-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, T0eH2QGYYLTaPmd6ETzDSpslymb6ekJp/L0N/56zgGZbUJ4rka9hEDkpcsZEaDvp 210NTjEdw5tPbCzSi95mvA== 0000950130-99-002226.txt : 19990416 0000950130-99-002226.hdr.sgml : 19990416 ACCESSION NUMBER: 0000950130-99-002226 CONFORMED SUBMISSION TYPE: S-3 PUBLIC DOCUMENT COUNT: 9 REFERENCES 429: 033-50832 FILED AS OF DATE: 19990415 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FORTUNE BRANDS INC CENTRAL INDEX KEY: 0000789073 STANDARD INDUSTRIAL CLASSIFICATION: HEATING EQUIP, EXCEPT ELEC & WARM AIR & PLUMBING FIXTURES [3430] IRS NUMBER: 133295276 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-3 SEC ACT: SEC FILE NUMBER: 333-76371 FILM NUMBER: 99594936 BUSINESS ADDRESS: STREET 1: 1700 E PUTNAM AVE CITY: OLD GREENWICH STATE: CT ZIP: 06870-0811 BUSINESS PHONE: 2036985000 FORMER COMPANY: FORMER CONFORMED NAME: AMERICAN BRANDS INC /DE/ DATE OF NAME CHANGE: 19920703 S-3 1 FORM S-3 As filed with the Securities and Exchange Commission on April 15, 1999 Registration Statement No. 333- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 -------------- FORM S-3 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 -------------- Fortune Brands, Inc. (Exact name of registrant as specified in its charter) Delaware 1700 East Putnam Avenue, 13-3295276 (State or other Old Greenwich, Connecticut 06870-0811 (I.R.S. Employer jurisdiction of (203) 698-5000 Identification incorporation or (Address, including zip code, and No.) organization) telephone number, including area code, of registrant's principal executive offices) -------------- LOUIS F. FERNOUS, JR., Vice President and Secretary Fortune Brands, Inc. 1700 East Putnam Avenue, Old Greenwich, Connecticut 06870-0811 (203) 698-5000 (Name, address, including zip code, and telephone number, including area code, of agent for service) -------------- Copies to: EDWARD P. SMITH, Esq. FRANCIS J. MORISON, Esq. Chadbourne & Parke LLP Davis Polk & Wardwell 30 Rockefeller Plaza 450 Lexington Avenue New York, New York 10112 New York, New York 10017 (212) 408-5100 (212) 450-4000 -------------- Approximate date of commencement of proposed sale to the public: From time to time after this Registration Statement becomes effective. If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. [_] If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, as amended (the "Securities Act"), other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. [X] If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [_] If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [_] If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. [_] CALCULATION OF REGISTRATION FEE - -------------------------------------------------------------------------------- - --------------------------------------------------------------------------------
Proposed Proposed maximum Title of each class of maximum aggregate Amount of securities to be Amount to be offering price offering registration registered registered(1) per unit(1) price(1) fee - ------------------------------------------------------------------------------------- Debt Securities and War- rants to Purchase Debt Securities............. $550,000,000(2) 100% $550,000,000 $152,900 - ------------------------------------------------------------------------------------- Common Stock, par value $3.125 per share, and associated Preferred Share Purchase Rights.. (3) - -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------- (1) Estimated solely for purposes of calculating the amount of the registration fee. Excludes an aggregate of $450,000,000 of unsold securities previously registered pursuant to Registration Statement No. 33-50832, which are covered by the Prospectus included in this Registration Statement. (2) Or, if any such Debt Securities are issued (i) at an original issue discount, such greater amount as shall result in aggregate net proceeds not in excess of $550,000,000 to the Registrant or (ii) with a principal amount denominated in a foreign currency or composite currency, such amount as shall result in an aggregate principal amount equivalent to $550,000,000 at the time of initial offering. (3) Such indeterminate number of shares of Common Stock of the Registrant and accompanying Preferred Share Purchase Rights, if any (i) as shall be issuable or deliverable upon conversion of any Debt Securities registered hereby which are convertible into such Common Stock and (ii) as may be required for delivery upon conversion of any such convertible debt securities as a result of anti-dilution provisions thereof. The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until this Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine. -------------- Pursuant to Rule 429 of the General Rules and Regulations under the Securities Act of 1933, the Prospectus included as part of this Registration Statement will be used in connection with the offer and sale of Debt Securities and Warrants to Purchase Debt Securities of the Registrant in the principal amount of $450,000,000 previously registered under the Registrant's Registration Statement on Form S-3 bearing Registration No. 33-50832, in respect of which Registrant paid a filing fee of $140,625. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- ++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++ +The information in this Prospectus is not complete and may be changed. We may + +not sell these securities until the registration statement filed with the + +Securities and Exchange Commission is effective. This Prospectus is not an + +offer to sell these securities and it is not soliciting an offer to buy these + +securities in any state where the offer or sale is not permitted. + ++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++ SUBJECT TO COMPLETION, DATED APRIL 15, 1999 PROSPECTUS [LOGO] $1,000,000,000 Debt Securities Warrants to Purchase Debt Securities ----------- We will provide specific terms of these securities in supplements to this Prospectus. You should read this Prospectus and any supplement carefully before you invest. ----------- Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities, or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense. The date of this Prospectus is , 1999. WHERE YOU CAN FIND MORE INFORMATION We file annual, quarterly and current reports, proxy statements and other information with the SEC. You can read and copy any document we file at the SEC's public reference rooms in Washington, D.C., New York, New York and Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for further information on the public reference rooms. Our SEC filings are also available to the public at the SEC's web site at http://www.sec.gov. The SEC allows us to "incorporate by reference" into this prospectus the information we file with it, which means that we can disclose important information to you by referring you to those documents. The information incorporated by reference is considered to be a part of this Prospectus, and later information filed with the SEC will update and supersede this information. We incorporate by reference the documents listed below and any future filings made with the SEC under Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 until our offering is completed: . Annual Report on Form 10-K for the year ended December 31, 1998; . The description of our common stock, par value $3.125 per share, set forth under the headings "Description of Fortune Brands Capital Stock" and "Comparative Rights of Shareholders" on pages 94-105 of our Proxy Statement for the 1997 Annual Meeting of Stockholders of Fortune Brands, Inc.; and . The description of our Preferred Share Purchase Rights, set forth on Form 8-A dated December 22, 1997. You may request a copy of these filings, at no cost other than for exhibits of such filings, by writing to or telephoning us at the following address (or by visiting our web site at http://www.fortunebrands.com): FORTUNE BRANDS, INC. Office of the Secretary 1700 East Putnam Avenue Old Greenwich, Connecticut 06870-0811 (telephone number (203) 698-5000) We have filed with the SEC a Registration Statement to register the debt securities and warrants to purchase such debt securities under the Securities Act of 1933. This Prospectus omits certain information contained in the Registration Statement, as permitted by SEC rules. You may obtain copies of the Registration Statement, including exhibits, as noted in the paragraph above. You should rely only on the information incorporated by reference or provided in this Prospectus or the prospectus supplement. We have authorized no one to provide you with different information. We are not making an offer of these securities in any state where the offer is not permitted. You should not assume that the information in this Prospectus or the prospectus supplement is accurate as of any date other than the date on the front of the document. FORTUNE BRANDS, INC. We are a holding company with subsidiaries engaged in various businesses. Our subsidiaries manufacture and sell home and office products, golf products, spirits and wine. We are a legal entity separate and distinct from our subsidiaries. Our rights, and the rights of our creditors (including holders of debt securities and debt warrants) and stockholders, to participate in any distribution of the assets or earnings of any subsidiary is subject to the claims of creditors of the subsidiary, except to the extent that our claims as a creditor of our subsidiaries may be recognized. Our claims may be subordinate to claims of other creditors. Our principal source of unconsolidated revenues and funds is dividends and other payments from our subsidiaries. Our principal subsidiaries currently are not limited by long-term debt or other agreements in their abilities to pay cash dividends or to make other distributions with respect to their capital stock or other payments to us. Our principal executive offices are currently located at 1700 East Putnam Avenue, Old Greenwich, Connecticut 06870-0811 and our telephone number is (203) 698-5000. USE OF PROCEEDS We intend to use the net proceeds we receive from the sale of securities offered by this Prospectus and the accompanying prospectus supplement for general corporate purposes, unless we specify otherwise in the applicable prospectus supplement. General corporate purposes may include the repayment of existing indebtedness, additions to working capital, capital expenditures or the financing of possible acquisitions. RATIO OF EARNINGS TO FIXED CHARGES The following table sets forth the ratio of earnings to fixed charges for Fortune Brands, Inc.:
Years Ended December 31, ------------------------ 1994 1995 1996 1997 1998 ---- ---- ---- ---- ---- Ratio of earnings to fixed charges.................. 1.22 3.23 2.81 2.06 5.22
For the purpose of computing the ratio of earnings to fixed charges, earnings means: . income from continuing operations before income taxes and minority interest; . plus fixed charges; . less capitalized interest; and . less excess of earnings over dividends of less-than-fifty-percent-owned companies. Fixed charges means the sum of the following: . interest (including capitalized interest) on all indebtedness; . amortization of debt discount and expense; and . that portion of rental expense which we believe to be representative of an interest factor. 2 DESCRIPTION OF DEBT SECURITIES The following description sets forth the general terms and provisions that could apply to the debt securities. Each prospectus supplement will state the particular terms that actually will apply to the debt securities covered by such prospectus supplement. We will issue debt securities in one or more series under an indenture dated as of April 15, 1999 between us and The Chase Manhattan Bank, as trustee. The indenture may be supplemented from time to time. We have filed a copy of the indenture as an exhibit to the Registration Statement. In addition the following summary, you should refer to the specific terms of the indenture for more detailed information. Some of the capitalized terms used in the following discussion are defined in the indenture, and their definitions are incorporated by reference into this Prospectus. When we use italics, we are referring to sections in the indenture. Wherever we refer to particular provisions of the indenture, such provisions are incorporated by reference in our summary, which is qualified by such reference. General The indenture does not limit the amount of securities we may issue. Debt securities may be issued in one or more series as we may authorize at various times. (Section 3.01). The prospectus supplement relating to the particular series of debt securities we are offering will specify the amounts, prices and terms of those debt securities. These terms may include: . the title and aggregate principal amount of the debt securities; . the percentage of the principal amount at which we will issue the debt securities; . the date or dates on which the debt securities will mature; . any annual rate or rates, or the method of determining the rate or rates, at which the debt securities will bear interest; . the date or dates from which interest shall accrue and the date or dates on which interest will be payable; . redemption and sinking fund terms; . whether the debt securities are convertible into Common Stock and, if so, the initial conversion price or rate, the conversion period and the other terms and conditions relating to the conversion, including whether any Preferred Share Purchase Rights of Fortune Brands, Inc. will be delivered with shares of Common Stock issued upon conversion; . if the debt securities are not denominated in U.S. dollars, the foreign currency or currencies or composite currency or currencies in which the debt securities are denominated and, if any payment of principal of or premium or interest on or any other amount for the debt securities is not payable in U.S. dollars, the foreign currency or currencies or composite currency or currencies in which the payment shall be payable and the particular provisions applicable to the debt securities; . whether the debt securities are issuable as registered securities or as bearer securities, or both; . whether the debt securities will be issued in whole or in part in the form of one or more global securities and the depositary for the global security or securities; . any events of default or covenants that will apply to the debt securities; and . any other terms of the debt securities, which will not conflict with the terms of the indenture. (Section 3.01). 3 The debt securities will be our direct, unsecured and unsubordinated obligations. The debt securities will rank equally with any of our other unsecured and unsubordinated obligations for borrowed money. The indenture does not limit other indebtedness or securities which we may incur or issue. The indenture does not contain financial or similar restrictions on us, except as described under "Certain Covenants". Other than the protections which may otherwise be afforded holders of debt securities as a result of the operation of the covenants described in the indenture, there are no covenants or other provisions which may afford holders of debt securities protection if there is a leveraged buyout or other highly leveraged transaction involving us or any similar occurrence. We will describe the restrictions, elections, tax consequences, specific terms and other information relating to any debt securities denominated in a foreign currency or composite currency in the prospectus supplement. If we issue any original issue discount securities (securities bearing no interest or interest at a rate which at the time of issuance is below market rates), we will describe the federal income tax consequences and other special considerations applicable to any debt securities issued as original issue discount securities in the prospectus supplement. Form, Denominations, Exchange and Transfer Unless we provide otherwise in an applicable prospectus supplement with respect to a series of debt securities, we will issue the debt securities in definitive form solely as registered securities, solely as bearer securities or as both registered securities and bearer securities. Unless otherwise provided in an applicable prospectus supplement, interest coupons will be attached to bearer securities. (Section 2.01). The indenture also provides that we may issue debt securities of a series in temporary or permanent global form. (Section 3.01). Unless we specify otherwise in the applicable prospectus supplement, we will issue registered securities in denominations of multiples of $1,000 and bearer securities in denominations of $1,000 or $10,000. (Section 3.02). We will issue debt securities denominated in a foreign currency or in a composite currency in the denominations we specify in the prospectus supplement. You may surrender debt securities for exchange and registered securities for registration of transfer in the manner, at the places and subject to the restrictions set forth in the prospectus supplement. This may be done without service charge but we may require payment of related taxes or other governmental charges. (Section 3.05). Bearer securities and the attached coupons will be transferable by delivery. In connection with their sale during the "restricted period" as defined in Section 1.163-5(c)(2)(i)(D)(7) of the U.S. Treasury regulations (generally, the first 40 days after the closing date (or, in the case of debt securities issuable on exercise of a debt warrants, the first 40 days after the date of exercise of such debt warrants) and, with respect to unsold allotments, until sold), bearer securities may not be delivered within the U.S. or its possessions and may be delivered only upon certification as to the beneficial ownership of the bearer securities. See "Limitations on Issuance of Bearer Debt Securities and Bearer Debt Warrants". In the event of any redemption, we will not be required to: . issue, register the transfer of or exchange debt securities of any series during a period beginning at the opening of business 15 days before: . if debt securities of the series are issuable only as registered securities, the day the relevant notice of redemption is mailed and ending at the close of business on the day of such mailing; and . if debt securities of the series are issuable only as bearer securities, the day the relevant notice of redemption is first published, or, if earlier, and if debt securities of the series are also issuable as registered securities and there is no publication, the day of mailing of the relevant notice of redemption, and in either case, ending at the close of business on the date of such publication or mailing; or 4 . register the transfer or exchange of any portion of a registered security called for redemption, except the unredeemed portion of any registered security being redeemed in part; or . exchange any bearer security called for redemption, except to exchange such bearer security for a registered security of that series and like tenor which is immediately surrendered for redemption. Payment and Paying Agents Unless we indicate otherwise in an applicable prospectus supplement, we will pay principal of and any premium and any interest on registered securities at the office of the paying agent or paying agents as we may designate at various times. However, at our option, we may make interest payments on registered securities by check mailed to the address, as it appears on the security register, of the person entitled to the payments. Unless we specify otherwise in the applicable prospectus supplement, we will make payment of any installment of interest on registered securities to the person in whose name the registered security is registered at the close of business on the record date for such interest. (Sections 3.07 and 10.02). Unless we indicate otherwise in an applicable prospectus supplement, we will pay principal, any premium and any interest on bearer securities, subject to any applicable laws and regulations, at the offices of those paying agents outside the U.S. that we may designate at various times. However, at our option, we may make interest payments by check or by transfer to an account maintained by the payee with a bank located outside the U.S. (Sections 3.07 and 10.02). Unless we indicate otherwise in an applicable prospectus supplement, we will pay any interest on bearer securities on any interest payment date only upon presentation and surrender of the coupon relating to the interest payment date. (Section 10.01). We will not pay principal, any premium or any interest for any bearer security at any paying agency maintained by us in the U.S. or by check mailed to any address in the U.S. or by transfer to an account maintained with a bank located in the U.S. except as may be permitted without detriment to us under U.S. tax laws and regulations in effect at the time of such payment. Notwithstanding the foregoing, . any payment in respect of bearer securities to be made in U.S. dollars may be made at the office of a paying agent in the U.S. if payment at all paying agencies outside the U.S. is illegal or effectively precluded by exchange controls or other similar restrictions, and . any payment in respect of bearer securities to be made in a foreign currency or composite currency may be made at the office of a paying agent in the U.S. in U.S. dollars in an amount equal to the sum otherwise due in such foreign currency or composite currency as converted into U.S. dollars at the rate of exchange as set forth in the indenture if payment at all paying agencies outside the U.S. in such foreign currency or composite currency and in U.S. dollars in such amount is illegal or effectively precluded by exchange controls or other similar restrictions. (Section 10.02). We will name the paying agents outside the U.S. initially appointed by us for a series of debt securities in the applicable prospectus supplement. We may terminate the appointment of any of the paying agents at various times, but we will maintain in the Borough of Manhattan, The City of New York, at least one paying agency where the registered securities of each series may be presented for payment. We will maintain one or more paying agencies in a city or cities located outside the U.S. (including any city in which a paying agency is required to be maintained under the rules of any stock exchange on which the debt securities of such series are listed) where the bearer securities may be presented for payment. (Section 10.02). All monies we pay to a paying agent for the payment of principal of, any premium or any interest on any debt securities that remains unclaimed at the end of two years after becoming due and payable will be repaid to us. After that time, the holder of the debt securities or coupon will look only to us for payment. (Section 10.03). 5 Global Securities The debt securities of a series may be issued in whole or in part in the form of one or more fully registered global securities that we will deposit with a Depositary identified in the applicable prospectus supplement. Registered global securities will be issued in a denomination or aggregate denominations equal to the portion of the aggregate principal amount of outstanding debt securities of the series to be represented by the registered global security or securities. Unless and until it is exchanged in whole or in part for the individual debt securities it represents, a registered global security may not be transferred or exchanged except as a whole: . by the applicable Depositary to a nominee of the Depositary; . by any nominee to the Depositary itself or another nominee; or . by the Depositary or any nominee to a successor Depositary or any nominee of the successor Depositary and except in the circumstances described in the applicable prospectus supplement. (Section 3.05). We will describe the specific terms of the depositary arrangement with respect to any portion of a series of debt securities in the applicable prospectus supplement. We anticipate that the following provisions will generally apply to depositary arrangements. Ownership of beneficial interests in a registered global security will be limited to institutions that have accounts with the Depositary ("participants") and to persons that may hold interests through participants. For interests of participants, ownership of beneficial interests in the registered global security will be shown on the records maintained by the applicable Depositary. For interests of persons other than participants, ownership of beneficial interests in the registered global security will be shown on the records of participants. Transfer of that ownership will be effected only through those records. We expect that upon the issuance of a registered global security, and the deposit of the registered global security with or on behalf of the Depositary, the Depositary will immediately credit, on its book-entry registration and transfer system, the respective principal amounts of the debt securities represented by the registered global security to the accounts of participants. The accounts to be credited shall be designated by the underwriters or agents engaging in the distribution of such debt securities or by us if those debt securities are offered and sold directly by us. Unless we specify otherwise in the applicable prospectus supplement, payment of principal of and premium, and any interest on debt securities represented by any registered global security will be made to the Depositary or its nominee, as the sole registered owner and the sole holder of the debt securities. Neither we, the trustee, nor any agents will be responsible for any aspect of the Depositary's records or any participant's records relating to or payments made by the Depositary or any participants on account of beneficial ownership interests in a registered global security representing any debt securities. Neither we, the trustee nor any agents will be responsible or liable for maintaining, supervising or reviewing any of the Depositary's records or any participant's records relating to beneficial ownership interests. We expect that the Depositary or its nominee, upon receipt of any payment of principal of or any premium or any interest on any registered global security, immediately will credit, on its book-entry registration and transfer system, the participant's accounts with the payments. Those payments will be credited in amounts proportionate to the respective beneficial interests of the participants in the principal amount of the registered global security as shown on the records of the Depositary or its nominee. We also expect that payments by participants to owners of beneficial interests in a registered global security held through those participants will be governed by standing instructions and customary practices. This is now the case with securities held for customer accounts in bearer form or registered in "street name". Those payments will be the sole responsibility of those participants. 6 Except as otherwise set forth in the applicable prospectus supplement, we will issue certificated debt securities in exchange for each registered global security only if: . the Depositary notifies us that it is unwilling or unable to continue as Depositary for the registered global security or if at any time the Depositary ceases to be a clearing agency registered under the Securities Exchange Act of 1934, and we have not appointed a successor of the Depositary within 90 calendar days; . we determine (in our sole discretion) that the registered global security shall be exchangeable for definitive debt securities in registered form; or . an Event of Default (as defined below under "Defaults and Certain Rights on Default") for the debt securities represented by such registered global security has occurred and is continuing. Any registered global security that is exchangeable pursuant to the preceding sentence shall be exchangeable in whole for definitive debt securities in registered form, of like tenor and of an equal aggregate principal amount, in denominations of $100,000 and any larger amount that is an integral multiple of $1,000. Such definitive debt securities will be registered in the name or names of the owners of such person or persons as the Depositary shall instruct the trustee. It is expected that the instructions may be based upon directions received by the Depositary from its participants regarding ownership of beneficial interests in the registered global security. Unless we specify otherwise in the applicable prospectus supplement and except as provided above, owners of beneficial interests in the registered global security will not be entitled to receive physical delivery of debt securities in definitive form and will not be considered the holders for any purpose under the indenture. No registered global security representing debt securities will be exchangeable except for another permanent registered global security of like denomination and tenor to be registered in the name of the Depositary or its nominee. Each person owning a beneficial interest in the registered global security must rely on the procedures of the Depositary. Persons who are not participants must rely on the procedures of the participant through which such person owns its interest, to exercise any rights of a holder under the indenture. The laws of some jurisdictions require that certain purchasers of securities take physical delivery of the securities in definitive form. Such limits and such laws may impair the ability to transfer beneficial interests in a registered global security. The indenture permits the Depositary, as a holder, to authorize participants as its agents to make, give or take any request, demand, authorization, direction, notice, consent, waiver or other action which a holder is entitled to make, give or take under the indenture. We understand that under existing industry practices, in the event that we request any action of holders or an owner of a beneficial interest in the registered global security desires to make, give or take any request, demand, authorization, direction, notice, consent, waiver or other action which a holder is entitled to make, give or take under the indenture, the Depositary would authorize the participants holding the relevant beneficial interests to make, give or take such action. The participants would authorize beneficial owners owning through them to make, give or take such action or would otherwise act upon the instructions of beneficial owners owning through them. We may also issue the debt securities of a series in whole or in part in the form of one or more bearer global securities that we will deposit with a common depositary for Morgan Guaranty Trust Company of New York, Brussels office, as operator of the Euroclear System ("Euroclear"), and for Cedelbank, or with a nominee for such common depositary, identified in the applicable prospectus supplement. We may issue the bearer global securities in temporary or permanent form. The specific terms and procedures, including the specific terms of the depositary arrangement, for any portion of a series of debt securities to be represented by one or more bearer global securities, will be described in the applicable prospectus supplement. See "Limitations on Issuance of Bearer Debt Securities and Bearer Debt Warrants". 7 Convertible Debt Securities The terms and conditions upon which any convertible debt securities of a series may be converted into shares of Common Stock, including the initial conversion price or rate and the conversion period, and other provisions, will be set forth in the prospectus supplement. See "Description of Capital Stock". Certain Covenants Definitions. The following is a summary of certain defined terms used in the restrictive covenants contained in the indenture: . "Consolidated Net Tangible Assets" means the excess over current liabilities of all assets as set forth in our consolidated balance sheet after deducting goodwill, trademarks, patents, other like intangibles and minority interests of others. . "Funded Debt" includes, in addition to indebtedness for borrowed money maturing more than one year from the date of creation or extension thereof, guarantees of funded debt or of dividends (except guarantees arising in connection with the sale or pledge of customers' paper or otherwise arising in the ordinary course of business) and any funded debt secured by a mortgage on our property or any Restricted Subsidiary whether or not assumed. . "Restricted Subsidiary" is defined to exclude a Subsidiary organized under foreign laws or operating outside the U.S., a Subsidiary involved primarily in the business of finance, banking, credit, leasing, insurance, financial services, real estate, petroleum or gas, transportation or overseas financing, and Subsidiaries of the foregoing. A Subsidiary required to be disposed of by court order and determined by our board of directors not to be a Restricted Subsidiary is also excluded from the definition of Restricted Subsidiary. . "Secured Debt" includes indebtedness for money borrowed secured by a mortgage upon any of our assets or a Restricted Subsidiary; "mortgage" includes any mortgage, pledge or security interest. . "Subsidiary" is defined as any corporation of which we or any one or more Subsidiaries directly or indirectly own outstanding stock having voting power sufficient to elect, under ordinary circumstances, a majority of the directors. (Section 1.01). Restrictions on Secured Debt. The indenture provides that, except as described below, neither we nor any Restricted Subsidiary may incur any Secured Debt without securing the debt securities (and, if we so elect, any indebtedness ranking equally with the debt securities) equally and ratably with, or prior to, such Secured Debt. This restriction does not apply to indebtedness secured by: . mortgages existing at the time a corporation becomes a Restricted Subsidiary; . mortgages assumed in connection with a merger with, or an acquisition of substantially all of the properties of, a corporation, if any such mortgage existed prior to such merger or acquisition and did not apply to any property owned by us or a Restricted Subsidiary immediately prior to such merger or acquisition; . mortgages on property existing at the time of acquisition or mortgages on certain property to finance the cost of acquisition, construction or improvement; . mortgages securing indebtedness owing to us or a Restricted Subsidiary; . mortgages in favor of the U.S. or any State or any instrumentality of either to secure partial, progress, advance or other payments pursuant to any contract or statute; . mortgages incurred under industrial revenue bond or similar financings; or . extensions, renewals or refundings of any of the foregoing. 8 Notwithstanding the above provisions, we and our Restricted Subsidiaries may incur Secured Debt without equally and ratably securing the debt securities if after giving effect thereto the sum of: . the total of all of our Secured Debt and the Secured Debt of Restricted Subsidiaries (except Secured Debt of the types described in the paragraph immediately above); . the value of all sale and lease back transactions; and . the aggregate of all unsecured Funded Debt of Restricted Subsidiaries which, if it were secured debt, would be permitted by this paragraph, does not exceed 10% of Consolidated Net Tangible Assets. (Section 10.06). Restrictions on Borrowing by Restricted Subsidiaries. The indenture provides that Restricted Subsidiaries may not incur any Funded Debt, except: . Funded Debt owed to us or a Restricted Subsidiary; . Funded Debt which is Secured Debt that could under the preceding paragraphs of "Restrictions on Secured Debt" be incurred without ratably securing the debt securities; . unsecured Funded Debt which represents an extension, renewal or refunding of Secured Debt described in the second sentence of the first paragraph of "Restrictions on Secured Debt" above; . unsecured Funded Debt, which, if it were Secured Debt, would be permitted by the last paragraph of "Restrictions on Secured Debt" above; . existing unsecured Funded Debt assumed by a Restricted Subsidiary in connection with its merger with, or acquisition of all or a substantial part of the assets of any corporation; . unsecured Funded Debt of any corporation existing when it becomes a Restricted Subsidiary; . Funded Debt incurred in connection with industrial revenue bond or similar financings; or . extensions, renewals or refundings of any of the foregoing. (Section 10.05). Restrictions on Sale and Lease Back Transactions. The indenture provides that neither we nor any Restricted Subsidiary may sell and lease back for periods exceeding five years any major facility owned as of the date of the indenture unless: . fair value is received for the facility sold; and . an amount equal to the net proceeds of such sale is applied to the retirement of Funded Debt which is not subordinated in right of payment to the debt securities, provided that the amount of such required retirement shall be reduced by: --the amount of any Secured Debt which we or such Restricted Subsidiary could then incur under the last paragraph of "Restrictions on Secured Debt" above, and --the principal amount of any instruments evidencing Funded Debt (which may include the debt securities) delivered within 120 days after the sale to the applicable trustee for retirement and cancellation, other than instruments retired by payment at maturity or pursuant to mandatory sinking fund or prepayment provisions. (Section 10.07). Restrictions on Transfers of Property. Neither we nor any Restricted Subsidiary may transfer or lease any major facility to any Subsidiary not considered a "Restricted Subsidiary" for any of the reasons described in the first sentence of the Restricted Subsidiary definition in the "Definitions" paragraph above. (Section 10.08). 9 Limitations on Merger The indenture provides that if, we merge or consolidate with or into any other corporation or we transfer substantially all of our assets to any other corporation, and as a result any of our property or the property of a Restricted Subsidiary would become subject to any mortgage, we will simultaneously with or prior to such transaction secure the debt securities by a prior lien on such property. (Section 8.03). If we merge or consolidate with any other corporation or we transfer substantially all of our assets to any other corporation, the successor corporation shall be substituted as obligor under the indenture. (Sections 8.01 and 8.02). Modification of Indenture In general, our rights and obligations and the rights of holders of debt securities under the indenture may be modified if holders of a majority in aggregate principal amount of the outstanding debt securities of each series affected by the modification consent to it. However, the indenture provides that, unless each affected holder agrees, we cannot .make any adverse change to any payment term of a debt security such as: .extending the maturity date; .extending the date on which we have to pay interest; .reducing the interest rate; .reducing the amount of principal we have to repay; .changing the currency in which we have to make any payment of principal, premium or interest; . modifying any redemption or repurchase right to the detriment of the holder; . modifying any right to convert the debt securities for another security to the detriment of the holder; . impairing any right of a holder to bring suit for payment; . reducing the percentage of the aggregate principal amount of debt securities needed to make any amendment to the indenture or to waive any covenant or default; or .make any change to this provision of the indenture. (Section 9.02). However, if the trustee and we agree, we can amend the indenture without notifying any holders or seeking their consent if the amendment does not materially and adversely affect any holder. Defaults and Certain Rights on Default An "Event of Default" is defined under the indenture as any of the following: . default for 30 days in payment of any interest; . default in payment of principal; . default for 60 days after notice in performance of any other covenant in the indenture; and . certain events of bankruptcy, insolvency, receivership or reorganization. We will furnish to the trustee annually a written statement as to the fulfillment of our obligations under the indenture. In case an Event of Default with respect to debt securities of any series at the time outstanding occurs and is continuing, the trustee or the holders of at least 25% in principal amount of the debt securities of such series then outstanding may declare the principal of all the debt securities of such series to be due and payable. The indenture permits such declaration, under certain circumstances, to be rescinded by the holders of a majority in principal amount of the debt securities of the series at the time outstanding. (Sections 5.01, 5.02 and 10.04). 10 Subject to the provisions of the indenture relating to the duties of the trustee in case an Event of Default occurs and is continuing, the indenture provides that the trustee is not obligated to exercise any of the rights or powers under the indenture at the request or direction of any of the holders of debt securities, unless the holders have offered to the trustee reasonable security or indemnity. Subject to the provisions for indemnification and certain limitations contained in the indenture, the holders of a majority in principal amount of the debt securities of any series at the time outstanding and so affected have the right to direct the time, method and place of conducting any proceeding for any remedy available to the trustee or exercising any trust or power conferred on the trustee with respect to the debt securities of such series. The holders may, in certain cases, waive any default except a default in payment of principal of or premium, if any, or interest, if any, on the debt securities of such series. (Sections 5.12, 5.13 and 6.03). Defeasance The prospectus supplement will state if any defeasance provision will apply to the debt securities. The indenture contains a provision that, if made applicable to any series of debt securities, permits us to elect (a) to defease and be discharged from all our obligations (subject to limited exceptions) with respect to any series of debt securities then outstanding (known as "legal defeasance") (Section 4.03), or (b) to be released from our obligations under certain restrictive covenants (including those described above under "Certain Covenants") (known as "covenant defeasance") (Section 10.10). To make either of the above elections, we must: . deposit in trust with the trustee (a) in the case of debt securities and coupons denominated in U.S. dollars, U.S. government obligations and (b) in the case of debt securities and coupons denominated in a foreign currency, foreign government securities denominated in such foreign currency, which through the payment of principal and interest in accordance with their terms and, together with any additional currency deposited, will provide sufficient money, without reinvestment, to repay in full those debt securities; and . deliver to the trustee an opinion of counsel that holders of the debt securities will not recognize income, gain or loss for Federal income tax purposes as a result of the deposit and related defeasance and will be subject to Federal income tax in the same amount, in the same manner and at the same times as would have been the case if such deposit and related defeasance had not occurred (in the case of legal defeasance only, such opinion of counsel is to be based on a ruling of the IRS to such effect, unless we indicate otherwise in the prospectus supplement). Governing Law The indenture, the debt securities and any coupons will be governed by, and construed in accordance with, the laws of the State of New York. (Section 1.12). Concerning the Trustee The Chase Manhattan Bank is one of a number of banks with which we maintain ordinary banking relationships and with which we maintain credit facilities. As of the date of this prospectus, The Chase Manhattan Bank is a trustee under one other indenture under which unsecured debt obligations of ours are outstanding. 11 DESCRIPTION OF CAPITAL STOCK The following description of our capital stock includes a summary of certain provisions of our Restated Certificate of Incorporation and our By-laws, as amended. This description is not complete and is qualified by reference to the Restated Certificate of Incorporation and the By-laws. We have filed copies of the Restated Certificate of Incorporation and By-laws as exhibits to the Registration Statement of which this Prospectus is a part. Capital Stock Generally We have authorized 810 million shares, of which 750 million are Common Stock, par value $3.125 per share, and 60 million are Preferred Stock, without par value. Apart from the $2.67 Convertible Preferred Stock (the "$2.67 Preferred") described below under "Outstanding Preferred Stock", the rights, preferences and limitations of which are set forth in the Restated Certificate of Incorporation, our board of directors is empowered to provide for any series of Preferred Stock and, in general, to determine the relative rights, preferences and limitations of such series. The Restated Certificate of Incorporation provides that no holder of Common Stock or Preferred Stock shall have any preemptive rights. The outstanding shares of Common Stock and $2.67 Preferred are, and any shares of Common Stock issued upon conversion of any convertible debt securities will be, validly issued, fully paid and nonassessable. Common Stock Holders of Common Stock are entitled to receive such dividends as are declared by our board of directors. Holders of Common Stock are entitled to cast one vote for each share on all matters voted upon by stockholders, except where holders of Preferred Stock are entitled to vote separately in certain cases. Upon liquidation of Fortune Brands, Inc., holders of Common Stock are entitled to share equally and ratably in any assets available for distribution to them. No dividend may be paid or declared on the Common Stock or any other junior stock, other than a dividend payable in Common Stock or other junior stock, nor may any shares of Common Stock or any junior stock be acquired for a consideration by us or any subsidiary, unless all dividends on the $2.67 Preferred accrued for all past quarterly dividend periods have been paid and unless, in the case of dividends on the Common Stock or any other junior stock, the full dividends on the $2.67 Preferred for the then current quarterly dividend period have been then paid or declared. Subject to the foregoing, the Restated Certificate of Incorporation does not restrict us from purchasing shares of Common Stock. The co-transfer agent and registrar for shares of the Common Stock is Continental Stock Transfer & Trust Company. We also serve as the co-transfer agent for shares of the Common Stock. Outstanding Preferred Stock Holders of $2.67 Preferred are entitled to cumulative dividends at an annual rate of $2.67 per share, payable quarterly on the 10th day of March, June, September and December, as and when declared by our board of directors. Holders are also entitled to preference in liquidation of $30.50 per share plus accrued dividends then unpaid and to three-tenths of a vote per share on all matters voted upon by stockholders (but are not, except in certain cases, entitled to vote as a class) and effective June 2, 1997 have the right to convert each share of $2.67 Preferred into 6.205 (6205/1000) shares of Common Stock (subject to adjustment to prevent dilution of the conversion right in certain events). We may redeem all or any part of the $2.67 Preferred at a price of $30.50 per share, plus accrued dividends then unpaid. 12 Preferred Share Purchase Rights Each outstanding share of Common Stock also evidences one preferred share purchase right (the "Rights"). Unless otherwise specified in the prospectus supplement applicable to any convertible debt securities, as long as the Rights are attached to the Common Stock, we presently intend to deliver one Right with each new share of Common Stock issued, including shares issued upon conversion of such debt securities, prior to the expiration or earlier redemption or exchange of the Rights. All such shares will have attached Rights. The description and terms of the Rights are set forth in a Rights agreement dated as of November 19, 1997, as amended, between us and First Chicago Trust Company of New York, as Rights Agent, and the following is qualified by reference to such Rights agreement. We have filed a copy of the Rights agreement as an exhibit to the Registration Statement of which this Prospectus is a part. Each Right entitles its registered holder until December 24, 2007 (or, if earlier, the redemption or exchange of the Rights) to purchase from us one one- hundredth ( 1/100) of a share of Series A Junior Participating Preferred Stock, without par value (the "Preferred Shares"), of Fortune Brands, Inc. at an exercise price of $150 per one one-hundredth of a Preferred Share (the "Purchase Price"), subject to certain adjustments. The Rights will not be exercisable or transferable apart from the Common Stock, until the earlier of (1) the tenth day after the public announcement that a person or group has acquired, or obtained the right to acquire, beneficial ownership of 15% or more of the Common Stock (other than a person or group that becomes such a 15% beneficial owner by means of share acquisitions by us or a person or group that our board of directors determines in good faith has become such a 15% beneficial owner inadvertently, so long as such person or group as promptly as possible divests enough Common Stock so as no longer to be such a 15% beneficial owner) or (2) the tenth business day (or such later date as may be determined by our board of directors prior to a person or group becoming such a 15% beneficial owner) after the commencement of, or the announcement of an intention to commence, a tender or exchange offer the consummation of which would result in beneficial ownership by a person or group of 15% or more of the Common Stock. The Rights will not have any voting rights or be entitled to dividends. In the event that we are acquired in a merger or other business combination transaction or 50% or more of our assets or earning power and the assets or earning power of our subsidiaries (taken as a whole) are sold, each Right will entitle its holder to purchase, at the Purchase Price, that number of shares of common stock of the acquiring company which at the time of such transaction would have a market value of two times the Purchase Price. Alternatively, if a person or group has become a 15% beneficial owner as described in clause (1) of the first sentence of the preceding paragraph, each Right, other than Rights beneficially owned by the 15% holder (which will thereafter be void), will become exercisable for the number of shares of Common Stock which, at that time, would have a market value of two times the Purchase Price. If such beneficial ownership is less than 50% of the outstanding Common Stock, each Right may be exchanged by our board of directors, at its option, in whole or in part, for shares of Common Stock at an exchange ratio of one share of Common Stock for each Right, subject to adjustment. The Rights are redeemable at $.01 per Right (the "Redemption Price"), subject to adjustment, at any time prior to the time that a person or group has acquired, or obtained the right to acquire, beneficial ownership of 15% or more of the Common Stock. Immediately upon any redemption of the Rights, the right to exercise the Rights will terminate and the only right of the holders of Rights will be to receive the Redemption Price. The rights will expire on December 24, 2007 (unless earlier redeemed or exchanged). In the event that we are not able to authorize a sufficient number of additional shares of Common Stock to satisfy the exercise or exchange of a Right pursuant to its terms, we will be required to substitute Preferred Shares (or a fraction thereof) for the shares of Common Stock that would otherwise be issuable upon exercise or exchange of such Right at a rate such that the Preferred Shares substituted would have the same market value as the shares of Common Stock that would otherwise have been issued upon such exercise or exchange. 13 Election of Directors, Other Voting Provisions and Related Matters Pursuant to the Restated Certificate of Incorporation, our board of directors is divided into three classes of directors serving staggered three- year terms. The exact number of directors will be determined from time to time by or pursuant to the By-laws, provided that their number shall not exceed 20. The board of directors is currently comprised of 14 directors. The Restated Certificate of Incorporation also provides a procedure requiring that we receive advance written notice of stockholder nominations of directors. The Restated Certificate of Incorporation requires, in addition to any affirmative vote required by law, the Restated Certificate of Incorporation or the By-laws, the affirmative vote of two-thirds of the votes cast by our stockholders entitled to vote in order to obtain stockholder approval of amendments to the Restated Certificate of Incorporation, mergers, consolidations and sales or leases of substantially all of our assets. Currently, Delaware law generally requires the affirmative vote of the holders of a majority of the outstanding shares of our capital stock entitled to vote thereon. Notwithstanding the foregoing, the Restated Certificate of Incorporation further provides that the affirmative vote of at least 80 percent of the votes entitled to be cast by the holders of all the then outstanding shares of stock of Fortune Brands, Inc. entitled to be voted generally in the election of directors, voting together as a single class, shall be required for the amendment or repeal of, or the adoption of provisions inconsistent with, the above-described provisions of the Restated Certificate of Incorporation relating to classification and stockholder nomination of directors unless such amendment, repeal or adoption has been approved by three-fourths of the directors then in office. The By-laws require that the Annual Meeting of our stockholders for the election of directors and other proper business be held at such place as may from time to time be designated by the directors on the first Wednesday of May or on such other day as the directors may designate (or, if the day fixed for the meeting is a legal holiday, on the next business day which is not a legal holiday.) The By-laws further provide that special meetings of the stockholders may be called only by the Chairman of the Board, the President or the directors, by resolution adopted by a majority of the entire board of directors. In addition, the Restated Certificate of Incorporation provides that any action to be taken by the stockholders must be effected at a duly called annual or special meeting and may not be effected by written consent. The By- laws require that, except as otherwise provided by law, at least ten days' prior notice of each annual or special meeting shall be given by written notice signed by the Secretary or an Assistant Secretary and mailed to each stockholder of record entitled to vote. The By-laws also provide a procedure requiring that advance written notice be given to us of the proposal by stockholders of business other than the nomination of directors and then only such business as is stated in a notice of a special meeting shall be transacted at such meeting. Certain of the provisions described under this section entitled "Description of Capital Stock", including the right to issue additional shares of Preferred Stock, could have the effect of discouraging transactions that might lead to a change in control of Fortune Brands, Inc. DESCRIPTION OF DEBT WARRANTS We may issue, together with debt securities or separately, debt warrants for the purchase of debt securities. If we issue the debt warrants together with any debt securities, they may be attached to or separate from the debt securities. We will issue the debt warrants under a debt warrant agreement to be entered into between us and a bank or trust company, as debt warrant agent, as set forth in the prospectus supplement. We are summarizing certain provisions of the debt warrant agreement. In addition to the following summary, we have filed copies of the debt warrant agreements as an exhibit to the Registration Statement of which this Prospectus is a part. You should read the debt warrant agreement for more detailed information. When we use italics we are referring to sections in the debt warrant agreement. Wherever we refer to particular provisions of the debt warrant agreement, such provisions are incorporated by reference in our summary, which is qualified by such reference. 14 General The prospectus supplement will describe the particular terms of the debt warrants. These terms may include: . the price at which the debt warrants will be issued; . the currency or composite currency for which the debt warrants may be purchased; . the designation, aggregate principal amount, currency or composite currency and terms of the debt securities which may be purchased upon exercise of the debt warrants; . if applicable, the designation and terms of the debt securities with which the debt warrants are issued and the number of debt warrants issued with each of such debt securities; . if applicable, the date on and after which the debt warrants and the related debt securities will be separately transferable; . the principal amount of debt securities purchasable upon exercise of each debt warrant and the price at which and the currency or composite currency in which such principal amount of debt securities may be purchased upon such exercise; . the date on which the right to exercise the debt warrants will commence and the date on which the right will expire (if the debt warrants are not continuously exercisable throughout such period, the specific date or dates on which they will be exercisable which term shall also mean, with respect to debt warrants continuously exercisable for a period of time, every date during such period); . whether the debt warrants certificates representing the debt warrants will be in registered form or bearer form, or both; . any applicable federal income tax consequences; . the identity of the debt warrants agent for the debt warrants; and . any other terms of the debt warrants which will not conflict with the debt warrant agreement. Registered warrants of each series will be evidenced by debt warrant certificates in registered form and bearer warrants of each series will be evidenced by a permanent global debt warrant certificate in bearer form. The global debt warrant certificate will be deposited with a common depositary for Euroclear and Cedelbank, for credit to the accounts of the subscribers for the bearer warrants on the related date of issue. Bearer warrants will not be issued in definitive form. At the option of the holder upon request confirmed in writing, and subject to the terms of the relevant debt warrant agreement, registered warrants of any series will be exchangeable for registered warrants of the same series representing in the aggregate the number of debt warrants surrendered for exchange. Registered warrants may be presented for exchange and for registration of transfer (with the form of transfer endorsed thereon duly executed), at the corporate trust office of the debt warrant agent for such series of debt warrants (or any other office indicated in the prospectus supplement relating to such series of debt warrants). This may be done without service charge and upon payment of any taxes and other governmental charges as described in the relevant debt warrant agreement. Such transfer or exchange will be effected upon the debt warrant agent for such series of debt warrants being satisfied with the documents of title and identity of the person making the request. (Section 4.01). We will not offer, sell or deliver bearer warrants at any time to persons within the U.S. or to U.S. persons, except to the extent permitted under U.S. Treasury regulations. See "Limitations on Issuance of Bearer Debt Securities and Bearer Debt Warrants". 