Exhibit 1
UNDERWRITING AGREEMENT
June 9, 2009
Fortune Brands, Inc.
520 Lake Cook Road
Deerfield, Illinois 60015
Dear Sirs:
We (the “Manager”)
understand that Fortune Brands, Inc., a Delaware corporation (the
“Company”), proposes to issue and sell $500,000,000
aggregate principal amount of its 6.375% Notes due 2014 (the
“Notes”, the “Debt Securities” or the
“Offered Securities”). Subject to the terms and
conditions set forth herein or incorporated by reference herein,
the Company hereby agrees to sell and the underwriters named below
(the “Underwriters”) agree to purchase the Offered
Securities at 99.348% of the principal amount of such Offered
Securities and accrued interest from June 12, 2009, if any, to
the date of payment and delivery.
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Principal Amount
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Barclays Capital Inc.
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$
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91,500,000
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Credit Suisse Securities (USA) LLC
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91,500,000
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J.P. Morgan Securities Inc.
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91,500,000
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RBS Securities Inc.
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91,500,000
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Citigroup Global Markets Inc.
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20,000,000
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Mitsubishi UFJ Securities (USA),
Inc.
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20,000,000
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Mizuho Securities USA Inc.
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20,000,000
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Wachovia Capital Markets, LLC
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20,000,000
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BBVA Securities Inc.
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6,000,000
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BNP Paribas Securities Corp.
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6,000,000
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BNY Mellon Capital Markets, LLC
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6,000,000
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Calyon Securities (USA) Inc.
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6,000,000
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Deutsche Bank Securities Inc.
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6,000,000
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Loop Capital Markets, LLC
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6,000,000
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PNC Capital Markets LLC
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6,000,000
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Rabo Securities USA Inc.
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6,000,000
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U.S. Bancorp Investments, Inc.
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6,000,000
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Total:
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$
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500,000,000
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Upon delivery of such Offered
Securities, the Underwriters will pay for such Offered Securities
at a closing to be held at the offices of Davis Polk &
Wardwell, 450 Lexington Avenue, New York, New York 10017 at 10:00
a.m. (New York time) on June 12, 2009, or at such other time
as shall be designated by the Manager.
1. Definitions. The following
terms shall have the meanings ascribed to them below for purposes
of this Agreement and, notwithstanding the definitions of such
terms contained in the Fortune Brands, Inc. Underwriting Agreement
(Debt Securities and Warrants to Purchase Debt Securities) dated
June 9, 2009 (the “Standard Provisions”), a copy
of which you have previously received, shall have the meanings
ascribed to them below for purposes of the Standard
Provisions:
(a) “Rules” refers to
the rules promulgated under the Securities Act of 1933, as amended
(the “Securities Act”).
(b) “Registration
Statement” as of any time means the Registration Statement
(as otherwise defined in the Standard Provisions) and any
additional information contained in a form of prospectus or
prospectus supplement that is deemed retroactively to be a part of
the Registration Statement pursuant to Rules 430A, 430B or
430C.
(c) “Statutory
Prospectus” means the prospectus relating to the Offered
Securities that is included in the Registration Statement in the
form first used (or made available upon request of purchasers
pursuant to Rule 173) in connection with confirmation of sales of
the Offered Securities, including any document incorporated by
reference therein and any prospectus or prospectus supplement
deemed to be a part thereof that has not been superseded or
modified. For purposes of this definition, information contained in
a form of prospectus (including a prospectus supplement) that is
deemed retroactively to be a part of the Registration Statement
pursuant to Rules 430A, 430B or 430C shall be considered to be
included in the Statutory Prospectus only as of the actual time
that form of prospectus (including a prospectus supplement) is
filed with the Commission pursuant to Rule 424(b).
(d) “Issuer Free Writing
Prospectus” means any “issuer free writing
prospectus,” as defined in Rule 433, relating to the Offered
Securities in the form filed or required to be filed with the
Commission by the Company or, if not required to be filed, in the
form retained in the Company’s records pursuant to Rule
433(g).
