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Exhibit
10.17
NONQUALIFIED STOCK
OPTION
TERMS AND
CONDITIONS
DATE OF GRANT: FEBRUARY 25,
2008
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
not intended to be an incentive stock option within the
meaning of Section 422 of the Internal Revenue
Code.
1. Exercise
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(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 third
anniversary of the date of grant and an additional one-third
becoming first exercisable on each of the fourth and fifth
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 by
gift to a family member (as defined below) or pursuant to an
approved domestic relations order. During your lifetime, your
Nonqualified Stock Option shall be exercisable only by you unless
it has been transferred to a family member or 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. For the purpose of this provision, a family member can
include your child, step-child, grandchild, parent, step-parent,
grandparent, spouse, former spouse, sibling, niece, nephew,
mother-in-law, father-in-law, son-in-law, daughter-in-law,
brother-in-law or sister-in-law, including adoptive relationships,
any person sharing your household (other than a tenant or
employee), a trust in which these persons have more than fifty
percent of the beneficial interest, a foundation in which you or
these persons control the management of assets, and any other
entity in which you or these persons own more than fifty percent of
the voting interests. Please note that, pursuant to Paragraph 14 of
these Terms and Conditions, you remain responsible for any taxes
due upon the exercise of your option, except to the extent
applicable tax law provides otherwise in the case of a transfer
pursuant to an approved domestic relations order.
In addition, any transfer by
gift of your nonqualified stock option is subject to the following
conditions:
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you must
immediately notify the Stock Plans Administrator and Fortune of
such transfer and provide such information about the transferee as
the Stock Plans Administrator or Fortune may request (including,
but not limited to, name of the transferee, address of the
transferee, and taxpayer identification number);
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the
transferee may not make any subsequent transfer;
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any shares
issued to a transferee upon exercise may bear such legends as
deemed appropriate by Fortune;
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the
transferee may utilize the “cashless exercise” feature
only if it is generally available for all transferees through the
Stock Plans Administrator;
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Fortune has
no obligation to deliver any shares following an exercise until all
applicable withholding taxes are satisfied;
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you agree to
deliver a copy of the Nonqualified Stock Option Agreement,
including any amendments thereto, to the transferee.
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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.
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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 a
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