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Exhibit
10.21
FORM
OF
INCENTIVE STOCK
OPTION
TERMS AND
CONDITIONS
DATE OF GRANT
As a participant in the 2007 Long-Term
Incentive Plan (the Plan), you will be able to purchase shares of
Common Stock of Fortune Brands, Inc. (Fortune).
The date of grant, the maximum number of
shares the option entitles you to purchase, the option price per
share and the date or dates on which the option will ordinarily
first be exercisable are identified in the electronic, on-line
grant acceptance process administered by the Plan’s third
party administrator (the Stock Plans Administrator). The option is
intended (but not guaranteed) to be an incentive stock option
within the meaning of Section 422 of the Internal Revenue
Code.
1. Exercise
.
(a) Except as provided in
this paragraph 1 and paragraphs 3, 4, 5 and 9, the option shall be
exercisable in three annual installments with one-third of the
shares covered by the grant becoming first exercisable on the first
anniversary of the date of grant and an additional one-third
becoming first exercisable on each of the second and third
anniversaries, respectively, and ending seven years from the date
of grant (its expiration date). During this period, the option is
exercisable in whole or in part from time to time.
(b) The option shall not
become exercisable unless you remain employed by Fortune or one of
its subsidiaries for one year from the date of grant, except in the
event of your death and except as provided in paragraph
9.
2. Transferability of
Option . The option shall not be transferable by you other than
in the event of your death, except that it may be transferred
pursuant to an approved domestic relations order. During your
lifetime the option shall be exercisable only by you unless it has
been transferred pursuant to an approved domestic relations order,
in which case it may be exercisable only by the transferee. With
respect to any transfer pursuant to a domestic relations order,
such order must be approved in writing by the committee of the
Board of Directors of Fortune administering the Plan (the
Committee), or the Secretary of the Committee.
3. Death . If your
employment by Fortune or an entity in which Fortune has an equity
interest terminates by reason of your death, the option may
immediately be exercised in full and shall continue to be
exercisable in full for three years after death or until its
expiration date, whichever is earlier, provided that the option may
be exercised within one year from the date of your death even if
this one-year period extends beyond the expiration date.
4. Retirement;
Disability . If your employment by Fortune or an entity in
which Fortune has an equity interest terminates by reason of
disability or Retirement (as defined below), provided that you have
remained in the employ of Fortune or an entity in which Fortune has
an equity interest for one year from the date of grant, the option
shall become immediately exercisable in full and shall continue to
be exercisable in full for three years after your employment
terminates or until its expiration date, whichever is earlier. For
purposes of this paragraph, Retirement means either
(a) termination of employment on or after attaining age 55 and
completion of at least five years of service with Fortune or an
entity in which Fortune has an equity interest, provided that
Retirement shall not include termination of employment by reason of
failure to maintain work performance standards, violation of
company policies or dishonesty or other misconduct prejudicial to
the company, or (b) retirement under Section 3(b) of the
Fortune Brands, Inc. Supplemental Plan.
5. Termination of
Employment . If your employment by Fortune or an entity in
which Fortune has an equity interest terminates other than in the
circumstances referred to in paragraphs 3 and 4, any portion of the
option that is not yet exercisable shall not thereafter become
exercisable and any portion of the option that is exercisable shall
terminate and cease to be exercisable three months from the date of
your termination from employment, except as otherwise provided in
paragraph 9; provided that in no event shall the option be
exercisable after the expiration of seven years from the date of
grant. For the purpose of these terms and conditions, your
employment by an entity in which Fortune has an equity interest
shall be considered terminated on the date on which Fortune sells
or otherwise divests its equity interest in your
employer.
6. Stock Exchange
Listing . Fortune is not obligated to deliver any shares until
they have been listed on each stock exchange on which
Fortune’s common stock is listed and until Fortune is
satisfied that all applicable laws and regulations have been met.
Fortune agrees to use its best efforts to list the shares and meet
all legal requirements so that the shares can be delivered. No
fractional shares will be delivered.
7. Transfer of Employment;
Leave of Absence . For the purposes of your option, (a) if
you transfer between Fortune and an entity in which Fortune has an
equity interest or from one entity in which Fortune has an equity
interest to another entity in which Fortun
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