15 Exercise of Debt Warrants Each debt warrant will entitle the holder to purchase for cash the principal amount of debt securities at the exercise price set forth in the prospectus supplement. Debt warrants may be exercised at any time up to the close of business on the debt warrant expiration date set forth in the prospectus supplement. After the close of business on the debt warrant expiration date (or such later date to which the debt warrant expiration date may be extended by us), unexercised debt warrants will become void. (Section 2.02). Subject to any restrictions and additional requirements that may be set forth in the prospectus supplement, registered warrants may be exercised by delivering to the debt warrant agent the debt warrant certificate evidencing the registered warrants properly completed and duly executed and by delivering payment as provided in the prospectus supplement of the amount required to purchase the debt securities purchasable upon exercise. (Section 2.03). Subject to any such restrictions and additional requirements, bearer warrants may be exercised by delivering to Euroclear or Cedelbank a duly completed exercise letter or tested telex, in the form obtainable from Euroclear or Cedelbank or the debt warrant agent. The exercise letter will set forth, among other things, instructions for payment as provided in the prospectus supplement on the date of exercise of the amount required to purchase the debt securities purchasable upon exercise of bearer warrants. Purchasers of bearer securities to be delivered upon exercise of the bearer warrants will be subject to certification requirements as to beneficial ownership thereof. See "Limitations on Issuance of Bearer Debt Securities and Bearer Debt Warrants". The procedures to be followed in connection with the delivery of the exercise letter will be set forth in the prospectus supplement. The exercise price of debt warrants will be that price applicable on the date of receipt of payment in full of the requisite amount of funds, determined as set forth in the prospectus supplement. Upon receipt of such payment (plus payment under certain circumstances of accrued interest on the debt securities being purchased) and upon either (1) surrender of such debt warrant certificate at the corporate trust office of the debt warrant agent or any other office indicated in the prospectus supplement, in the case of Registered Warrants, or (2) satisfaction of the certification requirements referred to above, in the case of bearer warrants, we will, as soon as practicable, forward the debt securities purchasable upon such exercise. Only registered securities will be deliverable upon exercise of registered warrants. Registered securities or, subject to the certification procedures referred to above, bearer securities will be delivered upon exercise of bearer warrants, as may be specified in the exercise letter. If fewer than all of the registered warrants represented by a debt warrant certificate are exercised, a new debt warrant certificate will be issued representing the remaining number of registered warrants. (Section 2.03). Modifications The debt warrant agreement and the terms of the debt warrants and the debt warrant certificates may be amended by us and the debt warrant agent, without the consent of the holders, for the purpose of curing any ambiguity, or of curing, correcting or supplementing any defective or inconsistent provision or in any other manner which we may deem necessary or desirable and which will not adversely affect the interests of the holders in any material respect. (Section 6.01). Merger, Consolidation, Sale or Other Disposition If at any time we should merge or consolidate or transfer substantially all of our assets as permitted under the indenture, the successor corporation shall succeed to and assume all of our obligations under the debt warrant agreement and the debt warrant certificates. (Section 3.04). 16 Enforceability of Rights of Debt Warrants Holders; Governing Law The debt warrant agent will act solely as our agent in connection with the debt warrant certificates and will not assume any obligation or relationship of agency or trust for or with any holders of debt warrants certificates or beneficial owners of debt warrants. (Section 5.02). Any holder of debt warrant certificates evidencing registered warrants and any beneficial owner of bearer warrants may, without the consent of the debt warrant agent, any other holder, the trustee, the holder of any debt securities issued upon exercise of debt warrants or, if applicable, the common depositary for Euroclear and Cedelbank, enforce by appropriate legal action, on its own behalf, its right to exercise the debt warrants evidenced by such debt warrant certificates or the global debt warrant certificates evidencing such bearer warrants, as the case may be, in the manner provided therein and in the debt warrant agreement. (Section 3.03). Prior to the exercise of the debt warrants, a record or beneficial owner of debt warrants will not have any rights of a holder of the debt securities purchasable upon exercise, including the right to receive payments of principal of, any premium or interest on such debt securities or to enforce any of the covenants in the indenture. (Section 3.01). The debt warrants and each debt warrant agreement will be governed by, and construed in accordance with, the laws of the State of New York. (Section 6.04). LIMITATIONS ON ISSUANCE OF BEARER DEBT SECURITIES AND BEARER DEBT WARRANTS Except as may otherwise be provided in the prospectus supplement, in compliance with U.S. federal tax laws and regulations: . debt securities that are bearer securities (including debt securities in global form) may not be offered or sold during the restricted period (as defined under "Description of Debt Securities--Form, Denominations, Exchange and Transfer") to persons within the U.S. or its possessions ("U.S.") or to U.S. persons, . bearer securities sold during the restricted period may not be delivered within the U.S., and . bearer warrants may not be offered, sold or delivered to persons within the U.S. or to U.S. persons at any time, except to the extent permitted under Section 1.163-5(c)(2)(i)(D) of the U.S. Treasury regulations (the "D Rules"). Any underwriters, agents and dealers participating in the offering of bearer securities or bearer warrants must agree that, except to the extent permitted under the D Rules, they will not offer or sell bearer securities to persons within the U.S. or to U.S. persons during the restricted period, will not deliver within the U.S. bearer securities sold during the restricted period, and will not offer, sell or deliver bearer warrants to persons within the U.S. or to U.S. persons at any time. In addition, any underwriters, agents and dealers must have in effect procedures reasonably designed to ensure that their employees or agents who are directly engaged in selling bearer securities or bearer warrants are aware that bearer securities and bearer warrants cannot be offered or sold, during the applicable period, to persons within the U.S. or to U.S. persons. Bearer securities (other than temporary global debt securities) will be delivered in definitive form only upon certification, as provided in the D Rules, that the beneficial owners thereof are not U.S. persons, or other certification as to ownership permissible under the D Rules. Bearer securities (other than temporary global debt securities) and any related coupons will bear a legend substantially to the following effect: "Any U.S. person who holds this obligation will be subject to limitations under the U.S. income tax laws, including the limitations provided in Sections 165(j) and 1287(a) of the U.S. Internal Revenue Code". The sections referred to in such legend provide that a U.S. person (other than a U.S. financial institution described above or U.S. person holding through such a financial institution) who holds a bearer security or coupon will not be allowed to deduct any loss realized on the sale, exchange or redemption 17 of such bearer security and any gain (which might otherwise be characterized as capital gain) recognized on such sale, exchange or redemption will be treated as ordinary income. As used herein, "U.S. person" means a citizen, national or resident of the U.S., a corporation, partnership or other entity created or organized in or under the laws of the U.S. or any political subdivision thereof, or an estate or trust the income of which is subject to U.S. federal income taxation regardless of its source. PLAN OF DISTRIBUTION We may sell the debt securities and the debt warrants in any of three ways (or in any combination thereof): . through underwriters or dealers; . directly to a limited number of purchasers or to a single purchaser; or . through agents. The prospectus supplement with respect to the debt securities and the debt warrants will set forth the terms of the offering, including: . the name or names of any underwriters and the amounts of the debt securities; . the debt warrants underwritten or purchased by each of them; . the purchase price of the debt securities; . the debt warrants and the proceeds to us from such sale, any discounts, commissions or other items constituting compensation from us; . any initial public offering price and any discounts, commissions or concessions allowed or reallowed or paid to dealers; . any restrictions or limitations on persons to whom, jurisdictions in which or the manner in which the debt securities and the debt warrants may be offered, sold, resold or delivered; and . any securities exchanges on which the debt securities and the debt warrants may initially be listed. Only underwriters named in the prospectus supplement are deemed to be underwriters in connection with the debt securities and the debt warrants. If underwriters or dealers are used in the sale, the debt securities and the debt warrants will be acquired by underwriters and dealers for their own account and may be resold at various times in one or more transactions, including negotiated transactions, at a fixed public offering price or at varying prices determined at the time of sale. The debt securities and the debt warrants may be offered to the public either through underwriting syndicates represented by managing underwriters or directly by the managing underwriter or underwriters. Unless otherwise set forth in the prospectus supplement, the obligations of the underwriters to purchase the debt securities and the debt warrants will be subject to certain conditions precedent and the underwriters will be obligated to purchase all the debt securities and the debt warrants if any are purchased. Any initial public offering price and any discounts or concessions allowed or reallowed or paid to dealers may be changed at various times. We may sell debt securities and debt warrants directly through agents designated by us. The prospectus supplement will name any agent involved in the offer or sale in respect of which this prospectus is delivered and will set forth any commissions payable by us to such agent. Unless otherwise indicated in the prospectus supplement, any agent will be acting on a best efforts basis for the period of its appointment. If an applicable prospectus supplement indicates, we will authorize agents, underwriters or dealers to solicit offers by certain purchasers to purchase debt securities and debt warrants from us at the public offering 18 price set forth in the prospectus supplement under delayed delivery contracts providing for payment and delivery on a specified date in the future. These contracts will be subject to only those conditions set forth in the prospectus supplement, and the prospectus supplement will set forth the commission payable for solicitation of the contracts. Agents, dealers and underwriters may be entitled under agreements entered into with us to indemnification by us against certain civil liabilities, including liabilities under the Securities Act of 1933, or to contribution with respect to payments which the agents or underwriters may be required to make. Agents and underwriters may be customers of, engage in transactions with or perform services for us in the ordinary course of business. LEGAL OPINION The legality of the debt securities and debt warrants will be passed upon for us by Chadbourne & Parke LLP, New York, New York, and, if debt securities and debt warrants are being distributed in an underwritten offering, the legality of such debt securities and debt warrants will be passed upon for the underwriters by Davis Polk & Wardwell, New York, New York. EXPERTS The consolidated financial statements and financial statement schedule incorporated in this Prospectus by reference to Fortune Brands, Inc.'s Annual Report on Form 10-K for the year ended December 31, 1998, have been so incorporated in reliance on the reports of PricewaterhouseCoopers LLP, independent accountants, given on the authority of said firm as experts in accounting and auditing. 19 PART II INFORMATION NOT REQUIRED IN PROSPECTUS Item 14. Other Expenses of Issuance and Distribution. The expenses in connection with the issuance and distribution of the securities being registered hereby, other than underwriting discounts and commissions, are as follows: Securities and Exchange Commission Registration Fee................ $152,900 *Legal Fees and Expenses........................................... 100,000 *Accountants' Fees and Expenses.................................... 20,000 *Trustee's Fees and Expenses....................................... 40,000 *Printing and Engraving Expenses................................... 20,000 *Rating Agency Fees................................................ 100,000 *State Qualification Expenses (including legal fees)............... 4,000 *Miscellaneous..................................................... 4,000 -------- Total............................................................ $440,900 ========
- -------- * Estimated Item 15. Indemnification of Directors and Officers. Section 145 of the General Corporation Law of Delaware provides in part as follows: "(a) A corporation shall have power to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation) by reason of the fact that the person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by the person in connection with such action, suit or proceeding if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe the person's conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which the person reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that the person's conduct was unlawful. "(b) A corporation may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that the person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against expenses (including attorneys' fees) actually and reasonably incurred by the person in connection with the defense or settlement of such action or suit if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the corporation and except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the corporation unless and only to the extent that the Court of Chancery or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery or such other court shall deem proper. II-1 "(c) To the extent that a present or former director or officer of a corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in subsections (a) and (b) of this section, or in defense of any claim, issue or matter therein, such person shall be indemnified against expenses (including attorneys' fees) actually and reasonably incurred by such person in connection therewith. "(d) Any indemnification under subsections (a) and (b) of this section (unless ordered by a court) shall be made by the corporation only as authorized in the specific case upon a determination that indemnification of the present or former director, officer, employee or agent is proper in the circumstances because the person has met the applicable standard of conduct set forth in subsections (a) and (b) of this section. Such determination shall be made, with respect to a person who is a director or officer at the time of such determination, (1) by a majority vote of the directors who are not parties to such action, suit or proceeding, even though less than a quorum, or (2) by a committee of such directors designated by majority vote of such directors, even though less than a quorum, or (3) if there are no such directors, or if such directors so direct, by independent legal counsel in a written opinion, or (4) by the stockholders. "(e) Expenses (including attorneys' fees) incurred by an officer or director in defending any civil, criminal, administrative or investigative action, suit or proceeding may be paid by the corporation in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of such director or officer to repay such amount if it shall ultimately be determined that such person is not entitled to be indemnified by the corporation as authorized in this section. Such expenses (including attorneys' fees) incurred by former directors or officers or other employees and agents may be so paid upon such terms and conditions, if any, as the corporation deems appropriate. "(f) The indemnification and advancement of expenses provided by, or granted pursuant to, the other subsections of this section shall not be deemed exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled under any bylaw, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in such person's official capacity and as to action in another capacity while holding such office. "(g) A corporation shall have power to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against such person and incurred by such person in any such capacity, or arising out of such person's status as such, whether or not the corporation would have the power to indemnify such person against such liability under this section. "(h) For purposes of this section, references to 'the corporation' shall include, in addition to the resulting corporation, any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its directors, officers, and employees or agents, so that any person who is or was a director, officer, employee or agent of such constituent corporation, or is or was serving at the request of such constituent corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, shall stand in the same position under this section with respect to the resulting or surviving corporation as such person would have with respect to such constituent corporation if its separate existence had continued. "(i) For purposes of this section, references to 'other enterprises' shall include employee benefit plans; references to 'fines' shall include any excise taxes assessed on a person with respect to any employee benefit plan; and references to 'serving at the request of the corporation' shall include any service as a director, officer, employee or agent of the corporation which imposes duties on, or involves services by, such director, officer, employee, or agent with respect to an employee benefit plan, its participants or beneficiaries; and a person who acted in good faith and in a manner such person reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan shall be II-2 deemed to have acted in a manner "not opposed to the best interests of the corporation' as referred to in this section. "(j) The indemnification and advancement of expenses provided by, or granted pursuant to, this section shall, unless otherwise provided when authorized or ratified, continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such a person. "(k) The Court of Chancery is hereby vested with exclusive jurisdiction to hear and determine all actions for advancement of expenses or indemnification brought under this section or under any bylaw, agreement, vote of stockholders or disinterested directors, or otherwise. The Court of Chancery may summarily determine a corporation's obligation to advance expenses (including attorney's fees)." Article XIII of Registrant's By-laws provides as follows: "Section 1. (A) Each person (an 'indemnitee') who was or is made or threatened to be made a party to or was or is involved (as a witness or otherwise) in any action, suit or proceeding, whether civil, criminal, administrative or investigative (hereinafter a "proceeding'), by reason of the fact that he or she or a person of whom he or she is the legal representative was or is a director, officer or employee of the Company or was or is serving at the request of the Company as a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust or other enterprise, including service with respect to employee benefit plans, whether the basis of such proceeding was or is alleged action in an official capacity as a director, officer, employee or agent or in any other capacity while serving as a director, officer, employee or agent, shall be indemnified and held harmless by the Company to the fullest extent permitted by the General Corporation Law of the State of Delaware as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the Company to provide broader indemnification rights than said law permitted the Company to provide prior to such amendment), against all expense, liability and loss (including attorneys' fees and retainers therefor, judgments, fines, excise taxes or penalties under the Employee Retirement Income Security Act of 1974, as amended, and amounts paid in settlement) reasonably incurred or suffered by such person in connection therewith and such indemnification shall continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of his or her heirs, executors and administrators; provided, however, that except as provided in Section 3 of this Article XIII with respect to proceedings seeking to enforce rights to indemnification, the Company shall indemnify any such person seeking indemnification in connection with a proceeding (or part thereof) initiated by such person only if such proceeding (or part thereof) was authorized by the board of directors of the Company. (B) The right to indemnification conferred in this Article XIII is and shall be a contract right. The right to indemnification conferred in this Article XIII shall include the right to be paid by the Company the expenses (including attorneys' fees and retainers therefor) reasonably incurred in connection with any such proceeding in advance of its final disposition, such advances to be paid by the Company within 20 days after the receipt by the Company of a statement or statements from the indemnitee requesting such advance or advances from time to time; provided, however, that if the General Corporation Law of the State of Delaware requires, the payment of such expenses incurred by a director or officer in his or her capacity as a director of officer (and not in any other capacity in which service was or is rendered by such person while a director or officer, including, without limitation, service to an employee benefit plan) in advance of the final disposition of a proceeding, shall be made only upon delivery to the Company of an undertaking by or on behalf of such director or officer, to repay all amounts so advanced if it shall ultimately be determined that such director or officer is not entitled to be indemnified under this Article XIII or otherwise. "Section 2. (A) To obtain indemnification under this Article XIII, an indemnitee shall submit to the Company a written request, including therein or therewith such documentation and information as is reasonably available to the indemnitee and is reasonably necessary to determine whether and to what extent the indemnitee is entitled to indemnification. Upon written request by an indemnitee for indemnification pursuant to the first II-3 sentence of this Section 2(A), a determination, if required by applicable law, with respect to the indemnitee's entitlement thereto shall be made as follows: (1) if requested by the indemnitee, by Independent Counsel (as hereinafter defined), or (2) if no request is made by the indemnitee for a determination by Independent Counsel, (a) by the board of directors by a majority vote of a quorum consisting of Disinterested directors (as hereinafter defined), or (b) if a quorum of the board of directors consisting of Disinterested directors is not obtainable or, even if obtainable, such quorum of Disinterested directors so directs, by Independent Counsel in a written opinion to the board of directors, a copy of which shall be delivered to the indemnitee, or (c) by the stockholders of the Company. In the event the determination of entitlement to indemnification is to be made by Independent Counsel at the request of the indemnitee, the Independent Counsel shall be selected by the indemnitee unless the indemnitee shall request that such selection be made by the board of directors, in which event the Independent Counsel shall be selected by the board of directors. If it is so determined that the indemnitee is entitled to indemnification, payment to the indemnitee shall be made within 10 days after such determination. (B) In making a determination with respect to entitlement to indemnification hereunder, the person, persons or entity making such determination shall presume that the indemnitee is entitled to indemnification under this Article XIII, and the Company shall have the burden of proof to overcome that presumption in connection with the making by any person, persons or entity of any determination contrary to that presumption. "Section 3. (A) If a claim under Section 1 of this Article XIII is not paid in full by the Company within 30 days after a written claim pursuant to Section 2(A) of this Article XIII has been received by the Company, or if an advance is not made within 20 days after a request therefor pursuant to Section 1(B) of this Article XIII has been received by the Company, the indemnitee may at any time thereafter bring suit (or, at the indemnitee's option, an arbitration proceeding before a single arbitrator pursuant to the rules of the American Arbitration Association) against the Company to recover the unpaid amount of the claim or the advance and, if successful in whole or in part, the indemnitee shall be entitled to be paid also the expense of prosecuting such claim. It shall be a defense to any such suit or proceeding (other than a suit or proceeding brought to enforce a claim for expenses incurred in connection with any proceeding in advance of its final disposition where the required undertaking, if any is required, has been tendered to the Company) that the indemnitee has not met the standards of conduct which make it permissible under the General Corporation Law of the State of Delaware for the Company to indemnify the indemnitee for the amount claimed or that such indemnification otherwise is not permitted under the General Corporation Law of the State of Delaware, but the burden of proving such defense shall be on the Company. (B) Neither the failure of the Company (including its board of directors, Independent Counsel or stockholders) to have made a determination prior to the commencement of such action that indemnification of the indemnitee is proper in the circumstances because he or she has met the applicable standard of conduct set forth in the General Corporation Law of the State of Delaware, nor an actual determination by the Company (including its board of directors, Independent Counsel or stockholders) that the indemnitee has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that the indemnitee has not met the applicable standard of conduct. (C) If a determination shall have been made pursuant to Section 2(A) of this Article XIII that the indemnitee is entitled to indemnification, the Company shall be bound by such determination in any judicial proceeding or arbitration commenced pursuant to paragraph (A) of this Section 3. (D) The Company shall be precluded from asserting in any judicial proceeding or arbitration commenced pursuant to paragraph (A) of this Section 3 that the procedures and presumptions of this Article XIII are not valid, binding and enforceable and shall stipulate in any such court or before any such arbitrator that the Company is bound by all the provisions of this Article XIII. "Section 4. The right to indemnification and the payment of expenses incurred in connection with a proceeding in advance of its final disposition conferred in this Article XIII shall not be exclusive of any other II-4 right which any person may have or hereafter acquire under any statute, provision of the Certificate of Incorporation, by-laws, agreement, vote of stockholders or Disinterested directors or otherwise. "Section 5. The Company may maintain insurance, at its expense, to protect itself and any director, officer, employee or agent of the Company or another corporation, partnership, joint venture, trust or other enterprise against any expense, liability or loss, whether or not the Company would have the power to indemnify such person against such expense, liability or loss under the General Corporation Law of the State of Delaware. To the extent that the Company maintains any policy or policies providing such insurance, each such director, officer or employee, and each such agent to which rights to indemnification have been granted as provided in Section 6 of this Article XIII, shall be covered by such policy or policies in accordance with its or their terms to the maximum extent of the coverage thereunder for any such director, officer, employee or agent. "Section 6. The Company may, to the extent authorized from time to time by the board of Directors, grant rights to indemnification, and rights to be paid by the Company the expenses incurred in connection with any proceeding in advance of its final disposition, to any agent of the Company to the fullest extent of the provisions of this Article XIII with respect to the indemnification and advancement of expenses of directors, officers and employees of the Company. "Section 7. If any provision or provisions of this Article XIII shall be held to be invalid, illegal or unenforceable for any reason whatsoever: (A) the validity, legality and enforceability of the remaining provisions of this Article XIII (including without limitation, each portion of any Section of this Article XIII containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby; and (B) to the fullest extent possible, the provisions of this Article XIII (including, without limitation, each portion of any Section of this Article XIII containing any such provision held to be invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested by the provision held invalid, illegal or unenforceable. "Section 8. For purposes of this Article XIII: (A) 'Disinterested director' means a director of the Company who is not and was not a party to the matter in respect of which indemnification is sought by the indemnitee. (B) 'Independent Counsel' means a law firm, or a member of a law firm, that is experienced in matters of corporation law and neither presently is, nor in the past five years has been, retained to represent: (1) the Company or the indemnitee in any matter material to either such party, or (2) any other party to the matter giving rise to a claim for indemnification. Notwithstanding the foregoing, the term "Independent Counsel' shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or the indemnitee in an action to determine the indemnitee's rights under this Article XIII. "Section 9. Any notice, request or other communication required or permitted to be given to the Company under this Article XIII shall be in writing and either delivered in person or sent by telecopy, telex, telegram or certified or registered mail, postage prepaid, return receipt requested, to the Secretary of the Company and shall be effective only upon receipt by the Secretary." Registrant has procured insurance protecting it under its obligation to indemnify officers and directors against certain types of liabilities (including certain liabilities under the Securities Act of 1933) that may be incurred by them in the performance of their duties and affording protection to such officers and directors in certain areas to which the corporate indemnity does not extend, all within specified limits and subject to specified deductions. In addition, Registrant and certain other persons may be entitled under agreements entered into with agents or underwriters to indemnification by such agents or underwriters against certain liabilities, including liabilities under the Securities Act of 1933, or to contribution with respect to payments which Registrant or such persons may be required to make in respect thereof. II-5 Item 16. List of Exhibits. 1a1 --Forms of proposed Underwriting Agreement, Underwriting Agreement Standard Provisions (Debt Securities and Warrants to Purchase Debt Securities) and Delayed Delivery Contract. 4a1 --Indenture, to be dated as of April 15, 1999, between Registrant and The Chase Manhattan Bank, as Trustee (the "Trustee"). 4b1 --Restated Certificate of Incorporation of Registrant is incorporated herein by reference to Exhibit 3(i) to the Annual Report on Form 10-K of Registrant for the Fiscal Year ended December 31, 1998. 4c1 --By-laws of Registrant, as amended, are incorporated herein by reference to Exhibit 3(ii)b to the Annual Report on Form 10-K of Registrant for the Fiscal Year ended December 31, 1998. 4d1 --Rights Agreement, dated as of November 19, 1997, between Registrant and First Chicago Trust Company of New York, as Rights Agent, is incorporated herein by reference to Exhibit 4a to the Current Report on Form 8-K of Registrant dated December 2, 1997. 4e1 --Forms of Debt Securities. 4f1 --Forms of Debt Warrant Agreements, including forms of Debt Warrant Certificates. 5 --Opinion of Chadbourne & Parke LLP as to the legality of the securities being registered. 12 --Statement re Computation of Ratio of Earnings to Fixed Charges for the five years ended December 31, 1998 is incorporated herein by reference to Exhibit 12 to the Annual Report on Form 10-K of Registrant for the Fiscal Year ended December 31, 1998. 23a --Consent of PricewaterhouseCoopers LLP, independent accountants. 23b --Consent of Chadbourne & Parke LLP is contained in their opinion filed as Exhibit 5 to this Registration Statement. 24 --Power of Attorney authorizing certain persons to sign this Registration Statement on behalf of certain directors and officers of Registrant. 25 --Form T-1 Statement of Eligibility and Qualification under the Trust Indenture Act of 1939 of The Chase Manhattan Bank, the Trustee under the Indenture constituting Exhibit 4a1 hereto.
Item 17. Undertakings. The Registrant hereby undertakes: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement: (i) to include any prospectus required by Section 10(a)(3) of the Securities Act of 1933; (ii) to reflect in the prospectus any facts or events arising after the effective date of the Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the Registration Statement; notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20 percent change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective Registration Statement; and (iii) to include any material information with respect to the plan of distribution not previously disclosed in the Registration Statement or any material change to such information in the Registration Statement; provided, however, that clauses (i) and (ii) do not apply if the information II-6 required to be included in a post-effective amendment by those clauses is contained in periodic reports filed by the Registrant pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the Registration Statement. (2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. (4) That, for purposes of determining any liability under the Securities Act of 1933, each filing of the Registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 that is incorporated by reference in the Registration Statement shall be deemed to be a new registration statement relating to the securities offered herein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (5) To file an application for the purpose of determining the eligibility of the trustee to act under subsection (a) of Section 310 of the Trust Indenture Act of 1939 in accordance with the rules and regulations prescribed by the Commission under Section 305(b)(2) of the Trust Indenture Act of 1939. Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of Registrant pursuant to the foregoing provisions, or otherwise, Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by Registrant of expenses incurred or paid by a director, officer or controlling person of Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy, as expressed in the Securities Act of 1933 and will be governed by the final adjudication of such issue. II-7 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Old Greenwich, Connecticut, on this 15th day of April, 1999. FORTUNE BRANDS, INC. Dudley L. Bauerlein, Jr. By __________________________________ Dudley L. Bauerlein, Jr. Senior Vice President and Chief Financial Officer Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities indicated on this 15th day of April, 1999.
Signature Title --------- ----- Thomas C. Hays* Chairman of the Board and Chief Executive Officer (principal executive officer) and - -------------------------- Director (Thomas C. Hays) Norman H. Wesley* President and Chief Operating Officer and Director - -------------------------- (Norman H. Wesley) John T. Ludes* Vice Chairman and Director - -------------------------- (John T. Ludes) Gilbert L. Klemann, II* Executive Vice President--Corporate and Director - -------------------------- (Gilbert L. Klemann, II) Dudley L. Bauerlein, Jr. Senior Vice President and Chief Financial Officer (principal financial officer) - -------------------------- (Dudley L. Bauerlein, Jr.) Craig P. Omtvedt* Senior Vice President and Chief Accounting Officer (principal accounting officer) - -------------------------- (Craig P. Omtvedt) Eugene R. Anderson* Director - -------------------------- (Eugene R. Anderson) Patricia O. Ewers* Director - -------------------------- (Patricia O. Ewers) John W. Johnstone, Jr.* Director - -------------------------- (John W. Johnstone, Jr.)
II-8
Signature Title --------- ----- Sidney Kirschner* Director - ------------------------ (Sidney Kirschner) Gordon R. Lohman* Director - ------------------------ (Gordon R. Lohman) Director - ------------------------ (Charles H. Pistor, Jr.) Eugene A. Renna* Director - ------------------------ (Eugene A. Renna) Anne M. Tatlock* Director - ------------------------ (Anne M. Tatlock) John W. Thompson* Director - ------------------------ (John W. Thompson) Peter M. Wilson* Director - ------------------------ (Peter M. Wilson)
A. Robert Colby *By _________________________________ (A. Robert Colby, Attorney-in- Fact) II-9
INDEX OF EXHIBITS Sequentially Exhibit Numbered Number Description Page ------- ----------- ------------ 1a1 Forms of proposed Underwriting Agreement, Underwriting Agreement Standard Provisions (Debt Securities and Warrants to Purchase Debt Securities) and Delayed Delivery Contract. 4a1 Indenture, to be dated as of April 15, 1999, between Registrant and The Chase Manhattan Bank, as Trustee (the "Trustee"). 4b1 Restated Certificate of Incorporation of Registrant is incorporated herein by reference to Exhibit 3(i) to the Annual Report on Form 10-K of Registrant for the Fiscal Year ended December 31, 1998. 4c1 By-laws of Registrant, as amended, are incorporated herein by reference to Exhibit 3(ii)b to the Annual Report on Form 10-K of Registrant for the Fiscal Year ended December 31, 1998. 4d1 Rights Agreement, dated as of November 19, 1997, between Registrant and First Chicago Trust Company of New York, as Rights Agent, is incorporated herein by reference to Exhibit 4a to the Current Report on Form 8-K of Registrant dated December 2, 1997. 4e1 Forms of Debt Securities. 4f1 Forms of Debt Warrant Agreements, including forms of Debt Warrant Certificates. 5 Opinion of Chadbourne & Parke LLP as to the legality of the securities being registered. 12 Statement re Computation of Ratio of Earnings to Fixed Charges for the five years ended December 31, 1998 is incorporated herein by reference to Exhibit 12 to the Annual Report on Form 10-K of Registrant for the Fiscal Year ended December 31, 1998. 23a Consent of PricewaterhouseCoopers LLP, independent accountants. 23b Consent of Chadbourne & Parke LLP is contained in their opinion filed as Exhibit 5 to this Registration Statement. 24 Power of Attorney authorizing certain persons to sign this Registration Statement on behalf of certain directors and officers of Registrant. 25 Form T-1 Statement of Eligibility and Qualification under the Trust Indenture Act of 1939 of The Chase Manhattan Bank, the Trustee under the Indenture constituting Exhibit 4a1 hereto.
EX-1.A.1 2 UNDERWRITING AGREEMENT Exhibit 1a1 UNDERWRITING AGREEMENT [ ] Fortune Brands, Inc. 1700 East Putnam Avenue Old Greenwich, Connecticut 06870-0811 Dear Sirs: We (the "Manager") understand that Fortune Brands, Inc., a Delaware corporation (the "Company"), proposes to issue and sell $[ ] aggregate principal amount of its [ ]% [ ] Due [ ] (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 $[ ] principal amount of the Debt Securities at [ ]% of the principal amount of such Debt Securities and accrued interest from [ ], if any, to the date of payment and delivery. Principal Amount Name of Underwriter of Debt Securities ------------------- ------------------ $ Upon delivery of such Offered Securities, the Underwriters will pay for such Offered Securities at a closing to be held at the offices of the Company at 1700 East Putnam Avenue, Old Greenwich, Connecticut at [ ] [a.m.] (New York time) on [ ], or at such other time, not later than [ ], as shall be designated by the Manager. The Debt Securities shall have the following terms: Maturity: [ ], [ ] Interest Rate: [ ]% per annum Redemption Provisions: [ ] Interest Payment Dates: [ ] and [ ], commencing [ ], [ ] (the Interest payable on [ ] being in respect of the period commencing [ ]) Form and Denomination: Global Security held through the book-entry facilities of The Depository Trust Company All the provisions (other than the provisions of Article VII) contained in the document entitled Fortune Brands, Inc. Underwriting Agreement Standard Provisions (Debt Securities and Warrants to Purchase Debt Securities ) dated [ ], 1999, a copy of which you have previously received, 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. The term "Manager" as used therein shall mean [ ] whose authority thereunder may be exercised by them jointly or by [ ] alone. Very truly yours, [ ] Acting severally and on behalf of itself and the other Underwriters referred to above By ____________________________ [Name] [Title] Accepted: FORTUNE BRANDS, INC. By ____________________________ FORTUNE BRANDS, INC. UNDERWRITING AGREEMENT STANDARD PROVISIONS (DEBT SECURITIES AND WARRANTS TO PURCHASE DEBT SECURITIES) [ ], 1999 From time to time, FORTUNE BRANDS, INC., a Delaware corporation (the "Company"), may enter into one or more underwriting agreements that provide for the sale of designated securities to the several underwriters named therein. The standard provisions set forth herein may be incorporated by reference in any such underwriting agreement (an "Underwriting Agreement"). The Underwriting Agreement, including the provisions incorporated therein by reference, is herein referred to as this Agreement. Unless otherwise defined herein, terms defined in the Underwriting Agreement are used herein as therein defined. I. The Company proposes to issue and sell from time to time certain of (a) its debt securities (the "Debt Securities") to be issued pursuant to the provisions of an Indenture dated as of [ ], 1999, as supplemented (the "Indenture"), between the Company and The Chase Manhattan Bank, N.A., as Trustee (the "Trustee") and (b) its Warrants (the "Debt Warrants") to purchase Debt Securities (such Debt Securities to be purchasable through the exercise of Debt Warrants being referred to herein as the "Debt Warrant Securities") to be evidenced by warrant certificates (the "Warrant Certificates") and to be issued pursuant to the provisions of the Debt Warrant Agreement identified in the Underwriting Agreement. The Debt Securities may be convertible into Common Stock, par value $3.125 per share, of the Company ("Common Stock") as provided in or pursuant to the Indenture, and Preferred Share Purchase Rights (the "Rights") may be delivered with Common Stock upon conversion of any convertible Debt Securities. The Debt Securities and Debt Warrants to be sold pursuant to this Agreement, but not the Debt Warrant Securities or the Common Stock or Rights, if any, issuable or deliverable upon conversion of any convertible Debt Securities, are collectively referred to herein as the "Offered Securities". The Debt Securities and Debt Warrants will have or be of varying designations, maturities, rates and times of payment of interest, selling prices, exercise prices, conversion prices, expiration dates, redemption terms, currencies and other terms. The Company has filed with the Securities and Exchange Commission (the "Commission") registration statements relating to the Debt Securities and Debt Warrants and the shares of Common Stock and Rights, if any, issuable or deliverable upon conversion of any convertible Debt Securities, has filed such amendments thereto as may have been required to the date of the Underwriting Agreement and has filed with, or mailed for filing to, or shall promptly hereafter file with or mail for filing to, the Commission a prospectus supplement specifically relating to the Offered Securities and the Debt Warrant Securities, if any, pursuant to Rule 424 under the Securities Act of 1933. The term "Registration Statement" means such registration statements as amended to the date of the Underwriting Agreement. The term "Basic Prospectus" means the prospectus included in the Registration Statement relating to the Debt Securities and the Debt Warrants, as updated from time to time. The term "Prospectus" means the Basic Prospectus together with the prospectus supplement specifically relating to the Offered Securities and the Debt Warrant Securities, if any, as filed with, or mailed for filing to, or as shall promptly hereafter be filed with or mailed for filing to, the Commission pursuant to such Rule 424. The term "preliminary prospectus" means a preliminary prospectus supplement specifically relating to the Offered Securities and the Debt Warrant Securities, if any, together with the Basic Prospectus. As used herein, the terms "Registration Statement", "Basic Prospectus", "Prospectus" and "preliminary prospectus" shall include in each case the material, if any, incorporated by reference therein. The term "Underwriters' Securities" means the Offered Securities to be purchased by the Underwriters herein. The term "Contract Securities" means the Offered Securities, if any, to be purchased pursuant to the delayed delivery contracts referred to below. II. If the Prospectus provides for sales of Offered Securities pursuant to delayed delivery contracts, the Company hereby authorizes the Underwriters to solicit offers to purchase Contract Securities on the terms and subject to the conditions set forth in the Prospectus pursuant to delayed delivery contracts substantially in the form of Exhibit A attached hereto ("Delayed Delivery Contracts") but with such changes therein as the Company may authorize or approve. Delayed Delivery Contracts are to be with institutional investors approved by the Company and of the types set forth in the Prospectus. On the Closing Date (as hereinafter defined), the Company will pay the Manager as compensation, for the accounts of the Underwriters, the fee set forth in the Underwriting Agreement in respect of the principal amount and number of Contract Securities. The Underwriters will not have any responsibility in respect of the validity or the performance of Delayed Delivery Contracts. 2 If the Company executes and delivers Delayed Delivery Contracts with institutional investors, the principal amount and number of Contract Securities shall be deducted from the principal amount and number of Offered Securities to be purchased by the several Underwriters and the aggregate principal amount or number of Offered Securities to be purchased by each Underwriter shall be reduced pro rata in proportion to the principal amount or number, as the case may be, of Offered Securities set forth opposite each Underwriter's name in the Underwriting Agreement, except to the extent that the Manager determines that such reduction shall be otherwise and so advises the Company. III. The Company is advised by the Manager that the Underwriters propose to make a public offering of their respective portions of the Underwriters' Securities as soon after this Agreement is entered into as in the Manager's judgment is advisable. The terms of the public offering of the Underwriters' Securities are set forth in the Prospectus. IV. Except as otherwise provided in this Article IV, payment for the Underwriters' Securities shall be made by wire transfer to an account designated by the Company in immediately available funds at the time, on the date and at the place set forth in the Underwriting Agreement, upon delivery to the Manager for the respective accounts of the several Underwriters of the Underwriters' Securities (other than Debt Securities in registered global form) registered in such names and in such denominations as the Manager shall request in writing not less than two full business days prior to the date of delivery and, in the case of Underwriters' Securities that are Debt Securities in registered global form, upon delivery to the Depositary identified in the Underwriting Agreement of a single global Debt Security certificate, registered in the name of the Depositary or a nominee thereof, for credit to the respective accounts of the Depositary participants. The time and date of such payment and delivery with respect to the Underwriters' Securities are herein referred to as the Closing Date. Delivery of any Underwriters' Securities that are (i) Debt Securities in bearer form on the Closing Date shall be initially effected by delivery of a single temporary 3 global Debt Security without coupons (the "Global Debt Security") evidencing the Offered Securities that are Debt Securities in bearer form and (ii) Debt Warrants in bearer form shall be effected only by delivery of a single permanent global Debt Warrant (the "Global Debt Warrant") evidencing the Offered Securities that are Debt Warrants in bearer form, in each case to a common depositary for Morgan Guaranty Trust Company of New York, Brussels office, as operator of the Euro-clear System ("Euro-clear"), and for Centrale de Livraison de Valeurs Mobilieres S.A. ("CEDEL") for credit to the respective accounts at Euro-clear or CEDEL of each Underwriter or such other accounts as each Underwriter may direct. Any Global Debt Security or Global Debt Warrant shall be delivered to the Manager not later than the Closing Date, against payment of funds to the Company in the net amount due to the Company for such Global Debt Security or Global Debt Warrant, as the case may be, by the method and in the form set forth herein. The Company shall cause definitive Debt Securities in bearer form to be prepared and delivered in exchange for such Global Debt Security in such manner and at such time as may be provided in or pursuant to the Indenture; provided, however, that the Global Debt Security shall be -------- ------- exchangeable for definitive Debt Securities in bearer form only on or after the date specified for such purpose in the Prospectus. The Offered Debt Warrants shall be evidenced only by a Global Debt Warrant until their expiration. V. The several obligations of the Underwriters hereunder are subject to the following conditions: (a) No stop order suspending the effectiveness of the Registration Statement shall be in effect, and no proceedings for such purpose shall be pending before or threatened by the Commission and there shall have been no material adverse change in the condition of the Company and its subsidiaries, taken as a whole, from that set forth in the Registration Statement and the Prospectus; and the Manager shall have received, on the Closing Date, a certificate, dated the Closing Date and signed by an executive officer of the Company, to the foregoing effect. Such certificate will also provide that the representations and warranties of the Company contained herein are true and correct as of the Closing Date. The officer making such certificate may rely upon the best of his knowledge as to proceedings pending or threatened. 4 (b) The Manager shall have received on the Closing Date an opinion of Chadbourne & Parke LLP, counsel for the Company, dated the Closing Date, to the effect set forth in Exhibit B attached hereto. (c) The Manager shall have received on the Closing Date an opinion of Davis Polk & Wardwell, counsel for the Underwriters, dated the Closing Date, to the effect set forth in Exhibit C attached hereto. (d) The Manager shall have received on the Closing Date a letter dated the Closing Date, in form and substance satisfactory to the Manager, from PricewaterhouseCoopers LLP, independent certified public accountants, containing statements and information of the type ordinarily included in accountants' "comfort letters" to underwriters with respect to the financial statements and certain financial information contained in or incorporated by reference in the Registration Statement and the Prospectus. VI. In further consideration of the agreements of the Underwriters contained in this Agreement, the Company covenants as follows: (a) To furnish the Manager, without charge, a copy of the Registration Statement including exhibits and materials, if any, incorporated by reference therein and, during the period mentioned in paragraph (c) below, as many copies of the Prospectus, any documents incorporated by reference therein and any supplements and amendments thereto as the Manager may reasonably request. The terms "supplement" and "amendment" or "amend" as used in this Agreement shall include all documents filed by the Company with the Commission subsequent to the date of the Basic Prospectus, pursuant to the Securities Exchange Act of 1934, which are deemed to be incorporated by reference in the Prospectus. (b) Before amending or supplementing the Registration Statement or the Prospectus with respect to the Offered Securities, to furnish the Manager a copy of each such proposed amendment or supplement. (c) If, during such period after the first date of the public offering of the Offered Securities as in the opinion of counsel for the Underwriters the Prospectus is required by law to be delivered, any event 5 shall occur as a result of which it is necessary to amend or supplement the Prospectus in order to make the statements therein, in the light of the circumstances when the Prospectus is delivered to a purchaser, not misleading, or if it is necessary to amend or supplement the Prospectus to comply with law, forthwith to prepare and furnish, at its own expense, to the Underwriters, either amendments or supplements to the Prospectus so that the statements in the Prospectus as so amended or supplemented will not, in the light of the circumstances when the Prospectus is delivered to a purchaser, be misleading or so that the Prospectus will comply with law. (d) To endeavor to qualify the Offered Securities for offer and sale under the securities or Blue Sky laws of such jurisdictions as the Manager shall reasonably request and to pay all expenses (including fees and disbursements of counsel) in connection with such qualification and in connection with the determination of the eligibility of the Offered Securities for investment under the laws of such jurisdictions as the Manager may designate; provided, however, that the Company shall not be -------- ------- obligated to file any general consent to service of process or to qualify as a foreign corporation in any jurisdiction in which it is not qualified. (e) To make generally available to the Company's security holders as soon as practicable an earnings statement covering a twelve- month period beginning after the date of the Underwriting Agreement and ending at the end of a fiscal quarter of the Company, which shall satisfy the provisions of Section 11(a) of the Securities Act of 1933 and the applicable rules and regulations (including Rule 158) thereunder. (f) During the period beginning on the date of the Underwriting Agreement and continuing to and including the Closing Date, not to offer, sell, contract to sell or otherwise dispose of any securities of the Company substantially similar to the Offered Securities, without the prior written consent of the Manager. VII. Each of the several Underwriters agrees with the Company that: 6 (a) except to the extent permitted under U.S. Treas. Reg. Section 1.163-5(c)(2)(i)(D) (the "D Rules"), (i) it has not offered or sold, and during the restricted period will not offer or sell, Debt Securities in bearer form to a person who is within the United States or its possessions or to a United States person, and (ii) it has not delivered and will not deliver within the United States or its possessions definitive Debt Securities in bearer form that are sold during the restricted period; (b) it has and throughout the restricted period will have in effect procedures reasonably designed to ensure that its employees or agents who are directly engaged in selling Debt Securities in bearer form are aware that such Debt Securities may not be offered or sold during the restricted period to a person who is within the United States or its possessions or to a United States person, except as permitted by the D Rules; (c) if it is a United States person, it is acquiring the Debt Securities in bearer form for purposes of resale in connection with their original issuance and if it retains Debt Securities in bearer form for its own account, it will only do so in accordance with the requirements of U.S. Treas. Reg. Section 1.163-5(c)(2)(i)(D)(6); (d) with respect to each affiliate that acquires from it Debt Securities in bearer form for the purpose of offering or selling such Debt Securities during the restricted period, it either (i) repeats and confirms the representations and agreements contained in clauses (a), (b) and (c) on its behalf or (ii) agrees that it will obtain from such affiliate for the Manager's benefit and the benefit of the Company the representations and agreements contained in clauses (a), (b) and (c); and (e) it will comply with or observe any other restrictions or limitations set forth in the Prospectus on persons to whom, or the jurisdictions in which, or the manner in which, the Debt Securities may be offered, sold, resold or delivered. If Underwriters' Securities that are Debt Securities are to be distributed through a selling group consisting of banks, brokers or dealers, the Manager agrees that it shall cause each member of such selling group to enter into an agreement that it will comply with this paragraph. Terms used in this paragraph have the meanings given to them by the applicable 7 provisions of the U.S. Internal Revenue Code and regulations thereunder, including the D Rules. Each of the several Underwriters further agrees with the Company that: (a) except to the extent permitted under the D Rules, (i) it has not offered or sold, and will not offer or sell at any time, Debt Warrants in bearer form to a person who is within the United States or its possessions or to a United States person, and (ii) it has not delivered and will not deliver within the United States or its possessions Debt Warrants in bearer form that are sold at any time; (b) except to the extent permitted under the D Rules, (i) it has not offered or sold, and during the restricted period will not offer or sell, Debt Warrant Securities in bearer form to a person who is within the United States or its possessions or to a United States person, and (ii) it has not delivered and will not deliver within the United States or its possessions definitive Debt Warrant Securities in bearer form that are sold during the restricted period; (c) it has and throughout the restricted period will have in effect procedures reasonably designed to ensure that its employees or agents who are directly engaged in selling Debt Warrants in bearer form or Debt Warrant Securities in bearer form are aware that such Debt Warrants may not be offered or sold at any time, and such Debt Warrant Securities may not be offered or sold during the restricted period, to a person who is within the United States or its possessions or to a United States person, except as permitted by the D Rules; (d) if it is a United States person, it is acquiring the Debt Warrants in bearer form and any Debt Warrant Securities in bearer form for purposes of resale in connection with their original issuance and if it retains Debt Warrants in bearer form or Debt Warrant Securities in bearer form for its own account, it will only do so in accordance with the requirements of U.S. Treas. Reg. Section 1.163-5(c)(2)(i)(D)(6); (e) with respect to each affiliate that acquires from it Debt Warrants in bearer form or Debt Warrant Securities in bearer form for the purpose of offering or selling such Debt Warrants at any time or offering or selling such Debt Warrant Securities during the restricted period, it either (i) repeats and 8 confirms the representations and agreements contained in clauses (a), (b), (c) and (d) on its behalf or (ii) agrees that it will obtain from such affiliate for the Manager's benefit and the benefit of the Company the representations and agreements contained in clauses (a), (b), (c) and (d); and (f) it will comply with or observe any other restrictions or limitations set forth in the Prospectus on persons to whom, or the jurisdictions in which, or the manner in which, the Debt Warrants may be offered, sold, resold or delivered. If Underwriters' Securities that are Debt Warrants are to be distributed through a selling group consisting of banks, brokers or dealers, the Manager agrees that it shall cause each member of such selling group to enter into an agreement that it will comply with this paragraph. Terms used in this paragraph have the meanings given to them by the applicable provisions of the U.S. Internal Revenue Code and regulations thereunder, including the D Rules. VIII. The Company represents and warrants to each Underwriter that (i) each document, if any, filed or to be filed pursuant to the Securities Exchange Act of 1934 and incorporated by reference in the Prospectus complied or will comply when so filed in all material respects with such Act and the rules and regulations thereunder, (ii) each part of the registration statement (including the documents incorporated by reference therein), filed with the Commission pursuant to the Securities Act of 1933 relating to the Debt Securities and Debt Warrants when such part became effective, did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading, (iii) each preliminary prospectus, if any, filed pursuant to Rule 424 under the Securities Act of 1933 complied when so filed in all material respects with such Act and the applicable rules and regulations thereunder, (iv) the Registration Statement and the Prospectus comply and, as amended or supplemented, if applicable, will comply in all material respects with the Securities Act of 1933 and the applicable rules and regulations thereunder and (v) the Registration Statement and the Prospectus do not contain and, as amended or supplemented, if applicable, will not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they 9 were made, not misleading; except that these representations and warranties do not apply to (a) statements or omissions in the Registration Statement, any preliminary prospectus or the Prospectus based upon information furnished to the Company in writing by any Underwriter expressly for use therein and (b) those parts of the Registration Statement which constitute the Statement of Eligibility under the Trust Indenture Act of 1939 on Form T-1 of the Trustee. The Company agrees to indemnify and hold harmless each Underwriter and each person, if any, who controls such Underwriter within the meaning of either Section 15 of the Securities Act of 1933 or Section 20 of the Securities Exchange Act of 1934, from and against any and all losses, claims, damages and liabilities caused by any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement, any preliminary prospectus or the Prospectus (if used within the period set forth in paragraph (c) of Article VI hereof and as amended or supplemented if the Company shall have furnished any amendments or supplements thereto), or caused by any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as such losses, claims, damages or liabilities are caused by any such untrue statement or omission or alleged untrue statement or omission based upon information furnished in writing to the Company by any Underwriter expressly for use therein; provided, however, that the foregoing indemnity with respect to preliminary prospectuses shall not inure to the benefit of any Underwriter (or to the benefit of any person controlling such Underwriter) from whom the person asserting any such losses, claims, damages or liabilities purchased Offered Securities if a copy of the Prospectus or the Prospectus as then amended or supplemented (if the Prospectus has been amended or supplemented prior to the written confirmation of the sale of such Offered Securities to such person) had not been sent or given to such person at or prior to such written confirmation and the untrue statement or omission of a material fact contained in such preliminary prospectus was corrected in such Prospectus or Prospectus as amended or supplemented, as the case may be. Each Underwriter agrees to indemnify and hold harmless the Company, its directors, its officers who sign the Registration Statement and any person controlling the Company to the same extent as the foregoing indemnity from the Company to each Underwriter, but only with reference to information relating to such Underwriter furnished in writing by such Underwriter expressly for use in the Registration Statement, any preliminary prospectus or the Prospectus. 