(e) “General Use Free Writing
Prospectus” means any Issuer Free Writing Prospectus that is
intended for general distribution to prospective investors, as
evidenced by its being specified in Schedule A to this
Agreement.
(f) “Limited Use Free Writing
Prospectus” means any Issuer Free Writing Prospectus that is
not a General Use Free Writing Prospectus.
(g) “Time of Sale” means
the time when sales of the Offered Securities are first
made.
(h) “Time of Sale
Information” means a Preliminary Prospectus Supplement dated
June 9, 2009, together with the Base Prospectus included in
the Registration Statement and each General Use Free Writing
Prospectus issued at or prior to the Time of Sale.
2. Representations and Warranties
of the Company. In addition to the representations, warranties
and agreements of the Company in the Standard Provisions, the
Company, as of the date of this Agreement, represents and warrants
to, and agrees with, each Underwriter that:
(a) As of the Time of Sale, neither
(i) any Time of Sale Information nor (ii) any Limited Use
Free Writing Prospectus, when considered together with the Time of
Sale Information, included any untrue statement of a material fact
or omitted to state any material fact necessary in order to make
the statements therein, in the light of the circumstances under
which they were made, not misleading. As of the Closing Date,
neither (i) the Time of Sale Information and the Statutory
Prospectus (collectively, the “General Disclosure
Package”) nor (ii) any individual Limited Use Free
Writing Prospectus, when considered together with the General
Disclosure Package, will include any untrue statement of a material
fact or omit to state any material fact necessary in order to make
the statements therein, in the light of the circumstances under
which they were made, not misleading. The preceding two sentences
do not apply to statements in or omissions from any prospectus
included in the Registration Statement or any Issuer Free Writing
Prospectus in reliance upon and in conformity with written
information furnished to the Company by any Underwriter through the
Manager specifically for use therein.
(b) Each Issuer Free Writing
Prospectus, as of its issue date and at all subsequent times
through the completion of the public offer and sale of the Offered
Securities or until any earlier date that the Company notified or
notifies the Manager as described in the next sentence, did not,
does not and will not include any information that conflicted,
conflicts or will conflict with the information then contained in
the Registration Statement. If at any time following issuance of an
Issuer Free Writing Prospectus there occurred or occurs an event or
development as a result of which such Issuer Free Writing
Prospectus related to the Offered Securities conflicted or would
conflict with the information then contained in the Registration
Statement or included
or would include an untrue statement
of a material fact or omitted or would omit to state a material
fact necessary in order to make the statements therein, in the
light of the circumstances prevailing at that subsequent time, not
misleading, (i) the Company has promptly notified or will
promptly notify the Manager and (ii) the Company has promptly
amended or will promptly amend or supplement such Issuer Free
Writing Prospectus related to the Offered Securities to eliminate
or correct such conflict, untrue statement or omission. The
foregoing two sentences do not apply to statements in or omissions
from any Issuer Free Writing Prospectus in reliance upon and in
conformity with written information furnished to the Company by any
Underwriter through the Manager specifically for use
therein.
(c) (i) The Registration Statement
is not the subject of any pending proceeding or examination under
Sections 8(d) or 8(e) of the Securities Act and (ii) the
Company is not, to the best of its knowledge, the subject of a
pending proceeding under Section 8A of the Securities Act in
connection with the offering of the Securities.
(d) At the earliest time after the
filing of the Registration Statement that the Company or another
offering participant made a bona fide offer (within the
meaning of Rule 164(h)(2)) of the Offered Securities and at the
date of this Agreement, the Company was not an “ineligible
issuer,” as defined in Rule 405.
(e) No Unlawful Payments.
