EXHIBIT 10b1
Fortune Brands, Inc.
Xxxx X. Xxxxxxx
Vice President
Human Resources
March 16, 2000
Xx. Xxxxxx X. Xxxxxx
[Address]
Dear Xx. Xxxxxx:
Reference is made to the agreement dated January 1, 1999 between
Fortune Brands, Inc. (the "Company") and you covering the Company's obligation
to make certain payments and provide certain benefits in the event of a
termination of your employment following a change in control of the Company (the
"Agreement"). In order to more precisely define the circumstances under which a
change in control of the Company would occur and to change the reference of your
Severance Agreement to your Severance and Retirement Agreement, it is hereby
agreed that the Agreement is amended as follows:
1. The second paragraph of the Agreement is amended in its entirety as
follows:
The Company must, of course, remain free to effect changes in management
and terminate employment. However, in order to induce you to remain in the
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 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.
2. Section 2(i) of the Agreement is amended by changing the second sentence
thereof as follows:
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 and
Retirement Agreement dated as of January 1, 2000 between you and the
Company.
Except as amended hereby, all provisions of the Agreement remain in full
force and effect.
Sincerely,
FORTUNE BRANDS, INC.
By /s/ Xxxx X. Xxxxxxx
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Xxxx X. Xxxxxxx
Vice President-Human Resources
Accepted this 16th day of March, 2000.
/s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx
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