAGE>

Mr. Thomas J. Flocco                                           September 1, 2000

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.

          If this letter correctly sets forth our agreement on the subject
matter hereof, please sign and return to the Company the enclosed copy of this
letter which will then constitute our agreement on this subject.

                                    Sincerely,

                                    FORTUNE BRANDS, INC.

                                    By _______________________________
                                       Anne C. Linsdau
                                       Vice President-Human Resources

Agree to this _____ day of

_____________, 2000.

                                       18

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