Neither the Company nor any of its subsidiaries nor, to the
knowledge of the Company, any director, officer, agent, employee or
other person associated with or acting on behalf of the Company or
any of its subsidiaries has (i) used any corporate funds for
any unlawful contribution, gift, entertainment or other unlawful
expense relating to political activity; (ii) made any direct
or indirect unlawful payment to any foreign or domestic government
official or employee from corporate funds; (iii) violated or
is in violation of any provision of the Foreign Corrupt Practices
Act of 1977; or (iv) made any bribe, rebate, payoff, influence
payment, kickback or other unlawful payment.
(f) Compliance with Money
Laundering Laws . The operations of the Company and its
subsidiaries are and have been conducted at all times in compliance
with applicable financial recordkeeping and reporting requirements
of the Currency and Foreign Transactions Reporting Act of 1970, as
amended, the money laundering statutes of all jurisdictions, the
rules and regulations thereunder and any related or similar rules,
regulations or guidelines, issued, administered or enforced by any
governmental agency (collectively, the “Money Laundering
Laws”) and no action, suit or proceeding by or before any
court or governmental agency, authority or body or any arbitrator
involving the Company or any of its subsidiaries with respect to
the Money Laundering Laws is pending or, to the knowledge of the
Company, threatened.
(g) Compliance with OFAC.
None of the Company, any of its subsidiaries or, to the knowledge
of the Company, any director, officer, agent, employee or affiliate
of the Company or any of its subsidiaries is currently subject to
any U.S. sanctions administered by the Office of Foreign Assets
Control of the U.S. Department of the Treasury
(“OFAC”); and the Company will not directly or
indirectly use the proceeds of the offering of the Securities
hereunder, or lend, contribute or otherwise make available such
proceeds to any subsidiary, joint venture partner or other person
or entity, for the purpose of financing the activities of any
person currently subject to any U.S. sanctions administered by
OFAC.
3. Certain Agreements of the
Company. (a) The Company has complied and will
comply with Rule 433. Each Issuer Free Writing Prospectus
complied in all material respects with Rule 433 and has been, or
will be, filed to the extent required in accordance with such
rule.
(b) The reference to “is
required by law to be delivered” in the first sentence of
paragraph (c) of Article VI of the Standard Provisions is
replaced with “is (or but for the exemption in Rule 172
would be required by law to be) delivered”.
4. Free Writing Prospectuses.
The Company represents and agrees that, unless it obtains the prior
consent of the Manager, and each Underwriter represents and agrees
that, unless it obtains the prior consent of the Company and the
Manager, it has not made and will not make any offer relating to
the Offered Securities that would constitute an Issuer Free Writing
Prospectus, or that would otherwise constitute a “free
writing prospectus,” as defined in Rule 405, required to be
filed with the Commission. Notwithstanding the preceding sentence,
the Company hereby consents to the provision by the Underwriters of
a Term Sheet, the form of which is set forth in Schedule B attached
hereto.
5. Non-U.S. Offering. In
relation to each Member State of the European Economic Area which
has implemented the Prospectus Directive (each, a “Relevant
Member State”), each Underwriter hereby represents and agrees
that with effect from and including the date on which the
Prospectus Directive is implemented in that Relevant Member State
(the “Relevant Implementation Date”) it has not made
and will not make an offer of the Debt Securities to the public in
that Relevant Member State prior to the publication of a prospectus
in relation to the Debt Securities which has been approved by the
competent authority in that Relevant Member State, or where
appropriate, approved in another Relevant Member State and notified
to the competent authority in that Relevant Member State, all in
accordance with the Prospectus Directive, except that it may, with
effect from and including the Relevant Implementation Date, make an
offer of Debt Securities to the public in that Relevant Member
State at any time:
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(i)
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to legal
entities which are authorized or regulated to operate in the
financial markets or, if not so authorized or regulated, whose
corporate purpose is solely to invest in securities;
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(ii)
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to any legal
entity which has two or more of (1) an average of at least 250
employees during the last financial year; (2) a total balance
sheet of more than €43,000,000; and (3) an annual net
turnover of more than €50,000,000, as shown in its last annual
or consolidated accounts; or
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(iii)
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to fewer than
100 natural or legal persons (other than qualified investors as
defined in the Prospectus Directive) subject to obtaining the prior
consent of the representatives for any such offer; or
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(iv)
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in any other
circumstances which do not require the publication by us of a
prospectus pursuant to Article 3 of the Prospectus
Directive.
