EXHIBIT 10j8
AMENDMENT TO SEVERANCE AGREEMENT
This AMENDMENT dated as of August 1, 1998 to the Severance
Agreement (the "Agreement") dated as of January 29, 1996, as amended, between
AMERICAN BRANDS, INC., a Delaware corporation (the "Company") and XXXXX X.
XXXXXXX (the "Executive"),
W I T N E S S E T H :
WHEREAS, the Company (now known as Fortune Brands, Inc.) and
the Executive entered into the Agreement in order to provide severance benefits
in the event of termination of the Executive's employment; and
WHEREAS, the Company and the Executive desire to amend the
Agreement in order to provide severance benefits in the event that the Executive
terminates employment for Good Reason (as defined herein);
NOW, THEREFORE, in consideration of the premises and to
further assure the retention of the Executive in the employ of the Company after
the date of this Amendment to Severance Agreement, the parties hereto do hereby
agree as follows:
1. Section 1(a) of the Agreement is hereby amended in
its entirety as follows:
"(a) Entitlement to Benefits. If and only if during
the term of the Agreement the Executive's employment with the
Company is terminated by the Company other than for Disability
or Cause or by the Executive for Good Reason (as defined in
this Section 1), the Executive shall be entitled to benefits
as provided in Section 2. The Executive shall not be entitled
to any benefits 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."
2. Section 1(d) of the Agreement is hereby amended by
changing the first sentence thereof as follows:
"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."
3. Section 1(e) of the Agreement is hereby amended in
its entirety as follows:
"(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 on which a
Notice of Termination is given, (iii) if employment is
terminated for Good Reason, the date specified in the Notice
of Termination, and (iv) if employment is terminated for any
other reason, the date on which the Executive ceases to
perform his duties for the Company; provided, however, that if
within 30 days
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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 Section
1(e)."
4. Section 1(f) is hereby added to the Agreement as
follows:
"(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) a reduction by the Company in the
Executive's base salary as in effect on August 1,
1998 plus all increases therein subsequent thereto;
(ii) 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 August 1, 1998 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
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deprive the Executive of any material fringe benefit
enjoyed by him on August 1, 1998 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;
(iii) 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 1997 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;
(iv) 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;
(v) 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
(vi) any failure of the Company to comply
with and satisfy Section 3;
provided, however, that termination of employment by the
Executive under clauses (i), (ii) and (iii) 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."
5. Section 2(a) of the Agreement is hereby amended in its
entirety as follows:
"(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."
6. Section 2(b) of the Agreement is hereby amended by adding
"or the Executive terminates his employment for Good Reason," after the words
"Disability or Cause," in the first sentence thereof.
7. Section 2(c) of the Agreement is hereby amended by adding
"or the Executive terminates his employment for Good Reason," after the words
"Disability or Cause," in the first sentence thereof.
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8. Section 2(d) of the Agreement is hereby amended by adding
"or the Executive terminates his employment for Good Reason," after the words
"Disability or Cause," in the first sentence thereof and to delete the following
sentence therefrom:
"Benefits hereunder which commence prior to age 60 shall be
actuarially reduced to reflect early commencement to the
extent, if any, provided in the Retirement Plan as if the
Executive's Termination Date were an Early Retirement Date."
9. Section 2(e) of the Agreement is hereby amended by adding "or
the Executive terminates his employment for Good Reason," after the words
"Disability or Cause," therein.
10. Section 2(f) of the Agreement is hereby amended by adding
"or the Executive terminates his employment for Good Reason," after the words
"Disability or Cause," in the first sentence thereof as well as to add "and
reduced by the amount actually paid for such calendar year under the Incentive
Compensation Plans" at the end of clause (ii) thereof.
11. Section 2(g) of the Agreement is hereby amended by adding
"or the Executive terminates his employment for Good Reason" after the words
"Disability or Cause" therein.
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12. Section 2(k) is hereby added to the Agreement as follows:
"(l) In addition to any other benefits which
may be payable to the Executive under the Pension Plans and
Section 2(d) hereof, if the Executive's employment with the
Company is terminated by the Company other than for Disability
or Cause, or by the Executive for Good Reason, and the
Termination Date occurs before the Executive attains Early
Retirement Date (as defined in the Retirement Plan), the
Company shall pay to the Executive a supplemental pension
benefit in an amount equal to the difference between (i) the
benefits payable from the Pension Plans and Section 2(d)
hereof and (ii) 65% of the Executive's accrued benefit under
the Pension Plans and Section 2(d) hereof, provided that the
Executive's full accrued benefit under the Pension Plans and
Section 2(d) hereof shall be paid without reduction for early
payment if the Executive has completed at least 30 years of
Qualifying Employment (as defined in the Retirement Plan) at
the date of the Executive's termination of employment with
entitlement to a benefit hereunder.
This additional pension benefit shall be
payable outside the Pension Plans and shall commence on the
first day of the month following the Executive's termination
of employment with the Company even though pension benefits
may not yet then be payable under the Pension Plans and
Section 2(d) hereof. The benefit payable under this Section
2(k) shall be paid to the Executive in the form of a 100%
joint and survivor annuity with the Executive's spouse as
contingent annuitant if the Executive is married at the date
of commencement of payments hereunder in which event the
benefit shall be further reduced for the joint and survivor
annuity coverage to the same extent as provided in the
Supplemental Plan; provided that if the Executive is not
married at the date the enhanced pension benefits commence
hereunder, the enhanced pension benefits under this Section
2(k) shall be paid as an annuity for the Executive's life
only. At the time that benefits commence under the
Supplemental Plan, the
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monthly benefits payable hereunder shall then be actuarially
adjusted to the form of benefit payable under the Supplemental
Plan and shall be paid in the same form as the benefit payable
under the Supplemental Plan, with survivorship benefits
hereunder then payable after the Executive's death to the same
contingent annuitant to whom benefits are payable under the
Supplemental Plan, if any, that survives the Executive.
In the event that an employee grantor trust
("Grantor Trust") has been established among the Company, the
Executive and a trustee, the Company may provide the
additional pension benefits payable pursuant to Section 2(d)
and Section 2(k) through the Grantor Trust (or, at the
Executive's request, the Segregated Account referred to in the
Grantor Trust) as soon as practicable after the termination of
employment of the Executive using the same actuarial basis and
methodology as for other Supplemental Plan benefits which are
provided through the Grantor Trust and assuming that the
underlying monthly pension benefits which are valued for
Grantor Trust funding purposes are payable in the form of an
annuity for the life of the Executive only and commencing
immediately upon termination of employment but with the early
payment reduction calculated as if the Executive had
terminated employment at age 55."
13. All references to "American Brands, Inc." in the
Agreement be and they are hereby changed to references to "Fortune Brands, Inc."
IN WITNESS WHEREOF, the Company has caused this Amendment to
Severance Agreement to be signed by its officer
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thereunto duly authorized and its seal to be hereunder affixed and attested and
the Executive has hereunto set his hand as of the date first written above.
FORTUNE BRANDS, INC.
(Corporate Seal) By Xxxxxx X. Xxxxxxxxxx
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Xxxxxx X. Xxxxxxxxxx
ATTEST: Senior Vice President and
Chief Administrative Officer
Xxxxx X. Xxxxxxx, Xx. Xxxxx X. Xxxxxxx
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Secretary XXXXX X. XXXXXXX