10 In case any proceeding (including any governmental investigation) shall be instituted involving any person in respect of which indemnity may be sought pursuant to either of the two preceding paragraphs, such person (the "indemnified party") shall promptly notify the person against whom such indemnity may be sought (the "indemnifying party") in writing and the indemnifying party, upon request of the indemnified party, shall retain counsel reasonably satisfactory to the indemnified party to represent the indemnified party and any others the indemnifying party may designate in such proceeding and shall pay the fees and disbursements of such counsel related to such proceeding. In any such proceeding, any indemnified party shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such indemnified party unless (i) the indemnifying party and the indemnified party shall have mutually agreed to the retention of such counsel or (ii) the named parties to any such proceeding (including any impleaded parties) include both the indemnifying party and the indemnified party and the representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them. It is understood that the indemnifying party shall not, in connection with any proceeding or related proceedings in the same jurisdiction, be liable for the reasonable fees and expenses of more than one separate firm (in addition to local counsel) for all such indemnified parties, and that all such fees shall be reimbursed as they are incurred. Such firm shall be designated in writing by the Manager in the case of parties indemnified pursuant to the second preceding paragraph and by the Company in the case of parties indemnified pursuant to the first preceding paragraph. The indemnifying party shall not be liable for any settlement of any proceeding effected without its written consent but if settled with such consent or if there be a final judgment for the plaintiff, the indemnifying party agrees to indemnify the indemnified party from and against any loss or liability by reason of such settlement or judgment. If the indemnification provided for in this Article VIII is unavailable to an indemnified party under the second or third paragraphs hereof or insufficient in respect of any losses, claims, damages or liabilities referred to therein, then each indemnifying party, in lieu of indemnifying such indemnified party, shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities in such proportion as is appropriate to reflect (i) the relative benefits received by the Company on the one hand and the Underwriters on the other from the offering of the Offered Securities and (ii) the relative fault of the Company on the one hand and of the 11 Underwriters on the other in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities, as well as any other relevant equitable considerations. The relative benefits received by the Company on the one hand and the Underwriters on the other in connection with the offering of the Offered Securities shall be deemed to be in the same proportion as the total net proceeds from the offering of such Offered Securities (before deducting expenses) received by the Company bear to the total underwriting discounts and commissions received by the Underwriters in respect thereof. The relative fault of the Company on the one hand and of the Underwriters on the other shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company or by the Underwriters and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company and the Underwriters agree that it would not be just and equitable if contribution pursuant to this Article VIII were determined by pro rata allocation or by any other method of allocation which does not take account of the considerations referred to in the immediately preceding paragraph. The amount paid or payable by an indemnified party as a result of the losses, claims, damages and liabilities referred to in the immediately preceding paragraph shall be deemed to include, subject to the limitations set forth above, any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Article VIII, no Underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the Offered Securities underwritten and distributed to the public by such Underwriter were offered to the public exceeds the amount of any damages which such Underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act of 1933) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The Underwriters' obligations to contribute pursuant to this Article VIII are several, in proportion to the respective principal amount or number, as the case may be, of Offered Securities purchased by each of such Underwriters, and not joint. The indemnity and contribution agreements contained in this Article VIII and the representations and warranties of the Company in this Agreement shall remain operative and 12 in full force and effect regardless of (i) any termination of this Agreement, (ii) any investigation made by any Underwriter or on behalf of any Underwriter or any person controlling any Underwriter or by or on behalf of the Company, its directors or officers or any person controlling the Company and (iii) acceptance of and payment for any of the Offered Securities. IX. This Agreement shall be subject to termination in the absolute discretion of the Underwriters, by notice given to the Company, if prior to the Closing Date (i) trading in securities generally on the New York Stock Exchange shall have been suspended or materially limited, (ii) a general moratorium on commercial banking activities in New York shall have been declared by either Federal or New York State authorities or (iii) there shall have occurred any material outbreak or escalation of hostilities or other calamity or crisis the effect of which on the United States or the international financial markets is such as to make it, in the judgment of the Manager, impracticable to market the Offered Securities. X. If any one or more of the Underwriters shall fail or refuse to purchase Underwriters' Securities which it or they have agreed to purchase pursuant to the Underwriting Agreement, and the aggregate amount of Underwriters' Securities which such defaulting Underwriter or Underwriters agreed but failed or refused to purchase is not more than one-tenth of the aggregate amount of the Underwriters' Securities, the other Underwriters shall be obligated severally in the proportions which the amounts of Underwriters' Securities set forth opposite their names in the Underwriting Agreement bear to the aggregate amount of Underwriters' Securities set forth opposite the names of all such non-defaulting Underwriters, or in such other proportions as the Manager may specify, to purchase the Underwriters' Securities which such defaulting Underwriter or Underwriters agreed but failed or refused to purchase; provided that in no event shall the amount of Underwriters' Securities which any Underwriter has agreed to purchase pursuant to the Underwriting Agreement be increased pursuant to this Article X by an amount in excess of one-ninth of such amount of Underwriters' Securities without the written consent of such Underwriter. If any Underwriter or 13 Underwriters shall fail or refuse to purchase Underwriters' Securities and the aggregate amount of Underwriters' Securities with respect to which such default occurs is more than one-tenth of the aggregate amount of the Underwriters' Securities and arrangements satisfactory to the Manager and the Company for the purchase of such Underwriters' Securities, are not made within 36 hours after such default, this Agreement, or the provisions hereof applicable to the sale and purchase of the Underwriters' Securities, will terminate without liability on the part of any non-defaulting Underwriter or of the Company. In any such case either the Manager or the Company shall have the right to postpone the Closing Date, but in no event for longer than seven days, in order that the required changes, if any, in the Registration Statement and in the Prospectus or in any other documents or arrangements may be effected. Any action taken under this paragraph shall not relieve any defaulting Underwriter from liability in respect of any default of such Underwriter under the Underwriting Agreement. If this Agreement shall be terminated by the Underwriters or any of them, because of any failure or refusal on the part of the Company to comply with the terms or to fulfill any of the conditions of this Agreement, or if for any reason the Company shall be unable to perform its obligations under this Agreement, the Company will reimburse the Underwriters or such Underwriters as have so terminated this Agreement, with respect to themselves, severally, for all out-of-pocket expenses (including the fees and disbursements of their counsel) reasonably incurred by such Underwriters in connection with the Offered Securities. This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. This Agreement shall be governed by and construed in accordance with the internal laws of the State of New York. 14 Exhibit A DELAYED DELIVERY CONTRACT [ ] Fortune Brands, Inc. 1700 East Putnam Avenue Old Greenwich, Connecticut 06870-0811 Dear Sirs: The undersigned hereby agrees to purchase from FORTUNE BRANDS, INC., a Delaware corporation (the "Company"), and the Company agrees to sell to the undersigned the Company's securities described in Schedule I annexed hereto (the "Securities"), offered by the Company's Prospectus dated [ ] and Prospectus Supplement dated [ ], receipt of copies of which is hereby acknowledged, at the purchase price stated in Schedule I and on the further terms and conditions set forth in this contract. The undersigned does not contemplate selling Securities prior to making payment therefor. The undersigned will purchase from the Company Securities in the principal amounts and number on the delivery dates as set forth in Schedule I. Each such date on which Securities are to be purchased hereunder is hereinafter referred to as a "Delivery Date". Payment for the Securities which the undersigned has agreed to purchase on each Delivery Date shall be made to the Company or its order by wire transfer to an account designated by the Company in immediately available funds, at [10:00 A.M.] (New York time) on the Delivery Date, upon delivery to the undersigned of the Securities to be purchased by the undersigned on the Delivery Date, in such denominations and registered in such names as the undersigned may designate by written or telegraphic communication addressed to the Company not less than five full business days prior to the Delivery Date, except that payment for any Securities that are Debt Securities in registered global form A-1 shall be so made on the Delivery Date upon delivery to the Depositary named in the Prospectus Supplement referred to above of a single global Debt Security certificate, registered in the name of such Depositary or a nominee thereof, for credit to the account of such Depositary participant as the undersigned may so designate. The obligation of the undersigned to take delivery of and make payment for the Securities on the Delivery Date shall be subject to the conditions that (1) the purchase of Securities to be made by the undersigned shall not at the time of delivery be prohibited under the laws of the jurisdiction to which the undersigned is subject and (2) the Company shall have sold, and delivery shall have taken place to the underwriters (the "Underwriters") named in the Prospectus Supplement referred to above of, such part of the Securities as is to be sold to them. Promptly after completion of sale and delivery to the Underwriters, the Company will mail or deliver to the undersigned at its address set forth below notice to such effect, accompanied by a copy of the opinion of counsel for the Company delivered to the Underwriters in connection therewith. Failure to take delivery of and make payment for Securities by any purchaser under any other Delayed Delivery Contract shall not relieve the undersigned of its obligations under this contract. This contract will inure to the benefit of and be binding upon the parties hereto and their respective successors, but will not be assignable by either party hereto without the written consent of the other. If this contract is acceptable to the Company, it is requested that the Company sign the form of acceptance below and mail or deliver one of the counterparts hereof to the undersigned at its address set forth below. This will become a binding contract, as of the date first above written, between the Company and the undersigned when such counterpart is so mailed or delivered. A-2 This contract shall be governed by and construed in accordance with the internal laws of the State of New York. Very truly yours, ____________________________ (Purchaser) By _________________________ _________________________ (Title) _________________________ _________________________ (Address) Accepted: FORTUNE BRANDS, INC. By__________________________ Name: Title: A-3 PURCHASER - PLEASE COMPLETE AT TIME OF SIGNING The name and telephone and department of the representative of the Purchaser with whom details of delivery on the Delivery Date may be discussed are as follows (please print):
Telephone No. Name (including Area Code) Department ---- -------------------- ---------- _______________________ _______________________ _______________________ _______________________ _______________________ _______________________ _______________________ _______________________ _______________________ _______________________ _______________________ _______________________ _______________________ _______________________ _______________________ _______________________ _______________________ _______________________ A-4
SCHEDULE I ---------- Securities: - ---------- Principal amount or Number to be Purchased: - ------------------------------------------ Purchase Price: - -------------- Delivery Dates: - -------------- A-5 Exhibit B Opinion of Chadbourne & Parke LLP, Counsel for the Company The opinion of Chadbourne & Parke LLP, counsel for the Company, to be delivered pursuant to Article V, paragraph (b) of the document entitled Fortune Brands, Inc. Underwriting Agreement Standard Provisions (Debt Securities and Warrants to Purchase Debt Securities) shall be to the effect that: (i) the Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of the State of Delaware; (ii) each of the following subsidiaries of the Company: ACCO World Corporation, Acushnet Company, Jim Beam Brands Worldwide, Inc. and MasterBrand Industries, Inc. has been duly incorporated and is validly existing under the laws of its state of incorporation; (iii) the Indenture has been duly authorized, executed and delivered by the Company and is a valid and binding agreement of the Company and has been duly qualified under the Trust Indenture Act of 1939, as amended; (iv) the Debt Warrant Agreement, if any, has been duly authorized, executed and delivered by the Company and is a valid and binding agreement of the Company; (v) the Offered Securities and the Debt Warrant Securities, if any, when executed and either authenticated or countersigned in accordance with the provisions of, as the case may be, the Indenture or the Debt Warrant Agreement, if any, and delivered and paid for (A) by the Underwriters pursuant to the Underwriting Agreement or by institutional investors, if any, pursuant to Delayed Delivery Contracts, in the case of the Offered Securities, and (B) upon exercise of Debt Warrants pursuant to the Debt Warrant Agreement, in the case of the Debt Warrant Securities, will be valid and binding obligations of the Company and will be entitled to the benefits of, as the case may be, the Indenture or the Debt Warrant Agreement; B-1 (vi) the shares of Common Stock initially issuable upon conversion of any convertible Debt Securities have been duly authorized and reserved for such issuance, the shares of Common Stock, if any, issued upon conversion of any convertible Debt Securities in accordance with their terms will be validly issued, fully paid and non-assessable and the accompanying Rights, if any, have been duly authorized and will be validly issued; (vii) the Registration Statement and the Prospectus, as amended or supplemented, if applicable (except for the financial statements and other financial and statistical data contained or incorporated by reference therein, as to which such counsel need express no opinion), comply as to form in all material respects with the Securities Act of 1933 and the rules and regulations thereunder; (viii) the Underwriting Agreement has been duly authorized, executed and delivered by the Company and is a valid and binding agreement of the Company, except as rights to indemnity and contribution thereunder may be limited by applicable law; (ix) the Delayed Delivery Contracts, if any, have been duly authorized, executed and delivered by the Company and are valid and binding agreements of the Company; (x) the issuance of the Offered Securities and the Debt Warrant Securities, if any, in accordance with, as the case may be, the Indenture and the Debt Warrant Agreement, if any, and the sale thereof in accordance with the Underwriting Agreement, and the issuance of the shares of Common Stock initially issuable upon conversion of any convertible Debt Securities and the accompanying Rights, if any, do not and will not contravene the Certificate of Incorporation or By-laws of the Company or any provision of any indenture, mortgage or other agreement known to such counsel by which the Company is bound; (xi) no authorization from any regulatory board, agency or instrumentality having jurisdiction over the Company (other than registration under the Securities Act of 1933 and qualification of the Indenture under the Trust Indenture Act of 1939, as amended, and qualification or other authorization under state securities or "blue sky" laws, as to which such counsel need express no opinion) is required for the B-2 performance by the Company of the Underwriting Agreement; (xii) the Indenture and the Debt Warrant Agreement, if any, and the Offered Securities, the Debt Warrant Securities, if any, and, if applicable, the capital stock of the Company and the Rights conform to the descriptions thereof in the Prospectus; (xiii) such counsel is of the opinion that each document, if any, filed pursuant to the Securities Exchange Act of 1934 (except as to financial statements and other financial and statistical data contained or incorporated therein, as to which such counsel need not express any opinion) and incorporated by reference in the Prospectus complied when so filed as to form in all material respects with such Act and the rules and regulations thereunder; and (xiv) such counsel believes that, based upon their examination and participation in conferences, but without independent verification except as specified (except for the financial statements and other financial and statistical data contained or incorporated by reference therein, as to which such counsel need express no opinion), each part of the Registration Statement (including the documents incorporated by reference therein) filed with the Commission pursuant to the Securities Act of 1933 relating to the Offered Securities and the Debt Warrant Securities, if any, when such part became effective, did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading, and that (except for the financial statements and other financial and statistical data contained or incorporated by reference therein, as to which such counsel need express no opinion) the Registration Statement and the Prospectus on the date of the Underwriting Agreement did not, and the Prospectus, as amended or supplemented, if applicable, on the Closing Date does not, contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. In rendering its opinion, Chadbourne & Parke LLP may limit its opinion to matters of the laws of the United States of America and the State of New York and the General Corporation Law of the State of Delaware. B-3 Exhibit C Opinion of Davis Polk & Wardwell, Counsel for the Underwriters The opinion of Davis Polk & Wardwell, counsel for the Underwriters, to be delivered pursuant to Article V, paragraph (c) of the document entitled Fortune Brands, Inc. Underwriting Agreement Standard Provisions (Debt Securities and Warrants to Purchase Debt Securities) shall be to the effect that: (i) the Indenture has been duly authorized, executed and delivered by the Company and is a valid and binding agreement of the Company and has been duly qualified under the Trust Indenture Act of 1939; (ii) the Debt Warrant Agreement, if any, has been duly authorized, executed and delivered by the Company and is a valid and binding agreement of the Company; (iii) the Offered Securities and the Debt Warrant Securities, if any, when executed and either authenticated or countersigned in accordance with the provisions of, as the case may be, the Indenture or the Debt Warrant Agreement, if any, and delivered and paid for (A) by the Underwriters or by institutional investors, if any, pursuant to Delayed Delivery Contracts, in the case of the Offered Securities, and (B) upon exercise of the Debt Warrants pursuant to the Debt Warrant Agreement, in the case of the Debt Warrant Securities, will be valid and binding obligations of the Company and will be entitled to the benefits of, as the case may be, the Indenture and the Debt Warrant Agreement; (iv) the Underwriting Agreement has been duly authorized, executed and delivered by the Company and is a valid and binding agreement of the Company, except as rights to indemnity and contribution thereunder may be limited by applicable law; (v) the Delayed Delivery Contracts, if any, have been duly authorized, executed and delivered by the C-1 Company and are valid and binding agreements of the Company; (vi) the statements in the Prospectus under "Description of Debt Securities", "Description of Debt Warrants", "Description of Capital Stock" and "Plan of Distribution", insofar as such statements constitute a summary of the documents or proceedings referred to therein, fairly present the information called for with respect to such documents and proceedings; and (vii) such counsel (A) is of the opinion that the Registration Statement and Prospectus, as amended or supplemented, if applicable (except for the financial statements contained or incorporated by reference therein and other financial data derived from such financial statements, as to which such counsel need not express any opinion), comply as to form in all material respects with the Securities Act of 1933 and the rules and regulations thereunder and (B) believes that the Registration Statement and the Prospectus (except for the financial statements contained or incorporated by reference therein and other financial data derived from such financial statements, as to which such counsel need not express any belief) on the date of the Underwriting Agreement did not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein not misleading and that the Prospectus (except as aforesaid), as amended or supplemented, if applicable, on the Closing Date does not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that such counsel may state that their opinion and belief is based upon their participation in the preparation of the Registration Statement and the Prospectus and any amendments and supplements thereto (other than the documents incorporated by reference therein) and review and discussion of the contents thereof, but is without independent check or verification except as specified. C-2 EX-4.A.1 3 INDENTURE EXHIBIT 4A1 ================================================================================ FORTUNE BRANDS, INC. and THE CHASE MANHATTAN BANK, Trustee ____________________________ INDENTURE Dated as of April 15, 1999 ____________________________ Debt Securities ================================================================================ TABLE OF CONTENTS
Page ---- Parties.................................................................................................1 Recitals................................................................................................1 ARTICLE ONE.............................................................................................1 Definitions and Other Provisions of General Application.................................................1 Section 1.01. Definitions.........................................................................1 "this Indenture", "Articles" and "Sections" ........................................1 "Act" ..............................................................................2 "Affiliate" ........................................................................2 "Authorized Newspaper" .............................................................2 "Bearer Security" ..................................................................2 "Board of Directors" ...............................................................3 "Board Resolution" .................................................................3 "Business Day" .....................................................................3 "CEDEL" ............................................................................3 "Commission" .......................................................................3 "Common Depositary" ................................................................3 "Common Stock" .....................................................................3 "Company" ..........................................................................3 "Company Request", "Company Order" and "Company Consent" ...........................4 "Consolidated Net Tangible Assets" .................................................4 Conversion Agent\.......................................................................................4 - ---------------- "Coupon" ...........................................................................4 "Defaulted interest" ...............................................................4 "Depositary" .......................................................................4 "Dollars", "$", "U.S. Dollars" and "U.S.$" .........................................4 "Euro-clear" .......................................................................4 "European Communities" .............................................................4 "Event of Default" .................................................................5 "Exchange Date" ....................................................................5 "Foreign Currency" .................................................................5 "Funded Debt" ......................................................................5 "generally accepted accounting principles" .........................................5
i
"Global Security" ..................................................................5 "Government Obligations" ...........................................................5 "Holder" or "Securityholder" .......................................................6 "Independent" ......................................................................6 "interest" .........................................................................6 "Interest Payment Date" ............................................................6 "mandatory sinking fund payment" ...................................................6 "Maturity" .........................................................................6 "mortgage" .........................................................................6 "Officers' Certificate" ............................................................7 "Opinion of Counsel" ...............................................................7 "optional sinking fund payment" ....................................................7 "Original Issue Discount Security" .................................................7 "Outstanding" ......................................................................7 "Paying Agent" .....................................................................8 "Permanent Global Security" ........................................................8 "Person" ...........................................................................8 "Place of Payment" .................................................................8 "Predecessor Securities" ...........................................................8 "Qualified Account Holder" .........................................................9 "Redemption Date" ..................................................................9 "Redemption Price" .................................................................9 "Registered Security" ..............................................................9 "Regular Record Date" ..............................................................9 "Responsible Officer" ..............................................................9 "Restricted Subsidiary" ............................................................9 "Secured Debt" ....................................................................10 "Security" or "Securities" ........................................................10 "Security Register" and "Security Registrar" ......................................10 "Special Record Date" .............................................................10 "Stated Maturity" .................................................................11 "Subsidiary" ......................................................................11 "Temporary Global Security" .......................................................11 "Trustee" .........................................................................11 "Trust Indenture Act" or "TIA" ....................................................11 "United States" ...................................................................11 "Value" ...........................................................................11 "Yield to Maturity" ...............................................................11 Section 1.02. Compliance Certificates and Opinions...............................................12 Section 1.03. Form of Documents Delivered to Trustee.............................................12
ii
Section 1.04. Acts of Securityholders............................................................13 Section 1.05. Notices, etc., to Trustee and Company..............................................15 Section 1.06. Notices to Securityholders; Waiver.................................................15 Section 1.07. Conflict with Trust Indenture Act..................................................16 Section 1.08. Effect of Headings and Table of Contents...........................................16 Section 1.09. Successors and Assigns.............................................................16 Section 1.10. Separability Clause................................................................16 Section 1.11. Benefits of Indenture..............................................................17 Section 1.12. Governing Law......................................................................17 Section 1.13. Payments Due on Non-Business Days..................................................17 ARTICLE TWO............................................................................................17 Forms of Securities....................................................................................17 Section 2.01. Forms Generally....................................................................17 Section 2.02. Form of Trustee's Certificate of Authentication....................................18 Section 2.03. Global Securities..................................................................19 ARTICLE THREE..........................................................................................19 The Securities.........................................................................................19 Section 3.01. Amount Unlimited; Issuable in Series...............................................19 Section 3.02. Denominations......................................................................23 Section 3.03. Execution, Authentication, Delivery and Dating.....................................23 Section 3.04. Temporary Securities; Exchange of Temporary Global Securities......................26 Section 3.05. Registration, Registration of Transfer and Exchange................................30 Section 3.06. Mutilated, Destroyed, Lost and Stolen Securities and Coupons.......................35 Section 3.07. Payment of Interest; Interest Rights Preserved.....................................36 Section 3.08. Persons Deemed Owners..............................................................38 Section 3.09. Cancellation.......................................................................39 ARTICLE FOUR...........................................................................................40 Satisfaction and Discharge.............................................................................40 Section 4.01. Satisfaction and Discharge of Indenture............................................40 Section 4.02. Application of Trust Money.........................................................42 Section 4.03. Defeasance and Discharge of Securities of any Series...............................43
iii
ARTICLE FIVE..........................................................................................45 Remedies..............................................................................................45 Section 5.01. Events of Default.................................................................45 Section 5.02. Acceleration of Maturity; Rescission and Annulment................................46 Section 5.03. Collection of Indebtedness and Suits for Enforcement by Trustee...................48 Section 5.04. Trustee May File Proofs of Claim..................................................49 Section 5.05. Trustee May Enforce Claims Without Possession of Securities.......................50 Section 5.06. Application of Money Collected....................................................50 Section 5.07. Limitation on Suits...............................................................51 Section 5.08. Unconditional Right of Securityholders to Receive Principal, Premium and Interest and to Convert Securities............................................52 Section 5.09. Restoration of Rights and Remedies................................................52 Section 5.10. Rights and Remedies Cumulative....................................................52 Section 5.11. Delay or Omission Not Waiver......................................................52 Section 5.12. Control by Securityholders........................................................53 Section 5.13. Waiver of Past Defaults...........................................................53 Section 5.14. Undertaking for Costs.............................................................54 Section 5.15. Waiver of Stay or Extension Laws..................................................54 Section 5.16. Judgment Currency.................................................................54 ARTICLE SIX...........................................................................................55 The Trustee...........................................................................................55 Section 6.01. Certain Duties and Responsibilities...............................................55 Section 6.02. Notice of Default.................................................................56 Section 6.03. Certain Rights of Trustee.........................................................57 Section 6.04. Not Responsible for Recitals or Issuance of Securities............................58 Section 6.05. May Hold Securities...............................................................58 Section 6.06. Money Held in Trust...............................................................59 Section 6.07. Compensation and Reimbursement....................................................59 Section 6.08. Disqualification; Conflicting Interests...........................................60 Section 6.09. Corporate Trustee Required; Eligibility...........................................60 Section 6.10. Resignation and Removal; Appointment of Successor.................................60 Section 6.11. Acceptance of Appointment by Successor............................................62 Section 6.12. Merger, Conversion, Consolidation or Succession to Business of Trustee............63
iv
Section 6.13. Preferential Collection of Claims Against Company...............................63 ARTICLE SEVEN.......................................................................................64 Securityholders' Lists and Reports by Trustee and Company...........................................64 Section 7.01. Company to Furnish Trustee Names and Addresses of Securityholders...............64 Section 7.02. Preservation of Information; Communications to Securityholders..................64 Section 7.03. Reports by Trustee..............................................................66 Section 7.04. Reports by Company..............................................................66 ARTICLE EIGHT.......................................................................................67 Consolidation, Merger, Conveyance or Transfer.......................................................67 Section 8.01. Company May Consolidate, etc., Only on Certain Terms............................67 Section 8.02. Successor Corporation Substituted...............................................68 Section 8.03. Securities to be Secured in Certain Events......................................68 ARTICLE NINE........................................................................................69 Supplemental Indentures.............................................................................69 Section 9.01. Supplemental Indentures Without Consent of Securityholders......................69 Section 9.02. Supplemental Indentures With Consent of Securityholders.........................71 Section 9.03. Execution of Supplemental Indentures............................................72 Section 9.04. Effect of Supplemental Indentures...............................................72 Section 9.05. Conformity with Trust Indenture Act.............................................72 Section 9.06. Reference in Securities to Supplemental Indentures..............................73 ARTICLE TEN.........................................................................................73 Covenants...........................................................................................73 Section 10.01. Payment of Principal, Premium and Interest.....................................73 Section 10.02. Maintenance of Office or Agency................................................73 Section 10.03. Money for Securities Payments to be Held in Trust..............................76 Section 10.04. Statement as to Compliance.....................................................77 Section 10.05. Restrictions on Borrowing by Restricted Subsidiaries...........................78 Section 10.06. Restrictions on Secured Debt...................................................78 Section 10.07. Restrictions on Sale and Lease Back Transactions...............................80 Section 10.08. Restrictions on Transfers of Property..........................................81
v
Section 10.09. Assumption of Obligations in Connection with Mergers and Acquisitions..........81 Section 10.10. Defeasance of Certain Obligations..............................................82 Section 10.11. Additional Amounts.............................................................83 ARTICLE ELEVEN......................................................................................85 Redemption of Securities............................................................................85 Section 11.01. Applicability of Article.......................................................85 Section 11.02. Election to Redeem; Notice to Trustee..........................................85 Section 11.03. Selection by Trustee of Securities to be Redeemed..............................85 Section 11.04. Notice of Redemption...........................................................86 Section 11.05. Deposit of Redemption Price....................................................86 Section 11.06. Securities Payable on Redemption Date..........................................87 Section 11.07. Securities Redeemed in Part....................................................88 ARTICLE TWELVE......................................................................................89 Sinking Funds.......................................................................................89 Section 12.01. Applicability of Article.......................................................89 Section 12.02. Satisfaction of Sinking Fund Payments with Securities..........................89 Section 12.03. Redemption of Securities for Sinking Fund......................................89 ARTICLE THIRTEEN....................................................................................90 Meetings of Holders of Securities...................................................................90 Section 13.01. Purposes for Which Meetings May Be Called.....................................90 Section 13.02. Call, Notice and Place of Meetings............................................90 Section 13.03. Persons Entitled to Vote at Meetings..........................................91 Section 13.04. Quorum; Action....................................................................91 Section 13.05. Determination of Voting Rights; Conduct and Adjournment of Meetings...............92 Section 13.06. Counting Votes and Recording Action of Meetings...................................93 ARTICLE FOURTEEN........................................................................................94 Immunity of Incorporators, Stockholders, Officers and Directors.........................................94 Section 14.01. Exemption from Individual Liability...............................................94
vi
ARTICLE FIFTEEN.........................................................................................95 Conversion..............................................................................................95 Section 15.01. Conversion of Securities..........................................................95
vii TABLE SHOWING REFLECTION IN THE INDENTURE OF CERTAIN PROVISIONS OF TRUST INDENTURE ACT OF 1939* *
TIA Section Page - --------------------------------------------------- ----------------------------- ---- ss.310(a)(1)....................................... 6.09......................... 60 (a)(2)............................................. 6.09......................... 60 (a)(3)............................................. Not Applicable (a)(4)............................................. Not Applicable (b)................................................ 6.08......................... 60 ss. 311(a)......................................... 6.13......................... 63 (b)................................................ 6.13......................... 63 (b)(2)............................................. 6.13......................... 63 ss. 312(a)......................................... 7.01......................... 64 7.02(a)...................... 64 (b)................................................ 7.02(b)...................... 64 (c)................................................ 7.02(c)...................... 64 ss. 313(a)......................................... 7.03......................... 66 (b)................................................ 7.03......................... 66 (c)................................................ 7.03......................... 66 (d)................................................ 7.03......................... 66 ss. 314(a)......................................... 7.04......................... 66 (b)................................................ Not Applicable (c)(1)............................................. 1.02......................... 12 (c)(2)............................................. 1.02......................... 12 (c)(3)............................................. Not Applicable (d)................................................ Not Applicable (e)................................................ 1.02......................... 12
______________________________ * This table is not part of the Indenture viii TABLE SHOWING REFLECTION OF TIA
TIA Section Page - --------------------------------------------------- ---------------------------- ---- ss. 315(a)......................................... 6.01(a)...................... 55 6.01(c)...................... 55 (b)................................................ 6.02......................... 56 7.03......................... 66 (c)................................................ 6.01(b)...................... 55 (d)................................................ 6.01......................... 55 (d)(1)............................................. 6.01(a)...................... 55 (d)(2)............................................. 6.01(c)(2)................... 55 (d)(3)............................................. 6.01(c)(3)................... 55 (e)................................................ 5.14......................... 54 ss. 316(a)......................................... 1.01......................... 1 (a)(1)(A).......................................... 5.02......................... 46 5.12......................... 53 (a)(1)(B).......................................... 5.13......................... 53 (a)(2)............................................. Not Applicable (b)................................................ 5.08......................... 52 ss. 317(a)(1)...................................... 5.03......................... 48 (a)(2)............................................. 5.04......................... 49 (b)................................................ 10.03........................ 76 ss. 318(a)......................................... 1.07......................... 16
ix INDENTURE dated as of April 15, 1999 between FORTUNE BRANDS, INC., a Delaware corporation (hereinafter called the "Company") having its principal office at 1700 East Putnam Avenue, Old Greenwich, Connecticut 06870, and THE CHASE MANHATTAN BANK, a New York banking corporation (hereinafter called the "Trustee") having its principal corporate trust office in the Borough of Manhattan, The City of New York. WHEREAS, the Company has duly authorized the issuance from time to time of its unsecured debentures, notes or other evidences of indebtedness to be issued in one or more series (hereinafter called the "Securities") up to such principal amount or amounts as may from time to time be authorized in accordance with the terms of this Indenture, and to provide therefor the Company has duly authorized the execution and delivery of this Indenture; and WHEREAS, all things necessary to make this Indenture a valid agreement of the Company, in accordance with its terms, have been done; NOW, THEREFORE, THIS INDENTURE WITNESSETH: For and in consideration of the premises and the purchase of the Securities by the Holders thereof, it is mutually covenanted and agreed, for the equal and proportionate benefit of all Holders of the Securities, as follows: ARTICLE ONE DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION ------------------------------------------------------- SECTION 1.01. Definitions. ----------- For all purposes of this Indenture, except as otherwise expressly provided or unless the context otherwise requires: (1) the term "this Indenture" means this instrument as originally executed or as it may from time to time be supplemented or amended by one or more indentures supplemental hereto entered into pursuant to the applicable provisions hereof and shall include the forms and terms of particular series of Securities established as contemplated hereunder; (2) all references in this instrument to designated "Articles", "Sections" and other subdivisions are to the designated Articles, Sections and other subdivisions of this instrument as originally executed. The words "herein", "hereof" and "hereunder" and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or other subdivision; (3) the terms defined in this Article have the meanings assigned to them in this Article and include the plural as well as the singular; (4) all other terms used herein which are defined in the Trust Indenture Act, either directly or by reference therein, have the meanings assigned to them therein; and (5) all accounting terms not otherwise defined herein have the meanings assigned to them in accordance with generally accepted accounting principles. "Act" when used with respect to any Securityholder has the meaning --- specified in Section 1.04. ------------ "Affiliate" of any specified Person means any other Person directly --------- or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For the purposes of this definition, "control" when used with respect to any specified Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms "controlling" and "controlled" have meanings correlative to the foregoing. "Authorized Newspaper", when used with respect to Securities of any -------------------- series, means a newspaper (which will be, if practicable, The Wall Street --------------- Journal (Eastern Edition), the Financial Times (London Edition) and the - ------- --------------- Luxemburger Wort in the case of, respectively, The City of New York, London and - ---------------- Luxembourg) of general circulation published in an official language of the country of publication customarily published at least once a day for at least five days in each calendar week (i) in the place specified pursuant to the provisions hereof or (ii) if no place is so specified, in The City of New York and in London and, so long as the Securities of such series are listed on the Luxembourg Stock Exchange or any other stock exchange located outside the United States and the Luxembourg Stock Exchange or such other stock exchange so requires, in Luxembourg or in any city required by such other stock exchange (or, if it shall be impracticable in the opinion of the Trustee to make such publication in Luxembourg or such other city, elsewhere in Europe). "Bearer Security" means any Security that is not a Registered --------------- Security. 2 "Board of Directors" means the Board of Directors of the Company, the ------------------ Executive Committee of such Board of Directors or any other committee of such Board of Directors duly authorized to act for it hereunder. "Board Resolution" means a copy of a resolution delivered to the ---------------- Trustee and certified by the Secretary or an Assistant Secretary of the Company as having been duly adopted by the Board of Directors of the Company, or by the Secretary or an Assistant Secretary of the Company or the Secretary of the Executive Committee of such Board of Directors as having been duly adopted by such Executive Committee, or by the Secretary or an Assistant Secretary of the Company or the Secretary of any other committee of such Board of Directors duly authorized to act for it hereunder as having been duly adopted by such other committee. "Business Day" , when used with respect to the Securities of any ------------ series, has the meaning specified with respect to the Securities of such series as contemplated by Section 3.01; except that, if no such meaning is so ------------ specified, (i) when used with respect to any of the Places of Payment as to any Security of such series or with respect to any payment in respect of such Security, means a day that in each of the Places of Payment as to such Security is neither a Saturday or Sunday nor a day on which banking institutions are authorized or required by law or regulation to remain closed and (ii) otherwise means a day that in the place where any specified act pursuant to this Indenture is to occur is neither a Saturday or Sunday nor a day on which banking institutions are authorized or required by law or regulation to remain closed. "CEDEL" means Centrale de Livraison de Valeurs Mobilieres S.A., or ----- its successor "Commission" means the Securities and Exchange Commission, as from ---------- time to time constituted, created under the Securities Exchange Act of 1934, or if at any time after the execution of this instrument such Commission is not existing and performing the duties now assigned to it under the Trust Indenture Act, then the body performing such duties on such date. "Common Depositary" has the meaning set forth in Section 3.04(b). ----------------- --------------- "Common Stock" means the Common Stock of the Company. ------------ "Company" means the corporation named as the "Company" in the first ------- paragraph of this instrument until a successor corporation shall have become such pursuant to the applicable provisions of this Indenture, and thereafter "Company" shall mean such successor corporation. 3 "Company Request", "Company Order" and "Company Consent" mean, --------------- ------------- --------------- respectively, a written request, order or consent signed in the name of the Company by the Chairman of the Board, any Vice Chairman, the President, the principal financial officer, the general counsel, a Vice President, the Treasurer or an Assistant Treasurer of the Company, and by the principal accounting officer, the Controller, an Assistant Controller, the Secretary or an Assistant Secretary of the Company, and delivered to the Trustee. "Consolidated Net Tangible Assets" means the excess over current -------------------------------- liabilities of all assets as determined by the Company and set forth in a consolidated balance sheet of the Company and its consolidated Subsidiaries prepared in accordance with generally accepted accounting principles as of a date within 90 days of the date of such determination, after deducting goodwill, trademarks, patents, other like intangibles and the minority interest of others. "Conversion Agent" has the meaning set forth in Section 15.01(b). ---------------- ---------------- "Coupon" means any interest coupon appertaining to a Security. ------ "Defaulted Interest" has the meaning set forth in Section 3.07. ------------------ ------------ "Depositary" means, with respect to the Securities of any series ---------- issuable or issued in the form of a Global Security, the Person designated pursuant to Section 3.01(19) as the Common Depositary or other depositary with --------------- respect to any Securities of such series until a successor person shall have become such as provided pursuant to Section 3.01(19) of the Indenture, and --------------- thereafter 'Depositary' shall mean or include each Person which is then a Depositary hereunder with respect to any Securities of such series. If at any time there is more than one such Person which is then a Depositary with respect to the Securities of any series, "Depositary" as used with respect to any Securities of such series shall mean each Person which is then a Depositary with respect to such Securities. "Dollars", "$", "U.S. Dollars" and "U.S.$" mean the coin or currency ------- - ------------ ----- of the United States of America as at the time of payment is legal tender for the payment of public and private debts. "Euro-clear" means Morgan Guaranty Trust Company of New York, ---------- Brussels office, as operator of the Euro-clear System, or any successor to Morgan Guaranty Trust Company of New York, Brussels office, as operator thereof. "European Communities" means the European Economic Community, the -------------------- European Coal and Steel Community and the European Atomic Energy Community. 