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In particular, each Underwriter
hereby represents and agrees that:
(a) it has only communicated or
caused to be communicated and will only communicate or cause to be
communicated an invitation or inducement to engage in investment
activity (within the meaning of Section 21 of the Financial
Services and Markets Act 2000 (the “FSMA”)) received by
it in connection with the issue or sale of the Debt Securities in
circumstances in which Section 21(1) of the FSMA does not
apply to us; and
(b) it has complied and will comply
with all applicable provisions of the FSMA with respect to anything
done by it in relation to the Debt Securities in, from or otherwise
involving the United Kingdom.
For purposes of this Section 5,
an “offer of notes to the public” means the
communication in any form and by any means of sufficient
information on the terms of the offer and the Debt Securities to be
offered so as to enable an investor to decide to purchase or
subscribe for the Debt Securities, as the same may be varied in
that Member State by any measure implementing the Prospectus
Directive. The expression “Prospectus Directive” means
Directive 2003/71/EC and includes any relevant implementing measure
in each Relevant Member State. References to “€”
are to euros.
6. Conditions of
Underwriters’ Obligations. (a) The reference to
“the Registration Statement and the Prospectus” in the
first sentence of paragraph (a) of Article V is replaced with
“the Registration Statement, Prospectus and Time of Sale
Information”.
(b) In addition to the conditions
set forth in Article V of the Standard Provisions (including
paragraphs (b) and (c) thereof), the obligations of the
several Underwriters to purchase and pay for the Offered Securities
will be subject to the condition precedent that the Underwriters
shall have received a letter, dated the Closing Date, of each of
Chadbourne & Parke LLP, counsel for the Company, and Davis
Polk & Wardwell, counsel for the Underwriters, to the
effect that:
Such counsel has no reason to
believe that the documents specified in a schedule to such
counsel’s letter, consisting of those included in the Time of
Sale Information (as defined in Section 1(h) of this
Agreement), as of the Time of Sale (which such counsel may assume
is the date of this Agreement) and as of the Closing Date,
contained any untrue statement of a material fact or omitted to
state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were
made, not misleading.
7. Indemnification and
Contribution. References to “the Prospectus” in
Article VIII of the Standard Provisions shall be deemed to refer to
“each Statutory Prospectus, the Prospectus, the Time of Sale
Information and any Issuer Free Writing
Prospectus.”
8. Terms and Conditions of Debt
Securities. The Debt Securities will have the terms and
conditions set forth in “Description of the Notes” in
the prospectus supplement for the Debt Securities dated
June 9, 2009, and terms defined therein will have the same
meanings when used in this Agreement. The following is a summary of
such terms and conditions for the Debt Securities:
The Notes shall have the following
terms:
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Principal
Amount:
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$500,000,000,
subject to further issuances, as described below.
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Maturity:
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June 15,
2014.
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Interest
Rate:
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6.375% per
annum, computed on the basis of a 360-day year comprised of twelve
30-day months.
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Optional
Redemption Provisions:
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The Company may
redeem all or a portion of the Notes at any time, and from time to
time, at a redemption price equal to the greater of (i) 100% of the
principal amount of the Notes then outstanding to be redeemed or
(ii) the sum of the present values of the remaining scheduled
payments of principal and interest (including interest accrued and
unpaid to the date of redemption) on the Notes to be redeemed
discounted to the date of
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redemption on a
semiannual basis (assuming a 360-day year consisting of twelve
30-day months) at the applicable treasury rate (as defined in the
Description of the Notes), plus 50 basis points.
