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UNDERWRITING AGREEMENT

Underwriting Agreement

UNDERWRITING AGREEMENT | Document Parties: FORTUNE BRANDS INC | Barclays Capital Inc | BBVA Securities Inc | Citigroup Global Markets Inc | Credit Suisse Securities (USA) LLC | JP Morgan Securities Inc | Mitsubishi UFJ Securities (USA), Inc | Mizuho Securities USA Inc | RBS Securities Inc | Wachovia Capital Markets, LLC You are currently viewing:
This Underwriting Agreement involves

FORTUNE BRANDS INC | Barclays Capital Inc | BBVA Securities Inc | Citigroup Global Markets Inc | Credit Suisse Securities (USA) LLC | JP Morgan Securities Inc | Mitsubishi UFJ Securities (USA), Inc | Mizuho Securities USA Inc | RBS Securities Inc | Wachovia Capital Markets, LLC

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Title: UNDERWRITING AGREEMENT
Governing Law: New York     Date: 6/12/2009
Industry: Conglomerates     Law Firm: Davis Polk;Chadbourne Parke     Sector: Conglomerates

UNDERWRITING AGREEMENT, Parties: fortune brands inc , barclays capital inc , bbva securities inc , citigroup global markets inc , credit suisse securities (usa) llc , jp morgan securities inc , mitsubishi ufj securities (usa)  inc , mizuho securities usa inc , rbs securities inc , wachovia capital markets  llc
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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.

 

Name of Underwriter

  

Principal Amount

Barclays Capital Inc.

  

$

91,500,000

Credit Suisse Securities (USA) LLC

  

 

91,500,000

J.P. Morgan Securities Inc.

  

 

91,500,000

RBS Securities Inc.

  

 

91,500,000

Citigroup Global Markets Inc.

  

 

20,000,000

Mitsubishi UFJ Securities (USA), Inc.

  

 

20,000,000

Mizuho Securities USA Inc.

  

 

20,000,000

Wachovia Capital Markets, LLC

  

 

20,000,000

BBVA Securities Inc.

  

 

6,000,000

BNP Paribas Securities Corp.

  

 

6,000,000

BNY Mellon Capital Markets, LLC

  

 

6,000,000

Calyon Securities (USA) Inc.

  

 

6,000,000

Deutsche Bank Securities Inc.

  

 

6,000,000

Loop Capital Markets, LLC

  

 

6,000,000

PNC Capital Markets LLC

  

 

6,000,000

Rabo Securities USA Inc.

  

 

6,000,000

U.S. Bancorp Investments, Inc.

  

 

6,000,000

  

 

 

Total:

  

$

500,000,000


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:

 

 

(i)

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;


 

(ii)

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

 

 

(iii)

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

 

 

(iv)

in any other circumstances which do not require the publication by us of a prospectus pursuant to Article 3 of the Prospectus Directive.

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:

 

Principal Amount:

  

$500,000,000, subject to further issuances, as described below.

Maturity:

  

June 15, 2014.

Interest Rate:

  

6.375% per annum, computed on the basis of a 360-day year comprised of twelve 30-day months.

Optional Redemption Provisions:

  

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


  

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.

Interest Payment Dates:

  

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).

Form and Denomination:

  

Global Security held through book-entry facilities of The Depository Trust Company (as described in the Description of the Notes).

Sinking Fund Provisions:

  

None.

Further Issuances:

  

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.

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.

 

Very truly yours,

BARCLAYS CAPITAL INC.

By:

 

/s/ Pamela Kendall

Name:

 

Pamela Kendall

Title:

 

Director

CREDIT SUISSE SECURITIES (USA) LLC

By:

 

/s/ Sharen Harrison

Name:

 

Sharen Harrison

Title:

 

Director

J.P. MORGAN SECURITIES INC.

By:

 

/s/ Maria Sramek

Name:

 

Maria Sramek

Title:

 

Executive Director

RBS SECURITIES INC.

By:

 

/s/ Moshe Tomkiewicz

Name:

 

Moshe Tomkiewicz

Title:

 

Managing Director

 

Accepted:

FORTUNE BRANDS, INC.

By

 

/s/ Mark Hausberg

 

Mark Hausberg

 

Senior Vice President – Finance and Treasurer


Schedule A

General Use Free Writing Prospectuses

 

1)

Term Sheet for the Offered Securities dated June 9, 2009


Schedule B

Pricing Term Sheet

Fortune Brands, Inc.

$500,000,000 6.375% Notes due 2014

 

Issuer:

 

Fortune Brands, Inc.

Security:

 

Senior unsecured notes

Size:

 

$500,000,000

Maturity:

 

June 15, 2014

Coupon (Interest Rate):

 

6.375%

Interest Payment Dates:

 

June 15 and December 15, commencing December 15, 2009

Price to Public:

 

99.948%

Benchmark Treasury Yield:

 

2.887%

Spread to Benchmark Treasury:

 

+350.0 bps

Yield to Maturity:

 

6.387%

Benchmark Treasury:

 

2.250% due May 31, 2014

Make-whole Call:

 

At any time at a discount rate of Treasury plus 50 basis points

Trade Date:

 

June 9, 2009

Settlement Date:

 

June 12, 2009

CUSIP:

 

349631 AP6

Anticipated Ratings:

 

Baa2, review for potential downgrade (Moody’s Investors Service Inc.)

 
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