4 "Event of Default" has the meaning specified in Article Five. ---------------- ------------ "Exchange Date" has the meaning set forth in Section 3.04(b). ------------- --------------- "Foreign Currency" means a currency other than Dollars or a composite ---------------- currency (including, without limitation, the European Currency Unit, as defined and revised from time to time by the Council of European Communities). "Funded Debt" of any corporation means (i) all indebtedness for money ----------- borrowed which by its terms matures more than 12 months from the creation, extension or renewal thereof or which is extendible or renewable at the option of the obligor on such indebtedness to a time more than 12 months after its creation, extension or renewal and (ii) all guarantees, direct or indirect, of such indebtedness of others or of dividends; provided, however, that Funded Debt -------- ------- shall not include endorsements of negotiable instruments for collection, deposit or negotiation and guarantees by the Company or a Restricted Subsidiary arising in connection with the sale, discount, guarantee or pledge of notes, chattel mortgages, leases, accounts receivable, trade acceptances and other paper arising, in the ordinary course of business, out of installment or conditional sales to or by, or transactions involving title retention with, distributors, dealers or other customers, of merchandise, equipment or services. The Company or a Restricted Subsidiary shall be deemed to have assumed any Funded Debt secured by any mortgage upon any of its property or assets whether or not it has actually done so. "generally accepted accounting principles" with respect to any ---------------------------------------- computation required or permitted hereunder means such accounting principles which are generally accepted at the date or time of such computation. "Global Security" means, with respect to any series of Securities --------------- issued hereunder, a Security, which may be a Registered Security or a Bearer Security, executed by the Company and authenticated and delivered by the Trustee pursuant to Section 3.03, which shall represent, and shall be denominated in an ------------ amount equal to the aggregate principal amount of, all of the outstanding Securities of such series or a portion thereof having the same terms, including, without limitation, the same date or dates on which principal is due, the same interest rate or method of determining interest and, in the case of Original Issue Discount Securities, the same issue price (except that such outstanding Securities of such series or portion thereof need not have the same issue date), and which shall be a Temporary Global Security or a Permanent Global Security. "Government Obligations" means obligations which are (i) direct ---------------------- obligations of the sovereign government in the currency of which Securities of the relevant series are payable or (ii) obligations of any Person controlled or supervised by 5 and acting as an instrumentality of such sovereign government the payment of which is unconditionally guaranteed by such sovereign government, and which, in the case of either (i) or (ii), are full faith and credit obligations of such sovereign government, are payable in such currency and are not, by their terms, callable or redeemable. "Holder" or "Securityholder" , when used with respect to any Security ------ -------------- (including a Global Security), means, in the case of a Registered Security, the Person in whose name such Security is registered on the Security Register and, in the case of a Bearer Security, the bearer thereof and, when used with respect to any Coupon, means the bearer thereof. "Independent" when used with respect to any specified Person means ----------- such a Person who (1) is in fact independent, (2) does not have any direct financial interest or any material indirect financial interest in the Company or in any other obligor upon the Securities or in any Affiliate of the Company or of such other obligor, and (3) is not connected with the Company or such other obligor or any Affiliate of the Company or of such other obligor, as an officer, employee, promoter, underwriter, trustee, partner, director or person performing similar functions. Whenever it is herein provided that any Independent Person's opinion or certificate shall be furnished to the Trustee, such Person shall be appointed by a Company Order and approved by the Trustee in the exercise of reasonable care, and such opinion or certificate shall state that the signer has read this definition and that the signer is Independent within the meaning hereof. "interest", when used with respect to non-interest bearing -------- Securities, means interest payable after Maturity. "Interest Payment Date", when used with respect to any Security, --------------------- means the Stated Maturity of an installment of interest on such Security. "mandatory sinking fund payment" has the meaning set forth in Section ------------------------------ ------- 12.01. - ----- "Maturity" when used with respect to any Security, means the date on -------- which the principal of such Security becomes due and payable as therein or herein provided, whether at the Stated Maturity or by declaration of acceleration, call for redemption, repayment at the option of the Holder or otherwise. "mortgage" means any mortgage, pledge or security interest. -------- 6 "Officers' Certificate" means a certificate signed by the Chairman of --------------------- the Board, any Vice Chairman, the President, the principal financial officer, the general counsel, a Vice President, the Treasurer or an Assistant Treasurer of the Company, and by the principal accounting officer, the Controller, an Assistant Controller, the Secretary or an Assistant Secretary of the Company, and delivered to the Trustee. "Opinion of Counsel" means a written opinion of counsel, who may ------------------ (except as otherwise expressly provided in this Indenture) be counsel for the Company and who shall be acceptable to the Trustee. "optional sinking fund payment" has the meaning set forth in Section ----------------------------- ------- 12.01. - ----- "Original Issue Discount Security" means any Security that provides -------------------------------- for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration of the Maturity thereof pursuant to Section 5.02. ------------ "Outstanding", when used with respect to the Securities of any ----------- series, means, as of the date of determination, all Securities of such series theretofore authenticated and delivered under this Indenture, except: ------ (i) Securities of such series theretofore canceled by the Trustee or delivered to the Trustee for cancellation; (ii) Securities of such series for whose payment or redemption money in the necessary amount and in the required currency or composite currency has been theretofore deposited with the Trustee or any Paying Agent in trust for the Holders of such Securities, provided that, if such Securities -------- are to be redeemed, notice of such redemption has been duly given pursuant to this Indenture or provision therefor satisfactory to the Trustee has been made; and (iii) Securities of such series which have been paid pursuant to Section 3.06 or in exchange for or in lieu of which other Securities of the ------------ same series have been authenticated and delivered pursuant to this Indenture other than any such Securities in respect of which there shall have been presented to the Trustee proof satisfactory to it that such Securities are held by a bona fide purchaser in whose hands such Securities are valid obligations of the Company; provided, however, that in determining whether the Holders of the requisite - -------- ------- principal amount of Outstanding Securities of any series have given any request, demand, authorization, direction, notice, consent or waiver hereunder, (a) the principal amount of 7 an Original Issue Discount Security that shall be deemed to be Outstanding for such purposes shall be the amount of the principal thereof that would be due and payable as of the date of such determination upon acceleration of the Maturity thereof pursuant to Section 5.02, (b) the principal amount of a Security ------------ denominated in a Foreign Currency or Currencies that shall be deemed to be Outstanding for such purposes shall be the U.S. Dollar equivalent of the principal amount (or, in the case such a Security which is an Original Issue Discount Security, the principal amount deemed to be Outstanding pursuant to clause (a) of this proviso) of such Security (or, as the case may be, any Predecessor Security) determined upon original issuance thereof as provided pursuant to Section 3.01(3) with respect to the Securities of such series and -------------- (c) Securities of such series owned by the Company or any other obligor upon such Securities or any Affiliate of the Company or such other obligor shall be disregarded and deemed not to be Outstanding, except that, in determining whether the Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Securities of such series which the Trustee knows to be so owned shall be so disregarded. Securities of such series so owned which have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the Trustee the pledgee's right so to act with respect to such Securities and that the pledgee is not the Company or any other obligor upon such Securities or any Affiliate of the Company or such other obligor. "Paying Agent" means any Person authorized by the Company to pay the ------------ principal of (or premium, if any) or interest, if any, on Securities of any series on behalf of the Company. "Permanent Global Security" shall mean a permanent Global Security ------------------------- representing Securities of a series or a portion thereof. "Person" means any individual, corporation, partnership, joint ------ venture, association, joint-stock company, trust, unincorporated organization or government or any agency or political subdivision thereof. "Place of Payment" , when used with respect to Securities of any ---------------- series and the Coupons, if any, appertaining thereto, means the place or places established as such with respect to the Securities of such series pursuant to Section 3.01. - ------------ "Predecessor Securities" of any particular Security means every ---------------------- previous Security evidencing all or a portion of the same debt as that evidenced by such particular Security, and, for the purposes of this definition, any Security authenticated and delivered under Section 3.06 in lieu of a lost, ------------ destroyed or stolen Security or a Security to which a 8 lost, stolen or destroyed Coupon appertains shall be deemed to evidence the same debt as the lost, destroyed or stolen Security or the Security to which the lost, stolen or destroyed Coupon appertains, as the case may be. "Qualified Account Holder" means any Person which is shown in the ------------------------ records of Euro-clear or CEDEL as being entitled to Securities represented by all or any portion of a Temporary Global Security. "Redemption Date" when used with respect to any Security to be --------------- redeemed means the date fixed for such redemption pursuant to this Indenture. "Redemption Price", when used with respect to any Security to be ---------------- redeemed, means the price at which it is to be redeemed pursuant to this Indenture. "Registered Security" means any Security registered on the Security ------------------- Register. "Regular Record Date" for the interest payable on any Interest ------------------- Payment Date on the Registered Securities of any series means the date specified as provided in Section 3.01. ------------ "Responsible Officer" when used with respect to the Trustee means the ------------------- Chairman or Vice Chairman of the board of directors, the Chairman or Vice Chairman of the executive committee of the board of directors, the Chairman of the trust committee, the President, any Vice President (however titled), the Secretary, any Assistant Secretary or any Trust Officer, or any other officer or assistant officer of the Trustee customarily performing functions similar to those performed by any of the above designated officers and also means, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of his knowledge of and familiarity with the particular subject. "Restricted Subsidiary" means any Subsidiary other than (i) each --------------------- Subsidiary organized and existing under laws other than the laws of the United States or a state thereof, (ii) each Subsidiary substantially all of the physical properties of which are located, or substantially all of the business of which is carried on, outside of the United States, (iii) each Subsidiary the primary business of which consists of finance, banking, credit, leasing, insurance, financial services, or similar operations or any combination thereof, (iv) each Subsidiary the primary business of which consists of the ownership, construction, management, operation, sale or leasing of real property or improvements thereon, or similar operations or any combination thereof, (v) each Subsidiary the primary business of which consists of the exploration for, or the extraction, production, 9 transporting, or marketing of, petroleum or gas or other extracted substances, or similar operations or any combination thereof, (vi) each Subsidiary the primary business of which consists of the ownership or operation of one or more transportation businesses or facilities or equipment related thereto or similar operations or any combination thereof, (vii) each Subsidiary the primary business of which consists of obtaining funds with which to make investments outside of the United States, (viii) each Subsidiary substantially all of the assets of which consist of the ownership directly or indirectly of the capital stock of one or more Subsidiaries covered by the preceding clauses (i) through (vii), (ix) each Subsidiary which the Company or any Subsidiary is, by the terms of the final order of any court of competent jurisdiction from which no further appeal may be taken, required to dispose of and which shall by Board Resolution be determined not to be a Restricted Subsidiary, effective as of the date specified in such resolution and (x) any corporation a majority of the voting shares of which shall at the time be owned directly or indirectly by one or more corporations specified in the preceding clauses (i) through (ix); provided, -------- however, that the Board of Directors may by Board Resolution declare any such - ------- Subsidiary to be a Restricted Subsidiary, effective as of the date such resolution is adopted. "Secured Debt" means indebtedness for money borrowed if such ------------ indebtedness is secured by a mortgage upon any assets of the Company or a Restricted Subsidiary, including in such assets, without limitation, shares of stock or indebtedness of any Restricted Subsidiary owned by the Company or another Restricted Subsidiary. Indebtedness secured by mortgages on property existing at the time it is acquired and mortgages securing any part of the purchase price of property purchased, constructed or improved shall be deemed to be indebtedness for money borrowed. The Company or a Restricted Subsidiary shall be deemed to have assumed any indebtedness secured by any mortgage upon any of its property or assets whether or not it has actually done so. "Security" or "Securities" has the meaning stated in the first -------- ---------- recital of this Indenture and more particularly any Securities authenticated and delivered under this Indenture. "Security Register" and "Security Registrar" have the respective ----------------- ------------------ meanings specified in Section 3.05. ------------ "Special Record Date" for the payment of any Defaulted Interest on ------------------- the Registered Securities of any series means the date fixed by the Trustee pursuant to Section 3.07. ------------ 10 "Stated Maturity" , when used with respect to any Security or any --------------- installment of principal thereof or interest thereon, means the date specified in such Security or a Coupon representing such installment of interest as the fixed date on which the principal of such Security or such installment of principal or interest is due and payable. "Subsidiary" means any corporation of which the Company, or the ---------- Company and one or more Subsidiaries, or any one or more Subsidiaries, directly or indirectly own outstanding shares of capital stock having voting power sufficient to elect, under ordinary circumstances (not dependent upon the happening of a contingency), a majority of the directors. "Temporary Global Security" has the meaning set forth in Section ------------------------- ------- 3.04(b). - ------- "Trustee" means the Person named as the "Trustee" in the first ------- paragraph of this instrument and, subject to the provisions of Article Six, ----------- shall also include its successors and assigns. "Trust Indenture Act" or "TIA" means the Trust Indenture Act of ------------------- --- 1939, as amended, as in force at the date as of which this instrument was executed, except as otherwise provided in Section 9.05. ------------ "United States" means the United States of America, its territories ------------- and possessions and areas subject to its jurisdiction and the Commonwealth of Puerto Rico. "Value" means, as to any sale and lease back transaction to which ----- Section 10.07 applies, the product of (a) the net proceeds from any such sale - ------------- (less the amount applied in connection with such sale to the retirement of outstanding Funded Debt in accordance with Section 10.07(c)) and (b) a fraction, ---------------- the numerator of which is the number of full years of the term of the lease relating to such property (without regard to any options to renew or extend such term) remaining at the time of the determination of such value and the denominator of which is the number of full years of such term at the time of such sale. "Yield to Maturity" when used with respect to an Original Issue ----------------- Discount Security, means the yield to Maturity on such Security calculated at the time of issuance thereof, or, if applicable, at the most recent redetermination of interest on such Security, and calculated in accordance with either the constant interest method or such other accepted financial practice as is specified in the terms of such Security established pursuant to Section 3.01. ------------ 11 SECTION 1.02. Compliance Certificates and Opinions. ------------------------------------ Upon any application or request by the Company to the Trustee to take any action under any provision of this Indenture, the Company shall furnish to the Trustee an Officers' Certificate stating that all conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with and an Opinion of Counsel stating that in the opinion of such counsel all such conditions precedent, if any, have been complied with, except that in the case of any such application or request as to which the furnishing of such documents is specifically required by any provision of this Indenture relating to such particular application or request, no additional certificate or opinion need be furnished. Every certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture shall include: (1) a statement that each individual signing such certificate or opinion has read such covenant or condition and the definitions herein relating thereto; (2) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based; (3) a statement that, in the opinion of each such individual, he has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been complied with; and (4) a statement as to whether, in the opinion of each such individual, such condition or covenant has been complied with. SECTION 1.03. Form of Documents Delivered to Trustee. -------------------------------------- In any case where several matters are required to be certified by, or covered by an opinion of, any specified Person, it is not necessary that all such matters be certified by, or covered by the opinion of, only one such Person, or that they be so certified or covered by only one document, but one such Person may certify or give an opinion with respect to some matters and one or more other such Persons as to other matters, and any such Person may certify or give an opinion as to such matters in one or several documents. 12 Any certificate or opinion of an officer of the Company may be based, insofar as it relates to legal matters, upon a certificate or opinion of, or representations by, counsel, or, insofar as it relates to accounting matters, upon a certificate or opinion of, or representations by, independent public accountants, unless such officer knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to the matters upon which his certificate or opinion is based are erroneous. Any such certificate or Opinion of Counsel may be based, insofar as it relates to factual matters, upon a certificate or opinion of, or representations by, an officer or officers of the Company stating that the information with respect to such factual matters is in the possession of the Company, unless such Counsel knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to such matters are erroneous. Where any Person is required to make, give or execute two or more applications, requests, consents, certificates, statements, opinions or other instruments under this Indenture, they may, but need not, be consolidated and form one instrument. SECTION 1.04. Acts of Securityholders. ----------------------- (a) Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Indenture to be made, given or taken by the Holders of Securities of any series may be embodied in and evidenced by (i) one or more instruments of substantially similar tenor signed by such Holders in person or by agent duly appointed in writing, or (ii) in the event the Securities of such series are issuable in whole or in part as Bearer Securities, the record of Holders of such series voting in favor thereof, either in person or by proxies duly appointed in writing, at any meeting of Holders of such series duly called and held in accordance with the provisions of Article ------- Thirteen, or (iii) a combination of such instrument or instruments and any such - -------- record; and, except as herein otherwise expressly provided, such action shall become effective with respect to such series when such instrument or instruments or record or both are delivered to the Trustee, and, where it is hereby expressly required, to the Company. Such instrument or instruments and any such record (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the "Act" of the Holders of such series signing such --- instrument or instruments or so voting at any such meeting. Proof of execution of any such instrument or of a writing appointing any such agent, or of the holding of any Security of such series, shall be sufficient for any purpose of this Indenture and (subject to Section 6.01) conclusive with respect to such ------------ series in favor of the Trustee and the Company, and any agent of the Trustee and the Company, if made in the manner provided in this Section. 13 (b) The fact and date of the execution by any Person of any such instrument or writing may be proved in any manner which the Trustee deems sufficient. (c) The holding of Registered Securities of any series by any Person shall be proved by the Security Register or by a certificate of the Security Registrar. (d) The holding of Bearer Securities of any series by any Person, and the date of holding the same, may be proved by the production of such Bearer Securities or by a certificate executed, as depositary, by any trust company, bank, banker or other depositary, wherever situated, if such certificate shall be deemed by the Trustee to be satisfactory, showing that at the date therein mentioned such Person had on deposit with such depositary, or exhibited to it, the Bearer Securities therein described; or such facts may be proved by the certificate or affidavit of the Person holding such Bearer Securities, if such certificate or affidavit is deemed by the Trustee to be satisfactory. The Trustee and the Company may assume that such ownership of any Bearer Security continues until (i) another certificate or affidavit bearing a later date issued in respect of the same Bearer Security is produced, or (ii) such Bearer Security is produced to the Trustee by some other Person, or (iii) such Bearer Security is surrendered in exchange for a Registered Security, or (iv) such Bearer Security is no longer Outstanding. The principal amount and serial numbers of Bearer Securities of any series held by any Person, and the date of holding the same, may also be proved in any other manner which the Company and the Trustee deem sufficient. (e) The Trustee may require such additional proof of any matter referred to in this Section as it shall deem necessary. (f) Any request, demand, authorization, direction, notice, consent, waiver or other action by the Holder of any Security shall bind every subsequent Holder of the same Security, and the Holder of every Security issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof, in respect of anything done or suffered or omitted to be done by the Trustee, the Security Registrar, any Paying Agent or the Company in reliance thereon, whether or not notation of such action is made upon such Security. 14 SECTION 1.05. Notices, etc., to Trustee and Company. ------------------------------------- Any request, demand, authorization, direction, notice, consent, waiver or Act of Securityholders or other document provided or permitted by this Indenture to be made upon, given or furnished to, or filed with, (1) the Trustee by any Securityholder or by the Company shall be sufficient for every purpose hereunder only if made, given, furnished or filed in writing to or with the Trustee at its principal corporate trust office, or (2) the Company by the Trustee or by any Securityholder shall be sufficient for every purpose hereunder if in writing and mailed, first- class, postage prepaid, to the Company addressed to it at the address of its principal office specified in the first paragraph of this instrument or at any other address previously furnished in writing to the Trustee by the Company. SECTION 1.06. Notices to Securityholders; Waiver. ---------------------------------- Where this Indenture provides for notice to Securityholders of any event, such notice shall be sufficiently given (unless otherwise herein expressly provided) (a) to Holders of Registered Securities, if in writing and mailed, first-class, postage prepaid, to each Holder of a Registered Security affected by such event, at his address as it appears on the Security Register, not later than the latest date, and not earlier than the earliest date, prescribed for the giving of such notice and (b) to Holders of Bearer Securities, if published in an Authorized Newspaper on a Business Day at least twice, the first such publication to be not earlier than the earliest date, and not later than the latest date, prescribed herein for the giving of such notice. In any case where notice to Holders of Registered Securities is given by mail, neither the failure to mail such notice, nor any defect in any notice so mailed, to any particular Holder of a Registered Security shall affect the sufficiency of such notice with respect to other Holders of Registered Securities or the sufficiency of any notice by publication to Holders of Bearer Securities given as provided herein. Any notice mailed to Holders in the manner prescribed herein shall be deemed to have been given whether or not received by any particular Holder. In case, by reason of the suspension of regular mail service, or by reason of any other cause, it shall be impossible or impracticable to give any notice to Holders of Registered Securities by mail, then such notification as shall be made with the approval of the Trustee shall constitute notification for every purpose hereunder. 15 In case, by reason of the suspension of publication of any Authorized Newspaper, or by reason of any other cause, it shall be impossible or impracticable to make publication of any notice to Holders of Bearer Securities in an Authorized Newspaper or Authorized Newspapers as provided by this Indenture, then such method of publication or notification to Holders of Bearer Securities as shall be made with the approval of the Trustee shall constitute a sufficient publication of such notice for every purpose hereunder. Neither the failure to give notice by publication, nor any defect in any notice so given, to any particular Holder of a Bearer Security as provided herein shall affect the sufficiency of such notice with respect to other Holders of Bearer Securities or the sufficiency of any notice to Holders of Registered Securities as provided herein. Where this Indenture provides for notice in any manner, such notice may be waived in writing by the Person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice. Waivers of notice by Securityholders shall be filed with the Trustee, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver. SECTION 1.07. Conflict with Trust Indenture Act. --------------------------------- If any provision of this Indenture limits, qualifies or conflicts with another provision hereof which is required to be included in this Indenture by any of the provisions of TIA, such required provision shall control. SECTION 1.08. Effect of Headings and Table of Contents. ---------------------------------------- The Article and Section headings herein and the Table of Contents are for convenience only and shall not affect the construction hereof. SECTION 1.09. Successors and Assigns. ---------------------- All covenants and agreements in this Indenture by the Company shall bind its successors and assigns, whether so expressed or not. SECTION 1.10. Separability Clause. ------------------- In case any provision in this Indenture or in the Securities of any series or in any Coupons appertaining thereto shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. 16 SECTION 1.11. Benefits of Indenture. --------------------- Nothing in this Indenture or in the Securities or in any Coupons appertaining thereto, express or implied, shall give to any Person, other than the parties hereto, the Security Registrar and any Paying Agent, and their successors hereunder, and the Holders of Securities and Coupons, any benefit or any legal or equitable right, remedy or claim under this Indenture. SECTION 1.12. Governing Law. ------------- This Indenture and the Securities and any Coupons appertaining thereto shall be deemed to be contracts made under the laws of the State of New York and for all purposes shall be construed in accordance with and governed by the laws of said State. SECTION 1.13. Payments Due on Non-Business Days. --------------------------------- If any Stated Maturity, Redemption Date, Interest Payment Date or other day on which payment of any principal, premium or interest is required to be made in respect of a Security of any series shall not be a Business Day with respect to the Securities of such series, then (notwithstanding any other provision of this Indenture or of such Security or any Coupon appertaining thereto) payment of the principal (and premium, if any) and interest otherwise due in respect of such Security need not be made at such Stated Maturity or on such Redemption Date, Interest Payment Date or other day, as the case may be, but may be made on the next succeeding Business Day with the same force and effect as if made at such Stated Maturity or on such Redemption Date, Interest Payment Date or other day, as the case may be, and no interest shall accrue for the period from and after such Stated Maturity, Redemption Date, Interest Payment Date or other day, as the case may be. ARTICLE TWO FORMS OF SECURITIES SECTION 2.01. Forms Generally. --------------- The Registered Securities, if any, of each series and the Bearer Securities, if any, of each series and the Coupons, if any, appertaining thereto, shall be substantially in such form or forms (not inconsistent with this Indenture) as shall be established in or pursuant to a Board Resolution (and set forth in a Board Resolution or, to the extent established pursuant to rather than set forth in such Board Resolution, in an Officers' Certificate as to such establishment) or in one or more indentures supplemental hereto, in 17 each case with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Indenture or any indenture supplemental hereto, and, may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon as may be required to comply with any law or with any rules or regulations pursuant thereto, or with the rules of any securities exchange or to conform to usage, as may, consistently herewith, be determined by the officers executing such Securities or Coupons, as evidenced by their execution of such Securities or Coupons. The form of any Registered Security or Bearer Security which is a Global Security shall be as provided in the preceding sentence. The Securities of each series shall be issuable as Registered Securities without Coupons or as Bearer Securities with or without Coupons. Unless otherwise specified with respect to the Securities of a series as contemplated by Section 3.01, Bearer Securities (other than Global Securities) ------------ will have Coupons attached and Bearer Securities that are Global Securities will not have Coupons attached. Registered Securities and Bearer Securities of a series may, to the extent specified with respect to the Securities of such series, as contemplated by Section 3.01, be issued as Global Securities. ------------ The definitive Securities and Coupons, if any, shall be printed, lithographed or engraved or produced by any combination of these methods on steel engraved borders or may be produced in any other manner, all as determined by the officers executing such Securities and Coupons, as evidenced by their execution of such Securities and Coupons. SECTION 2.02. Form of Trustee's Certificate of Authentication. ----------------------------------------------- The Trustee's Certificate of Authentication on all Securities shall be in substantially the following form: "This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture. THE CHASE MANHATTAN BANK, as Trustee By _____________________________ Authorized Officer" 18 SECTION 2.03. Global Securities. ----------------- If the Securities of a series are issuable as a Global Security, such Global Security may provide that it shall represent the aggregate amount of Outstanding Securities from time to time endorsed thereon and may also provide that the aggregate amount of Outstanding Securities represented thereby may from time to time be reduced to reflect exchanges. Any endorsement of a Global Security to reflect the amount, or any increase or decrease in the amount, of Outstanding Securities represented thereby shall be made by the Trustee and in such manner as shall be specified in such Global Security. Any instructions by the Company with respect to a Global Security, after its initial issuance, shall be in writing but need not comply with Section 1.02. ------------ Unless otherwise provided with respect to the Securities of any series in accordance with Section 3.01, payment of principal of (and premium, if any, ------------ on) a Permanent Global Security of such series shall be made to each of Euro- clear and CEDEL with respect to the portion of such Permanent Global Security held for its account by the Depositary. Each of Euro-clear and CEDEL will in such circumstances credit the payment or principal (or premium, if any) received by it in respect of such Permanent Global Security to the accounts of the beneficial owners thereof. Payment of interest, if any, on such Permanent Global Security shall be made as provided in Section 3.07. ------------ ARTICLE THREE THE SECURITIES SECTION 3.01. Amount Unlimited; Issuable in Series. ------------------------------------ The aggregate principal amount of Securities which may be authenticated and delivered under this Indenture is unlimited. The Securities may be issued in one or more series. There shall be established in or pursuant to a Board Resolution, and set forth in an Officers' Certificate, or established in one or more indentures supplemental hereto, prior to the issuance of Securities of any series: (1) the title of the Securities of the series (which shall distinguish the Securities of the series from all other Securities); (2) any limit upon the aggregate principal amount of the Securities of the series which may be authenticated and delivered under this Indenture (except 19 for Securities authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Securities of the series pursuant to Section 3.04, 3.05, 3.06, 9.06 or 11.07); ------------ ---- ---- ---- ----- (3) if the Securities of the series are not denominated in Dollars, the Foreign Currency or Foreign Currencies in which such Securities are denominated, the manner in which the U.S. Dollar equivalent of the principal amount of each such Security is to be determined upon original issuance and, if any payment of principal of (or premium, if any) or interest on or any other amount in respect of the Securities of the series is not payable in Dollars, the Foreign Currency or Foreign Currencies in which such payment shall be payable and the particular provisions applicable thereto; (4) the date or dates (or the manner of determining the same) on which the principal of the Securities of the series is payable (which, if so provided in or pursuant to such Board Resolution or in such an indenture supplemental hereto, may be determined by the Company from time to time and set forth in the Securities of the series issued from time to time); (5) the rate or rates (or the method of determining the same) at which the Securities of the series shall bear interest, if any, and the date or dates from which such interest shall accrue (which, in the case of either or both, if so provided in or pursuant to such Board Resolution or in such an indenture supplemental hereto, may be determined by the Company from time to time and set forth in the Securities of the series issued from time to time), the Interest Payment Dates (or the manner of determining the same) on which such interest, if any, shall be payable, the Regular Record Dates (or the manner of determining the same), if any, for the determination of Holders to whom interest on Registered Securities is payable on any Interest Payment Date and the extent to which, or the manner in which, any interest payable on a Global Security will be paid if other than as provided in Section 3.07; ------------ (6) the place or places where, subject to Section 10.02, the principal ------------- of (and premium, if any) and interest, if any, on Securities of the series shall be payable, any Registered Securities of the series may be surrendered for registration of transfer and Securities of the series may be surrendered for exchange; (7) the period or periods within which, the price or prices at which, the Foreign Currency or Foreign Currencies, if any, in which and the terms and 20 conditions upon which Securities of the series may be redeemed, in whole or in part, at the option of the Company, pursuant to any sinking fund or otherwise; (8) the obligation, if any, of the Company to redeem, repay or purchase Securities of the series pursuant to any sinking fund or analogous provisions or at the option of a Holder thereof and the period or periods within which, the price or prices at which, the Foreign Currency or Foreign Currencies, if any, in which and the terms and conditions upon which Securities of the series shall be redeemed, repaid or purchased, in whole or in part, pursuant to such obligation; (9) if other than denominations of U.S. $1,000 and any integral multiple thereof, in the case of Registered Securities, or U.S. $1,000 and U.S. $10,000 in the case of Bearer Securities, the denominations in which Securities of the series shall be issuable; (10) if other than the principal amount thereof, the portion of the principal amount of Securities of the series which shall be payable upon declaration of acceleration of the Maturity thereof pursuant to Section ------- 5.02; ---- (11) if the amount of payments of principal of (or any premium) or any interest on the Securities of the series may be determined with reference to an index, the manner in which such amounts shall be determined; (12) whether the Securities of the series will be issuable as Registered Securities or Bearer Securities, or both, and, if applicable, whether any Bearer Securities of the series (other than Global Securities) will be issuable without Coupons attached or any Bearer Securities of the series that are Global Securities will be issuable with Coupons attached, whether any Securities of the series are to be issued initially as a Temporary Global Security and whether any Securities of the series are to be issued as a Permanent Global Security, and the terms and conditions upon which any such Global Security or any Bearer Securities of the series may be issued, delivered or exchanged or any Registered Security of the series may be exchanged for Bearer Securities of the series, if other than as provided herein and the form of any certificates or documents to be delivered in connection with (i) the exchange of an interest in a Temporary Global Security for an interest in a Permanent Global Security or a definitive Bearer Security as required by Section 1.163-5(c)(2)(i)(D) of the United States Treasury Regulations or (ii) the payment of principal (or premium, if any) or interest, if any, in respect 21 of a Temporary Global Security as required by Section 1.163-5(c)(2)(i)(D) of the United States Treasury Regulations; (13) whether and under what circumstances, and the terms and conditions on which, the Company will pay additional amounts on the Securities of the series in respect of any tax, assessment or governmental charge withheld or deducted and whether the Company will have the option to redeem such Securities rather than pay such additional amounts or to redeem such Securities in the event of the imposition of any certification, documentation, information or other reporting requirement and, if so, under what circumstances and the terms and conditions on which the Company may exercise such option; (14) the date as of which any Bearer Security of the series (including any Global Security) shall be dated if other than as of the date of original issuance of the first Security of the series to be issued; (15) any Events of Default or covenants other than as set forth herein with respect to the Securities of the series; (16) the application, if any, of Section 4.03 or Section 10.10 ------------ ------------- (including the application, if any, of the condition specified in subparagraph (4) of Section 4.03 or subparagraph (5) of Section 10.10, or ---------------- ------------ ---------------- ------------- both, and, in the case of the application of subparagraph (4) of Section ---------------- ------- 4.03, the application, if any, of clause (B) in lieu of clause (A) thereof) ---- ---------- ---------- to the Securities of the series; (17) any percentage greater than a majority in principal amount of the Outstanding Securities of the series as shall apply to Sections 9.02 and ------------- 13.04; ----- (18) the obligation, if any, of the Company to convert Securities of the series pursuant to the terms thereof, at the option of the Holders thereof, into shares of Common Stock issued by the Company, and the terms and conditions upon which such Securities shall be converted, in whole or in part, pursuant to such obligation; (19) any trustees, authenticating or paying agents, warrant agents, transfer agents or registrars with respect to the Securities of the series (if different from those named herein) and, if applicable, the Person which shall be the Common Depositary or other depositary for the Securities of such series or any portion thereof and any provisions for the appointment of a successor Common Depositary or other depositary, as the case may be; and 22 (20) any other terms of the series (which terms shall not be inconsistent with the provisions of this Indenture). All Securities of any one series and the Coupons, if any, appertaining to any Bearer Securities of such series shall be substantially identical except that such Securities and Coupons may differ as to denomination, date of issue, Stated Maturity, rate of interest, if any, and the date from which interest, if any, shall accrue and as may otherwise be provided in or pursuant to such Board Resolution or in such an indenture supplemental hereto. The terms of such Securities, as set forth above, may be determined by the Company from time to time if so provided in or pursuant to such Board Resolution or in such an indenture supplemental hereto. All Securities of any one series need not, but may, be issued at the same time. If any terms of the series are established by action taken pursuant to a Board Resolution, a copy of an appropriate record of such action shall be certified by the Secretary or an Assistant Secretary of the Company and delivered to the Trustee at or prior to the delivery of the Officers' Certificate setting forth the terms of the series. SECTION 3.02. Denominations. ------------- Unless otherwise specified with respect to Securities of a series as contemplated by Section 3.01, any Registered Securities of such series shall be ------------ issuable in the denominations of U.S. $1,000 and any integral multiple thereof and any Bearer Securities of such series shall be issuable in denominations of U.S. $1,000 and U.S. $10,000. SECTION 3.03. Execution, Authentication, Delivery and Dating. ---------------------------------------------- The Securities and the Coupons, if any, shall be executed on behalf of the Company by its Chairman of the Board of Directors (or its Chairman of the Executive Committee of such Board of Directors), any Vice Chairman, its President, its principal financial officer, its principal accounting officer, its general counsel, any Vice President or its Treasurer, in each case (except in the case of Coupons) under its corporate seal, which may, but need not, be attested. The signature of any of these officers on the Securities or the Coupons may be manual or facsimile and may be imprinted or otherwise reproduced thereon. The corporate seal of the Company may be in the form of a facsimile thereof and may be impressed, affixed, imprinted or otherwise reproduced on the Securities or the Coupons. Notwithstanding the foregoing, any Temporary Global Security may be executed on behalf of the Company as provided herein without any necessity of being under its corporate seal as aforesaid. 23 Securities and Coupons appertaining thereto bearing the manual or facsimile signatures of individuals who were at any time the proper officers of the Company shall bind the Company, notwithstanding that such individuals or any of them have ceased to hold such offices prior to the authentication and delivery of such Securities or did not hold such offices at the date of such Securities; and any Security or Coupon appertaining thereto may be executed on behalf of the Company by such person or persons as, at the actual date of execution of such Security or Coupon, shall be the proper officers of the Company, although at the date of the execution and delivery hereof such person or persons were not such officers. At any time and from time to time after the execution and delivery of this Indenture, the Company may deliver Securities (including Global Securities) of any series, together with any Coupons appertaining thereto, executed by the Company to the Trustee for authentication, together with a Company Order for the authentication and delivery of such Securities, and the Trustee in accordance with the Company Order shall authenticate and deliver such Securities; provided, -------- however, that, in connection with its original issuance, no Bearer Security - ------- shall be mailed or otherwise delivered to any location in the United States; and provided, further, that a Bearer Security may be delivered in connection with - -------- ------- its original issuance only if the person entitled to receive such Bearer Security shall have furnished a certificate referred to in the third sentence of the second paragraph of Section 3.04(b), dated no earlier than 15 days prior to --------------- the earlier of the date on which such Bearer Security is delivered and the date on which any Temporary Global Security or any Permanent Global Security first becomes exchangeable for such Bearer Security in accordance with the terms of such Temporary Global Security or Permanent Global Security and this Indenture. Except as permitted by Section 3.06, the Trustee shall not authenticate and ------------ deliver any Bearer Security unless all appurtenant Coupons then matured (other than matured Coupons in default) have been detached and canceled. If all the Securities of any one series are not to be issued at one time and if a Board Resolution or indenture supplemental hereto relating to the Securities of such series shall so permit, such Company Order may set forth procedures acceptable to the Trustee for the issuance of such Securities, including, without limitation, procedures with respect to date of issue, Stated Maturity, rate of interest, if any, and date from which interest, if any, shall accrue as determined by the Company as contemplated by Section 3.01. In authenticating ------------ and delivering such Securities, and accepting the additional responsibilities under this Indenture in relation to such Securities, the Trustee shall be entitled to receive, and (subject to Section 6.01) shall be fully protected in ------------ relying upon, an Opinion of Counsel stating, (a) that the form or forms of such Securities has been established in conformity with the provisions of this Indenture; 24 (b) that the terms of such Securities have been established in conformity with the provisions of this Indenture; (c) that such Securities, when authenticated and delivered by the Trustee and issued by the Company in the manner and subject to any conditions specified in such Opinion of Counsel, will constitute valid and legally binding obligations of the Company, enforceable in accordance with their terms, subject to bankruptcy, insolvency, reorganization and other laws of general applicability relating to or affecting the enforcement of creditors' rights and to general equity principles; and (d) that all laws and requirements in respect of the execution and delivery by the Company of such Securities have been complied with. The Trustee shall not be required to authenticate such Securities if (i) the Trustee, being advised by counsel, determines that such action may not be lawfully taken, (ii) the Trustee in good faith by its Board of Directors, executive committee or a trust committee of directors and/or Responsible Officers determines that such action would expose the Trustee to personal liability to Holders of any Outstanding Securities or (iii) the issue of such Securities pursuant to this Indenture will affect the Trustee's own rights, duties or immunities under the Securities and this Indenture or otherwise in a manner which is not reasonably acceptable to the Trustee. The Trustee shall authenticate and deliver each Security of any such series in accordance with the procedures, if any, specified by the Company in the Company Order delivered pursuant to the preceding paragraph. Notwithstanding the provisions of Section 3.01 and of the preceding ------------ paragraph, if all Securities of a series are not to be originally issued at one time, it shall not be necessary to deliver any Board Resolution, Officers' Certificate or Opinion of Counsel otherwise required pursuant to Section 3.01, ------------ such preceding paragraph or Section 1.02 at or prior to the time of ------------ authentication of each Security of such series if such documents are delivered at or prior to the authentication upon original issuance of the first Security of such series to be issued. Each Registered Security (including a Global Security) shall be dated the date of its authentication. Each Bearer Security of a series (including a Global Security) shall be dated as of the date of original issuance of the first Security of such series to be issued except as otherwise established in or pursuant to the Board Resolution or indenture supplemental hereto referred to in Section 3.01 relating to the Securities of such series. - ------------ 25 No Security or Coupon appertaining thereto shall be entitled to any benefit under this Indenture or be valid or obligatory for any purpose, unless there appears on such Security a certificate of authentication substantially in the form provided for herein executed by the Trustee by manual signature, and such certificate upon any Security shall be conclusive evidence, and the only evidence, that such Security has been duly authenticated and delivered hereunder. If the Company shall establish pursuant to Section 3.01(12) that the ---------------- Securities of all or part of a series are to be issued in whole or in part in the form of a Global Security which is a Registered Security, such Global Security shall be registered in the name of the Depositary for such Global Security or the nominee of such Depositary and shall be delivered by the Trustee to such Depositary or pursuant to such Depositary's instructions. Unless otherwise specified with respect to the Securities of a series as contemplated by Section 3.01, each Person designated pursuant to Section ------------ ------- 3.01(19) as a Depositary for a Global Security which is a Registered Security of - ------- such series, at the time of its designation and at all times while it serves as Depositary, shall be a clearing agency registered under the Securities Exchange Act of 1934, as amended, and any other applicable statute or regulation. SECTION 3.04. Temporary Securities; Exchange of Temporary Global -------------------------------------------------- Securities. ---------- (a) Pending the preparation of definitive Securities of any series, the Company may execute, and upon Company Order the Trustee shall authenticate and deliver, in the manner specified in Section 3.03, temporary Securities of ------------ such series which are printed, lithographed, typewritten, mimeographed or otherwise produced, in any authorized denomination, substantially of the tenor of the definitive Securities in lieu of which they are issued either as Registered Securities without Coupons or, if authorized, Bearer Securities with or without Coupons and with such appropriate insertions, omissions, substitutions and other variations as the officer executing such Securities may determine, as evidenced by his execution of such Securities. In the case of any series of Securities, such temporary Securities may be issued as a Temporary Global Security representing such of the Outstanding Securities of such series as shall be specified therein. If temporary Securities of any series are issued, the Company will cause definitive Securities of such series to be prepared without unreasonable delay but, in the case of Securities initially represented by a Temporary Global Security, in any event not 26 later than the applicable Exchange Date. Except in the case of Temporary Global Securities (which shall, except as otherwise specified with respect to the Securities of such series pursuant to Section 3.01, be exchanged in accordance ------------ with the provisions of Subsection (b)), after the preparation of definitive -------------- Securities of such series, the temporary Securities of such series shall be exchangeable for definitive Securities of such series upon surrender of the temporary Securities of such series at the office or agency of the Company maintained pursuant to Section 10.02 at a Place of Payment with respect to ------------- Securities of such series, without charge to the Holder. Upon surrender for cancellation of any one or more temporary Securities of any series (accompanied by any unmatured Coupons appertaining thereto) the Company shall execute and the Trustee shall authenticate and deliver in exchange therefor a like principal amount of definitive Securities of such series of authorized denominations and of a like Stated Maturity, with like terms and provisions, and, in the case of Bearer Securities, having attached thereto any appropriate Coupons; provided, -------- however, that, unless otherwise specified with respect to the Securities of such - ------- series pursuant to Section 3.01, no definitive Bearer Security shall be ------------ delivered in exchange for a temporary Registered Security; and provided, -------- further, that a definitive Bearer Security shall be delivered in exchange for a - ------- temporary Bearer Security only in compliance with the conditions set forth in Section 3.03. Until so exchanged the temporary Securities of any series shall in - ------------ all respects be entitled to the same benefits under this Indenture as definitive Securities of such series and with like terms and conditions authenticated and delivered hereunder, except as otherwise specified with respect to the Securities of such series pursuant to Section 3.01 or as provided in Subsection ------------ ---------- (b) as to payment of interest, if any. - --- (b) Unless otherwise specified by the applicable Board Resolution or indenture supplemental hereto pursuant to Section 3.01, the Securities of any ------------ series issuable as Bearer Securities shall initially be represented by one or more temporary Global Securities without Coupons (each, a "Temporary Global ---------------- Security"). Any Temporary Global Security shall, unless otherwise provided - -------- therein, be delivered to the London office of a depositary or common depositary (the "Common Depositary") for the benefit of Euro-clear and CEDEL for credit to ----------------- the respective accounts of the Qualified Account Holders. Unless otherwise specified in a Temporary Global Security, on or after the date which is 40 days after the date of payment for and delivery of such Temporary Global Security (the "Exchange Date"), any Qualified Account Holder ------------- shall be entitled to delivery of the aggregate principal amount of definitive Securities of such series, without charge (except as set forth in this Subsection) in exchange for the portion of such Temporary Global Security with respect to which it is a Qualified Account Holder, of authorized denominations and with like terms and provisions as the portion of such 27 Temporary Global Security to be exchanged. The definitive Securities to be delivered in exchange for such portion shall be definitive Registered Securities, definitive Bearer Securities or all or a portion of a Permanent Global Security without Coupons, or any combination thereof, as specified with respect to the Securities of such series pursuant to Section 3.01, and, if any ------------ combination thereof is so specified, as requested on behalf of the Qualified Account Holder by Euro-clear or CEDEL, as the case may be. A Qualified Account Holder of Euro-clear or CEDEL, as the case may be, desiring to effect the exchange of the portion of such Temporary Global Security with respect to which it is a Qualified Account Holder for such definitive Securities or one or more Permanent Global Securities shall instruct Euro-clear or CEDEL, as the case may be, to request such exchange on its behalf and shall deliver to Euro-clear or CEDEL, as the case may be, a certificate substantially in such form as shall be specified with respect to the Securities of such series pursuant to Section 3.01 ------------ and dated no earlier than 15 days prior to the Exchange Date. On or after the Exchange Date, upon request of the Common Depositary, acting on behalf of Euro- clear and CEDEL, acting on behalf of the respective Qualified Account Holders, the Trustee, as the Company's agent for such purpose, but only upon surrender of such Temporary Global Security by the Common Depositary to the Trustee and delivery to the Trustee of a certificate of Euro-clear or CEDEL, as the case may be, substantially in such form as shall be specified with respect to the Securities of such series pursuant to Section 3.01, to the effect that it has ------------- received in writing, by tested telex or by electronic transmission a certificate or certificates substantially in the form referred to in the preceding sentence dated no earlier than 15 days prior to the Exchange Date and signed by the Qualified Account Holders in respect of such Temporary Global Security or portions thereof being exchanged, shall, on the date of such certificate of Euro-clear or CEDEL, as the case may be, (1) endorse such Temporary Global Security to reflect the reduction of its principal amount by an amount equal to the aggregate principal amount of such definitive Securities or Permanent Global Security, as the case may be, (2) cause the applicable terms of such Securities to be entered on any definitive Security or Securities to be exchanged therefor and the Coupons, if any, appertaining thereto or, as the case may be, endorse any applicable Permanent Global Security to reflect the initial amount, or an increase in the amount, of Securities represented thereby, (3) manually authenticate such definitive Securities or such Permanent Global Security, as the case may be, (4) subject to and in compliance with the requirements of Section 3.03, deliver such definitive Securities to the Holder thereof or, as - ------------ the case may be, deliver such Permanent Global Security to the Common Depositary to be held outside the United States for the accounts of Euro-clear and CEDEL for credit to the respective accounts at Euro-clear and CEDEL of the Qualified Account Holders and (5) redeliver such Temporary Global Security to the Common Depositary, unless such Temporary Global Security shall have been canceled in accordance with Section 3.09. ------------ 28 Unless otherwise specified in such Temporary Global Security, any exchange thereof or of a portion thereof shall be made free of charge to the beneficial owners of such Temporary Global Security, except that a Person receiving definitive Securities must bear the cost of insurance, postage, transportation and the like in the event that such Person does not take delivery of such definitive Securities in person at the offices of Euro-clear or CEDEL. Until exchanged in full as hereinabove provided, any Temporary Global Security of any series shall in all respects be entitled to the same benefits under this Indenture as definitive Securities of such series and with like terms and conditions authenticated and delivered hereunder, except that, unless otherwise specified with respect to the Securities of such series as contemplated by Section 3.01, (i) interest payable on such Temporary Global ------------ Security on an Interest Payment Date for Securities of such series occurring prior to the applicable Exchange Date shall be payable on such Interest Payment Date to Euro-clear and CEDEL for credit without further interest on or after such Interest Payment Date to the respective accounts of the Qualified Account Holders in respect of such Temporary Global Security on such Interest Payment Date who have each delivered to Euro-clear or CEDEL, as the case may be, a certificate as provided in this clause (i); provided, however, that such ------ --- -------- ------- interest shall be so payable to Euro-clear and CEDEL only upon delivery to the Trustee of a certificate of Euro-clear or CEDEL, as the case may be, and on the date of such certificate and that such certificate shall be substantially in such form as specified with respect to the Securities of such series pursuant to Section 3.01 and to the effect that Euro-clear or CEDEL, as the case may be, has - ------------ received in writing, by tested telex or electronic transmission a certificate or certificates substantially in such form as shall also be so specified dated no earlier than 15 days prior to such Interest Payment Date and signed by such Qualified Account Holders; and (ii) interest payable on such Temporary Global Security on an Interest Payment Date for Securities of such series occurring on or after the applicable Exchange Date shall be payable to Euro-clear and CEDEL on such Interest Payment Date but shall not be credited by Euro-clear or CEDEL to the account of any Qualified Account Holder or other Person who is a beneficial owner of such Temporary Global Security on such Interest Payment Date until such Qualified Account Holder or other Person shall exchange its interest in such Temporary Global Security in full as hereinabove provided. Any interest so received by Euro-clear and CEDEL and not credited as provided in clause (ii) of the preceding sentence shall be returned to the Trustee immediately prior to the expiration of two years after such Interest Payment Date, to be repaid to the Company in accordance with Section 10.03. ------------- The delivery to the Trustee by Euro-clear or CEDEL of any certificate of Euro-clear or CEDEL, as the case may be, referred to in this Subsection (b) -------------- may be relied 29 upon by the Company and the Trustee as conclusive evidence that a corresponding certificate of Qualified Account Holders of Euro-clear or CEDEL, as the case may be, referred to in this Subsection (b) has or have been delivered to Euro-clear -------------- or to CEDEL, as the case may be, pursuant to the terms of this Indenture. Any definitive Bearer Security authenticated and delivered by the Trustee in exchange for a portion of a Temporary Global Security shall not bear a Coupon in respect of any interest which shall theretofore have been duly paid by the Trustee to Euro-clear or CEDEL or by the Company to the Trustee in accordance with the provisions of this Subsection, and any Coupon in respect thereof shall be canceled by the Trustee and destroyed in accordance with Section 3.09. - ------------ SECTION 3.05. Registration, Registration of Transfer and Exchange. --------------------------------------------------- The Company shall cause to be kept at one of its offices or agencies maintained pursuant to Section 10.02 a register or registers in respect of each ------------- series of Securities issuable as Registered Securities (herein sometimes referred to as the "Security Register") in which, subject to such reasonable ----------------- regulations as it may prescribe, the Company shall provide for the registration of Registered Securities of such series and the registration of transfers of Registered Securities of such series. Said office or agency is hereby initially appointed "Security Registrar" in respect of each series of Securities issuable ------------------ as Registered Securities for the purpose of registering Registered Securities of such series and transfers of Registered Securities of such series as herein provided. Upon surrender for registration of transfer of any Registered Security of any series at the office or agency of the Company in a Place of Payment in respect of such series, but subject to any restrictions thereon, the Company shall execute, and the Trustee shall authenticate and deliver, in the name of the designated transferee or transferees, one or more new Registered Securities of such series of any authorized denominations, of a like Stated Maturity and aggregate principal amount and with like terms and conditions. At the option of the Holder, Registered Securities (including Registered Securities which are Global Securities) of any series may be exchanged for one or more other Registered Securities of such series of any authorized denominations, of a like Stated Maturity and aggregate principal amount and with like terms and conditions, upon surrender of the Registered Securities to be exchanged at any such office or agency. Except as otherwise specified pursuant to Section 3.01, Registered Securities may not be exchanged ------------ for Bearer Securities. 