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Interest
Payment Dates:
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June 15 and
December 15, commencing December 15, 2009 (the Interest payable on
December 15, 2009 being in respect of the period commencing June
12, 2009).
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Form and
Denomination:
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Global Security
held through book-entry facilities of The Depository Trust Company
(as described in the Description of the Notes).
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Sinking Fund
Provisions:
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None.
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Further
Issuances:
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The Company may
create and issue further notes ranking equally and ratably with the
Notes offered hereby in all respects, so that such further notes
will be consolidated and form a single series with the Notes
offered hereby and will have the same terms as to status,
redemption or otherwise.
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The Company acknowledges and agrees
that the Underwriters are acting solely in the capacity of an
arm’s length contractual counterparty to the Company with
respect to the offering of Offered Securities (including in
connection with determining the terms of the offering) and not as a
financial advisor or a fiduciary to, or an agent of, the Company or
any other person. Additionally, no Underwriter is advising the
Company or any other person as to any legal, tax, investment,
accounting or regulatory matters in any jurisdiction. The Company
shall consult with its own advisors concerning such matters and
shall be responsible for making its own independent investigation
and appraisal of the transactions contemplated hereby, and the
Underwriters shall have no responsibility or liability to the
Company with respect thereto. Any review by the Underwriters of the
Company, the transactions contemplated hereby or other matters
relating to such transactions will be performed solely for the
benefit of the Underwriters and shall not be on behalf of the
Company.
All of the provisions (other than
the provisions of Article VII) contained in the Standard
Provisions, are herein incorporated by reference in their entirety
and shall be deemed to be a part of this Agreement to the same
extent as if such provisions had been set
forth in full herein. Notwithstanding the
preceding sentence, in the event of any conflict between the
Standard Provisions and this Agreement, the provisions of this
Agreement shall control. The term “Manager” as used
therein shall mean Barclays Capital Inc., Credit Suisse Securities
(USA) LLC, J.P. Morgan Securities Inc. and RBS Securities Inc.,
whose authority thereunder may be exercised by them
jointly.
For themselves and on behalf of the
several Underwriters named above.
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Very truly
yours,
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BARCLAYS
CAPITAL INC.
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By:
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Name:
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Pamela
Kendall
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Title:
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Director
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CREDIT SUISSE
SECURITIES (USA) LLC
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By:
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Name:
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Sharen
Harrison
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Title:
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Director
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J.P. MORGAN
SECURITIES INC.
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By:
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Name:
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Maria
Sramek
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Title:
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Executive
Director
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RBS SECURITIES
INC.
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By:
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Name:
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Moshe
Tomkiewicz
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Title:
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Managing
Director
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Accepted:
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FORTUNE BRANDS,
INC.
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By
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Mark
Hausberg
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Senior Vice
President – Finance and Treasurer
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Schedule A
General Use Free Writing
Prospectuses
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1)
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Term Sheet for
the Offered Securities dated June 9, 2009
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Schedule B
Pricing Term Sheet
Fortune Brands, Inc.
$500,000,000 6.375% Notes due
2014
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Issuer:
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Fortune Brands,
Inc.
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Security:
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Senior
unsecured notes
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Size:
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$500,000,000
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Maturity:
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June 15,
2014
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Coupon
(Interest Rate):
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6.375%
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Interest
Payment Dates:
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June 15 and
December 15, commencing December 15, 2009
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Price to
Public:
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99.948%
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Benchmark
Treasury Yield:
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2.887%
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Spread to
Benchmark Treasury:
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+350.0
bps
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Yield to
Maturity:
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6.387%
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Benchmark
Treasury:
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2.250% due May
31, 2014
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Make-whole
Call:
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At any time at
a discount rate of Treasury plus 50 basis points
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Trade
Date:
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June 9,
2009
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Settlement
Date:
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June 12,
2009
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CUSIP:
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349631
AP6
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Anticipated
Ratings:
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Baa2, review
for potential downgrade (Moody’s Investors Service
Inc.)
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