EXHIBIT 10a2
SEVERANCE AND RETIREMENT AGREEMENT
AMENDMENT dated as of February 3, 2003 to Severance Agreement dated as
of January, 1, 1999 (the "Agreement"), as amended, between FORTUNE BRANDS, INC.,
a Delaware Corporation (the "Company"), and XXXXXX X. XXXXXX (the "Executive").
W I T N E S S E T H :
WHEREAS, the Company and the Executive entered into the Agreement, as
amended on January 1, 2000, in order to provide enhanced severance and
retirement benefits in the event of termination of employment of the Executive
under certain circumstances; and
WHEREAS, the Company and the Executive desire to amend the Agreement in
order to change the circumstances under which the Executive may be terminated by
the Company for cause without obtaining the benefits of this Agreement and to
change certain references to terms used in the revised Fortune Brands Pension
Plan;
NOW, THEREFORE, in consideration of the premises, the parties agree
that the Severance Agreement is amended as follows:
1. Sections 1(b)(ii) and 10(k) are amended by changing the reference
from "Retirement Plan for Employees and Former Employees of Fortune Brands,
Inc." to "Fortune Brands Pension Plan".
2. Section 2(i) is amended by changing the reference "Average Actual
Earnings" therein to "Final Average Compensation", and by changing the reference
"Qualifying Employment" therein to "Vesting Service".
3. Section 3(a)(i) is amended by changing the reference "Average Actual
Earnings" therein to "Final Average Compensation", by changing the reference
"Qualifying Employment" therein to "Vesting Service", by changing the reference
"Service" therein to "Benefit Service" and by changing the reference "Actual
Earnings" therein to "Compensation".
4. Section 3(a) is further amended by changing the reference from
"Actual Earnings" to "Compensation" in the last sentence thereof.
5. Section 10(a) is amended by changing the reference from "Actual
Earnings" to "Compensation".
6. Section 10(b) is amended in its entirety as follows:
"(b) Cause. You may be terminated for Cause if (i) you engage
in specified misconduct and (ii) we comply with certain procedural
requirements.
(i) Specified Misconduct. To be terminated for Cause,
you must either
(A) engage in act(s) of dishonesty
constituting a felony; or
(B) willfully and continually fail
substantially to perform your duties as
an officer of the Company.
You cannot be terminated for Cause, however,
if your act(s) or failure
(C) was done as a result of your bad judgment
or negligence or your good faith belief
that the act(s) or failure to act was not
opposed to the interests of the Company;
(D) meets the applicable standard of conduct
for indemnification or reimbursement or
payment of expenses under our By-laws,
laws of the state of our incorporation or
directors' and officers' liability
insurance, as in effect at the time of
the act(s) or failure to act; or
(E) in the case of failure to perform duties
only, results from your incapacity due to
physical or mental illness.
(ii) Procedural Requirements. We may not terminate
you for Cause unless we comply with the following procedural
requirements:
(A) Termination for Cause due to failure
substantially to perform duties. Before
we may terminate you for willfully and
continually failing substantially to
perform your duties as an officer of the
Company, our Board of Directors must
deliver a demand for substantial
performance which specifically identifies
the manner in which our Board believes
that you have not substantially performed
your duties and you must be given a
reasonable time after such demand to
perform your duties.
(B) Any termination for Cause. Before we may
terminate you for Cause
(1) our Board of Directors must hold a
meeting for the purpose of
determining whether you should be
terminated for Cause;
(2) you must receive reasonable notice
in advance of the Board meeting with
an opportunity for you and your
representative to be heard before
the Board;
(3) three-quarters of our entire Board
of Directors must affirmatively
resolve in good faith to terminate
you for Cause; and
(4) you must receive a copy of the
Board resolution setting forth the
particulars of the for Cause
termination and a notice of
termination."
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7. Section 10(j) is amended by changing the reference from "Qualifying
Employment" to "Vesting Service".
8. Section 10(l) is amended by changing the reference from "Service" to
"Benefit Service".
9. Section 10 is amended to reorder the definitions in alphabetical
order.
Except as amended hereby, all provisions of the Agreement remain in
full force and effect.
FORTUNE BRANDS, INC.
[Seal]
ATTEST: By /s/ Xxxx X. Xxxxx
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/s/ Xxxxxxxxx Xxxx
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Assistant Secretary /s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx
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