30 At the option of the Holder, Bearer Securities of any series may be exchanged for Registered Securities of the same series of any authorized denominations, of a like Stated Maturity and aggregate principal amount and with like terms and conditions upon surrender of the Bearer Securities to be exchanged at any such office or agency, with all unmatured Coupons and all matured Coupons in default appertaining thereto. If the Holder of a Bearer Security is unable to produce any such unmatured Coupon or Coupons or matured Coupon or Coupons in default, such exchange may be effected if the Bearer Securities are accompanied by payment in funds acceptable to the Company in an amount equal to the face amount of such missing Coupon or Coupons, or the surrender of such missing Coupon or Coupons may be waived by the Company and the Trustee if there is furnished to them such security or indemnity as they may require to save each of them and any Paying Agent harmless. If thereafter the Holder of such Security shall surrender to any Paying Agent any such missing Coupon in respect of which such a payment shall have been made, such Holder shall be entitled to receive the amount of such payment; provided, however, -------- ------- that, except as otherwise provided in Section 10.02, interest represented by ------------- Coupons shall be payable only upon presentation and surrender of such Coupons at an office or agency located outside the United States. Notwithstanding the foregoing, in case a Bearer Security of any series is surrendered at the office or agency of the Company in a Place of Payment in respect of such series in exchange for a Registered Security of the same series and with like terms and conditions after the close of business at such office or agency on or after (i) any Regular Record Date and before the opening of business at such office or agency on the relevant Interest Payment Date, or (ii) any Special Record Date and before the opening of business at such office or agency on the related proposed date for payment of Defaulted Interest, such Bearer Security shall be surrendered without the Coupon relating to such Interest Payment Date or proposed date for payment, as the case may be (or, if such Coupon is so surrendered with such Bearer Security, such Coupon shall be returned to the Person so surrendering the Bearer Security), and interest or Defaulted Interest, as the case may be, will not be payable on such Interest Payment Date or proposed date for payment, as the case may be, in respect of the Registered Security issued in exchange for such Bearer Security, but will be payable only to the Holder of such Coupon when due in accordance with the provisions of this Indenture. Whenever any Registered Securities or Bearer Securities are so surrendered for exchange, the Company shall execute, and the Trustee shall authenticate and deliver, the Securities which the Holder making the exchange is entitled to receive. Notwithstanding the foregoing, except as otherwise specified with respect to the Securities of any series pursuant to Section 3.01, any Permanent ------------ Global Security representing Securities of such series shall be exchangeable only as provided in this 31 paragraph. If the beneficial owners of interests in such Permanent Global Security are entitled to exchange such interests for definitive Securities of such series, as specified with respect to the Securities of such series pursuant to Section 3.01, then without unnecessary delay but in any event not later than ------------ the earliest date on which such interests may be so exchanged, the Company shall deliver to the Trustee definitive Securities in aggregate principal amount equal to the principal amount of such Permanent Global Security, executed by the Company. On or after such date, any such beneficial owner shall be entitled to delivery, without charge (except as set forth in this paragraph), of the aggregate principal amount of definitive Securities of such series in exchange for the portion of the Permanent Global Security with respect to which it is such beneficial owner, of authorized denominations and with like terms and provisions as the portion of such Permanent Global Security to be exchanged. The definitive Securities to be delivered in exchange for such portion shall, unless the Securities of such series are not issuable as both Registered Securities and Bearer Securities, be definitive Registered Securities or definitive Bearer Securities, or any combination thereof, as requested on behalf of such beneficial owner, or shall, if the Securities of such series are issuable only as Registered Securities or only as Bearer Securities, be definitive Registered Securities or definitive Bearer Securities, as the case may be. On or after the earliest date on which interests in such Permanent Global Security may be so exchanged, upon 30 days' notice to the Trustee by Euro-clear or CEDEL, as the case may be, and upon surrender of such Permanent Global Security by the Depositary to the Trustee, as the Company's agent for such purpose, for exchange in whole or from time to time in part, the Trustee shall (1) endorse such Permanent Global Security to reflect the reduction of its principal amount by an amount equal to the aggregate principal amount of such definitive Securities, (2) cause the terms of such Securities to be entered on the definitive Security or Securities to be exchanged therefor and the Coupons, if any, appertaining thereto, (3) manually authenticate such definitive Securities, (4) subject to and in compliance with the requirements of Section 3.03, deliver such definitive ------------ Securities to the Holder thereof and (5) unless such Permanent Global Security shall have been canceled in accordance with Section 3.09, redeliver such ------------ Permanent Global Security to the Depositary, as the case may be; provided, -------- however, that no such exchanges may occur during a period beginning at the - ------- opening of business 15 days before any selection of Securities of such series to be redeemed and ending on the relevant Redemption Date. If a Registered Security is issued in exchange for any portion of a Permanent Global Security after the close of business at the office or agency where such exchange occurs on (i) any Regular Record Date and before the opening of business at such office or agency on the relevant Interest Payment Date, or (ii) any Special Record Date and before the opening of business at such office or agency on the related proposed date for payment of Defaulted Interest, interest or Defaulted Interest, as the case may be, will not be payable on such Interest Payment Date or proposed date for payment, as the case may be, in respect of such 32 Registered Security, but will be payable on such Interest Payment Date or proposed date for payment, as the case may be, only to the Person to whom interest in respect of such portion of such Permanent Global Security is payable in accordance with the provisions of this Indenture. Unless otherwise specified in such Permanent Global Security, any exchange thereof or of a portion thereof shall be made free of charge to the beneficial owners of such Permanent Global Security, except that a Person receiving definitive Securities must bear the cost of insurance, postage, transportation and the like in the event that such Person does not take delivery of such definitive Securities in person at the offices of Euro-clear or CEDEL. Until exchanged in full as hereinabove provided, any Permanent Global Security of any series shall in all respects be entitled to the same benefits under this Indenture as definitive Securities of such series and with like terms and conditions authenticated and delivered hereunder. Any definitive Bearer Security authenticated and delivered by the Trustee in exchange for a portion of a Permanent Global Security shall not bear a Coupon in respect of any interest which shall theretofore have been duly paid to Euro- clear or CEDEL as provided in Section 3.07, and any Coupon in respect thereof ------------ shall be canceled by the Trustee and destroyed in accordance with Section 3.09. ------------ All Securities issued upon registration of transfer of or in exchange for Securities shall be the valid obligations of the Company, evidencing the same debt, and entitled to the same benefits under this Indenture, as the Securities surrendered for such exchange or registration of transfer. Unless otherwise specified with respect to the Securities of a series as contemplated by Section 3.01, if at any time a Depositary for any Securities ------------ of such series represented by a Global Security which is a Registered Security notifies the Company that it is unwilling or unable to continue as Depositary for such Securities or if at any time a Depositary for any Securities of such series represented by a Global Security which is a Registered Security shall no longer be eligible under the last paragraph of Section 3.03 or if an Event of ------------ Default with respect to such Securities has occurred and is continuing, the Company shall appoint a successor Depositary with respect to the Securities of such series. If a successor Depositary for such Securities is not appointed by the Company within 90 calendar days after the Company receives such notice or becomes aware of such ineligibility or if such Event of Default shall be continuing, such Securities shall, notwithstanding the terms of the Securities of such series established pursuant to Section 3.01, no longer be represented by ------------ a Global Security and the Company will execute, and the Trustee, upon receipt of a Company Order for the authentication and delivery of definitive Registered Securities of such series, will authenticate and deliver, in exchange for such Global Security, Registered Securities of such series in definitive form in authorized denominations, in an aggregate principal amount equal to the principal 33 amount of each Global Security previously delivered to such Depositary and having like terms and conditions. The Company may at any time and in its sole discretion determine that the Securities of any series issued in the form of a Global Security which is a Registered Security shall no longer be represented by such Global Security. In such event the Company will execute, and the Trustee, upon receipt of a Company Order for the authentication and delivery of definitive Registered Securities of such series, will authenticate and deliver, in exchange for such Global Security, Registered Securities of such series in definitive form in authorized denominations, in an aggregate principal amount equal to the principal amount of the Securities no longer to be represented by such Global Security and having like terms and conditions. If specified by the Company with respect to a series of Securities pursuant to Section 3.01, the Depositary for any Securities of such series ------------ represented by a Global Security which is a Registered Security may surrender such Global Security in exchange in whole or in part for Registered Securities of such series of like terms and conditions and in definitive form on such terms as are acceptable to the Company and such Depositary. At such Depositary's request, the Company shall thereupon execute, and the Trustee shall authenticate and deliver, (i) to each Person specified by such Depositary a new Registered Security or Securities of the same series, of like terms and conditions and of any authorized denomination as requested by such Person in aggregate principal amount equal to and in exchange for such Person's beneficial interest in the Global Security so surrendered and (ii) to such Depositary a new Global Security which is a Registered Security of like terms and conditions and in a denomination equal to the difference, if any, between the principal amount of the surrendered Global Security and the aggregate principal amount of Registered Securities delivered to each such Person as provided in clause (i). Every Registered Security of a series presented or surrendered for registration of transfer or exchange shall (if so required by the Company or the Trustee) be duly endorsed, or be accompanied by a written instrument of transfer in form satisfactory to the Company, the Trustee and the Security Registrar in respect of such series duly executed, by the Holder thereof or his attorney duly authorized in writing. No service charge shall be made for any registration of transfer or exchange of Securities (except as otherwise set forth in Section 3.04 with ------------ respect to exchanges of Temporary Global Securities or portions thereof or in this Section with respect to exchanges of Permanent Global Securities or portions thereof) but the Company may require payment of a sum sufficient to cover any tax or other 34 governmental charge that may be imposed in connection with any registration of transfer or exchange of Securities, other than exchanges pursuant to Sections -------- 3.04, 9.06 and 11.07 or conversions pursuant to Section 15.01 not involving any - ---- ---- ----- ------------- transfer. The Company shall not be required (i) to issue, register the transfer of or exchange any Security of any series during a period beginning at the opening of business 15 days before (A) if Securities of such series are issuable only as Registered Securities, the day of the mailing of a notice of redemption of Securities of such series selected for redemption hereunder and ending at the close of business on the day of such mailing and (B) if Securities of such series are issuable as Bearer Securities, the day of the first publication of the relevant notice of redemption or, if earlier, and if Securities of such series are also issuable as Registered Securities and there is no publication, the day of the mailing of the relevant notice of redemption and in either case ending at the close of business on the day of such publication or mailing, or (ii) to register the transfer of or exchange any Registered Security of such series so selected for redemption in whole or in part, except the unredeemed portion of any Registered Security being redeemed in part, or (iii) to exchange any Bearer Security of such series so selected for redemption except that such a Bearer Security may be exchanged for a Registered Security of such series and like tenor, provided that such Registered Security shall be simultaneously -------- surrendered for redemption. SECTION 3.06. Mutilated, Destroyed, Lost and Stolen Securities and ---------------------------------------------------- Coupons. ------- If any mutilated Security or a Security with a mutilated Coupon is surrendered to the Trustee, or if the Company and the Trustee receive evidence to their satisfaction of the destruction, loss or theft of any Security or Coupon, and there is delivered to the Company and the Trustee such security or indemnity as may be required by them to save each of them and any agent of them harmless, then, in the absence of notice to the Company or the Trustee that such Security or Coupon has been acquired by a bona fide purchaser, the Company shall execute and upon its request the Trustee shall authenticate and deliver, in exchange for any such mutilated Security or in lieu of any such destroyed, lost or stolen Security, or in exchange for the Security to which a mutilated, destroyed, lost or stolen Coupon appertains (with all appurtenant Coupons not mutilated, destroyed, lost or stolen), a new Security of the same series, in a like principal amount, of a like Stated Maturity and with like terms and conditions and bearing a number not contemporaneously outstanding with Coupons corresponding to the Coupons, if any, appertaining to such mutilated, destroyed, lost or stolen Security or to the Security to which such mutilated, destroyed, lost or stolen Coupon appertains. 35 In case any such mutilated, destroyed, lost or stolen Security or Coupon has become or is about to become due and payable, the Company in its discretion may, instead of issuing a new Security, pay such Security or Coupon (without surrender thereof except in the case of a mutilated Security or Coupon) if the applicant for such payment shall furnish to the Company and the Trustee such security or indemnity as may be required by them to save each of them and any agent of them harmless, and in case of destruction, loss or theft, evidence satisfactory to the Company and such Trustee and any agent of either of them of the destruction, loss or theft of such Security and the ownership thereof; provided, however, that the principal of (and premium, if any) and interest, if - -------- ------- any, on Bearer Securities shall, except as otherwise provided in Section 10.02, ------------- be payable only at an office or agency located outside the United States and, unless otherwise specified as contemplated by Section 3.01, any interest on ------------ Bearer Securities shall be payable only upon presentation and surrender of the Coupons appertaining thereto. Upon the issuance of any new Security under this Section, the Company may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Trustee) connected therewith. Every new Security of any series, with its Coupons, if any, issued pursuant to this Section in lieu of any destroyed, lost or stolen Security of such series or in exchange for any mutilated Security of such series, or in exchange for a Security to which a mutilated, destroyed, lost or stolen Coupon appertains, shall constitute an original additional contractual obligation of the Company, whether or not the destroyed, lost or stolen Security and its Coupons, if any, or the destroyed, lost or stolen Coupon shall be at any time enforceable by anyone, and shall be entitled to all the benefits of this Indenture equally and proportionately with any and all other Securities of such series and the Coupons, if any, appertaining thereto duly issued hereunder. The provisions of this Section are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities or Coupons. SECTION 3.07. Payment of Interest; Interest Rights Preserved. ---------------------------------------------- Interest, if any, on any Registered Security which is payable, and is punctually paid or duly provided for, on any Interest Payment Date shall be paid to the Person in whose name such Registered Security (or one or more Predecessor Securities) is registered on the Regular Record Date for such interest specified as provided in Section 3.01. ------------ 36 Except as otherwise specified with respect to the Securities of a series as contemplated by Section 3.01, interest, if any, on the Securities of ------------ each series shall be computed on the basis of a 360-day year of twelve thirty- day months. Unless otherwise provided with respect to the Securities of any series in accordance with Section 3.01, and subject to Sections 3.04(b) and 3.05 and ------------ ---------------- ---- the next following paragraph, payment of interest may be made (i) by check mailed to the address of the Person entitled thereto as such address shall appear in the Security Register in respect of Securities of such series, or (ii) at the option of the Company, (1) in the case of a Bearer Security, by transfer to an account maintained by the payee with a bank located outside the United States, or (2) in the case of a Registered Security, by transfer to an account maintained by the payee with a bank located inside the United States. Unless otherwise provided with respect to the Securities of any series in accordance with Section 3.01, every Permanent Global Security of such series ------------ will provide that interest, if any, payable on any Interest Payment Date will be paid to each of Euro-clear and CEDEL with respect to that portion of such Permanent Global Security held for its account by the Depositary. Each of Euro- clear and CEDEL will in such circumstances credit the interest, if any, received by it in respect of such Permanent Global Security to the accounts of the beneficial owners thereof. Any interest on any Registered Security of any series which is payable, but is not punctually paid or duly provided for, on any Interest Payment Date (herein called "Defaulted Interest") shall forthwith cease to be ------------------ payable to the Holder on the relevant Regular Record Date by virtue of having been such Holder; and such Defaulted Interest may be paid by the Company, at its election in each case, as provided in paragraph (1) or paragraph (2) below: ------------- -------------- (1) The Company may elect to make payment of any Defaulted Interest to the Persons in whose names the Registered Securities of such series (or their respective Predecessor Securities of such series) are registered at the close of business on a Special Record Date for the payment of such Defaulted Interest, which shall be fixed in the following manner. The Company shall notify the Trustee in writing of the amount of Defaulted Interest proposed to be paid on each Registered Security of such series and the date of the proposed payment, and at the same time the Company shall deposit with the Trustee an amount of money in the currency or composite currency in which the Securities of such series are payable (except as otherwise specified pursuant to Section 3.01 with respect to Securities of ------------ such series) equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest or shall make arrangements satisfactory to the 37 Trustee for such deposit prior to the date of the proposed payment, such money when deposited to be held in trust for the benefit of the Persons entitled to such Defaulted Interest as in this paragraph provided. Thereupon the Trustee shall fix a Special Record Date for the payment of such Defaulted Interest which shall be not more than 15 nor less than 10 days prior to the date of the proposed payment and not less than 10 days after the receipt by the Trustee of the notice of the proposed payment. The Trustee shall promptly notify the Company of such Special Record Date and, in the name and at the expense of the Company, shall cause notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor to be mailed, first-class, postage prepaid, to each Holder of a Registered Security of such series at the address of such Holder as it appears in the Security Register in respect of the Securities of such series not less than 10 days prior to such Special Record Date. The Trustee may, in its discretion, in the name and at the expense of the Company, cause a similar notice to be published at least once in an Authorized Newspaper in each Place of Payment with respect to the Securities of such series located in the United States, but such publication shall not be a condition precedent to the establishment of such Special Record Date. Notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor having been mailed as aforesaid, such Defaulted Interest shall be paid to the Persons in whose names the Registered Securities of such series (or their respective Predecessor Securities) are registered on such Special Record Date and shall no longer be payable pursuant to the following paragraph (2). ------------- (2) The Company may make payment of any Defaulted Interest in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Registered Securities of such series may be listed, and upon such notice as may be required by such exchange, if, after notice given by the Company to the Trustee of the proposed payment pursuant to this paragraph, such payment shall be deemed practicable by the Trustee. Subject to the foregoing provisions of this Section and Section 3.05, ------------ each Security delivered under this Indenture upon registration of transfer of or in exchange for or in lieu of any other Security shall carry the rights to interest accrued and unpaid, and to accrue, which were carried by such other Security. SECTION 3.08. Persons Deemed Owners. --------------------- The Company, the Trustee and any Paying Agent, the Security Registrar and any other agent of the Company or the Trustee in respect of the Securities of any series may treat the Person in whose name any Registered Security of such series is 38 registered as the owner of such Registered Security for the purpose of receiving payment of principal of (and premium, if any) and (subject to Sections 3.05 and ------------- 3.07) interest, if any, on such Security and for all other purposes whatsoever, - ---- whether or not such Security be overdue, and neither the Company nor the Trustee nor any Paying Agent, Security Registrar or other agent of the Company or the Trustee in respect of the Securities of such series shall be affected by notice to the contrary. Title to any Bearer Security and any Coupons appertaining thereto shall pass by delivery. The Company, the Trustee and any Paying Agent and any other agent of the Company or the Trustee in respect of the Securities of any such series may treat the Holder of any Bearer Security and the Holder of any Coupon as the absolute owner of such Bearer Security or Coupon for the purpose of receiving payment of principal of (and premium, if any) and (subject to Section 3.07) interest, if any, on such Security and for all other purposes ------------ whatsoever, whether or not such Security or Coupon be overdue, and neither the Company nor the Trustee nor any Paying Agent or other agent of the Company or the Trustee in respect of the Securities of such series shall be affected by any notice to the contrary. All such payments so made to any such Person or Holder, as the case may be, shall be valid and, to the extent of the sum or sums so paid, effectual to satisfy and discharge the liability for moneys payable upon such Security or Coupon. Notwithstanding the foregoing, except as otherwise specified with respect to the Securities of a series as contemplated by Section 3.01, and ------------ except as provided in Sections 2.03 and 3.07 with respect to the payment of ------------- ---- principal of (or premium, if any) or interest, if any, on a Permanent Global Security, the Company, the Trustee and any agent of the Company and the Trustee shall treat a Person having a beneficial interest in a Permanent Global Security as a Holder of such principal amount of Outstanding Securities represented by such Permanent Global Security as shall be specified in a written statement of such Holder or, in the case of a Permanent Global Security that is a Bearer Security, of Euro-clear or CEDEL, which is produced to the Trustee by such Holder or by Euro-clear or CEDEL, as the case may be. None of the Company, the Trustee and any Paying Agent, the Security Registrar and any other agent of the Company or the Trustee will have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial ownership interests of a Global Security or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests. SECTION 3.09. Cancellation. ------------ All Securities and Coupons surrendered for payment, registration of transfer, exchange, conversion, redemption or repayment, or delivered in satisfaction of 39 any sinking fund payment or analogous payment, shall, if surrendered to any Person other than the Trustee, be delivered to the Trustee for cancellation and shall be promptly canceled by it. The Company may at any time deliver to the Trustee for cancellation any Securities previously authenticated and delivered hereunder or any Coupons previously delivered hereunder which the Company may have acquired in any manner whatsoever and may deliver to the Trustee (or to any other Person for delivery to the Trustee) for cancellation any Securities previously authenticated hereunder which the Company has not issued and sold, and all Securities and Coupons so delivered shall be promptly canceled by the Trustee. No Security shall be authenticated in lieu of or in exchange for any Securities canceled as provided in this Section, except as expressly permitted by this Indenture. All canceled Securities and Coupons held by the Trustee shall be destroyed by it and the Trustee shall deliver a certificate of such destruction to the Company. In the case of any Temporary Global Security, which shall be destroyed if the entire aggregate principal amount of the Securities represented thereby has been exchanged, the certificate of such destruction shall state that all certificates required pursuant to Section 3.04 hereof, ------------ substantially in the form of Exhibit B hereto, to be given by Euro-clear or CEDEL, have been duly presented to the Trustee by Euro-clear or CEDEL, as the case may be. Permanent Global Securities shall not be cancelled until exchanged in full for other Permanent Global Securities or definitive Securities or until payment thereof is made in full. ARTICLE FOUR SATISFACTION AND DISCHARGE SECTION 4.01. Satisfaction and Discharge of Indenture. --------------------------------------- This Indenture shall cease to be of further effect with respect to any series of Securities, and the Trustee, on demand of and at the expense of the Company, shall execute proper instruments acknowledging satisfaction and discharge of this Indenture with respect to such series, when (1) any of the following shall occur: (A) all Securities of such series theretofore authenticated and delivered and all Coupons, if any, appertaining thereto (other than (i) Coupons appertaining to Bearer Securities surrendered for exchange for Registered Securities and maturing after such exchange, the surrender of which is not required or has been waived as provided in Section 3.05, (ii) any Securities or Coupons, if any, appertaining ------------ thereto which have been destroyed, lost or stolen and which have been replaced or paid as provided 40 in Section 3.06, (iii) Coupons appertaining to Securities and called ------------ for redemption and maturing after the relevant Redemption Date, the surrender of which is not required as provided in Section 11.06, and ------------- (iv) Securities and Coupons money for the payment of which has theretofore been deposited in trust or segregated and held in trust by the Company and thereafter repaid to the Company or discharged from such trust, as provided in Section 10.03) have been delivered to the ------------- Trustee for cancellation; or (B) all Securities of such series and all unmatured Coupons, if any, appertaining thereto not theretofore delivered to the Trustee for cancellation (i) have become due and payable, or (ii) will become due and payable at their Stated Maturity within 1 year, or (iii) are to be called for redemption within 1 year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Company, and the Company, in the case of (i), (ii) or (iii) above, has deposited or caused to be deposited with the Trustee, as trust funds in trust for the purpose, an amount sufficient to pay and discharge the entire indebtedness on such Securities of such series and all Coupons, if any, appertaining thereto not theretofore delivered to the Trustee for cancellation, for principal (and premium, if any) and interest, if any, to the date of such deposit (in the case of Securities which have become due and payable), or to the Stated Maturity or Redemption Date, as the case may be; (2) the Company has paid or caused to be paid all other sums payable hereunder by the Company in respect of the Securities of such series and the Coupons, if any, appertaining thereto; and (3) the Company has delivered to the Trustee an Officers' Certificate and an Opinion of Counsel each stating that all conditions precedent herein provided for relating to the satisfaction and discharge of this Indenture in respect of such series have been complied with. 41 Notwithstanding the satisfaction and discharge of this Indenture with respect to any series of Securities, so long as any Security of such series remains Outstanding, the obligations of the Company to the Trustee under Section 6.07 ------------ and, if money shall have been deposited with the Trustee pursuant to subclause (B) of clause (1) of this Section or if money or Government Obligations shall have been deposited with or received by the Trustee pursuant to Section 4.03 or ------------ 10.10, the obligations of the Trustee under Section 4.02 and the last paragraph - ----- ------------ of Section 10.03 with respect to such series shall survive and the remaining ------------- rights of conversion of any Securities of such series, if convertible, shall continue in full force and effect pursuant to the terms set forth in Article ------- Fifteen herein. - ------- SECTION 4.02. Application of Trust Money. -------------------------- (a) Subject to the provisions of Section 4.02(c) and the last --------------- paragraph of Section 10.03, all money or Government Obligations deposited with ------------- the Trustee pursuant to Section 4.01, 4.03 or 10.10 or the principal of or ------------ ---- ----- interest on such Government Obligations shall be held in trust and applied by the Trustee, in accordance with the provisions of this Indenture and of the Securities of the series to which such money or Government Obligations relate and the Coupons, if any, appertaining thereto, to the payment, either directly or through any Paying Agent (including the Company acting as its own Paying Agent), as the Trustee may determine, to the Persons entitled thereto, of the principal (and premium, if any) and interest, if any, for the payment of which such money or Government Obligations have been deposited with the Trustee or to make mandatory sinking fund payments or analogous payments as contemplated by Section 4.03 or 10.10, but such money or proceeds need not be segregated from - ------------ ----- other funds except to the extent required by law. (b) The Company shall pay and shall indemnify the Trustee against any tax, fee or other charge imposed on or assessed against Government Obligations deposited pursuant to Section 4.03 or 10.10 or the principal of or interest on ------------ ----- such Government Obligations other than any payable by or on behalf of the Holders. (c) The Trustee shall deliver or pay to the Company from time to time upon Company Request any money or Government Obligations (or the principal of or interest on such Government Obligations) held by it as provided in Section 4.01, ------------ 4.03 or 10.10 which, in the opinion of a nationally recognized firm of - ---- ----- independent public accountants expressed in a written certification thereof delivered to the Trustee, are then in excess of the amount thereof which then would have been required to be deposited for the purpose for which such money or Government Obligations were deposited or received. The principal of and interest on the Government Obligations deposited in trust pursuant to Sections -------- 4.03(1) and 10.10(1), to the extent that such principal and interest - ------- -------- 42 are not required for a period of time for the payment of the principal of (and premium, if any) and interest, if any, on the Securities with respect to which such Government Obligations relate, shall, so far as practicable, be invested as agreed with the Trustee in Government Obligations of such maturities (six months or less) as necessary to ensure that funds are available to pay the principal of (and premium, if any) and interest, if any, on such Securities and the Trustee, upon receipt thereof, shall pay to the Company the income from such investments. SECTION 4.03. Defeasance and Discharge of Securities of any Series. ---------------------------------------------------- If this Section 4.03 has been specified in accordance with Section ------- 3.01 to be applicable to Securities of any series, then notwithstanding Section - ---- ------- 4.01, the Company shall be deemed to have paid and discharged the entire - ---- indebtedness on all the Outstanding Securities of such series and the Coupons, if any, appertaining thereto, the provisions of this Indenture as it relates to such Outstanding Securities and Coupons (except as to the rights of Holders of Outstanding Securities of such series and Coupons, if any, appertaining thereto to receive, from the trust funds described in subparagraph (1), payment of the ---------------- principal of (and premium, if any) and any installment of principal of (and premium, if any) or interest, if any, on such Securities on the Stated Maturity of such principal or installment of principal or interest or any mandatory sinking fund payments or analogous payments applicable to the Securities of such series on the day on which such payments are due and payable in accordance with the terms of this Indenture and of such Securities, the Company's obligations with respect to such Securities under Sections 3.05, 3.06, 10.02, 10.03 and ------------- ---- ----- ----- 15.01 the rights, powers, trusts, duties and immunities of the Trustee - ----- hereunder) shall no longer be in effect, and the Trustee, at the expense of the Company, shall, upon Company Request, execute proper instruments acknowledging the same, provided that the following conditions have been satisfied: (1) with reference to this Section 4.03, the Company has deposited or caused to be deposited with the Trustee (or another trustee satisfying the requirements of Section 6.09), irrevocably (irrespective of whether the ------------ conditions in subparagraphs (2), (3), (4) (if applicable) or (5) have been ----------------- --- --- --- satisfied, but subject to the provisions of Section 4.02(c) and the last --------------- paragraph of Section 10.03), as trust funds in trust, specifically pledged ------------- as security for, and dedicated solely to, the benefit of the Holders of the Securities of such series and the Coupons, if any, appertaining thereto, (A) money in an amount in the currency or composite currency in which the Securities of such series are payable (except as otherwise specified with respect to the Securities of such series pursuant to Section 3.01), or (B) ------------ Government Obligations which through the payment of interest and principal in respect thereof in accordance with their terms will provide not later than the 43 opening of business on the due date of any payment referred to in clause (i) or (ii) of this subparagraph (1) money in an amount, or (C) a combination thereof, sufficient, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee, to pay and discharge (i) the principal of (and premium, if any) and each installment of principal (and premium, if any) and interest, if any, on such Outstanding Securities and Coupons on the Stated Maturity of such principal or installment of principal or interest, (ii) any mandatory sinking fund payments or analogous payments applicable to the Securities of such series on the day on which such payments are due and payable in accordance with the terms of this Indenture and of such Securities and (iii) any repayment of the Securities of such series at the option of a Holder of any of such Securities on the date such repayment is due and payable; (2) such deposit will not result in a breach or violation of, or constitute a default under, this Indenture or any other agreement or instrument to which the Company is a party or by which it is bound; (3) no Event of Default or event which with the giving of notice or lapse of time, or both, would become an Event of Default with respect to the Securities of such series shall have occurred and be continuing on the date of such deposit and no Event of Default under Section 5.01(d) or --------------- 5.01(e) or event which with the giving of notice or lapse of time, or both, ------- would become an Event of Default under Section 5.01(d) or 5.01(e) shall --------------- ------- have occurred and be continuing on the 91st day after such date; (4) if this subparagraph has been specified in accordance with Section 3.01 to be applicable to the Securities of such series, the Company ------------ has delivered to the Trustee (A) an Opinion of Counsel to the effect that the Company has received from, or there has been published by, the Internal Revenue Service a ruling to the effect, or (B) in lieu thereof, but only if this clause (B) is specified in accordance with Section 3.01 to be ------------ applicable to the Securities of such series, an Opinion of Counsel to the effect, that Holders of the Securities of such series and the Coupons, if any, appertaining thereto will not recognize income, gain or loss for federal income tax purposes as a result of such deposit, defeasance and discharge and will be subject to federal income tax on the same amount and in the same manner and at the same times, as would have been the case if such deposit, defeasance and discharge had not occurred; and 44 (5) the Company has delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that all conditions precedent provided for relating to the defeasance and discharge of the entire indebtedness on all Outstanding Securities of such series as contemplated by this Section have been complied with. ARTICLE FIVE REMEDIES SECTION 5.01. Events of Default. ----------------- "Event of Default" wherever used herein with respect to Securities of any series means any one of the following events (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body): (a) default in the due and punctual payment of any interest upon any of the Securities of such series as and when the same shall become due and payable, and continuance of such default for a period of 30 days; or (b) default in the due and punctual payment of the principal of (and premium, if any, on) any of the Securities of such series as and when the same shall become due and payable either at Maturity, by declaration as authorized by this Indenture, or otherwise; or (c) failure on the part of the Company to duly observe or perform any other of the covenants or agreements on the part of the Company in the Securities of such series or in this Indenture contained (other than a covenant or agreement a default in whose performance or whose breach is elsewhere in this Section specifically dealt with or which has expressly been included in this Indenture solely for the benefit of a series of Securities other than such series) for a period of 60 days after the date on which written notice of such failure, requiring the same to be remedied, shall have been given to the Company by the Trustee or to the Company and the Trustee by the Holders of at least 25% in principal amount of the Securities of such series at the time Outstanding; provided, however, that, -------- ------- subject to the provisions of Subsections (a), (b) and (c) of Section 6.01 --------------- --- --- ------------ hereof, the Trustee shall not be charged with knowledge of such default unless the Trustee, in the course of its administration of corporate trusts, shall have actual knowledge of such default or unless written notice thereof shall have been given to the Trustee 45 by the Company or by the Holders of not less than 25% in principal amount of the Outstanding Securities of such series; or (d) entry of a decree or order by a court having jurisdiction in the premises for relief in respect of the Company in an involuntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or appointing a receiver, liquidator, assignee, trustee, sequestrator (or similar official) of the Company or of any substantial part of its property, or ordering the winding up or liquidation of its affairs, and the continuance of any such decree or order unstayed and in effect for a period of 60 consecutive days; or (e) commencement by the Company of a voluntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or the consent by the Company to the entry of an order for relief in an involuntary case under any such law, or the consent by the Company to the appointment of or taking possession by a receiver, liquidator, assignee, trustee, sequestrator (or other similar official) of the Company or of any substantial part of its property, or the making by the Company of a general assignment for the benefit of creditors, or the admission by the Company in writing of its inability generally to pay its debts as they become due, or the taking of corporate action by the Company in furtherance of any such action; or (f) any other Event of Default provided with respect to Securities of such series. SECTION 5.02. Acceleration of Maturity; Rescission and Annulment. -------------------------------------------------- If an Event of Default with respect to Securities of any series then Outstanding occurs and is continuing, then and in every such case the Trustee or the Holders of not less than 25% in principal amount of the Outstanding Securities of such series may declare the principal of all the Securities of such series (or, in the case of Securities of such series that are Original Issue Discount Securities, such portion of the principal of such Securities as may be specified in the terms thereof) to be due and payable immediately, by a notice in writing to the Company (and to the Trustee if given by Securityholders), and upon any such declaration such principal (or, as the case may be, such portion) shall become immediately due and payable. At any time after such a declaration of acceleration has been made and before a judgment or decree for payment of the money due has been obtained by the Trustee as hereinafter in this Article provided, the Holders of a majority in principal 46 amount of the Outstanding Securities of such series, by written notice to the Company and the Trustee, may rescind and annul such declaration and its consequences if: (1) the Company has paid or deposited with the Trustee a sum sufficient to pay in the currency or composite currency in which the Securities of such series are payable (except as otherwise specified with respect to the Securities of such series pursuant to Section 3.01) ------------ (A) all overdue installments of interest on all Securities of such series, (B) the principal of (and premium, if any, on) any securities of such series which have become due otherwise than by such declaration of acceleration and interest thereon at the rate borne by such Securities (or, in the case of Securities of such series that are Original Issue Discount Securities, the Yield to Maturity in respect thereof), (C) to the extent that payment of such interest is lawful, interest upon overdue installments of interest at the rate borne by such Securities (or, in the case of Securities of such series that are Original Issue Discount Securities, the Yield to Maturity in respect thereof), and (D) all sums paid or advanced by the Trustee hereunder and the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel; and (2) all Events of Default with respect to Securities of such series, other than the non-payment of the principal of Securities of such series which have become due solely by such acceleration, have been cured or waived as provided in Section 5.13. ------------ No such recission shall affect any subsequent default or impair any right consequent thereon. 47 SECTION 5.03. Collection of Indebtedness and Suits for Enforcement by ------------------------------------------------------- Trustee. ------- The Company covenants that if (1) default is made in the payment of any installment of interest on any Security of any series when such interest becomes due and payable and such default continues for a period of 30 days, or (2) default is made in the payment of the principal of (or premium, if any, on) any Security of any series at the Maturity thereof, the Company will, upon demand of the Trustee, pay to it, for the benefit of the Holders of the Securities of such series and the Coupons, if any, appertaining thereto, the whole amount then due and payable on such Securities and Coupons for principal (and premium, if any) and interest, if any, with interest upon the overdue principal (and premium, if any) and, to the extent that payment of such interest shall be legally enforceable, upon overdue installments of interest, at the rate borne by such Securities (or in the case of Securities of such series that are Original Issue Discount Securities, the Yield to Maturity in respect thereof); and, in addition thereto, such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel. If the Company fails to pay such amounts forthwith upon such demand, the Trustee, in its own name and as trustee of an express trust, may institute a judicial proceeding for the collection of the sums so due and unpaid, and may prosecute such proceeding to judgment or final decree, and may enforce the same against the Company or any other obligor upon such Securities and Coupons and collect the moneys adjudged or decreed to be payable in the manner provided by law out of the property of the Company or any other obligor upon such Securities and Coupons, wherever situated. If an Event of Default with respect to Securities of any series occurs and is continuing, the Trustee may in its discretion proceed to protect and enforce its rights and the rights of the Holders of the Securities of such series and the Coupons, if any, appertaining thereto, by such appropriate judicial proceedings as the Trustee shall deem most effectual to protect and enforce any such rights, whether for the specific enforcement of any covenant or agreement in this Indenture or in aid of the exercise of any power granted herein, or to enforce any other proper remedy. 48 SECTION 5.04. Trustee May File Proofs of Claim. -------------------------------- In case of the pendency of any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or other judicial proceeding relative to the Company or any other obligor upon the Securities of any series and the Coupons, if any, appertaining thereto or the property of the Company or of such other obligor or their creditors, the Trustee (irrespective of whether the principal of the Securities of such series shall then be due and payable as therein expressed or by declaration or otherwise and irrespective of whether the Trustee shall have made any demand on the Company for the payment of overdue principal or interest) shall be entitled and empowered, by intervention in such proceeding or otherwise, (i) to file and prove a claim for the whole amount of principal (or, in the case of Securities of such series that are Original Issue Discount Securities, such portion of the principal of such Securities as may be specified in the terms thereof) (and premium, if any) and interest owing and unpaid in respect of the Securities of such series and the Coupons, if any, appertaining thereto and to file such other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel) and of the Holders of the Securities of such series and the Coupons, if any, appertaining thereto allowed in such judicial proceeding, and (ii) to collect and receive any moneys or other property payable or deliverable on any such claims and to distribute the same; and any receiver, assignee, trustee, liquidator, sequestrator (or other similar official) in any such judicial proceeding is hereby authorized by each such Holder to make such payments to the Trustee, and in the event that the Trustee shall consent to the making of such payments directly to such Holders, to pay to the Trustee any amount due to it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 6.07. ------------ Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder of a Security or Coupon any plan of reorganization, arrangement, adjustment or composition affecting the Securities of any series or the rights of any Holder thereof, or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding. 49 SECTION 5.05. Trustee May Enforce Claims Without Possession of ------------------------------------------------ Securities. ---------- All rights of action and claims under this Indenture or the Securities of any series or the Coupons, if any, appertaining thereto may be prosecuted and enforced by the Trustee without the possession of any of the Securities of such series or any of such Coupons or the production thereof in any proceeding relating thereto, and any such proceeding instituted by the Trustee shall be brought in its own name as trustee of an express trust, and any recovery of judgment shall, after provision for the payment of the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, be for the ratable benefit of the Holders of the Securities and Coupons in respect of which such judgment has been recovered. SECTION 5.06. Application of Money Collected. ------------------------------ Any money collected by the Trustee pursuant to this Article with respect to the Securities of any series or the Coupons, if any, appertaining thereto shall be applied in the following order, at the date or dates fixed by the Trustee and, in case of the distribution of such money on account of principal (or premium, if any) or interest, if any, upon presentation of the Securities or Coupons, or both, as the case may be, in respect of which such money was collected, and the notation thereon of the payment if only partially paid and upon surrender thereof if fully paid: FIRST: To the payment of all amounts due the Trustee under Section ------- 6.07; - ---- SECOND: To the payment of the amounts then due and unpaid upon the Securities of such series and the Coupons, if any, appertaining thereto for the principal (and premium, if any) and interest, if any, in respect of which or for the benefit of which such money has been collected, ratably, without preference or priority of any kind, according to the amounts due and payable on such Securities and Coupons, for principal (and premium, if any) and interest, if any, respectively; and THIRD: To the payment of the remainder, if any, to the Company or to whomsoever may be lawfully entitled to receive the same, or as a court of competent jurisdiction may determine. 50 SECTION 5.07. Limitation on Suits. ------------------- No Holder of any Security of any series or any Coupon appertaining thereto shall have any right to institute any proceeding, judicial or otherwise, with respect to this Indenture, or for the appointment of a receiver or trustee, or for any other remedy hereunder, unless (1) such Holder has previously given written notice to the Trustee of a continuing Event of Default with respect to Securities of such series; (2) the Holders of not less than 25% in principal amount of the Outstanding Securities of such series shall have made written request to the Trustee to institute proceedings in respect of such Event of Default in its own name as Trustee hereunder; (3) such Holder or Holders have offered to the Trustee reasonable indemnity against the costs, expenses and liabilities to be incurred in compliance with such request; (4) the Trustee for 60 days after its receipt of such notice, request and offer of indemnity has failed to institute any such proceeding; and (5) no direction inconsistent with such written request has been given to the Trustee during such 60 day period by the Holders of a majority in principal amount of the Outstanding Securities of such series; it being understood and intended that no one or more Holders of Securities of any series or Coupons, if any, appertaining thereto shall have any right in any manner whatever by virtue of, or by availing of, any provision of this Indenture to affect, disturb or prejudice the rights of any other Holders of Securities of such series or Coupons, if any, appertaining thereto or to obtain or to seek to obtain priority or preference over any other such Holders or to enforce any right under this Indenture, except in the manner herein provided and for the equal and ratable benefit of all the Holders of Securities of such series and Coupons, if any, appertaining thereto. 51 SECTION 5.08. Unconditional Right of Securityholders to Receive ------------------------------------------------- Principal, Premium and Interest and to Convert ---------------------------------------------- Securities. ---------- Notwithstanding any other provision in this Indenture, the Holder of any Security or Coupon shall have the right which is absolute and unconditional to receive payment of the principal of (and premium, if any) and (subject to Section 3.07) interest, if any, on such Security on the respective Stated - ------------ Maturities expressed in such Security or Coupon (or, in the case of redemption, on the Redemption Date), to require conversion of such Security, if convertible, and to institute suit for the enforcement of any such payment and any such right to convert and such right shall not be impaired without the consent of such Holders. SECTION 5.09. Restoration of Rights and Remedies. ---------------------------------- If the Trustee or the Holder of any Security or Coupon has instituted any proceeding to enforce any right or remedy under this Indenture and such proceeding has been discontinued or abandoned for any reason, or has been determined adversely to the Trustee or to such Holder, then and in every such case the Company, the Trustee and the Holders of Securities and Coupons, if any, shall, subject to any determination in such proceeding, be restored severally and respectively to their former positions hereunder, and thereafter all rights and remedies of the Trustee and such Holders shall continue as though no such proceeding had been instituted. SECTION 5.10. Rights and Remedies Cumulative. ------------------------------ Except as otherwise provided with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities or Coupons in the last paragraph of Section 3.06, no right or remedy herein conferred upon or ------------ reserved to the Trustee or to the Holders of Securities or Coupons is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereinafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy. SECTION 5.11. Delay or Omission Not Waiver. ---------------------------- No delay or omission of the Trustee or of any Holder of any Security of any series or any Coupon appertaining thereto to exercise any right or remedy accruing upon any Event of Default in respect of the Securities of such series shall impair any such 52 right or remedy or constitute a waiver of any such Event of Default or an acquiescence therein. Every right and remedy given by this Article or by law to the Trustee or to the Holders of Securities or Coupons may be exercised from time to time, and as often as may be deemed expedient, by the Trustee or by such Holders, as the case may be. SECTION 5.12. Control by Securityholders. -------------------------- The Holders of a majority in principal amount of the Outstanding Securities of any series shall have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or exercising any trust or power conferred on the Trustee with respect to the Securities of such series, provided that -------- (1) such direction shall not be in conflict with any rule of law or this Indenture, expose the Trustee to personal liability or be unduly prejudicial to Holders not joining therein, and (2) the Trustee may take any other action deemed proper by the Trustee which is not inconsistent with such direction. SECTION 5.13. Waiver of Past Defaults. ----------------------- The Holders of not less than a majority in principal amount of the Outstanding Securities of any series may on behalf of the Holders of all Securities of such series and all Coupons, if any, appertaining thereto waive any past default hereunder with respect to Securities of such series and its consequences, except a default (1) in the payment of the principal of (or premium, if any) or interest, if any, on any Security of such series, or (2) in respect of a covenant or provision hereof which under Article ------- Nine cannot be modified or amended without the consent of the Holder of ---- each Outstanding Security of such series affected. Upon any such waiver, such default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured, for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other default or impair any right consequent thereon. 