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Exhibit
10.25
FORM OF
PERFORMANCE STOCK
AWARD
TERMS AND
CONDITIONS
You have been granted a performance
stock award under the Fortune Brands, Inc. 2007 Long-Term Incentive
Plan (the “Plan”).
The date of the grant, the minimum
performance award, the target performance award and the maximum
performance award are listed at the top of your Notice of
Performance Stock Award. The average per share targets and the
minimum and maximum average return on invested capital and earnings
per share targets for the performance period are set forth in the
Matrix attached to your Notice of Performance Stock
Award.
1. Number of Shares
Payable Pursuant to Award. Subject to the provisions of
paragraphs 5 through 13 below, the number of shares of Common Stock
of Fortune Brands, Inc. (“Fortune”) payable to you
pursuant to your award shall be determined as follows:
(a) If the Average Return on
Invested Capital and Cumulative Earnings Per Share (as determined
pursuant to paragraph 2) of Fortune and its consolidated
subsidiaries (the “Company”) for the performance period
equals the minimum goal for that performance period as set forth in
the attached Matrix, the number of shares payable to you will be
your minimum performance award set forth on the Notice of
Performance Stock Award.
(b) If the Average Return on
Invested Capital and Cumulative Earnings Per Share (as determined
pursuant to paragraph 2) of the Company for the performance period
equals or exceeds the maximum goal for that performance period as
set forth in the attached Matrix, the number of shares payable to
you will be your maximum performance award set forth on the Notice
of Performance Stock Award.
(c) If the Average Return on
Invested Capital and Cumulative Earnings Per Share (as determined
pursuant to paragraph 2) of the Company for the performance period
exceeds the minimum goal for the performance period, but is less
than the maximum goal for the performance period, the number of
shares payable to you will be interpolated between the goals set
forth in the attached Matrix within the range in which the Average
Return on Invested Capital and Cumulative Earnings Per Share
fall.
(d) No shares shall be
payable for any performance period if the Average Return on
Invested Capital and Cumulative Earnings Per Share (as determined
pursuant to paragraph 2) for the performance period is less than
the minimum goal for that performance period.
Subject to the provisions of
paragraphs 5 through 13, the shares of Common Stock of Fortune
payable to you pursuant to this performance award with respect to
any performance period shall be paid by Fortune as soon as
practicable after the end of that performance period and after the
committee of the Board of Directors of Fortune administering the
Plan (which is currently the Compensation and Stock Option
Committee, or “Committee”) certifies attainment of the
performance goals.
2. Determination of Net
Income, Return on Invested Capital and Cumulative Earnings Per
Share . “Return on Invested Capital” for any
performance period means Net Income during the performance period
divided by average invested capital for the same period. Net
Income, Return on Invested Capital and Cumulative Earnings Per
Share shall be adjusted to eliminate unusual or non-recurring
income or expense items and for significant items not considered in
determining the initial performance measures; such adjustments may
include, but are not limited to, restructuring and restructuring
related charges; the impact of actual foreign exchange rates
varying from planned foreign exchange rates; differences between
actual and planned stock option expense; significant share
repurchase activity; significant nonrecurring income tax credits or
charges; and the impact of significant acquisitions and
divestitures of businesses .
3. Dividend
Equivalents . Subject to the provisions of paragraphs 5, 6, 7,
9, 11, 12 and 13, with respect to the performance period you shall
be paid, on the date of payment of any shares with respect to the
performance period pursuant to paragraph 1, a cash Dividend
Equivalent that is equal to the amount of the cash dividends that
would have been declared on that number of shares actually paid to
you if such shares had been issued and outstanding on any record
date for the payment of any cash dividends on Common Stock of
Fortune during the performance period and prior to the date of
payment of such shares. Such Dividend Equivalent shall be paid,
subject to paragraph 16, on the date of payment of such shares
pursuant to paragraph 1. Payment of any Dividend Equivalent shall
be made by delivery to you of a check of Fortune in the amount of
such Dividend Equivalent or in such other manner as is determined
by the Committee.
4. Transferability of
Award . This performance award shall not be transferable by you
otherwise than by will or by the laws of descent and
distribution.
5. Termination of
Employment for Death, Disability, Retirement or Elimination of
Position . If your employment by the Company terminates during
any performance period by reason of your death, disability,
retirement under a retirement plan of the Company or the
elimination of your position, you will be entitled to receive as
soon as practicable after the end of that performance period and
after the Committee certifies that performance goals have been
attained for that performance period, a payment of the number of
shares of Common Stock, if any, that would otherwise be payable
pursuant to paragraph 1. Also in the event of such a termination of
employment, you will be paid, on the date of
payment of any shares paid pursuant to
the preceding sentence, Dividend Equivalents pursuant to paragraph
3, and you will not be entitled to be credited with or to receive
any other Dividend Equivalents.
6. Termination of
Employment for Other Reasons . Except as otherwise provided in
paragraphs 9 through 13 below, if your employment by the Company
terminates during a performance period other than by reason of your
death, disability, retirement under a retirement plan of the
Company or the elimination of your position, you will not be
entitled to any payment of shares pursuant to paragraph 1 with
respect to that performance period and will not be entitled to
receive payment pursuant to paragraph 3 of any Dividend
Equivalent.
7. Forfeiture of Award for
Detrimental Activity . If you engage in detrimental activity at
any time (whether before or after termination of your employment),
you will not be entitled to any payment of shares or Dividend
Equivalents here
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