53 SECTION 5.14. Undertaking for Costs. --------------------- All parties to this Indenture agree, and each Holder of any Security of any series or any Coupon appertaining thereto by his acceptance thereof shall be deemed to have agreed, that any court may in its discretion require, in any suit for the enforcement of any right or remedy under this Indenture, or in any suit against the Trustee for any action taken or omitted by it as Trustee, the filing by any party litigant in such suit of an undertaking to pay the costs of such suit, and that such court may in its discretion assess reasonable costs, including reasonable attorneys' fees, against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; but the provisions of this Section shall not apply to any suit instituted by the Trustee, to any suit instituted by any Holder or group of Holders, holding in the aggregate more than 10% in principal amount of the Outstanding Securities of any series or to any suit instituted by any Holder of a Security or Coupon for the enforcement of the payment of the principal of (or premium, if any) or interest, if any, on any Security or the payment of any Coupon on or after the respective Stated Maturities expressed in such Security or Coupon (or, in the case of redemption, on or after the Redemption Date). SECTION 5.15. Waiver of Stay or Extension Laws. -------------------------------- The Company covenants (to the extent that it may lawfully do so) that it will not at any time insist upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay or extension law wherever enacted, now or at any time hereafter in force, which may affect the covenants or the performance of this Indenture; and the Company (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law, and covenants that it will not hinder, delay or impede the execution of any power herein granted to the Trustee, but will suffer and permit the execution of every such power as though no such law had been enacted. SECTION 5.16. Judgment Currency. ----------------- The Company agrees, to the extent that it may effectively do so under applicable law, that (i) if for the purpose of obtaining judgment in any court it is necessary to convert a sum due in respect of the principal of (or premium, if any) or interest, if any, on the Securities of any series in a Foreign Currency into Dollars, the rate of exchange used shall be the rate of exchange stated as the New York selling rate for such Foreign Currency into Dollars in The Wall Street Journal (Eastern Edition) for the Business Day preceding that on - ----------------------- which final unappealable judgment is given (or, if by reason of the temporary or permanent suspension of publication of such newspaper or of such information in such newspaper, such exchange rate is not given, then such rate of 54 exchange as is stated for such day in such comparable newspaper as the Trustee shall select) and (ii) the Company's obligations under this Indenture to make payments in respect of such Securities or the Coupons, if any, appertaining thereto, in a Foreign Currency (A) shall not be discharged or satisfied by any tender, or any recovery pursuant to any judgment, in any currency other than such Foreign Currency, except to the extent that such tender or recovery shall result in the payee being able to receive the full amount of such Foreign Currency expressed to be payable in respect of such payments, and (B) shall be enforceable as an alternative or additional cause of action for the purpose of recovering in such Foreign Currency the amount, if any, by which such tender or recovery shall fall short of the amount of such Foreign Currency so expressed to be payable and shall not be affected by judgment being obtained for any other sum due under this Indenture. ARTICLE SIX THE TRUSTEE SECTION 6.01. Certain Duties and Responsibilities. ----------------------------------- (a) Except during the continuance of an Event of Default in respect of the Securities of any series, (1) the Trustee undertakes to perform such duties and only such duties as are specifically set forth in this Indenture, and no implied covenants or obligations shall be read into this Indenture against the Trustee; and (2) in the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture; but in the case of any such certificates or opinions which by any provision hereof are specifically required to be furnished to the Trustee, the Trustee shall be under a duty to examine the same to determine whether or not they conform to the requirements of this Indenture. (b) In case an Event of Default in respect of the Securities of any series has occurred and is continuing, the Trustee shall with respect to such Securities exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in their exercise, as a prudent man would exercise or use under the circumstances in the conduct of his own affairs. 55 (c) No provision of this Indenture shall be construed to relieve the Trustee from liability for its own negligent action, its own negligent failure to act, or its own willful misconduct, except that (1) this Subsection shall not be construed to limit the effect of Subsection (a) of this Section; -------------- (2) the Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer, unless it shall be proved that the Trustee was negligent in ascertaining the pertinent facts; and (3) the Trustee shall not be liable with respect to any action taken, suffered or omitted to be taken by it in good faith in accordance with the direction of the Holders of a majority in principal amount (or such lesser principal amount as is provided for by this Indenture) of the Outstanding Securities of any series relating to the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee, under this Indenture, in respect of the Securities of such series. (d) No provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it. (e) Whether or not therein expressly so provided, every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Section. SECTION 6.02. Notice of Default. ----------------- Within 90 days after the occurrence of any default hereunder in respect of the Securities of any series, the Trustee shall give or transmit, in the manner and to the extent provided in Sections 1.06 and, if applicable, ------------- 7.03(c)(2), notice of such default hereunder known to the Trustee, unless such - ---------- default shall have been cured or waived; provided, however, that, except in the -------- ------- case of a default in the payment of the principal of (or premium, if any) or interest, if any, on any Security of such series or the making of any sinking fund payment in respect of the Securities of such series when due, the Trustee shall be protected in withholding such notice if and so long as the board of directors, the executive committee or a trust committee of directors and/or Responsible Officers of the 56 Trustee in good faith determine that the withholding of such notice is in the interests of the Holders of Securities of such series; and provided, further, -------- ------- that in the case of any default of the character specified in Section 5.01(c) no --------------- such notice to Holders of Securities of such series shall be given until at least 60 days after the occurrence thereof. For the purpose of this Section, the term "default" means any event which is, or after notice or lapse of time or both would become, an Event of Default with respect to Securities of such series. SECTION 6.03. Certain Rights of Trustee. ------------------------- Subject to the provisions of Section 6.01: ------------ (a) the Trustee may rely and shall be protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties; (b) any request or direction of the Company mentioned herein shall be sufficiently evidenced by a Company Request or Company Order and any resolution of the Board of Directors may be sufficiently evidenced by a Board Resolution; (c) whenever in the administration of this Indenture the Trustee shall deem it desirable that a matter be proved or established prior to taking, suffering or omitting any action hereunder, the Trustee (unless other evidence be herein specifically prescribed) may, in the absence of bad faith on its part, rely upon an Officers' Certificate; (d) the Trustee may consult with counsel and the written advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon; (e) the Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the Securityholders pursuant to this Indenture, unless such Securityholders shall have offered to the Trustee reasonable security or indemnity against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction; 57 (f) the Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture or other paper or document but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit, and, if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled to examine the books, records and premises of the Company, personally or by agent or attorney; (g) the Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys and the Trustee shall not be responsible for any misconduct or negligence on the part of any agent or attorney appointed with due care by it hereunder; and (h) the Trustee shall not be liable for any action taken, suffered or omitted to be taken by it in good faith and reasonably believed by it to be authorized or within the discretion or rights or powers conferred upon it by this Indenture. SECTION 6.04. Not Responsible for Recitals or Issuance of Securities. ------------------------------------------------------ The recitals contained herein and in the Securities of any series, except the certificates of authentication, and in any Coupons shall be taken as the statements of the Company, and the Trustee assumes no responsibility for their correctness. The Trustee makes no representations as to the validity or sufficiency of this Indenture or of the Securities of any series. The Trustee shall not be accountable for the use or application by the Company of Securities of any series or the proceeds thereof. SECTION 6.05. May Hold Securities. ------------------- The Trustee, any Paying Agent, any Security Registrar or any other agent of the Company or the Trustee, in its individual or any other capacity, may become the owner or pledgee of Securities of any series and, subject to Sections 6.08 and 6.13, may otherwise deal with the Company with the same rights - ------------- ---- it would have if it were not Trustee, Paying Agent, Security Registrar or such other agent. 58 SECTION 6.06. Money Held in Trust. ------------------- Money held by the Trustee in trust hereunder need not be segregated from other funds except to the extent required by law. The Trustee shall be under no liability for interest on any money received by it hereunder except as provided in Section 4.02 or as otherwise agreed with the Company. ------------ SECTION 6.07. Compensation and Reimbursement. ------------------------------ (a) The Company agrees (1) to pay to the Trustee from time to time reasonable compensation for all services rendered by it hereunder (which compensation shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust); (2) except as otherwise expressly provided herein, to reimburse the Trustee upon its request for all reasonable expenses, disbursements and advances incurred or made by the Trustee in accordance with any provision of this Indenture (including the reasonable compensation and the expenses and disbursements of its agents and counsel), except any such expense, disbursement or advance as may be attributable to its negligence or bad faith; and (3) to indemnify the Trustee for, and to hold it harmless against, any loss, liability or expense incurred without negligence or bad faith on its part, arising out of or in connection with the acceptance or administration of this trust or the performance of its duties hereunder, including the costs and expenses of defending itself against any claim or liability in connection with the exercise or performance of any of its powers or duties hereunder. (b) As security for the performance of the obligations of the Company under this Section, the Trustee shall have a prior claim to the Securities of a series upon all property and funds held or collected by the Trustee as such, except funds held in trust for the payment of principal of or interest on particular Securities. 59 SECTION 6.08. Disqualification; Conflicting Interests. --------------------------------------- The Trustee shall comply with the provisions of Section 310(b) of the Trust Indenture Act. The Indenture dated as of July 15, 1988, as amended, between the Company and the Trustee (formerly known as Chemical Bank, as successor by merger to Manufacturers Hanover Trust Company) shall be excluded from the operation of such Section 310(b) of the Trust Indenture Act to the extent permitted thereby. SECTION 6.09. Corporate Trustee Required; Eligibility. --------------------------------------- There shall at all times be a Trustee hereunder which shall be a corporation organized and doing business under the laws of the United States of America or of any State, authorized under such laws to exercise corporate trust powers, having a combined capital and surplus of at least $5,000,000, subject to supervision or examination by Federal or State authority. If such corporation publishes reports of condition at least annually, pursuant to law or to the requirements of the aforesaid supervising or examining authority, then for the purposes of this Section, the combined capital and surplus of such corporation shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time the Trustee shall cease to be eligible in accordance with the provisions of this Section, it shall resign immediately in respect of the Securities of all series in the manner and with the effect hereinafter specified in this Article. SECTION 6.10. Resignation and Removal; Appointment of Successor. ------------------------------------------------- (a) No resignation or removal of the Trustee and no appointment of a successor Trustee pursuant to this Article shall become effective until the acceptance of appointment by the successor Trustee under Section 6.11. ------------ (b) The Trustee may resign at any time in respect of the Securities of one or more series by giving written notice thereof to the Company. If an instrument of acceptance by a successor Trustee shall not have been delivered to the Trustee within 30 days after the giving of such notice of resignation, the resigning Trustee may petition any court of competent jurisdiction for the appointment of a successor Trustee in respect of the Securities of such series. (c) The Trustee may be removed at any time in respect of the Securities of any series by Act of the Holders of a majority in principal amount of the Outstanding Securities of such series, delivered to the Trustee and to the Company. 60 (d) If at any time: (1) the Trustee shall fail to comply with Section 6.08 after ------------ written request therefor by the Company or by any Securityholder who has been a bona fide Holder of a Security for at least 6 months, or (2) the Trustee shall cease to be eligible under Section 6.09 ------------ and shall fail to resign after written request therefor by the Company or by any such Securityholder, or (3) the Trustee shall become incapable of acting or shall have entered against it a decree for relief under the Federal bankruptcy laws or be adjudged a bankrupt or insolvent under applicable law or a receiver of the Trustee or of its property shall be appointed or any public officer shall take charge or control of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation, then, in any such case, (i) the Company, by a Board Resolution, may remove the Trustee in respect of all Securities or (ii) subject to Section 5.14, ------------ any Holder who has been a bona fide Holder of a Security for at least 6 months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the removal of the Trustee in respect of all Securities and the appointment of a successor Trustee or Trustees. (e) If the Trustee shall resign, be removed or become incapable of acting, or if a vacancy shall occur in the office of Trustee for any cause, in respect of the Securities of one or more series, the Company, by a Board Resolution shall promptly appoint a successor Trustee or Trustees (it being understood that any such successor Trustee may be appointed in respect of the Securities of any one or more or all of such series and that at any time there shall be only one Trustee in respect of the Securities of any one series). If, within one year after such resignation, removal or incapability, or the occurrence of such vacancy, a successor Trustee in respect of the Securities of any series shall be appointed by Act of the Holders of a majority in principal amount of the Outstanding Securities of such series delivered to the Company and the retiring Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance of such appointment, become the successor Trustee and supersede the successor Trustee appointed by the Company. If no successor Trustee in respect of the Securities of any series shall have been so appointed by the Company or such Holders and accepted appointment in the manner hereinafter provided, within 60 days after the 61 occurrence of the event as a result of which a successor Trustee may be appointed, then the Trustee may, or any Holder who has been a bona fide Holder of a Security of such series for at least 6 months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the appointment of a successor Trustee in respect of the Securities of such series. (f) The Company shall give notice of each resignation and each removal of the Trustee in respect of the Securities of any series and each appointment of a successor Trustee in respect of the Securities of any series in the manner and to the extent set forth in Section 1.06 and, if ------------ applicable, 7.03(c)(2). Each notice shall include the name of the successor ---------- Trustee in respect of the Securities of such series and the address of its principal corporate trust office. SECTION 6.11. Acceptance of Appointment by Successor. -------------------------------------- In case of the appointment hereunder of a successor Trustee in respect of all Securities, every successor Trustee appointed hereunder shall execute, acknowledge and deliver to the Company and to the retiring Trustee an instrument accepting such appointment, and thereupon the resignation or removal of the retiring Trustee shall become effective and such successor Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties, of the retiring Trustee; but, on request of the Company or the successor Trustee, such retiring Trustee shall, upon payment of its charges, execute and deliver an instrument transferring to such successor Trustee all the rights, powers and trusts of the retiring Trustee, and shall duly assign, transfer and deliver to such successor Trustee all property and money held by such retiring Trustee hereunder. Upon request of any such successor Trustee, the Company shall execute any and all instruments for more fully and certainly vesting in and confirming to such successor Trustee all such rights, powers and trusts. In case a successor Trustee is appointed in respect of the Securities of one or more (but not all) series, the Company, the retiring Trustee and each successor Trustee in respect of the Securities of any such series shall execute and deliver a supplemental indenture hereto which (1) shall contain such provisions as shall be deemed necessary or desirable to transfer and confirm to, and to vest in, each successor Trustee all the rights, powers and trusts of the retiring Trustee in respect of the Securities of that or those series to which the appointment of the successor Trustee relates, (2) to confirm that all the rights, powers and trusts of the retiring Trustee in respect of the Securities of any series as to which the retiring Trustee is not retiring shall continue to be vested in the retiring Trustee, and (3) shall add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more 62 than one Trustee, it being understood that nothing herein or in such supplemental indenture shall constitute such Trustees co-trustees of the same Trust and that each such Trustee shall be Trustee of a trust or trusts hereunder separate and apart from any trust or trusts hereunder administered by any other such Trustee; and upon the execution and delivery of such supplemental indenture the resignation or removal of the retiring Trustee shall become effective to the extent provided therein and each successor Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Trustee in respect of the Securities of that or those series to which the appointment of such successor Trustee relates; but, on request of the Company or any successor Trustee, such retiring Trustee shall duly assign, transfer and deliver to such successor Trustee all property and money held by such retiring Trustee hereunder in respect of the Securities of that or those series for which the appointment of such successor Trustee relates. No successor Trustee shall accept its appointment unless at the time of such acceptance such successor Trustee shall be qualified and eligible under this Article. SECTION 6.12. Merger, Conversion, Consolidation or Succession to -------------------------------------------------- Business of Trustee. ------------------- Any corporation into which the Trustee may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Trustee shall be a party, or any corporation succeeding to all or substantially all of the corporate trust business of the Trustee, shall be the successor of the Trustee hereunder, provided such corporation shall be otherwise qualified and eligible under this - -------- Article, without the execution or filing of any paper or any further act on the part of any of the parties hereto. In case any of the Securities of any series shall have been authenticated, but not delivered, by the Trustee then in office, any successor by merger, conversion or consolidation to such authenticating Trustee may adopt such authentication and deliver the Securities so authenticated with the same effect as if such successor Trustee had itself authenticated such Securities. SECTION 6.13. Preferential Collection of Claims Against Company. ------------------------------------------------- If and when the Trustee shall be or become a creditor of the Company (or any other obligor upon the Securities), the Trustee shall be subject to the provisions of Section 311(a) of the Trust Indenture Act regarding the collection of claims against the Company (or any such other obligor), excluding any creditor relationships described in Section 311(b) of the Trust Indenture Act. A Trustee who resigned or has been removed 63 shall be subject to Section 311(a) of the Trust Indenture Act to the extent indicated therein. ARTICLE SEVEN SECURITYHOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY SECTION 7.01. Company to Furnish Trustee Names and Addresses of ------------------------------------------------- Securityholders. --------------- The Company will furnish or cause to be furnished to the Trustee, in respect of each series of Securities: (a) semi-annually, not more than 15 days after each Regular Record Date in respect of the Securities of such series or, if there is no Regular Record Date relating to the Securities of such series, on each June 30 and December 31, a list in such form as the Trustee may reasonably require, containing all the information in the possession or control of the Company or any Paying Agent other than the Trustee as to the names and addresses of the Holders of Securities of such series as of such Regular Record Date or the preceding June 15 or December 15, as the case may be; and (b) at such other times as the Trustee may request in writing, within 30 days after receipt by the Company of any such request, a list of similar form and content as of a date not more than 15 days prior to the time such list is furnished; provided, however, that so long as the Trustee is the Security Registrar in -------- ------- respect of the Securities of such series, no such list shall be required to be furnished in respect of Holders of Registered Securities of such series. SECTION 7.02. Preservation of Information; Communications to ---------------------------------------------- Securityholders. --------------- (a) The Trustee shall preserve, in respect of each series of Securities, in as current a form as is reasonably practicable, (i) the names and addresses of Holders of Securities of such series contained in the most recent list furnished to it as provided in Section 7.01, (ii) the ------------ names and addresses of Holders of Registered Securities of such series received by the Trustee in its capacity as Security Registrar or Paying Agent in respect thereof, if so acting and (iii) the names and addresses of Holders of Bearer Securities of such series received by the Trustee or filed with it within the two preceding years pursuant to Section ------- 7.03(c)(2). ---------- 64 The Trustee may destroy any list furnished to it as provided in Section 7.01 upon receipt of a new list so furnished. ------------- (b) If 3 or more Holders of Securities of any series (hereinafter referred to as "applicants") apply in writing to the Trustee, and furnish ---------- to the Trustee reasonable proof that each such applicant has owned a Security of such series for a period of at least 6 months preceding the date of such application, and such application states that the applicants desire to communicate with other Holders of such Securities with respect to their rights under this Indenture or under such Securities and is accompanied by a copy of the form of proxy or other communication which such applicants propose to transmit, then the Trustee shall, within 5 Business Days after the receipt of such application, at its election, either (i) afford such applicants access to the information preserved at the time by the Trustee in accordance with Subsection (a), or (ii) inform such applicants as to the approximate number of Holders of such Securities whose names and addresses appear in the information preserved at the time by the Trustee in accordance with Subsection (a), and as to the approximate cost of mailing to such -------------- Holders the form of proxy or other communication, if any, specified in such application. If the Trustee shall elect not to afford such applicants access to such information, the Trustee shall, upon the written request of such applicants, mail to each Holder of Securities of such series whose name and address appear in the information preserved at the time by the Trustee in accordance with Subsection (a), a copy of the form of proxy or other -------------- communication which is specified in such request, with reasonable promptness after a tender to the Trustee of the material to be mailed and of payment, or provision for the payment, of the reasonable expenses of mailing, unless within 5 days after such tender, the Trustee shall mail to such applicants and file with the Commission together with a copy of the material to be mailed, a written statement to the effect that, in the opinion of the Trustee, such mailing would be contrary to the best interests of the Holders of the Securities of such series or would be in violation of applicable law. Such written statement shall specify the basis of such opinion. If the Commission, after opportunity for a hearing upon the objections specified in the written statement so filed, shall enter an order refusing to sustain any of such objections or if, after the entry of an order sustaining one or more of such objections, the Commission shall find, after notice and opportunity for hearing, that all the objections so sustained 65 have been met and shall enter an order so declaring, the Trustee shall mail copies of such material to all such Holders with reasonable promptness after the entry of such order and the renewal of such tender; otherwise the Trustee shall be relieved of any obligation or duty to such applicants respecting their application. (c) Every Holder of Securities or Coupons, by receiving and holding the same, agrees with the Company and the Trustee that neither the Company nor the Trustee, nor any agent of either of them, shall be held accountable by reason of the disclosure of any such information as to the names and addresses of the Holders of Securities in accordance with Subsection (b), -------------- regardless of the source from which such information was derived, and that the Trustee shall not be held accountable by reason of mailing any material pursuant to a request made under Subsection (b). -------------- SECTION 7.03. Reports by Trustee. ------------------ Within 60 days after May 15 in each year, commencing with the first May 15 after the first issuance of Securities pursuant to this Indenture, the Trustee shall transmit by mail to all Holders such reports concerning the Trustee and its actions under this Indenture in accordance with and to the extent required under Section 313 of the Trust Indenture Act. A copy of each such report in respect of the Securities of any series shall, at the time of such transmission to Holders of Securities of such series, be filed by the Trustee with each stock exchange upon which the Securities of such series are listed and also with the Commission and with the Company. The Company will notify the Trustee when the Securities of any series are listed on any stock exchange. SECTION 7.04. Reports by Company. ------------------ The Company will (1) file with the Trustee, within 15 days after the Company is required to file the same with the Commission, copies of the annual reports and of the information, documents and other reports (or copies of such portions of any of the foregoing as the Commission may from time to time by rules and regulations prescribe) which the Company may be required to file with the Commission pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934; or, if the Company is not required to file information, documents or reports pursuant to either of said Sections, then it will file with the Trustee and the Commission, in accordance with rules and regulations prescribed from time to 66 time by the Commission, such of the supplementary and periodic information, documents and reports which may be required pursuant to Section 13 of the Securities Exchange Act of 1934 in respect of a security listed and registered on a National Securities Exchange as may be prescribed from time to time in such rules and regulations; (2) file with the Trustee and the Commission, in accordance with rules and regulations prescribed from time to time by the Commission, such additional information, documents and reports with respect to compliance by the Company with the conditions and covenants of this Indenture as may be required from time to time by such rules and regulations; and (3) transmit by mail to all Holders of Securities of any series, as provided in Section 7.03(c), within 30 days after the filing thereof with --------------- the Trustee, such summaries of any information, documents and reports required to be filed by the Company pursuant to paragraphs (1) and (2) of -------------- --- this Section as may be required by rules and regulations prescribed from time to time by the Commission. ARTICLE EIGHT CONSOLIDATION, MERGER, CONVEYANCE OR TRANSFER SECTION 8.01. Company May Consolidate, etc., Only on Certain Terms. ---------------------------------------------------- The Company shall not consolidate with or merge into any other corporation or convey or transfer its properties and assets substantially as an entirety to any Person, unless (1) the corporation formed by such consolidation or into which the Company is merged or the Person which acquires by conveyance or transfer the properties and assets of the Company substantially as an entirety shall be a corporation organized and existing under the laws of the United States of America or any State or the District of Columbia, and shall expressly assume, by an indenture supplemental hereto, executed and delivered to the Trustee, in form satisfactory to the Trustee, the due and punctual payment of the principal of (and premium, if any) and interest, if any, on all Securities of all series and the performance of every covenant of this Indenture on the part of the Company to be performed or observed; 67 (2) immediately after giving effect to such transaction, no Event of Default in respect of the Securities of any series, and no event which, after notice or lapse of time, or both, would become an Event of Default in respect of the Securities of any series, shall have happened and be continuing; (3) with respect to Securities of any series that, in connection with their original issuance, were offered for sale outside the United States, the corporation formed by such consolidation or into which the Company is merged or the Person which acquires by conveyance or transfer the properties and assets of the Company substantially as an entirety shall have agreed, by an indenture supplemental hereto, to indemnify the individuals liable therefor for the amount of United States federal estate tax attributable to or paid in respect of any such Securities includable in the gross estate of an individual who is not a citizen or resident of the United States at the time of death; and (4) the Company has delivered to the Trustee an Officers' Certificate and an Opinion of Counsel each stating that such consolidation, merger, conveyance or transfer and such indenture supplemental hereto comply with the Article and that all conditions precedent herein provided for relating to such transaction have been complied with. SECTION 8.02. Successor Corporation Substituted. --------------------------------- Upon any consolidation or merger, or any conveyance or transfer of the properties and assets of the Company substantially as an entirety in accordance with Section 8.01, the successor corporation formed by such consolidation or ------------ into which the Company is merged or to which such conveyance or transfer is made shall succeed to, and be substituted for, and may exercise every right and power of, the Company under this Indenture with the same effect as if such successor corporation had been named as the Company herein. In the event of any such conveyance or transfer (other than a transfer by way of lease) the predecessor company shall be discharged from all obligations and covenants under this Indenture, the Securities and any Coupons and may be liquidated and dissolved. SECTION 8.03. Securities to be Secured in Certain Events. ------------------------------------------ If, upon any merger or consolidation of the Company with or into any corporation, or upon the conveyance or transfer by the Company of its properties and assets substantially as an entirety in accordance with Section 8.01 hereof ------------ to any Person, any of the property owned by the Company or a Restricted Subsidiary immediately prior thereto would thereupon become subject to any mortgage, the Company will, 68 simultaneously with or prior to such consolidation, merger, conveyance or transfer, by an indenture supplemental hereto, make effective provision for the securing of principal of (and premium, if any, on) and interest, if any, on all Outstanding Securities of all series (equally and ratably with any other indebtedness then entitled thereto) by a prior lien upon such property. ARTICLE NINE SUPPLEMENTAL INDENTURES SECTION 9.01. Supplemental Indentures Without Consent of ------------------------------------------ Securityholders. ---------------- Without the consent of the Holders of any Securities or Coupons, the Company, when authorized by a Board Resolution, and the Trustee, at any time and from time to time, may enter into one or more indentures supplemental hereto, in form satisfactory to the Trustee, for any of the following purposes: (1) to evidence the succession of another corporation to the Company, and the assumption by any such successor of the covenants of the Company herein and in the Securities of all series contained; or (2) to add to the covenants of the Company, for the benefit of the Holders of all or any series of such Securities and any Coupons appertaining thereto (and if such covenants are to be for the benefit of less than all the Securities, stating that such covenants are being included solely for the benefit of such series), or to surrender any right or power herein conferred upon the Company, or (3) to cure any ambiguity, to correct or supplement any provision herein or in any supplemental indenture which may be defective or inconsistent with any other provision herein or in any supplemental indenture, or to make any other provisions with respect to matters or questions arising under this Indenture or under any supplemental indenture, in each case in such manner as shall not adversely affect the interests of the Holders of Outstanding Securities of any series or any Coupons appertaining thereto in any material respect; or (4) to secure payment of Outstanding Securities of any series equally and ratably with certain other liens as and to the extent required by this Indenture; or 69 (5) to add any additional Events of Default with respect to any or all series of Securities (and, if any such additional Event of Default applies to fewer than all series of Securities, stating each series to which such Event of Default applies); or (6) to add to or change any of the provisions of this Indenture to provide that Bearer Securities may be registrable as to principal, to change or eliminate any restrictions on the payment of principal of or any premium or interest on Bearer Securities, to permit Bearer Securities to be issued in exchange for Registered Securities, to permit Bearer Securities to be issued in exchange for Bearer Securities of other authorized denominations or to permit or facilitate the issuance of Securities in uncertificated form, provided that any such action shall not adversely -------- affect the interests of the Holders of Outstanding Securities of any series or any Coupons appertaining thereto in any material respect; or (7) to change or eliminate any of the provisions of this Indenture, provided that any such change or elimination shall become effective only -------- when there is no Security Outstanding of any series created prior to the execution of such indenture supplemental hereto which is entitled to the benefit of such provision; or (8) to add to such conditions, limitations and restrictions on the authorized amount, form, terms or purposes of issue, authentication and delivery of Securities as are herein set forth other conditions, limitations and restrictions thereafter to be observed; or (9) to add or change or eliminate any provisions of this Indenture as shall be necessary or desirable in accordance with the Trust Indenture Act; or (10) to establish the forms or terms of Securities of any series and Coupons, if any, appertaining thereto as permitted by Sections 2.01 and ------------- 3.01 or to amend such forms or terms (whether established by indenture ---- supplemental hereto or pursuant to Board Resolution) in any manner which shall not adversely affect the interests of the Holders of Outstanding Securities of any series or any Coupons appertaining thereto in any material respect; or (11) to evidence and provide for the acceptance of appointment hereunder by a successor Trustee with respect to Securities of one or more series or to add or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee, pursuant to the requirements of Section ------- 6.11. ---- 70 SECTION 9.02. Supplemental Indentures With Consent of --------------------------------------- Securityholders. --------------- With the consent of the Holders of not less than a majority in principal amount of the Outstanding Securities of each series affected thereby (or such greater percentage in such principal amount as may be specified with respect to the Securities of such series pursuant to Section 3.01), by Act of ------------ said Holders delivered to the Company and the Trustee, the Company, when authorized by a Board Resolution, and the Trustee may enter into an indenture or indentures supplemental hereto for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Indenture or of modifying in any manner the rights of the Holders of Securities of such series under this Indenture; provided, however, that no such supplemental -------- ------- indenture shall, without consent of the Holder of each Outstanding Security of each series affected thereby: (1) change the Stated Maturity of the principal of, or any installment of interest on, any Security of such series, or reduce the principal amount thereof or the rate of any interest thereon or any premium payable upon the redemption thereof, or reduce the amount of principal of an Original Issue Discount Security that would be due and payable upon a declaration of acceleration of Maturity thereof pursuant to Section 5.02, ------------ or change the coin or currency in which any Security of such series or any premium or any interest thereon is payable, or impair the right to institute suit for the enforcement of any such payment on or after the Stated Maturity thereof (or, in the case of redemption, on or after the Redemption Date), or impair the right of repayment, if any, of the Securities of such series at the option of the Holders thereof or the right to institute suit for the enforcement of any such repayment on or after the date such repayment is due and payable or impair the right of conversion, if any, of any Security of such series at the option of the Holder thereof or the right to institute suit for the enforcement of any such right of conversion, or relieve the obligation of the Company to redeem, repay or purchase any Security of such series pursuant to any sinking fund or analogous provisions or otherwise; or (2) reduce the percentage in principal amount of the Outstanding Securities of such series, the consent of whose Holders is required for any such indenture supplemental hereto or the consent of whose Holders is required for any waiver (of compliance with certain provisions of this Indenture or certain defaults hereunder and their consequences) provided for in this Indenture; or 71 (3) modify any of the provisions of this Section or Section 5.13, ------------ except to increase any such percentage or to provide that certain other provisions of this Indenture cannot be modified or waived without the consent of the Holder of each Security affected thereby. A supplemental indenture which changes or eliminates any covenant or other provision of this Indenture which has expressly been included solely for the benefit of one or more particular series of Securities, or which modifies the rights of the Holders of Securities of such series with respect to such covenant or other provision, shall be deemed not to affect the rights under this Indenture of the Holders of Securities of any other series. It shall not be necessary for any Act of Holders under this Section to approve the particular form of any proposed supplemental indenture, but it shall be sufficient if such Act shall approve the substance thereof. SECTION 9.03. Execution of Supplemental Indentures. ------------------------------------ In executing, or accepting the additional trusts created by, any supplemental indenture permitted by this Article or the modifications thereby of the trusts created by this Indenture the Trustee shall be entitled to receive, and (subject to Section 6.01) shall be fully protected in relying upon, an ------------ Opinion of Counsel stating that the execution of such supplemental indenture is authorized or permitted by this Indenture. The Trustee may, but shall not be obligated to, enter into any such supplemental indenture which affects the Trustee's own rights, duties or immunities under this Indenture or otherwise. SECTION 9.04. Effect of Supplemental Indentures. --------------------------------- Upon the execution of any supplemental indenture under this Article, this Indenture shall be modified in accordance therewith, and such supplemental indenture shall form a part of this Indenture for all purposes; and the Holders of Securities of any series affected thereby theretofore or thereafter authenticated and delivered hereunder and of any Coupons appertaining thereto shall be bound thereby. SECTION 9.05. Conformity with Trust Indenture Act. ----------------------------------- Every supplemental indenture executed pursuant to this Article shall conform to the requirements of TIA as then in effect. 72 SECTION 9.06. Reference in Securities to Supplemental Indentures. -------------------------------------------------- Securities of any series authenticated and delivered after the execution of any supplemental indenture pursuant to this Article may, and shall if required by the Trustee, bear a notation in form approved by the Trustee as to any matter provided for in such supplemental indentures. If the Company shall so determine, new Securities of any series and any Coupons appertaining thereto, so modified as to conform, in the opinion of the Trustee and the Board of Directors, to any such supplemental indenture may be prepared and executed by the Company and authenticated and delivered by the Trustee in exchange for Outstanding Securities of such series and any Coupons appertaining thereto. ARTICLE TEN COVENANTS SECTION 10.01. Payment of Principal, Premium and Interest. ------------------------------------------ The Company covenants and agrees for the benefit of any series of Securities that it will duly and punctually pay the principal of (and premium, if any) and interest on Securities of such series in accordance with the terms thereof, any Coupons appertaining thereto and this Indenture. Unless otherwise specified as contemplated by Section 3.01 with respect to any series of ------------ Securities, any interest due on Bearer Securities on or before Maturity shall be payable only upon presentation and surrender of the several Coupons for such interest installments as are evidenced thereby as they severally mature. Except as otherwise specified with respect to the Securities of a series as contemplated by Section 3.01, the interest, if any, due in respect of any ------------ Temporary Global Security or any Permanent Global Security shall be payable only upon presentation thereof to the Trustee for notation thereon of the payment of such interest. SECTION 10.02. Maintenance of Office or Agency. ------------------------------- If the Securities of a series are issuable only as Registered Securities, the Company will maintain one or more offices or agencies in each Place of Payment for Securities of such series where the Securities of such series may be presented or surrendered for payment, where the Securities of such series may be surrendered for registration of transfer or exchange, where the Securities of each series, if convertible, may be surrendered for conversion and where notices and demands to or upon the Company in respect of the Securities of such series and this Indenture may be served. The Trustee is hereby initially appointed the Company's office or agency for each of said purposes with respect to each such series issued hereunder. If the Securities of a series are issuable as Bearer Securities, the Company will maintain (A) in a Place of Payment 73 for Securities of such series which is located in the United States, an office or agency where any Registered Securities of such series may be presented or surrendered for payment, where any Registered Securities of such series may be surrendered for registration of transfer, where any Registered Securities of such series, if convertible, may be surrendered for conversion, where Securities of such series may be surrendered for exchange, where notices and demands to or upon the Company in respect of the Securities of such series and this Indenture may be served and where Bearer Securities of such series and Coupons, if any, appertaining thereto may be presented or surrendered for payment in the circumstances described in the following paragraph (and not otherwise); (B) subject to any laws or regulations applicable thereto, in a Place of Payment for Securities of such series which is located outside the United States, an office or agency where Securities of such series and Coupons, if any, appertaining thereto may be presented and surrendered for payment and where Securities of such series, if convertible, may be surrendered for conversion; provided, -------- however, that if and so long as the Securities of such series are listed on the - ------- Luxembourg Stock Exchange or any other stock exchange located outside the United States and the Luxembourg Stock Exchange or such other exchange shall so require, the Company will maintain a Paying Agent for the Securities of such series and an office or agency where Securities of such series, if convertible, may be surrendered for conversion in Luxembourg or any other required city located outside the United States, as the case may be; and (C) subject to any laws or regulations applicable thereto, in a Place of Payment for the Securities of such series which is located outside the United States, an office or agency where any Registered Securities of such series may be surrendered for registration of transfer, where Securities of such series may be surrendered for exchange, where Securities of such series, if convertible, may be surrendered for conversion and where notices and demands to or upon the Company in respect of the Securities of such series and this Indenture may be served. The Company will give prompt written notice to the Trustee for the Securities of such series of the location, and of any change in the location, of any such office or agency. If at any time the Company shall fail to maintain any such required office or agency in respect of any series of Securities or shall fail to furnish the Trustee with the address thereof, such presentations (to the extent permitted by law) and surrenders of Securities of such series and such notices and demands may be made or served at the principal corporate trust office of the Trustee, except that Bearer Securities of such series and the Coupons, if any, appertaining thereto may be presented and surrendered for payment, and Bearer Securities of such series, if convertible, may be surrendered for conversion at the place established for the purpose pursuant to Section 3.01, and the Company ------------ hereby appoints the same as its agents to receive such respective presentations, surrenders, notices and demands. 74 No payment of principal (and premium, if any) or interest, if any, on Bearer Securities shall be made at any office or agency of the Company in the United States or by check mailed to any address in the United States or by transfer to an account maintained with a bank located in the United States, except as may be permitted by United States tax laws and regulations in effect at the time of such payment without detriment to the Company. Payments will not be made in respect of Bearer Securities or Coupons appertaining thereto pursuant to presentation to the Company or its designated Paying Agents within the United States. Notwithstanding the foregoing, (i) in the event that any payment in respect of a Bearer Security of any series or a Coupon appertaining thereto which is denominated and payable in Dollars may not be made at any office or agency maintained by the Company in respect of such series outside the United States for payment on such Bearer Security or Coupon because such payment would be illegal or effectively precluded by exchange controls or other similar restrictions, then the Company shall designate a paying agency in the United States from which such payment shall be made; and (ii) in the event that any payment in respect of a Bearer Security of any series or a Coupon appertaining thereto which is denominated or payable in a Foreign Currency may not be made at any office or agency maintained by the Company in respect of such series outside the United States for payment on such Bearer Security or Coupon because such payment would be illegal or effectively precluded by exchange controls or other similar restrictions, then such payment shall be made at any such office or agency in Dollars in an amount equal to the sum otherwise due in such Foreign Currency as converted into Dollars at the rate of exchange stated as the New York selling rate for such Foreign Currency into Dollars in The Wall Street --------------- Journal (Eastern Edition) for the Business Day preceding that on which such - ------- payment becomes due (or, if by reason of the temporary or permanent suspension of publication of such newspaper or of such information in such newspaper, such exchange rate is not given, then such rate of exchange as is stated for such Business Day in such comparable newspaper as the Trustee shall select), provided -------- that if such payment in Dollars pursuant to this clause (ii) may not be so made because such payment would be illegal or effectively precluded by exchange controls or other similar restrictions, then the Company shall designate a paying agency in the United States from which such payment shall be made in Dollars in an amount as aforesaid. The Company may also from time to time designate one or more other offices or agencies (in or outside the Place of Payment) where the Securities of one or more series may be presented or surrendered for any or all of the purposes specified above in this Section and may from time to time rescind such designations; provided, however, that no such designation or rescission shall in -------- ------- any manner relieve the Company of its obligation to maintain an office or agency in each Place of Payment for such 75 purpose. The Company will give prompt written notice to the Trustee of any such designation or rescission and of any change in the location of any such office or agency. SECTION 10.03. Money for Securities Payments to be Held in Trust. ------------------------------------------------- If the Company shall at any time act as its own Paying Agent in respect of any series of Securities, it will, on or before each due date of the principal of (and premium, if any) or interest on, any of the Securities of such series, segregate and hold in trust for the benefit of the Persons entitled thereto a sum in the currency or composite currency in which the Securities of such series are payable (except as otherwise specified with respect to the Securities of such series pursuant to Section 3.01) sufficient to pay the ------------ principal (and premium, if any) or interest so becoming due until such sums shall be paid to such Persons or otherwise disposed of as herein provided, and will promptly notify the Trustee of its action or failure so to act. Whenever the Company shall have one or more Paying Agents for the Securities of any series, it will, prior to each due date of the principal of (and premium, if any) or interest on, any of the Securities of such series, deposit with a Paying Agent for the Securities of such series a sum in the currency or composite currency in which the Securities of such series are payable (except as otherwise specified with respect to the Securities of such series pursuant to Section 3.01 or as otherwise provided by Section 10.02) ------------ ------------- sufficient to pay the principal (and premium, if any) or interest so becoming due, such sum to be held in trust for the benefit of the Persons entitled to such principal, premium or interest, and (unless such Paying Agent is the Trustee) the Company will promptly notify the Trustee of its action or failure so to act. The Company will cause each Paying Agent for the Securities of any series other than the Trustee to execute and deliver to the Trustee an instrument in which such Paying Agent shall agree with the Trustee, subject to the provisions of this Section, that such Paying Agent will: (1) hold all sums held by it for the payment of principal of (and premium, if any) or interest on the Securities of such series in trust for the benefit of the Persons entitled thereto until such sums shall be paid to such Persons or otherwise disposed of as herein provided; (2) give the Trustee notice of any default by the Company (or any other obligor upon the Securities of such series) in the making of any such payment of principal (and premium, if any) or interest; and 76 (3) at any time during the continuance of any such default, upon the written request of the Trustee, forthwith pay to the Trustee all sums so held in trust by such Paying Agent. The Company may at any time, for the purpose of obtaining the satisfaction and discharge of this Indenture in respect of the Securities of any series or for any other purpose, pay, or by Company Order direct any Paying Agent to pay, to the Trustee all sums held in trust by the Company or such Paying Agent in respect of such series, such sums to be held by the Trustee upon the same trusts as those upon which such sums were held by the Company or such Paying Agent; and, upon such payment by the Company or any Paying Agent to the Trustee, the Company and such Paying Agent shall be released from all further liability with respect to such money. Any money deposited with the Trustee or any Paying Agent or then held by the Company in trust for the payment of the principal of (and premium, if any) or interest on any Security and remaining unclaimed for two years after such principal (and premium, if any) or interest has become due and payable shall, unless otherwise required by mandatory provisions of applicable escheat or abandoned or unclaimed property law, be paid to the Company on Company Request, or (if then held by the Company) shall be discharged from such trust; and the Holder of such Security shall thereafter, as an unsecured general creditor, look only to the Company for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money, and all liability of the Company as trustee thereof, shall thereupon cease; provided, however, -------- ------- that the Trustee or such Paying Agent, before being required to make any such repayment, may at the expense of the Company cause to be published once in an Authorized Newspaper or mail to each such Holder or both with respect to Securities of such series notice that such money remains unclaimed and that, after a date specified therein, which shall not be less than 30 days from the date of such publication or mailing, any unclaimed balance of such money then remaining will, unless otherwise required by mandatory provisions of applicable escheat or abandoned or unclaimed property law, be repaid to the Company. SECTION 10.04. Statement as to Compliance. -------------------------- The Company will deliver to the Trustee, within 120 days after the end of each fiscal year (which on the date hereof is the calendar year), a written statement signed by the principal executive officer, the principal financial officer or the principal accounting officer of the Company and by the President, any Vice Chairman, any Vice President, the Treasurer, any Assistant Treasurer, the Controller or any Assistant Controller of the Company, stating, as to each signer thereof, that 77 (1) a review of the activities of the Company during such year and of performance under this Indenture has been made under his supervision and (2) to the best of his knowledge, based on such review, the Company has fulfilled all its obligations under this Indenture throughout such year, or, if there has been a default in the fulfillment of any such obligation, specifying each such default known to him and the nature and status thereof. SECTION 10.05. Restrictions on Borrowing by Restricted Subsidiaries. ---------------------------------------------------- The Company will not permit any Restricted Subsidiary to issue, assume, guarantee or incur any Funded Debt, except (i) Funded Debt owed to the Company or to a Restricted Subsidiary, or (ii) Funded Debt which is Secured Debt permitted by Section 10.06 without equally and ratably securing the Outstanding ------------- Securities of all series, or (iii) unsecured Funded Debt issued, assumed, guaranteed or incurred which represents an extension, renewal or refunding of Secured Debt permitted by the first paragraph of Section 10.06 to the extent of ------------- the principal amount of the Secured Debt so extended, renewed or refunded, or (iv) unsecured Funded Debt in an amount which, if it were Secured Debt, would be permitted by the second paragraph of Section 10.06 without equally and ratably ------------- securing the Outstanding Securities of all series, or (v) unsecured Funded Debt assumed by a Restricted Subsidiary in connection with its merger with, or acquisition of all or a substantial part of the assets and business of, any Person and which constitutes existing indebtedness or an existing guarantee of such Person, or (vi) unsecured Funded Debt of a Person existing at the time it becomes a Restricted Subsidiary, or (vii) Funded Debt created in connection with any industrial revenue bond, pollution control bond or similar financing arrangement between the Company or any Restricted Subsidiary and the United States, any- State thereof or any municipal government or other governmental body or agency or (viii) any extension, renewal or refunding (or successive extensions, renewals or refundings), in whole or in part, of any Funded Debt referred to in the foregoing clauses (i) through (vii). ----------- ----- SECTION 10.06. Restrictions on Secured Debt. ---------------------------- The Company will not, and will not permit any Restricted Subsidiary to, issue, assume, guarantee or incur any Secured Debt, without effectively providing that the Outstanding Securities of all series (together with, if the Company shall so determine, any other indebtedness of the Company or such Restricted Subsidiary then existing or thereafter created ranking equally with such Outstanding Securities, including guarantees of indebtedness of others) shall be secured equally and ratably with (or prior to) such 78 Secured Debt, so long as such Secured Debt shall be so secured, except that this Section shall not apply to Secured Debt secured by: (a) mortgages on property of any corporation existing at the time such corporation becomes a Restricted Subsidiary; (b) mortgages on property of any Person which is merged with, or all or a substantial part of whose properties are acquired by, the Company or any Restricted Subsidiary; provided, however, that any such mortgage shall -------- ------- have existed prior to such merger or acquisition and shall not have applied to any property owned by the Company or any Restricted Subsidiary immediately prior to such merger or acquisition; (c) mortgages upon or with respect to any property acquired, constructed or improved by the Company or any Restricted Subsidiary after the date hereof which are created, incurred or assumed contemporaneously with, or within 90 days after, such acquisition, completion of construction or completion of improvement to secure or provide for the payment of any part of the purchase price of such property or the cost of such construction or improvement, or mortgages upon or with respect to any property existing at the time of acquisition thereof; provided, however, that any such mortgage shall not apply to any property theretofore owned by the Company or any Restricted Subsidiary other than any theretofore unimproved real property on which the property so constructed, or the improvement, is located; (d) mortgages which secure indebtedness owing to the Company or to a Restricted Subsidiary; (e) the mortgage of any property of the Company or any Restricted Subsidiary in favor of the United States, or any State thereof, or any department, agency or instrumentality of either, to secure partial, progress, advance or other payments to the Company or any Restricted Subsidiary pursuant to the provisions of any contract or statute; (f) the mortgage of any property of the Company or any Restricted Subsidiary created, incurred or assumed in connection with any industrial revenue bond, pollution control bond or similar financing arrangement between the Company or any Restricted Subsidiary and the United States, any state thereof or any municipal government or other governmental body or agency; or 79 (g) any extension, renewal or refunding (or successive extensions, renewals or refundings), in whole or in part, of any mortgage referred to in the foregoing clauses (a) through (f), or of any indebtedness secured ----------- --- thereby; provided, however, that such extension, renewal or refunding -------- ------- mortgage shall be limited to all or any part of the same property that secured the mortgage extended, renewed or refunded (plus improvements on such property). Notwithstanding the foregoing provisions of this Section 10.06, the Company and any one or more Restricted Subsidiaries may issue, assume, guarantee or incur Secured Debt, without equally and ratably securing the Outstanding Securities of all series, if after giving effect thereto, the sum of (i) the aggregate amount of all Secured Debt of the Company and its Restricted Subsidiaries (except Secured Debt pursuant to clauses (a) through (g) of the ----------- --- first paragraph of this Section 10.06), (ii) the aggregate Value of sale and lease back transactions to which Section 10.07 applies and (iii) the aggregate ------------- amount of all unsecured outstanding Funded Debt of all Restricted Subsidiaries permitted under Section 10.05(iv) (or any extension, renewal or refunding ----------------- thereof), does not exceed 10% of Consolidated Net Tangible Assets. If the Company shall hereafter be required to secure the Outstanding Securities equally and ratably with (or prior to) any other indebtedness pursuant to this Section 10.06, (i) the Company will promptly deliver to the Trustee an Officers' Certificate stating that such covenant has been complied with, and an Opinion of Counsel stating that in the opinion of such counsel such covenant has been complied with, that any instruments executed by the Company or any Restricted Subsidiary in the performance of such covenant comply with the requirements of such covenant and that all steps necessary to perfect such security have been taken, and (ii) the Trustee is hereby authorized to enter into such instruments and to take such action, if any, as it may deem advisable to enable it to enforce the rights of Holders of such Outstanding Securities so secured. SECTION 10.07. Restrictions on Sale and Lease Back Transactions. ------------------------------------------------ The Company will not, and will not permit any Restricted Subsidiary to, sell or transfer (other than to the Company or to a Restricted Subsidiary) any property owned by the Company or any Restricted Subsidiary on the date hereof, which (as determined by Board Resolution) constitutes a major facility of the Company and its Restricted Subsidiaries, taken as a whole, with the intention of the Company or any Restricted Subsidiary taking back a lease of such property, except a lease for a temporary period (not exceeding five years) by the end of which it is intended that the use of such property by the lessee will be discontinued. Notwithstanding the foregoing, the Company 80 or any Restricted Subsidiary may so sell any such property and lease it back if (a) the Company promptly gives notice of such sale to the Trustee; (b) the net proceeds of such sale are at least equal to the fair value (as determined by Board Resolution) of such property; and (c) the Company shall, and in any such case the Company covenants that it will, within 120 days after such sale, apply, or cause such Restricted Subsidiary to apply, not less than an amount equal to the net proceeds of such sale to the retirement of outstanding Funded Debt of the Company and/or any Restricted Subsidiary (other than any thereof which is owed to the Company or any Restricted Subsidiary and other than any thereof which is subordinate in right of payment to the Outstanding Securities); provided, however, that the amount to be applied to the retirement of Funded - -------- ------- Debt of the Company or such Restricted Subsidiary shall be reduced by (i) the amount of Secured Debt which the Company or such Restricted Subsidiary could at that time issue, assume, guarantee or incur pursuant to the second paragraph of Section 10.06 without equally and ratably securing ------------- the Outstanding Securities of all series, and (ii) the principal amount of any debentures, notes or other instruments evidencing Funded Debt of the Company (which may include Securities of any series) or of a Restricted Subsidiary delivered within 120 days after such sale to the applicable trustee for retirement and cancellation, other than any debentures, notes or other instruments retired by payment at maturity or pursuant to any mandatory sinking fund payment or any mandatory prepayment provision. SECTION 10.08. Restrictions on Transfers of Property. ------------------------------------- The Company will not itself, and will not permit any Restricted Subsidiary to, transfer or lease any assets which, in the opinion of the Board of Directors, constitute a major facility of the Company and its Restricted Subsidiaries, taken as a whole, to any Subsidiary which would be a Restricted Subsidiary except for clauses (i) through (viii) of the definition of Restricted ----------- ------ Subsidiary contained in Section 1.01 and clause (x) of such definition insofar ------------ ---------- as it relates to the said clauses (i) through (viii). ----------- ------ SECTION 10.09. Assumption of Obligations in Connection with Mergers ---------------------------------------------------- and Acquisitions. ---------------- Nothing herein shall prevent the Company or any Subsidiary, in connection with its merger with or acquisition of all or substantially all of the assets of any Person, from assuming all obligations and liabilities of such Person; provided, however, that no mortgage of such Person shall be so assumed -------- ------- if, as a result thereof, the property of the Company or any of its Restricted Subsidiaries immediately prior thereto 81 would thereupon become subject to the lien of such mortgage, unless either the assumption by the Company or any Restricted Subsidiary of the obligations and liabilities secured by such mortgage would be permitted by the second paragraph of Section 10.06 without equally and ratably securing the Outstanding Securities ------------- of all series or simultaneously therewith or prior thereto effective provision shall be made for the securing of such Outstanding Securities by a prior lien on such property. SECTION 10.10. Defeasance of Certain Obligations. --------------------------------- If this Section 10.10 has been specified in accordance with Section ------- 3.01 to be applicable to Securities of any series, the Company may omit to - ---- comply with any term, provision or condition set forth in Sections 10.05, 10.06, -------------- ----- 10.07 and 10.08, and Section 5.01(c) with respect to Sections 10.05, 10.06, - ----- ----- --------------- -------------- ----- 10.07 and 10.08 shall be deemed not to be an Event of Default, in each case with - ----- ----- respect to the Securities of that series, provided that the following conditions have been satisfied: (1) with reference to this Section 10.10, the Company has deposited or caused to be deposited with the Trustee (or another trustee satisfying the requirements of Section 6.09) irrevocably (irrespective of whether the ------------ conditions in subparagraphs (2), (3), (4), (5) (if applicable) and (6) have ----------------- --- --- --- --- been satisfied, but subject to the provisions of Section 4.02(c) and the --------------- last paragraph of Section 10.03), as trust funds in trust, specifically ------------- pledged as security for, and dedicated solely to, the benefit of the Holders of the Securities of that series and the Coupons, if any, appertaining thereto, (A) money in an amount in the currency or composite currency in which the Securities of such series are payable (except as otherwise specified with respect to the Securities of such series pursuant to Section 3.01), or (B) Government Obligations which through the payment ------------ of interest and principal in respect thereof in accordance with their terms will provide not later than the opening of business on the due date of any payment referred to in clause (i) or (ii) of this subparagraph (1) money in an amount, or (C) a combination thereof, sufficient, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee, to pay and discharge (i) the principal of (and premium, if any) and each installment of principal (and premium, if any) and interest, if any, on such Outstanding Securities and Coupons on the Stated Maturity of such principal or installment of principal or interest, (ii) any mandatory sinking fund payments or analogous payments applicable to the Securities of such series on the day on which such payments are due and payable in accordance with the terms of this Indenture and of such Securities and (iii) any repayment of the Securities of 82 such series at the option of the Holder of any of such Securities on any date such repayment is due and payable; (2) such deposit shall not cause the Trustee with respect to the Securities of that series to have a conflicting interest as defined in Section 6.08 and for purposes of the Trust Indenture Act with respect to ------------ the Securities of any series; (3) such deposit will not result in a breach or violation of, or constitute a default under, this Indenture or any other agreement or instrument to which the Company is a party or by which it is bound; (4) no Event of Default or event which with the giving of notice or lapse of time, or both, would become an Event of Default with respect to the Securities of such series shall have occurred and be continuing on the date of such deposit and no Event of Default under Section 5.01(d) or --------------- Section 5.01(e) or event which with the giving of notice or lapse of time, --------------- or both, would become an Event of Default under Section 5.01(d) or Section --------------- ------- 5.01(e) shall have occurred and be continuing on the 91st day after such ------- date; (5) if this subparagraph has been specified in accordance with Section 3.01 to be applicable to the Securities of such series, the Company ------------ has delivered to the Trustee an Opinion of Counsel to the effect that Holders of the Securities of such series and the Coupons, if any, appertaining thereto will not recognize income, gain or loss for federal income tax purposes as a result of such deposit and defeasance of certain obligations and will be subject to federal income tax on the same amount and in the same manner and at the same times, as would have been the case if such deposit and defeasance had not occurred; and (6) the Company has delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that all conditions precedent herein provided for relating to the defeasance contemplated by this Section have been complied with. SECTION 10.11. Additional Amounts. ------------------ If the Securities of a series provide for the payment of additional amounts as contemplated by clause (13) of Section 3.01, the Company will pay to ----------- ------------ the Holder of any Security of such series or any Coupon appertaining thereto additional amounts upon the terms and subject to the conditions provided therein. Whenever in this Indenture there is mentioned, in any context, the payment of the principal of (or premium, if any) or 83 interest, if any, on, or in respect of, any Security of any series or the payment of any Coupon appertaining thereto or the net proceeds received at maturity or on the sale or exchange of any Security of any series, such mention shall be deemed to include mention of the payment of additional amounts provided for in this Section to the extent that, in such context, additional amounts are, were or would be payable in respect thereof pursuant to the provisions of this Section and express mention of the payment of additional amounts (if applicable) in any provisions hereof shall not be construed as excluding additional amounts in those provisions hereof where such express mention is not made. If the Securities of a series provide for the payment of additional amounts, at least 10 days prior to the first Interest Payment Date with respect to such series (or if the Securities of such series will not bear interest prior to Maturity, the first day on which a payment of principal (and premium, if any) is made), and at least 10 days prior to each date of payment of principal (and premium, if any) or interest if there has been any change with respect to the matters set forth in the below-mentioned Officers' Certificate, the Company will furnish the Trustee and the Company's principal Paying Agent or Paying Agents, if other than the Trustee, with an Officers' Certificate instructing the Trustee and such Paying Agent or Paying Agents whether such payment of principal of (or premium, if any) or interest on the Securities of such series shall be made to Holders of Securities of such series or any Coupons appertaining thereto who are United States Aliens without withholding for or on account of any tax, assessment or other governmental charge described in the Securities of that series. If any such withholding shall be required, then such Officers' Certificate shall specify by country the amount, if any, required to be withheld on such payments to such Holders of Securities or Coupons and the Company will pay to the Trustee or such Paying Agent the additional amounts, if any, required by this Section. The Company covenants to indemnify the Trustee and any Paying Agent for, and to hold them harmless against, any loss, liability or expense reasonably incurred without negligence or bad faith on their part arising out of or in connection with actions taken or omitted by any of them in reliance on any Officers' Certificate furnished pursuant to this Section. As used in this Section, the term "United States Alien" means any ------------------- corporation, partnership, individual or fiduciary that, as to the United States, and for United States tax purposes, is (i) a foreign corporation, (ii) a foreign partnership one or more of the members of which is, as to the United States, a foreign corporation, a nonresident alien individual or a nonresident alien fiduciary of a foreign estate or trust, (iii) a nonresident alien individual or (iv) a nonresident alien fiduciary of a foreign estate or trust. 84 ARTICLE ELEVEN REDEMPTION OF SECURITIES SECTION 11.01. Applicability of Article. ------------------------ Redemption of Securities of any series which are redeemable before their Stated Maturity at the election of the Company or otherwise, as permitted or required by their terms, shall be made in accordance with such terms and, except as otherwise specified as contemplated by Section 3.01 for the Securities ------------ of such series, this Article. SECTION 11.02. Election to Redeem; Notice to Trustee. ------------------------------------- In case of any redemption at the election of the Company of less than all the Securities of any series, the Company shall, at least 60 days prior to the Redemption Date fixed by the Company (unless a shorter notice shall be satisfactory to the Trustee) notify the Trustee of such Redemption Date and of, if applicable, each portion of the Securities of such series having like terms and conditions to be redeemed, the principal amount of the Securities of such series or such portion thereof, as the case may be, to be redeemed and the principal amount thereof to be redeemed. SECTION 11.03. Selection by Trustee of Securities to be Redeemed. ------------------------------------------------- If less than all the Securities of any series are to be redeemed, or if less than all the Securities of such series having like terms and conditions are to be redeemed, as the case may be, the particular Securities of such series or portion thereof, as the case may be, to be redeemed shall be selected not more than 60 days prior to the Redemption Date by the Trustee, from the Outstanding Securities of such series or portion thereof, as the case may be, not previously called for redemption, by such method as the Trustee shall deem fair and appropriate and which may provide for the selection for redemption of portions of the principal of such Securities of a denomination larger than the minimum authorized denomination of Securities of such series. The portions of the principal of such Securities so selected for partial redemption shall be equal to the smallest authorized denomination of such Securities, or an integral multiple thereof which is also an authorized denomination. The Trustee shall promptly notify the Company in writing of the Securities selected for redemption and, in the case of any Security selected for partial redemption, the principal amount thereof to be redeemed. 85 For all purposes of this Indenture, unless the context otherwise requires, all provisions relating to the redemption of Securities shall relate, in the case of any Security redeemed or to be redeemed only in part, to the portion of the principal of such Security which has been or is to be redeemed. SECTION 11.04. Notice of Redemption. -------------------- Notice of redemption shall be given in the manner provided in Section ------- 1.06 not less than 30 nor more than 60 days prior to the Redemption Date, to - ---- each Holder of Securities to be redeemed. All notices of redemption shall state: (1) the Redemption Date, (2) the Redemption Price, (3) if less than all Outstanding Securities of any series are to be redeemed, the identification (and, in the case of partial redemption, the respective principal amounts) of the Securities of such series to be redeemed, (4) that on the Redemption Date the Redemption Price will become due and payable upon each such Security, and that interest, if any, thereon shall cease to accrue from and after said date, (5) the place or places where such Securities, together in the case of Bearer Securities with all Coupons, if any, appertaining thereto maturing after the Redemption Date, are to be surrendered for payment of the Redemption Price, each of which shall be the office or agency of the Company in a Place of Payment, and (6) that the redemption is for a sinking fund, if such is the case. Notice of redemption of Securities to be redeemed at the election of the Company shall be given by the Company or, at the Company's request, by the Trustee in the name of and at the expense of the Company. SECTION 11.05. Deposit of Redemption Price. --------------------------- Prior to any Redemption Date, the Company shall deposit with the Trustee or with a Paying Agent in respect of the Securities of any series which are to be redeemed on that date (or, if the Company is acting as its own Paying Agent in respect of such 86 Securities, segregate and hold in trust as provided in Section 10.03) an amount ------------- of money in the currency or composite currency in which the Securities of such series are payable (except as otherwise specified with respect to the Securities of such series pursuant to Section 3.01) sufficient to pay the Redemption Price ------------ of and (except if the Redemption Date shall be an Interest Payment Date) accrued interest, if any, on all the Securities which are to be redeemed on that date, or, in the event of a defeasance and discharge of this Indenture, or defeasance of certain covenants, with respect to such Securities pursuant to Section ------- 4.03(1) or 10.10(1), as the case may be, shall have deposited such money or - ------- -------- Government Obligations required by such Section for purposes of the payment of the Redemption Price of such Securities. SECTION 11.06. Securities Payable on Redemption Date. ------------------------------------- Notice of redemption having been given as aforesaid, the Securities of any series so to be redeemed shall, on the Redemption Date, become due and payable at the Redemption Price therein specified in the currency or composite currency in which the Securities of such series are payable (except as otherwise specified with respect to the Securities of such series pursuant to Section ------- 3.01), and from and after such date (unless the Company shall default in the - ---- payment of the Redemption Price) such Securities shall cease to bear interest and the Coupons for such interest appertaining to any Bearer Securities so to be redeemed, except to the extent provided below, shall be void. Upon surrender of such Securities for redemption in accordance with said notice together with all Coupons, if any, maturing after the Redemption Date, such Securities shall be paid by the Company at the Redemption Price; provided, however, that -------- ------- installments of any interest on Bearer Securities of such series the Stated Maturity of which interest is on or prior to the Redemption Date shall be payable (but without interest thereon, unless the Company shall default in the payment thereof) only at an office or agency outside the United States (except as otherwise provided in Section 10.02) and, unless otherwise specified with ------------- respect to the Securities of such series pursuant to Section 3.01, only upon ------------ presentation and surrender of Coupons for such interest; and provided, further, -------- ------- that, unless otherwise specified with respect to the Securities of such series pursuant to Section 3.01, installments of any interest on Registered Securities ------------ of such series the Stated Maturity of which interest is on or prior to the Redemption Date shall be payable (but without interest thereon, unless the Company shall default in the payment thereof) to the Holders of such Registered Securities or one or more Predecessor Securities, registered as such on the relevant Regular Record Dates according to their terms and the provisions of Section 3.07. - ------------ 87 If a Bearer Security of any series surrendered for redemption shall not be accompanied by all Coupons, if any, appertaining thereto maturing after the Redemption Date, such Bearer Security may be paid after deducting from the Redemption Price an amount equal to the face amount of all such missing Coupons or the surrender of such missing Coupon or Coupons may be waived by the Company if there is furnished to the Company and the Trustee such security or indemnity as they may require to save each of them and any agent of them harmless. If thereafter the Holder of such Bearer Security shall surrender to the Trustee or any Paying Agent in respect of such series any such missing Coupon in respect of which a deduction shall have been made from the Redemption Price, such Holder shall be entitled to receive the amount so deducted; provided, however, that -------- ------- interest represented by Coupons shall be payable only at an office or agency located outside the United States (except as otherwise provided in Section ------- 10.02) and, unless otherwise specified with respect to the Securities of such - ----- series pursuant to Section 3.01, only upon presentation and surrender of those ------------ Coupons. If any Security called for redemption shall not be so paid upon surrender thereof for redemption, the principal (and premium, if any) shall, until paid, bear interest from the Redemption Date at the rate borne by the Security (or, in the case of an Original Issue Discount Security, such Security's Yield to Maturity). SECTION 11.07. Securities Redeemed in Part. --------------------------- Any Registered Security which is to be redeemed only in part shall be surrendered at a Place of Payment (with, if the Company or the Trustee so requires, due endorsement by, or a written instrument of transfer in form satisfactory to the Company and the Trustee duly executed by, the Holder thereof or his attorney duly authorized in writing), and the Company shall execute and the Trustee shall authenticate and deliver to the Holder of such Security without service charge a new Registered Security or Registered Securities of the same series, of any authorized denominations as requested by such Holder, of a like Stated Maturity and with like terms and conditions, in aggregate principal amount equal to and in exchange for the unredeemed portion of the principal of the Registered Security so surrendered. Any Permanent Global Security which is to be redeemed only in part shall be so surrendered, and the Company shall execute, and the Trustee shall authenticate and deliver to the Depositary for such Permanent Global Security, without service charge, a new Permanent Global Security in a denomination equal to and in exchange for the unredeemed portion of the principal of the Permanent Global Security so surrendered. 88 ARTICLE TWELVE SINKING FUNDS SECTION 12.01. Applicability of Article. ------------------------ Redemption or retirement of Securities of any series through operation of a sinking fund, as permitted or required by their terms, shall be made in accordance with such terms and, except as otherwise specified as contemplated by Section 3.01 for the Securities of such series, this Article. - ------------ The minimum amount of any sinking fund payment provided for by the terms of Securities of any series is herein referred to as a "mandatory sinking ----------------- fund payment", and any payment in excess of such minimum amount provided for by - ------------ the terms of Securities of any series is herein referred to as an "optional -------- sinking fund payment". If provided for by the terms of Securities of any - -------------------- series, the cash amount of any sinking fund payment may be subject to reduction as provided in Section 12.02. Each sinking fund payment shall be applied to the redemption of Securities of any series as provided for by the terms of the Securities of such series. SECTION 12.02. Satisfaction of Sinking Fund Payments with Securities. ----------------------------------------------------- The Company (1) may deliver Outstanding Securities of a series (other than any previously called for redemption), together in the case of any Bearer Securities of such series with all unmatured Coupons, if any, appertaining thereto, and (2) may apply as a credit Securities of a series which have been redeemed either at the election of the Company pursuant to the terms of such Securities or through the application of permitted optional sinking fund payments pursuant to the terms of such Securities, in each case in satisfaction of all or any part of any sinking fund payment with respect to the Securities of such series required to be made pursuant to the terms of such Securities as provided for by the terms of such series; provided, however, that such -------- ------- Securities have not been previously so credited. Such Securities shall be received and credited for such purpose by the Trustee at the Redemption Price specified in such Securities for redemption through operation of the sinking fund and the amount of such sinking fund payment shall be reduced accordingly. SECTION 12.03. Redemption of Securities for Sinking Fund. ----------------------------------------- Not less than 60 days prior to each sinking fund payment date for any series of Securities or such shorter period as shall be satisfactory to the Trustee, the Company will deliver to the Trustee an Officers' Certificate specifying the amount of the 89 next ensuing sinking fund payment for Securities of such series pursuant to the terms of such Securities, the portion thereof, if any, which is to be satisfied by payment of cash, the portion thereof, if any, which is to be satisfied by delivering and crediting Securities of such series pursuant to Section 12.02 and ------------- the basis for such credit and stating that such Securities have not previously been so credited and will also deliver to the Trustee any Securities to be so delivered. The Trustee shall select the Securities to be redeemed upon such sinking fund payment date in the manner specified in Section 11.03 and cause ------------- notice of the redemption thereof to be given in the name of and at the expense of the Company in the manner provided in Section 11.04. Such notice having been ------------- duly given, the redemption of such Securities shall be made upon the terms and in the manner stated in Sections 11.06 and 11.07. -------------- ----- ARTICLE THIRTEEN MEETINGS OF HOLDERS OF SECURITIES SECTION 13.01. Purposes for Which Meetings May Be Called. ----------------------------------------- If Securities of a series are issuable in whole or in part as Bearer Securities, a meeting of Holders of Securities of such series may be called at any time and from time to time pursuant to this Article to make, give or take any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Indenture to be made, given or taken by Holders of Securities of such series. SECTION 13.02. Call, Notice and Place of Meetings. ---------------------------------- (a) The Trustee may at any time call a meeting of Holders of Securities of any series issuable in whole or in part as Bearer Securities for any purpose specified in Section 13.01, to be held at such time and at such ------------- place in the Borough of Manhattan, The City of New York, or in London as the Trustee shall determine. Notice of every meeting of Holders of Securities of any series, setting forth the time and the place of such meeting and in general terms the action proposed to be taken at such meeting, shall be given, in the manner provided in Section 1.06, not less than 21 nor more than 180 days prior ------------ to the date fixed for the meeting. (b) In case at any time the Company, pursuant to a Board Resolution, or the Holders of at least 10% in principal amount of the Outstanding Securities of any series shall have requested the Trustee to call a meeting of the Holders of Securities of such series for any purpose specified in Section 13.01, by ------------- written request setting forth in reasonable detail the action proposed to be taken at such meeting, and the Trustee shall not have made the first publication of the notice of such meeting within 21 days after 90 receipt of such request or shall not thereafter proceed to cause the meeting to be held as provided herein, then the Company or the Holders of Securities of such series in the amount above specified, as the case may be, may determine the time and the place in the Borough of Manhattan, The City of New York, or in London for such meeting and may call such meeting for such purposes by giving notice thereof as provided in Subsection (a). -------------- SECTION 13.03. Persons Entitled to Vote at Meetings. ------------------------------------ To be entitled to vote at any meeting of Holders of Securities of any series, a Person shall be (1) a Holder of one or more Outstanding Securities of such series, or (2) a Person appointed by an instrument in writing as proxy for a Holder or Holders of one or more Outstanding Securities of such series by such Holder or Holders. The only Persons who shall be entitled to be present or to speak at any meeting of Holders of Securities of any series shall be the Persons entitled to vote at such meeting and their counsel, any representatives of the Trustee and its counsel and any representatives of the Company and its counsel. SECTION 13.04. Quorum; Action. -------------- The Persons entitled to vote a majority in principal amount of the Outstanding Securities of a series shall constitute a quorum for a meeting of Holders of Securities of such series; provided, however, that if any action is -------- ------- to be taken at such meeting with respect to a consent or waiver which is required to be given by the Holders of not less than a greater percentage in such principal amount as shall have been specified with respect to the Securities of such series pursuant to Section 3.01, the Persons entitled to vote ------------ such greater percentage in principal amount of the Outstanding Securities of such series shall constitute a quorum. In the absence of a quorum within 30 minutes of the time appointed for any such meeting, the meeting shall, if convened at the request of Holders of Securities of such series, be dissolved. In the absence of a quorum in any other case the meeting may be adjourned for a period of not less than 10 days as determined by the chairman of the meeting prior to the adjournment of such meeting. In the absence of a quorum at any such adjourned meeting, such adjourned meeting may be further adjourned for a period of not less than 10 days as determined by the chairman of the meeting prior to the adjournment of such adjourned meeting. Subject to Section 13.05, ------------- notice of the reconvening of any adjourned meeting shall be given as provided in Section 13.02(a), except that such notice need be given only once not less than - ---------------- five days prior to the date on which the meeting is scheduled to be reconvened. Notice of the reconvening of an adjourned meeting shall state expressly the percentage, as provided 91 above, of the principal amount of the Outstanding Securities of such series which shall constitute a quorum. Except as limited by the proviso to Section 9.02, any resolution ------------ presented to a meeting or adjourned meeting duly reconvened at which a quorum is present as aforesaid may be adopted only by the affirmative vote of the Holders of a majority in principal amount of the Outstanding Securities of that series; provided, however, that, except as limited by the proviso to Section 9.02, any - -------- ------- ------------ resolution with respect to any consent or waiver which is required to be given by the Holders of not less than a greater percentage in such principal amount as shall have been specified with respect to the Securities of such series pursuant to Section 3.01 may be adopted at a meeting or an adjourned meeting duly ------------ reconvened and at which a quorum is present as aforesaid only by the affirmative vote of the Holders of such greater percentage in principal amount of the Outstanding Securities of that series; and provided, further, that, except as -------- ------- limited by the proviso to Section 9.02, any resolution with respect to any ------------ request, demand, authorization, direction, notice, consent, waiver or other action which this Indenture expressly provides may be made, given or taken by the Holders of a specified percentage, which is less than a majority, in principal amount of the Outstanding Securities of a series may be adopted at a meeting or an adjourned meeting duly reconvened and at which a quorum is present as aforesaid by the affirmative vote of the Holders of such specified percentage in principal amount of the Outstanding Securities of that series. Any resolution passed or decision taken at any meeting of Holders of Securities of any series duly held in accordance with this Section shall be binding on all the Holders of Securities of such series and the Coupons, if any, appertaining thereto, whether or not present or represented at the meeting. SECTION 13.05. Determination of Voting Rights; Conduct and ------------------------------------------- Adjournment of Meetings. ----------------------- (a) Notwithstanding any other provisions of this Indenture, the Trustee may make such reasonable regulations as it may deem advisable for any meeting of Holders of Securities of such series in regard to proof of the holding of Securities of such series and of the appointment of proxies and in regard to the appointment and duties of inspectors of votes, the submission and examination of proxies, certificates and other evidence of the right to vote, and such other matters concerning the conduct of the meeting as it shall deem appropriate. Except as otherwise permitted or required by any such regulations, the holding of Securities shall be proved in the manner specified in Section ------- 1.04 and the appointment of any proxy shall be proved in the manner specified in - ---- Section 1.04 or by having the signature of the person executing the proxy - ------------ witnessed or 92 guaranteed by any trust company, bank or banker authorized by Section 1.04 to ------------ certify to the holding of Bearer Securities. Such regulations may provide that written instruments appointing proxies, regular on their face, may be presumed valid and genuine without the proof specified in Section 1.04 or other proof. ------------ (b) The Trustee shall, by an instrument in writing, appoint a temporary chairman of the meeting, unless the meeting shall have been called by the Company or by holders of Securities as provided in Section 13.02(b), in ---------------- which case the Company or the Holders of Securities of the series calling the meeting, as the case may be, shall in like manner appoint a temporary chairman. A permanent chairman and a permanent secretary of the meeting shall be elected by vote of the Persons entitled to vote a majority in principal amount of the Outstanding Securities of such series represented at the meeting. (c) At any meeting each Holder of a Security of such series or proxy shall be entitled to one vote for each $1,000 principal amount (or, in case the Securities of such series are denominated in a Foreign Currency, the equivalent thereof) of Securities of such series held or represented by him; provided, -------- however, that no vote shall be cast or counted at any meeting in respect of any - ------- Security challenged as not Outstanding and ruled by the chairman of the meeting to be not Outstanding. The chairman of the meeting shall have no right to vote, except as a Holder of a Security of such series or proxy. (d) Any meeting of Holders of Securities of any series duly called pursuant to Section 13.02 at which a quorum is present may be adjourned from ------------- time to time by Persons entitled to vote a majority in principal amount of the Outstanding Securities of such series represented at the meeting, and the meeting may be held as so adjourned without further notice. SECTION 13.06. Counting Votes and Recording Action of Meetings. ----------------------------------------------- The vote upon any resolution submitted to any meeting of Holders of Securities of any series shall be by written ballots on which shall be subscribed the signatures of the Holders of Securities of such series or of their representatives by proxy and the principal amounts and serial numbers of the Outstanding Securities of such series held or represented by them. The permanent chairman of the meeting shall appoint two inspectors of votes who shall count all votes cast at the meeting for or against any resolution and who shall make and file with the secretary of the meeting their verified written reports in triplicate of all votes cast at the meeting. A record, at least in triplicate, of the proceedings of each meeting of Holders of Securities of any series shall be prepared by the secretary of the meeting and there shall be attached to said record the original reports of the inspectors of votes on any vote by ballot taken thereat and 93 affidavits by one or more persons having knowledge of the facts setting forth a copy of the notice of the meeting and showing that said notice was given as provided in Section 13.02 and, if applicable, Section 13.04. Each copy shall ------------- ------------- be signed and verified by the affidavits of the permanent chairman and secretary of the meeting and one such copy shall be delivered to the Company and another to the Trustee to be preserved by the Trustee, the latter to have attached thereto the ballots voted at the meeting. Any record so signed and verified shall be conclusive evidence of the matters therein stated. ARTICLE FOURTEEN IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS SECTION 14.01. Exemption from Individual Liability. ----------------------------------- No recourse under or upon any obligation, covenant or agreement of this Indenture, or of any Security of any series or any Coupon appertaining thereto, or for any claim based thereon or otherwise in respect thereof, shall be had against any incorporator, stockholder, officer or director, as such, past, present or future, of the Company or of any successor corporation, either directly or through the Company or any successor corporation, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise; it being expressly understood that this Indenture and the obligations issued hereunder are solely corporate obligations, and that no such personal liability whatever shall attach to, or is or shall be incurred by, the incorporators, stockholders, officers or directors, as such, of the Company or of any successor corporation, or any of them, because of the creation of the indebtedness hereby authorized, or under or by reason of the obligations, covenants or agreements contained in this Indenture or in any Securities of any series or any Coupon appertaining thereto or implied therefrom; and that any and all such personal liability, either at common law or in equity or by constitution or statute, of, and any and all such rights and claims against, every such incorporator, stockholder, officer or director, as such, because of the creation of the indebtedness hereby authorized, or under or by reason of the obligations, covenants or agreements contained in this Indenture or in any such Securities or any Coupon appertaining thereto or implied therefrom, are hereby expressly waived and released as a condition of, and as a consideration for, the execution of this Indenture and the issue of such Securities and Coupons. 94 ARTICLE FIFTEEN CONVERSION SECTION 15.01. Conversion of Securities. ------------------------ (a) If the terms of any series of Securities provide for any Securities of such series to be convertible into shares of Common Stock issued by the Company as contemplated by Section 3.01, then, subject to and upon ------------ compliance with (i) the provisions of this Section 15.01, if and to the extent ------------- such provisions are specified as contemplated by Section 3.01 to be applicable ------------ to the Securities of such series, and (ii) such other provisions, if any, as shall be so specified, the Holder of any Security or Securities of such series shall have the right, at such Holder's option, to convert the principal amount of such Security or Securities, or any portion of such principal amount which is $1,000 or such other minimum amount (in Dollars or a Foreign Currency) as may be specified with respect to the Securities of such series, or any integral multiple thereof, into that number of fully paid and nonassessable shares of Common Stock (as such shares shall then be constituted) obtained by dividing the aggregate principal amount of the Security or Securities or portion thereof surrendered for conversion by the conversion price in effect at such time, by surrender of the Securities to be so converted in whole or in part in the manner provided in Subsection (b) below or as otherwise provided with respect to the ---------- --- Securities of such series as contemplated by Section 3.01. A Holder of ------------ Securities is not entitled to any rights of a holder of Common Stock until such Holder has converted his Securities. (b) In order to exercise a conversion privilege, the Holder of any Security or Securities to be converted in whole or in part shall surrender such Security or Securities at an office or agency maintained by the Company for such purpose as provided in Section 10.02, together with, if such Securities are ------- ----- Bearer Securities, all unmatured Coupons and any matured Coupons in default appertaining thereto or, if such Securities are Registered Securities, the funds, if any, required by the last paragraph of this Subsection (b), and with -------------- the conversion notice thereon (or such other notice which is acceptable to the Company, the Trustee, any agent appointed by the Company as a conversion agent in respect of such Securities (each, a "Conversion Agent") and, if such ---------------- Securities are Registered Securities, the Security Registrar) duly executed, to the Company at the office or agency of any Conversion Agent maintained for such purpose as provided in Section 10.02 at which the Holder elects to convert such ------------- Security or Securities or the portion thereof specified in said notice; provided, however, that any Bearer Securities may be surrendered for conversion - -------- ------- only at an office or agency of any Conversion Agent maintained by the Company pursuant to Section 10.02 which is ------------- 95 outside of the United States, except that, if conversion thereof at each such office or agency outside the United States is illegal or effectively precluded by exchange controls or other similar restrictions, such Bearer Securities may be surrendered for conversion at such an office or agency in The City of New York. Such notice shall be accompanied by such transfer taxes and duties, or funds therefor, as are required pursuant to Subsection (g) below. Convertible -------------- Registered Securities surrendered for conversion shall, unless the shares of Common Stock issuable on conversion are to be issued in the name of the Holder of such Registered Securities, be duly endorsed by, or be accompanied by instruments of transfer in form satisfactory to the Company, the Trustee and the applicable Security Registrar duly executed by, the Holder or his duly authorized attorney. As promptly as practicable after the surrender for conversion of any such Security or Securities as aforesaid and the receipt of such Coupons, if any, and notice as aforesaid (accompanied by the funds, if any, required by the penultimate paragraph of this Section), the Company shall deliver or cause to be delivered at such office or agency to or upon written order of the Holder thereof a certificate or certificates representing the number of full shares of Common Stock issuable upon the conversion of such Security or Securities or portion thereof issued in such name or names as such Holder may direct and a check or cash in respect of any fractional share of Common Stock arising upon such conversion, as provided in Subsection (c) below. In case any Security or -------------- Securities of a denomination greater than the minimum amount for conversion referred to in Subsection (a) above shall be surrendered for conversion in part -------------- only, the Company shall execute and the Trustee shall authenticate and deliver to or upon the written order of the Holder of such Security or Securities so surrendered, without charge to such Holder, and at the expense of the Company, if any, a new Security or Securities in authorized denominations in an aggregate principal amount equal to the unconverted portion of the surrendered Security or Securities. Each conversion of a convertible Security or Securities as aforesaid shall be deemed to have been effected at the close of business on the date such Security or Securities, Coupons, if any, and notices shall have been surrendered as aforesaid (accompanied by the funds, if any, required by the penultimate paragraph of this Section), and at such time the rights of the Holder of such Security or Securities as Holder of the principal amount thereof so surrendered for conversion shall cease and the person or persons in whose name or names the certificate or certificates for shares of Common Stock are to be issued upon such conversion shall be treated for all purposes as having become the holder or holders of record of the shares represented thereby at such time and such conversion shall be at the conversion price in effect at such time; provided, -------- however, that any such surrender and payment on any date when the stock transfer - ------- books of the 96 Company shall be closed shall constitute the person or persons in whose name or names the certificates for such shares of Common Stock are to be issued as the record holder or holders thereof for all purposes at the close of business on the next succeeding day on which such stock transfer books are opened and such conversion shall be at the conversion price in effect at such time on such succeeding day. If the conversion date in respect of any convertible Registered Securities or portion thereof is during the period from the close of business on any Regular Record Date to the opening of business on the next succeeding Interest Payment Date, such Registered Securities shall (unless such Registered Securities or portion thereof being converted shall have been called for redemption on a date during such period) be accompanied by payment in funds acceptable to the Company of an amount equal to the interest otherwise payable on such Interest Payment Date to the Holder thereof at the Close of business on the Regular Record Date for such Interest Payment Date with respect to the principal amount being converted; provided, however, that no such payment need -------- ------- be made if there shall exist at the time of conversion a default in the payment of interest on the Securities of such series. An amount equal to such payment shall be paid by the Company on such Interest Payment Date to the Holder of such Registered Securities at the close of business on such Regular Record Date; provided, however, that if the Company shall default in the payment of interest - -------- ------- on such Interest Payment Date, such amount shall be paid to the person who made such required payment. Except as provided in this paragraph, no adjustment shall be made for any interest accrued on any Security or Securities converted or for dividends on any shares of Common Stock issued upon the conversion of such Security or Securities as provided in this Section 15.01. ------------- If any Bearer Securities surrendered for conversion shall not be accompanied by all related Coupons maturing after the conversion date, such Securities may be converted only if there be furnished to the Company and the Conversion Agent such security or indemnity as may be required by them to indemnify and hold harmless each of them and any other agent of the Company and evidence to their satisfaction that such Coupons are missing and of the ownership thereof. (c) No fractional shares of Common Stock or scrip representing fractional shares shall be issued upon the conversion of any convertible Securities. If more than one Security shall be surrendered for conversion at one time by the same Holder, the number of full shares which shall be issuable upon the conversion of such Securities shall be computed on the basis of the aggregate principal amount of the Securities (or specified portions thereof to the extent permitted hereby) so surrendered. If any fractional share of Common Stock would, absent the provisions of this Subsection (c), be issuable upon the -------------- 97 conversion of any Security or Securities, the Company shall, in lieu of delivering the fractional share therefor, adjust such fractional interest by payment to the Holder of such surrendered Security or Securities of an amount in cash equal to the current market value of such fractional interest, computed on the basis of the closing price of the Common Stock (determined as provided in paragraph (4) of Subsection (e) below) on the date of conversion. - ------------- -------------- (d) The conversion price in respect of a series of convertible Securities shall be as specified with respect to the Securities of such series as contemplated by Section 3.01, subject to adjustment as provided in Subsection ------------ ---------- 15.01(e). - -------- (e) The conversion price shall be adjusted from time to time by the Company as follows: (1) In case the Company shall (A) pay a dividend on the Common Stock, or make a distribution to all holders of the Common Stock of, shares of its capital stock (whether shares of Common Stock or of capital stock of any other class), (B) subdivide its outstanding shares of Common Stock into a greater number of shares, (C) combine its outstanding shares of Common Stock into a smaller number of shares or (D) issue by reclassification of its shares of Common Stock any shares of capital stock of the Company, the conversion price in effect immediately prior to such action shall be adjusted so that the Holder of any Security or Securities thereafter surrendered for conversion shall be entitled to receive the number of shares of capital stock of the Company which such Holder would have owned or have been entitled to receive immediately following such action had such Security or Securities been converted immediately prior thereto. An adjustment made pursuant to this subparagraph (1) shall become effective ---------------- retroactively immediately after the record date in the case of a dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or reclassification. If, as a result of an adjustment made pursuant to this subparagraph (1), the ---------------- Holder of any Security or Securities thereafter surrendered for conversion shall become entitled to receive shares of two or more classes of capital stock of the Company, the Company (whose determination shall be conclusive) shall determine the allocation of the conversion price between or among shares of such classes of capital stock. (2) In case the Company shall issue rights (other than rights under a periodic dividend reinvestment plan that are exercisable at a price per share of Common Stock of not less than 85% of the current market price per share (determined as provided in such plan) of Common Stock) or warrants to all 98 holders of Common Stock entitling them (for a period expiring within 45 days after the record date mentioned below) to subscribe for or purchase shares of Common Stock at a price per share less than the current market price per share of Common Stock (as determined pursuant to subparagraph (4) ---------------- below) on the record date mentioned below, the conversion price shall be adjusted so that the same shall equal the price determined by multiplying the conversion price in effect immediately prior to the date of issuance of such rights or warrants by a fraction of which the numerator shall be the number of shares of Common Stock outstanding on such date of issuance plus the number of shares of Common Stock which the aggregate offering price of the total number of shares of Common Stock so offered would purchase at such current market price, and of which the denominator shall be the number of shares of Common Stock outstanding on such date of issuance plus the number of additional shares of Common Stock offered for subscription or purchase. Such adjustment shall become effective retroactively immediately after the record date for the determination of stockholders entitled to receive such rights or warrants, and in the event that more than 10% of such rights or warrants are not so exercised, the conversion price shall again be adjusted to be the conversion price which would then be in effect if the rights or warrants so exercised had been the only rights or warrants offered. (3) In case the Company shall distribute to all holders of the Common Stock evidences of its indebtedness or assets (excluding any cash dividend paid from the surplus account of the Company (designated "Retained earnings" on the books of the Company)) or rights or warrants to subscribe for securities of the Company (excluding (y) those referred to in subparagraph (2) above and (z) rights under a periodic dividend or interest ---------------- reinvestment plan that are exercisable at a price per share of Common Stock of not less than 85% of the current market price per share (determined as provided in such plan) of Common Stock), then in each such case the conversion price shall be adjusted so that the same shall equal the price determined by multiplying the conversion price in effect immediately prior to the date of such distribution by a fraction of which the numerator shall be the current market price per share (determined as provided in subparagraph (4) below) of Common Stock less the then fair market value (as ---------------- determined by the Board of Directors, whose determination shall be conclusive) per share of Common Stock of the assets or evidences of indebtedness so distributed or of such subscription rights or warrants, and of which the denominator shall be such current market price per share of Common Stock on the record date mentioned below. Such adjustment shall become effective retroactively immediately after the record date for the determination of stockholders entitled to receive such distribution, and in the event that more than 10% of the rights or warrants so distributed are not so 99 exercised, the conversion price shall again be adjusted to be the conversion price which would then be in effect if the rights or warrants so exercised had been the only rights or warrants so distributed. (4) For the purpose of any computation under subparagraphs (2) and ----------------- (3) above, the current market price per share of Common Stock on any date --- shall be deemed to be the average of the daily closing prices for 30 consecutive Business Days in The City of New York commencing 45 such Business Days before the day in question; provided, however, that if an -------- ------- issuance or distribution of the types described under subparagraphs (2) and --- (3) above is to be made, and no public announcement of such issuance or --- distribution is made by or on behalf of the Company more than 20 trading days (as defined below) before the day in question, the current market price per share of Common Stock on such date shall be deemed to be the average of the daily closing prices for the five consecutive trading days selected by the Company not more than 20 trading days before, and ending not later than, the day in question. The closing price for each day shall be the last reported sales price on the New York Stock Exchange Composite Tape, or, if not so reported, or, in case no such reported sale takes place on such day, the average of the reported closing bid and asked quotations on the New York Stock Exchange, or, if the Common Stock is not at such time listed on such Exchange or no such quotations are available, the average of the closing bid and asked prices of the Common Stock on NASDAQ or any comparable system, or if the Common Stock is not listed on NASDAQ or a comparable system, the closing bid and asked prices as furnished by any member of the National Association of Securities Dealers, Inc. selected from time to time by the Company for that purpose. If on any trading day the Common Stock is not quoted by any organization referred to in this subparagraph (4), the fair value of the Common Stock on such day, as ---------------- determined by the Board of Directors (whose determination shall be conclusive), shall be used. For purposes of this subparagraph (4), the ---------------- term "trading day" shall mean each Monday, Tuesday, Wednesday, Thursday and Friday other than any day on which securities are not traded on any such exchange or in any such market referred to in this subparagraph (4). ---------------- (5) In the case of either (A) any consolidation or merger to which the Company is a party, other than a consolidation or a merger in which the Company is a continuing corporation and which does not result in any reclassification of, or change (other than a change in, from or to par value, or as a result of a subdivision or combination) in, outstanding shares of the Common Stock, or (B) any sale or conveyance to another corporation of the property of the Company as an entirety or substantially as an entirety, then the successor or purchasing corporation, as the 100 case may be, shall execute with the Trustee an indenture supplemental hereto providing that the Holder of each convertible Security or Securities then Outstanding shall have the right to convert such Security or Securities into the kind and amount of shares of stock and other securities and property (including cash) receivable upon such consolidation, merger, sale or conveyance by a holder of the number of shares of Common Stock issuable upon conversion of such Security or Securities immediately prior to such consolidation, merger, sale or conveyance, subject to adjustments equivalent as nearly as practicable to the adjustments provided for in this Section 15.01 assuming, in the case of any consolidation, merger, sale or ------------- conveyance, such holder of Common Stock of the Company (i) is not a person with or into which the Company consolidated or merged or which merged into the Company or to which such sale or conveyance was made, as the case may be ("constituent person"), or an affiliate of a constituent person and (ii) ----------- ------ failed to exercise such holder's rights of election, if any, as to the kind or amount of shares of stock and other securities and property (including cash) receivable upon such consolidation, merger, sale or conveyance (provided that if the kind or amount of shares of stock and other securities and property (including cash) receivable upon such consolidation, merger, sale or conveyance is not the same for each share of Common Stock held immediately prior to such consolidation, merger, sale or conveyance by others than a constituent person or an affiliate thereof and in respect of which such rights of election shall not have been exercised ("non-electing share"), then for the purpose of this Section 15.01 the kind ------------------ ------------- and amount of shares of stock and other securities and property (including cash) receivable upon such consolidation, merger, sale or conveyance with respect to each non-electing share shall be deemed to be the kind and amount so receivable per share with respect to a plurality of the non- electing shares). The provisions of this subparagraph (5) shall similarly ---------------- apply to successive consolidations, mergers, sales or conveyances. (6) No adjustment in the conversion price shall be required unless such adjustment would require an increase or decrease of at least 1% in such price; provided, however, that any adjustments which by reason of this -------- ------- subparagraph (6) are not required to be made shall be carried forward and ---------------- taken into account in any subsequent adjustment; and provided, further, -------- ------- that adjustment shall be required and made in accordance with the provisions of this Section 15.01 (other than this subparagraph (6)) not ------------- ---------------- later than the earlier of (A) three years after the date of the particular event involved, (B) the date as to which the aggregate adjustments not previously made would require a total increase or decrease of 1% in the conversion price and (C) such other time as may be required in order to preserve the tax-free nature of a distribution to the holders of shares of Common Stock. 101 All calculations under this Section 15.01 shall be made by the Company and ------------- shall be made to the nearest cent (or, in the case of Securities of a series denominated in a Foreign Currency or Foreign Currencies, such other nearest currency unit as may be specified with respect to the Securities of such series as contemplated by Section 3.01) or to the nearest one- ------------ hundredth of a share, as the case may be. Anything in this Section 15.01 ------------- to the contrary notwithstanding, (i) the Company shall be permitted to make such adjustments in the conversion price, in addition to those required by this Section 15.01, as it in its discretion shall consider to be advisable ------------- in order that any stock dividends, subdivision of shares, distribution of rights to purchase stock or securities or distribution of securities convertible into or exchangeable for stock hereafter made by the Company to its stockholders shall not be taxable to the holders of the Common Stock and (ii) the Company may at any time decrease the conversion price by any amount. (7) Whenever the conversion price with respect to any convertible Securities is adjusted as herein provided, the Company shall promptly file with the Trustee and any Conversion Agent other than the Trustee an Officers' Certificate setting forth the conversion price after such adjustment, a brief statement of the facts requiring such adjustment and, in the event the conversion price is adjusted other than pursuant to clause ------ (ii) of the last sentence of subparagraph (6) above, the method of ---- ---------------- calculation thereof. In lieu of delivering such Officers' Certificate, the Company may deliver to the Trustee and any Conversion Agent, a certificate of any firm of independent public accountants selected by the Company (who may be the regular accountants employed by the Company) setting forth the conversion price and the method of calculation thereof. Any such Officers' Certificate or certificate of any firm of independent public accountants shall be evidence of the correctness of any adjustment of the conversion price made pursuant to this Subsection (e). Neither the Trustee nor any -------------- Conversion Agent shall bear any responsibility with respect to any such Officers' Certificate or certificate. Promptly after delivery of such certificate, the Company shall, if any of such Securities are Bearer Securities, cause a notice stating that the conversion price has been adjusted and setting forth the adjusted conversion price to be published at least once in an Authorized Newspaper and, if any of such Securities are Registered Securities, to be mailed to each Holder at such Holder's address as it appears on the Security Register; provided, however, that if it shall -------- ------- be impractical to make publication of such notice as provided herein, then such publication or other notice in lieu thereof as shall be made to the Trustee shall constitute sufficient publication of such notice; and provided, further, that if within ten days after the publishing and mailing -------- ------- of such a notice an event occurs which would require the publishing and mailing of an additional 102 notice, such additional notice shall be published and mailed as aforesaid promptly but in no event earlier than the tenth day after the publishing and mailing of the immediately prior notice. (8) In any case in which this Subsection (e) shall require that an -------------- adjustment be made retroactively immediately following a record date, the Company may elect to defer (but only until five Business Days following the filing of the Officers' Certificate as provided in subparagraph (7) above) ---------------- (y) issuing to the holder of any share of Common Stock obtained upon conversion of Securities after such record date the shares of Common Stock and other capital stock of the Company issuable upon such conversion only on the basis of the conversion price prior to adjustment and (z) paying to such Holder any amount in cash in lieu of any fraction pursuant to Subsection (c). -------------- (f) In case of any consolidation or merger of the Company with or into any other corporation (other than a consolidation or merger in which the Company is the continuing corporation), or in case of any sale or transfer of all or substantially all the assets of the Company, the corporation formed by such consolidation or the corporation into which the Company shall have been merged or the corporation which shall have acquired such assets, as the case may be, execute with the Trustee an indenture supplemental hereto providing that the Holder of each convertible Security or Securities then Outstanding shall thereafter have the right to convert such Security or Securities pursuant to Subsection (e)(5) above subject to adjustment for events after the grant - ----------------- subsequent to the effective date thereof equivalent as nearly as practicable to the adjustment provided for in Subsection (f) above. The provisions of this -------------- Subsection (f) shall similarly apply to successive consolidations, mergers, - -------------- sales or transfers. (g) The issuance of certificates for shares of Common Stock on conversion of Securities pursuant hereto shall be made at the expense of the Company and without charge to the Holder converting a Security or Securities for any stamp or other similar tax or duty in respect of the issue thereof; provided, however, that if any such certificate is to be issued in a name other - -------- ------- than that of the Holder of the Security or Securities to be converted, the person or persons requesting the issuance thereof shall pay to the Company the amount of any tax or duty which may be payable in respect of any transfer involved in such issuance or delivery or shall establish to the satisfaction of the Company that such tax or duty has been paid. Certificates representing shares of Common Stock will not be issued or delivered unless all taxes and duties, if any, payable by such Holder have been paid. 103 (h) The Company covenants that it will at all times reserve and keep available, solely for the purpose of issue upon conversion of Securities, such number of shares of Common Stock as shall be issuable upon the conversion of all outstanding Securities; provided, however, that nothing contained herein shall -------- ------- be construed to preclude the Company from satisfying its obligations in respect of the conversion of the Securities by delivery of purchased shares of Common Stock which are held in the treasury of the Company. For the purposes of this Subsection (h), the full number of shares of Common Stock issuable upon the - -------------- conversion of all outstanding Securities shall be computed as if at the time of computation of such number of shares of Common Stock all outstanding Securities were held by a single holder. Unless otherwise provided with respect to the convertible Securities of any series as provided in Section 3.01, the Company ------------ covenants that if any shares of Common Stock required to be reserved for issuance upon conversions of such Securities hereunder require registration with or approval of any governmental authority under any federal or state law before such shares may be issued upon such conversions, the Company will cause such shares to be duly registered or approved, as the case may be. Unless otherwise provided with respect to the convertible Securities of any series as provided in Section 3.01, the Company will endeavor to list the shares of Common Stock - ------------ required to be delivered upon conversion of such Securities hereunder prior to such delivery on the New York Stock Exchange and any other securities exchange on which the outstanding Common Stock is listed at the time of such delivery. Before taking any action which would cause an adjustment reducing the then conversion price of any convertible Securities below the then par value, if any, of the Common Stock, the Company will take all corporate action which may, in the opinion of its counsel, be necessary in order that the Company may validly and legally issue shares of such Common Stock at such adjusted conversion price. The Company covenants that all authorized but unissued shares of Common Stock which may at any time be reserved pursuant to this Subsection (h) for issuance -------------- upon conversions of any convertible Securities will be free from preemptive rights and duly and validly authorized for issuance upon such conversions and that all shares of Common Stock which may at any time be issued upon conversions of such Securities in accordance with the terms hereof and thereof will upon such issuance, be free from preemptive rights, duly and validly authorized and issued, fully paid and nonassessable. (i) Neither the Trustee nor any Conversion Agent shall at any time be under any duty or responsibility to any Holder of convertible Securities to determine whether any facts exist which may require any adjustment of the conversion price thereof, or with respect to the nature or extent of any such adjustment when made or with respect to the method employed, herein provided to be employed, in making the same. Neither the Trustee nor any Conversion Agent shall be accountable with respect to the validity or value (or the kind or amount) of any shares of Common Stock, or of any securities or 104 property (including cash) which may at any time be issued or delivered upon the conversion of any such Security or Securities; and neither the Trustee nor any Conversion Agent makes any representations with respect thereto. Subject to Section 6.01, neither the Trustee nor any Conversion Agent shall be responsible - ------------ for any failure of the Company to issue, transfer or deliver any shares of Common Stock or stock certificates or other securities or property (including cash) upon the surrender of any convertible Security for the purpose of conversion or to comply with any of the duties, responsibilities or covenants of the Company contained in this Section 15.01. ------------- (j) In case: (1) the Company shall take any action which would require an adjustment in the conversion price with respect to any convertible Securities of a series pursuant to Subsection (e) above; or -------------- (2) the Company shall authorize the granting to the holders of the Common Stock of rights or warrants to subscribe for or purchase any shares of stock of any class or any other rights or warrants and notice thereof shall be given to holders of Common Stock; or (3) there shall be any capital reorganization or reclassification of the Common Stock (other than a subdivision or combination of the outstanding Common Stock and other than a change in, from or to par value of the Common Stock), or any consolidation or merger to which the Company is a party and for which approval of any stockholders of the Company is required, or any sale or transfer of all or substantially all of the assets of the Company; or (4) of the voluntary or involuntary dissolution, liquidation or winding up of the Company; then the Company shall cause to be filed with the Trustee and any Conversion Agent and, with respect to Registered Securities of such series, to be mailed to each Holder and, with respect to Bearer Securities of such series, published as provided in Subsection (e)(7), at least 10 days prior to the applicable date ----------------- hereinafter specified, a notice setting forth (x) the date on which a record is to be taken for the purpose of any distribution or grant to holders of Common Stock, or, if a record is not to be taken, the date as of which the holders of Common Stock of record to be entitled to such distribution or grant are to be determined or (y) the date on which such reorganization, reclassification, consolidation, merger, sale, transfer, dissolution, liquidation or winding up is expected to become effective, and the date as of which it is expected that holders of Common Stock of record shall be entitled to exchange their shares of Common Stock for securities or other 105 property deliverable upon such reorganization, reclassification, consolidation, merger, sale, transfer, dissolution, liquidation or winding up. Failure to give such notice, or any defect therein, shall not affect the legality or validity of the proceedings described in paragraphs (1) through (4) of this Subsection (j). --- --- -------------- (k) Notwithstanding anything else in this Section 15.01, any funds ------------- which at any time shall have been deposited by the Company or on its behalf with any Paying Agent for the purpose of paying interest on or the redemption or repayment price of any convertible Securities and which shall not be required for such purposes because of the conversion of such Securities, upon delivery to such Paying Agent of evidence satisfactory to it of such conversion, after such conversion, shall be repaid to the Company by such Paying Agent. (1) All Securities surrendered for conversion shall, if applicable, be delivered to the Trustee for cancellation and shall be cancelled and destroyed by the Trustee as provided in Section 3.09. ------------ 106 IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed, and their respective corporate seals to be hereunto affixed and attested, all as of the date first above written. FORTUNE BRANDS, INC. By: _______________________________ Name: Title: Attest: THE CHASE MANHATTAN BANK, Trustee By: ________________________________ Name: Title: Attest: 107 EX-4.E.1 4 FORMS OF DEBT SECURITIES Exhibit 4e1 [Form of Registered Security] [FORM OF FACE OF REGISTERED SECURITY] No.________________ [U.S.$]______ FORTUNE BRANDS, INC. ------------- FORTUNE BRANDS, INC., a corporation duly organized and existing under the laws of the State of Delaware (herein referred to as the "Company"), for value received, hereby promises to pay to ___________________ or registered assigns, the principal sum of _________ Dollars on ______________, and to pay interest, semiannually on _________ and _____________ of each year, on said principal sum at the rate of ___% per annum, from the ________ or ________, as the case may be, next preceding the date of this Security to which interest has been paid, unless the date hereof is a date to which interest has been paid, in which case from the date of this Security, or unless no interest has been paid on the Securities, in which case from _______, until payment of said principal sum has been made or duly provided for. Notwithstanding the foregoing, if the date hereof is after a _____________ or _________, as the case may be, and before the following ______________ or ___________, this Security shall bear interest from such _________ or _________; provided, however, that if the Company shall default in the payment of interest due on such ___________ or _________, then this Security shall bear interest from the next preceding _____________ or _____________to which interest has been paid, or, if no interest has been paid on the Securities from ___________. The interest so payable on any ______________ or __________ will, subject to certain exceptions provided in the Indenture referred to on the reverse hereof, be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on the __________ or __________, as the case may be, next preceding such _____________or _______________. The principal of [(and premium, if any)] and interest on this Security are payable at the office or agency of the Company in the Borough of Manhattan, The City of New York, in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts; provided that interest -------- may be paid, at the option of the Company, by check mailed to the Person entitled thereto at his address on the Security Register. Any interest not punctually paid or duly provided for shall be payable as provided in said Indenture. Reference is made to the further provisions of this Security set forth on the reverse hereof. Such further provisions shall for all purposes have the same effect as though fully set forth at this place. Unless the certificate of authentication hereon has been executed by the Trustee by the manual signature of one of its authorized officers, this Security shall not be entitled to any benefit under said Indenture, or be valid or obligatory for any purpose. IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed under its corporate seal. Dated:_________________ FORTUNE BRANDS, INC. By:_______________________ [SEAL] Attest: _______________________ Secretary [FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION] This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture. , as Trustee By:_______________________ Authorized Officer 2 [FORM OF REVERSE OF REGISTERED SECURITY] FORTUNE BRANDS, INC. -------------- This Security is one of a duly authorized issue of Securities of the Company designated as its ______________ (Securities of such series being hereinafter called the "Securities"), [limited, except as provided in the Indenture referred to below, in aggregate principal amount to $_______,] issued and to be issued under an Indenture dated as of ________, 19__ (hereinafter called the "Indenture") between the Company and ____________________, a New York corporation (hereinafter called the "Trustee", which term includes any successor trustee under the Indenture with respect to the Securities of this series), to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights, limitations of rights, obligations, duties and immunities thereunder of the Company, the Trustee and the Holders of the Securities, and the terms upon which the Securities are, and are to be, authenticated and delivered. No reference herein to the Indenture and no provision of this Security or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of [(and premium, if any)] and interest on this Security at the times, place and rate, and in the coin and currency, herein prescribed. [The Securities are not subject to redemption by the Company prior to maturity.] [The Securities may be redeemed at the option of the Company, as a whole or from time to time in part, on or at any time after ______________ and prior to maturity upon mailing a notice of such redemption not less than 30 nor more than 60 days prior to the Redemption Date to the Holders of Securities, all as provided in the Indenture, at the following Redemption Prices, expressed in percentages of the principal amount, together with accrued interest to the Redemption Date: 3 Year Percentage Year Percentage Beginning of Principal Beginning of Principal Amount Amount ---------- ------------ ---------- ------------ and at ____% of the principal amount thereafter[; provided, however, that no -------- ------- such optional redemption may be effected, directly or indirectly, prior to ____________, from or in anticipation of moneys borrowed by or for the account of the Company at an interest cost (computed in accordance with generally accepted financial practice) of less than ___% per annum].] [The Securities are [also] subject to redemption through the operation of the mandatory and optional sinking funds as provided in the Indenture, on __________, and on each _________ thereafter to and including ___________[, on notice as set forth above,] at a Sinking Fund Redemption price equal to ____% of the principal amount thereof, together with accrued interest to the Redemption Date. Securities acquired or redeemed by the Company in any manner other than by redemption through the mandatory sinking fund may be credited against future mandatory sinking fund payments.] [The Securities are [also] subject to repayment on _________, in whole or in part, in increments of $_____ or integral multiples of $____ in excess of $____, provided that the portion of the principal amount of any Security not being repaid shall be at least $______, at the option of the Holders thereof at a repayment price equal to the principal amount thereof to be repaid, together with interest payable thereon to the repayment date. For this Security to be repaid at the option of the Holder, the Company must receive at the corporate trust office of the Trustee in the Borough of Manhattan, The City of New York, during the period from and including __________ to and including __________ or, if 4 __________ is not a Business Day in The City of New York, the next succeeding Business Day in The City of New York, (i) this Security with the form entitled "Option to Elect Repayment" below duly completed or (ii) a telegram, telex, facsimile transmission or letter from a member of a national securities exchange or the National Association of Securities Dealers, Inc. or a commercial bank or trust company in the United States of America setting forth the name of the Holder of this Security, the principal amount of this Security, the amount of this Security to be repaid, a statement that the option to elect repayment is being made thereby and a guarantee that this Security with the form entitled "Option to Elect Repayment" on the reverse hereof duly completed will be received by the Company no later than five Business Days in The City of New York after the date of such telegram, telex, facsimile transmission or letter, and this Security and such form duly completed are received by the Company by such fifth Business Day. Either form of notice duly received during the period from and including _____________ to and including _______________ shall be irrevocable. All questions as to the validity, eligibility (including time of receipt) and acceptance of any Securities for repayment will be determined by the Company, whose determination shall be final and binding.] [Section 4.03 [(including subparagraph (4) thereof and [clause (A), but not clause (B),] [clause (B), but not clause (A),] of such subparagraph)] thereof)] and Section 10.10 [(including subparagraph (5) thereof)] of the Indenture contain provisions applicable to this Security that provide for defeasance at any time of (a) the entire indebtedness on this Security and (b) certain restrictive covenants and certain Events of Default upon compliance by the Company with certain conditions set forth therein.] As provided in the Indenture and subject to certain limitations therein set forth, this Security may be registered for transfer on the Security Register of the Company, upon surrender of this Security for registration of transfer at the office or agency of the Company in the Borough of Manhattan, The City of New York, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company, the Trustee and the Security Registrar duly executed by, the registered Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Securities, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees. 5 The Securities are issuable only as Registered Securities in denominations of [$1,000 and any integral multiple thereof]. As provided in the Indenture, and subject to certain limitations therein set forth, Securities are exchangeable for a like aggregate principal amount of Registered Securities of different authorized denominations, as requested by the Holder surrendering the same. No service charge will be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. The Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Security is registered as the owner hereof for all purposes, whether or not this Security be overdue, and neither the Company or the Trustee nor any such agent shall be affected by notice to the contrary. If an Event of Default, as defined in the Indenture, with respect to the Securities shall occur, the principal of all the Securities may be declared due and payable in the manner and with the effect provided in the Indenture. The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders of the Securities under the Indenture at any time by the Company with the consent of the Holders of [a majority] [applicable greater percentage] in aggregate principal amount of the then Outstanding Securities of this series and of each other series issued under the Indenture and affected by such amendment or modification. The Indenture also permits the Holders of a majority in aggregate principal amount of the Securities at the time Outstanding, on behalf of the Holders of all the Securities, to waive certain past defaults under the Indenture with respect to the Securities and their consequences. Any such consent or waiver shall be conclusive and binding upon the Holder of this Security and upon all future Holders of this Security and of any Security issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof whether or not a notation of such consent or waiver is made upon this Security. 6 No recourse shall be had for the payment of the principal of [(or premium, if any)] or the interest on this Security, or for any claim based hereon, or otherwise in respect hereof, or based on or in respect of the Indenture or any indenture supplemental thereto, against any incorporator, stockholder, officer or director, as such, past, present or future, of the Company or any successor corporation, either directly or through the Company, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise, all such liability being, by the acceptance hereof and as part of the consideration for the issue hereof, expressly waived and released. Except as otherwise defined herein, all terms used in this Security which are defined in the Indenture shall have the meanings assigned to them in the Indenture. This Security shall be deemed to be a contract made under the laws of the State of New York and for all purposes shall be construed in accordance with and governed by the laws of said State. [FORM OF OPTION TO ELECT REPAYMENT] OPTION TO ELECT REPAYMENT The undersigned hereby irrevocably requests and instructs the Company to repay the within Security (or portion thereof specified below) pursuant to its terms at a price equal to the principal amount thereof, together with interest to the repayment date, to the undersigned, at ____________________________________________________________ ________________________________Tax I.D. No.________________ (Please Print or Typewrite Name, Address and Tax Identification Number of the Undersigned) For this Security to be repaid the Company must receive at the corporate trust office of the Trustee in the Borough of Manhattan, The City of New York or at such additional place or places of which the Company shall from time to time notify the Holder of the within Security during the period from and including _____________________ to and including ___________ or, if _______________ is not a Business Day in The City of New York, the next succeeding Business Day in The City of New York, (i) this Security with this "Option to Elect Repayment" form duly completed or (ii) a telegram, telex, facsimile transmission or letter from a 7 member of a national securities exchange or the National Association of Securities Dealers, Inc. or a commercial bank or trust company in the United States of America setting forth the name of the holder of this Security, the principal amount of this Security, the amount of this Security to be repaid, a statement that the option to elect repayment is being made thereby and a guarantee that this Security with this form entitled "Option to Elect Repayment" duly completed will be received by the Company not later than five Business Days in The City of New York after the date of such telegram, telex, facsimile transmission or letter, and this Security and form duly completed are received by the Company by such fifth Business Day. If less than the entire principal amount of the within Security is to be repaid, specify the portion thereof (which shall be $______ or an integral multiple of $______ in excess of $______) which the Holder elects to have repaid: $_____; and specify the denomination or denominations (which shall be $______ or an integral multiple of $______in excess of $______) of the Security or Securities to be issued to the Holder for the amount of the portion of the within Security not being repaid (in the absence of any such specification, one such Security will be issued for the portion not being repaid): $______. Dated:________________ _______________________________ NOTICE: The signature on this Option to Elect Repayment must correspond with the name as written upon the face of this Security in every particular without alteration or enlargement or any other change whatsoever. 8 Exhibit 4e1 [Form of Bearer Security] [FORM OF FACE OF BEARER SECURITY] ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING THE LIMITATIONS PROVIDED IN SECTIONS 165(j) AND 1287(a) OF THE UNITED STATES INTERNAL REVENUE CODE. No.________________ [U.S.$]______ FORTUNE BRANDS, INC. ___________________ FORTUNE BRANDS, INC., a corporation duly organized and existing under the laws of the State of Delaware (herein referred to as the "Company"), for value received, hereby promises to pay to bearer, the principal sum of _______________ [United States Dollars] on _______________, and to pay interest thereon, from the date hereof, [annually _______________ on in each year] [semiannually on _______________ and _______________ in each year], commencing _______________, 19___ at the rate of ____% per annum, until the principal hereof is paid or made available for payment. Such payments (including premium, if any) shall be made, subject to any laws or regulations applicable thereto and to the right of the Company (limited as provided in the Indenture referred to on the reverse hereof) to rescind the designation of any of the following Paying Agents, at the [main] offices of _______________ in _______________, in _______________, in _______________, _______________ in _______________, and_______________ in _______________, or at such other offices or agencies outside the United States of America, its territories and possessions and areas subject to its jurisdiction and the Commonwealth of Puerto Rico (the "United States") as the Company may designate, at the option of the Holder, by [United States Dollar] check drawn on a bank in [The City of New York] or by transfer of [United States Dollars] to an account maintained by the payee with a bank located outside the United States. Interest on this Security due on or before maturity shall be payable only upon presentation and surrender at such an office or agency of the interest 9 coupons hereto attached (the "Coupons") as they severally mature. No payment of principal [(or premium, if any)] or interest on this Security shall be made at any office or agency of the Company in the United States or by check mailed to any address in the United States or by transfer to an account maintained with a bank located in the United States; provided, however, that payment of principal -------- ------- of [(and premium, if any)] and interest on this Security (including any additional amounts which may be payable as provided below)[, converted for such purpose into United States Dollars as provided in said Indenture,] shall be made at the office of the Company's Paying Agent in the Borough of Manhattan, The City of New York, if (but only if) payment of the full amount of such principal, [(or premium, if any)] interest or additional amounts, as the case may be, [in the currency herein prescribed and as so converted,] in United States Dollars at all offices or agencies outside the United States maintained for the purpose by the Company in accordance with the Indenture is illegal or effectively precluded by exchange controls or other similar restrictions. Reference is made to the further provisions of this Security set forth on the reverse hereof. Such further provisions shall for all purposes have the same effect as though fully set forth at this place. Unless the certificate of authentication hereon has been executed by the trustee by the manual signature of one of its authorized officers, neither this Security, nor 2 any coupon appertaining hereto, shall be entitled to any benefit under said Indenture, or be valid or obligatory for any purpose. IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed under its corporate seal. Dated __________________ FORTUNE BRANDS, INC. By:_________________________ [SEAL] Attest: _____________________ Secretary 3 [FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION] This is one of the Securities of the series designated therein referred to the within-mentioned Indenture. , as Trustee By:_______________________________ Authorized Officer [FORM OF REVERSE OF BEARER SECURITY] FORTUNE BRANDS, INC. ____________________ This Security is one of a duly authorized issue of Securities of the Company designated as its ______________________ (Securities of such series being hereinafter called the "Securities"), [limited, except as provided in the Indenture referred to below, in aggregate principal amount to [U.S.$]______,] issued and to be issued under an Indenture dated as of ________________, 19__ (hereinafter called the "Indenture") between the Company and ______________________, a New York corporation (hereinafter called the "Trustee", which term includes any successor trustee under the Indenture with respect to the Securities of this series), to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights, limitations of rights, obligations, duties and immunities thereunder of the Company, the Trustee and the Holders of the Securities and any Coupons appertaining thereto and of the terms upon which the Securities are, and are to be, authenticated and delivered. No reference herein to the Indenture and no provision of this Security or any Coupon appertaining hereto or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of [(and premium, if any)] and interest on this Security at the times, place and rate, and in the coin and currency, herein prescribed. Except as provided herein, the Securities are not subject to redemption by the Company prior to maturity. 4 The Company will pay to the Holder of any Security or any Coupon appertaining thereto who is a United States Alien (as defined below) such additional amounts ("Additional Amounts") as may be necessary in order that every net payment by the Company or any of its Paying Agents of the principal of [(or premium, if any)] or interest on such Security, after deduction or holding for or on account of any present or future tax, assessment or other governmental charge imposed upon or as a result of such payment by the United States or any political subdivision or taxing authority thereof or therein, will not be less than the amount provided for in such Security or in such Coupon to be then due and payable; provided, however, that the foregoing obligation to pay Additional -------- ------- Amounts shall not apply to: (a) any tax, assessment or other governmental charge which would not have been so imposed but for (i) the existence of any present or former connection between such Holder (or between a fiduciary, settlor, beneficiary or member or a shareholder of, or possessor of a power over, such Holder if such Holder is an estate, trust, partnership or corporation) and the United States, the Commonwealth of Puerto Rico or any territory or possession of the United States or area subject to its jurisdiction, as the case may be, including, without limitation, such Holder (or such fiduciary, settlor, beneficiary, member, shareholder or possessor) being or having been a citizen or resident or treated as a resident thereof or being or having been engaged in a trade or business therein or being or having been present therein or having or having had a permanent establishment therein, (ii) the failure of such Holder to comply with any certification, identification or other reporting requirement under United States income tax laws or regulations (including backup withholding) to establish entitlement to exemption from such tax, assessment or other governmental charge, or (iii) such Holder's present or former status as a domestic personal holding company or a foreign personal holding company with respect to the United States, as a controlled foreign corporation with respect to the United States, as a corporation which accumulates earnings to avoid United States federal income tax, or as a private foundation or other tax exempt organization; 5 (b) any tax, assessment or other governmental charge which would not have been so imposed but for the presentation by the Holder of such Security or Coupon for payment on a date more than 10 days after the date on which such payment became due and payable or the date on which payment thereof is duly provided for, whichever occurs later; (c) any estate, inheritance, gift, sales, transfer, personal property or any similar tax, assessment or governmental charge; (d) any tax, assessment or other governmental charge which is payable otherwise than by withholding from payment of such Security or Coupon; (e) any tax, assessment or other governmental charge imposed by reason of the Holder[, actually or constructively,] owning or having owned 10% or more of the total combined voting power of all classes of stock of the Company entitled to vote; or (f) any combination of items (a), (b), (c), (d) and (e); nor will Additional Amounts be paid with respect to payment of the principal of [(or premium, if any)] or interest on any such Security to a person who is a fiduciary or partnership or other than the sole beneficial owner of such payment to the extent such payment would be required by the laws of the United States (or any political subdivision or taxing authority thereof or therein) to be included in the income for tax purposes of a beneficiary or settlor with respect to such fiduciary or a member of such partnership or a beneficial owner who would not have been entitled to the Additional Amounts had such beneficial owner been a Holder of such Security or Coupon. The term "United States Alien" as used herein means any corporation, partnership, individual or fiduciary that, as to the United States (including the Commonwealth of Puerto Rico, any territory or possession of the United States or other area subject to its jurisdiction), and for United States tax purposes, is (i) a foreign corporation, (ii) a foreign partnership one or more of the members of which is, as to the United States, a foreign corporation, a nonresident alien individual or a nonresident alien fiduciary of a foreign estate or trust, (iii) a nonresident 6 alien individual or (iv) a nonresident alien fiduciary of a foreign estate or trust. The Securities may be redeemed at the option of the Company in whole but not in part at any time, at a redemption price equal to their principal amount, together with interest accrued to the date fixed for redemption, if the Company determines that it will be obligated to pay to the Holder of any Security or Coupon on the next succeeding Interest Payment Date Additional Amounts as set forth herein. Prior to the publication of notice of such redemption, the Company shall deliver to the Trustee (i) a certificate stating that the Company is entitled to effect such redemption and setting forth a statement of facts showing that the conditions precedent to the right of the Company so to redeem have occurred, and (ii) an opinion of independent counsel reasonably acceptable to the Trustee to such effect based on such statement of facts. If the Company shall determine, based upon an opinion of independent legal counsel, that any payment made outside the United States by the Company or any of its Paying Agents in respect of any Security or any Coupon appertaining thereto would, under any present or future laws or regulations of the United States, be subject to any certification, documentation, information or other reporting requirement of any kind, the effect of which requirement is the disclosure to the Company, any Paying Agent or any governmental authority of the nationality, residence or identity of a beneficial owner of such Security or Coupon who is a United States Alien (other than such a requirement (a) which would not be applicable to a payment made either by the Company or by any one of its Paying Agents (i) directly to the beneficial owner or (ii) to a custodian, nominee or other agent of the beneficial owner, or (b) which can be satisfied by such custodian, nominee or other agent certifying to the effect that the beneficial owner is a United States Alien; provided, however, that, in any case -------- ------- referred to in clause (a)(ii) or (b), payment by the custodian, nominee or agent to the beneficial owner is not otherwise subject to any such requirement) the Company shall at its option either (x) redeem the Securities as a whole, at a redemption price equal to the principal amount thereof, together with accrued interest to the date fixed for redemption and any Additional Amounts payable in respect of such principal and accrued interest, or (y) if the conditions of the next succeeding paragraph are satisfied, pay the Additional Amounts specified in such paragraph. The 7 Company shall make such determination as soon as practicable and publish prompt notice thereof (the "Determination Notice"), stating the effective date of such certification, documentation, information or reporting requirement, whether the Company will redeem the Securities or pay the Additional Amounts specified in the next succeeding paragraph, and (if applicable) the last date by which the redemption of the Securities must take place, as provided in the next succeeding sentence. If the Securities are to be redeemed as provided in this paragraph, such redemption shall take place on such date, not later than one year after the publication of the Determination Notice, as the Company shall elect by notice to the Trustee at least 60 days before the date fixed for redemption. Notwithstanding the foregoing, the Company shall not so redeem the Securities if the Company, based upon an opinion of independent legal counsel, shall subsequently determine, not less than 30 days prior to the date fixed for redemption, that subsequent payments on the Securities and any Coupons appertaining thereto would not be subject to any such certification, documentation, information or other reporting requirement, in which case the Company shall publish prompt notice of such subsequent determination and any earlier redemption notice shall be deemed revoked and of no further effect. If and so long as the certification, documentation, information or other reporting requirement referred to in the immediately preceding paragraph would be fully satisfied by payment of a backup withholding tax or similar charge, the Company may elect to pay as Additional Amounts (regardless of clause (a)(ii) of the fourth preceding paragraph) such amounts as may be necessary so that every net payment made outside the United States following the effective date of such requirement by the Company or any of its Paying Agents of principal [(or premium, if any)] or interest in respect of any Security or any Coupon appertaining thereto of which the beneficial owner is a United States Alien (but without any requirement that the nationality, residence or identity of such beneficial owner be disclosed to the Company, any Paying Agent or any governmental authority), after deduction or withholding for or on account of such backup withholding tax or similar charge (other than a backup withholding tax or similar charge which is the result of a requirement referred to in the parenthetical clause of the first sentence of the immediately preceding paragraph), will not be less than the amount provided in such Security or Coupon to be then due and payable. If the Company elects to pay Additional 8 Amounts as provided in this paragraph, the Company shall have the right to redeem the Securities at any time as a whole, subject to the provisions of the last two sentences of the immediately preceding paragraph. If the Company elects to pay Additional Amounts as provided in this paragraph and the condition specified in the first sentence of this paragraph should no longer be satisfied, then the Company shall redeem the Securities pursuant to the provisions of the immediately preceding paragraph. [The Securities may also be redeemed at the option of the Company, as a whole or from time to time in part, on or at any time after ______________________ and prior to maturity upon publication of a notice as set forth below, at the following Redemption Prices, expressed in percentages of the principal amount, together with accrued interest to the Redemption Date: Year Percentage Year Percentage Beginning of Principal Beginning of Principal Amount Amount --------- ------------ --------- ------------ and at ___% of the principal amount thereafter[; provided, however, that no such -------- ------- optional redemption may be effected, directly or indirectly, prior to __________, from or in anticipation of moneys borrowed by or for the account of the Company at an interest cost (computed in accordance with generally accepted financial practice) of less than _____% per annum].] [The Securities are [also] subject to redemption through the operation of the mandatory and optional sinking funds as provided in the Indenture, on __________, and on each__________ thereafter to and including __________, on notice as set forth below, at a Sinking Fund Redemption Price equal to ___% of the principal amount thereof, 9 together with accrued interest to the Redemption Date. Securities acquired or redeemed by the Company in any manner other than by redemption through the mandatory sinking fund may be credited against future mandatory sinking fund payments.] If the conditions giving rise to an option of the Company to redeem the Securities under more than one of the provisions of this Security are satisfied, the Company's determination, in its sole discretion, as to the provision under which a redemption shall be effected shall be conclusive and binding upon all the holders of Securities. Notice of redemption will be given by publication in an Authorized Newspaper in The City of New York and London and, if the Securities are then listed on the Luxembourg Stock Exchange or any other stock exchange located outside the United States and the Luxembourg Stock Exchange or such other stock exchange shall so require, in Luxembourg or in any city required by such other stock exchange (or, if it shall be impracticable in the opinion of the Trustee to make such publication in Luxembourg or such other city, elsewhere in Europe) on a Business Day at least twice, the first such publication to be not earlier than the 60th day, and not later than the 30th day, prior to the Redemption Date. [Section 4.03 [(including subparagraph (4) thereof and [clause (A), but not clause (B),] [clause (B), but not clause (A),] of such subparagraph)] and Section 10.10 [(including subparagraph (5) thereof)] of the Indenture contain provisions for defeasance at any time of (a) the entire indebtedness on this Security and (b) certain restrictive covenants and certain Events of Default upon compliance by the Company with certain conditions set forth therein, which provisions apply to this Security.] The Securities are issuable [only] as Bearer Securities, with Coupons attached, in denominations of [U.S.$1,000] [U.S.$10,000]. As provided in the Indenture, and subject to certain limitations therein set forth, Bearer Securities are exchangeable for a like aggregate principal amount of Bearer Securities of authorized denominations, as requested by the Holder surrendering the same. No service charge will be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. Title to this Security and any Coupon appertaining hereto will pass by delivery. The Company, the Trustee and any agent of the Company or the Trustee may treat the bearer of any Security and any Coupon appertaining thereto as the absolute owner thereof for all purposes, whether or not such Security or Coupon be overdue, and neither the Company or the Trustee nor any such agent shall be affected by notice to the contrary. If an Event of Default, as defined in the Indenture, with respect to the Securities shall occur, the principal of all the Securities may be declared due and payable in the manner and with the effect provided in the Indenture. The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders of the Securities under the Indenture at any time by the Company with the consent of the Holders of [a majority] [applicable greater percentage] in aggregate principal amount of the then Outstanding Securities of this series and of each other series issued under the Indenture and affected by such amendment or modification. The Indenture also permits the Holders of a majority in aggregate principal amount of the Securities at the time Outstanding, on behalf of the Holders of all the Securities, to waive certain past defaults under the Indenture with respect to the Securities and their consequences. Any such consent or waiver shall be conclusive and binding upon the Holder of this Security or any Coupon appertaining hereto and upon all future Holders of this Security or any Coupon appertaining hereto and of any Security issued in exchange herefor or in lieu hereof whether or not a notation of such consent or waiver is made upon this Security. No recourse shall be had for the payment of the principal of [(or premium, if any)] or the interest on this Security, or for any claim based hereon or on any Coupon appertaining hereto, or otherwise in respect hereof or thereto, or based on or in respect of the Indenture or any indenture supplemental thereto, against any incorporator, stockholder, officer or director, as such, past, present or future, of the Company or any successor corporation, either directly or through the Company or any successor 11 corporation, whether by virtue of any constitutions statute or rule of law, or by the enforcement of any assessment or penalty or otherwise, all such liability being, by the acceptance hereof and as part of the consideration for the issue hereof, expressly waived and released. Except as otherwise defined in this Security or any Coupon appertaining hereto, all terms used herein or therein which are defined in the Indenture shall have the meanings assigned to them in the Indenture. This Security and the Coupons appertaining hereto shall each be deemed to be contracts made under the laws of the State of New York and for all purposes shall be construed in accordance with and governed by the laws of said State. [FORM OF FACE OF COUPON] ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT To LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING THE LIMITATIONS PROVIDED IN SECTIONS 165(j) AND 1287(a) OF THE UNITED STATES INTERNAL REVENUE CODE. [U.S.$_______] Due ________, 19__ FORTUNE BRANDS, INC. ____________________ Unless the Security to which this Coupon appertains shall have been called for previous redemption and payment thereof duly provided for, on the date set forth hereon, Fortune Brands, Inc., a Delaware corporation (the "Company"), will pay to the bearer, upon surrender hereof, the amount shown hereon (together with any additional amounts in respect thereof which the Company may be required to pay according to the terms of said Security and the Indenture referred to therein), subject to any applicable laws and regulations, at the option of the bearer either (a) at the office of the Paying Agent in London set forth on the reverse hereof, or (b) subject to the limitations set forth in said Security and Indenture and as prescribed thereon and therein, at the offices of the other Paying Agents set out on the reverse hereof or at such other places outside the 12 United States of America, its territories and possessions and areas subject to its jurisdiction and the Commonwealth of Puerto Rico (the "United States") as the Company may determine from time to time by a [United States Dollar] check drawn on a bank located in [The City of New York] or, at the option of the bearer, by transfer to a [United States Dollar] account maintained by the bearer with a bank located outside the United States, being interest then payable on said Security. FORTUNE BRANDS, INC. By:_________________________ [FORM OF REVERSE OF COUPON] PAYING AGENTS 13 Exhibit 4e1 [Form of Zero Coupon Registered Security] [FORM OF FACE OF ZERO COUPON REGISTERED SECURITY] UNDER THE UNITED STATES INTERNAL REVENUE CODE, THIS SECURITY HAS BEEN ISSUED WITH ORIGINAL ISSUE DISCOUNT OF ______ PER FACE AMOUNT AND THE YIELD TO MATURITY IS ____% [,DETERMINED UNDER THE EXACT METHOD]. THE ISSUE DATE OF THIS SECURITY IS ______[,AND THE AMOUNT OF ORIGINAL ISSUE DISCOUNT ATTRIBUTABLE TO THE ______ PERIOD FROM THE ISSUE DATE WOULD BE ______ PER ______ FACE AMOUNT]. No.________________ [U.S.$]______ FORTUNE BRANDS, INC. ____________________ FORTUNE BRANDS, INC., a corporation duly organized and existing under the laws of the State of Delaware (herein referred to as the "Company"), for value received, hereby promises to pay to ____________________ or registered assigns, the principal sum of ____________ Dollars on _________________. The principal on this Security shall not bear interest, except in the case of default in payment of principal upon acceleration, redemption or maturity, and in such case the amount in default shall bear interest at the rate of _____% per annum (to the extent enforceable under applicable law) from the date of default in payment to the date such payment has been made or duly provided for, at said office or agency and in like coin or currency. The principal of [(and premium, if any)] on this Security is [are] payable at the office or agency of the Company in the Borough of Manhattan, The City of New York, in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts. Reference is made to the further provisions of this Security set forth on the reverse hereof. Such further provisions shall for all purposes have the same effect as though fully set forth at this place. Unless the certificate of authentication hereon has been executed by the Trustee by the manual signature of one of its authorized officers, this Security shall not be entitled to any benefit under said Indenture, or be valid or obligatory for any purpose. IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed under its corporate seal. Dated__________________ FORTUNE BRANDS, INC. By:________________________ [SEAL] Attest: _____________________ Secretary [FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION] This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture. , as Trustee By:_________________________ Authorized Officer 2 [FORM OF REVERSE OF ZERO COUPON REGISTERED SECURITY] FORTUNE BRANDS, INC. ____________________ This Security is one of a duly authorized issue of Securities of the Company designated as its ____________ (Securities of such series being hereinafter called the "Securities"), [limited, except as provided in the Indenture referred to below, in aggregate principal amount to $_________,] issued and to be issued under an Indenture dated as of _________________, 19___ (hereinafter called the "Indenture") between the Company and _________________, a New York corporation (hereinafter called the "Trustee", which term includes any successor trustee under the Indenture with respect to the Securities of this series), to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights, limitations of rights, obligations, duties and immunities thereunder of the Company, the Trustee and the Holders of the Securities, and the terms upon which the Securities are, and are to be, authenticated and delivered. No reference herein to the Indenture and no provision of this Security or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of [(and premium, if any)] and interest (if any) on this Security at the times, place and rate, and in the coin and currency, herein prescribed. [The Securities are not subject to redemption by the Company prior to maturity.] [The Securities may be redeemed at the option of the Company as a whole, or from time to time in part, on or at any time after _________________ and prior to maturity upon mailing a notice of such redemption not less than 30 nor more than 60 days prior to the Redemption Date to the Holders of Securities, all as provided in the Indenture, at the following Redemption Prices, expressed in percentages of the principal amount, together with accrued interest to the Redemption Date: 3 Year Percentage Year Percentage Beginning of Principal Beginning of Principal Amount Amount --------- ------------ ---------- ------------ and at _____% of the principal amount thereafter[; provided, however, that no -------- ------- such optional redemption may be effected, directly or indirectly, prior to _____________, from or in anticipation of moneys borrowed by or for the account of the Company at an interest cost (computed in accordance with generally accepted financial practice) of less than _____% per annum].] [The Securities are [also] subject to redemption through the operation of the mandatory and optional sinking funds as provided in the Indenture, on ___________________, and on each ___________________ thereafter to and including ____________[,on notice as set forth above,] at a Sinking Fund Redemption Price equal to ____% of the principal amount thereof. Securities acquired or redeemed by the Company in any manner other than by redemption through the mandatory sinking fund may be credited against future mandatory sinking fund payments.] [The Securities are [also] subject to repayment on ____________, in whole or in part, in increments of $______or integral multiples of $______ in excess of $_____, provided that the portion of the principal amount of any Security not being repaid shall be at least $_____, at the option of the Holders thereof at a repayment price equal to ____% of the principal amount thereof. For this Security to be repaid at the option of the Holder, the Company must receive at the corporate trust office of the Trustee in the Borough of Manhattan, The City of New York, during the period from and including ______________ to and including ______________ or, if ______________ is not a Business Day in The City of New York, the next succeeding Business Day in 4 The City of New York, (i) this Security with the form entitled "Option to Elect Repayment" below duly completed or (ii) a telegram, telex, facsimile transmission or letter from a member of a national securities exchange or the National Association of Securities Dealers, Inc. or a commercial bank or trust company in the United States of America setting forth the name of the Holder of this Security, the principal amount of this Security, the amount of this Security to be repaid, a statement that the option to elect repayment is being made thereby and a guarantee that this Security with the form entitled "Option to Elect Repayment" on the reverse hereof duly completed will be received by the Company no later than five Business Days in The City of New York after the date of such telegram, telex, facsimile transmission or letter, and this Security and such form duly completed are received by the Company by such fifth Business Day. Either form of notice duly received during the period from and including _________ to and including _______________ shall be irrevocable. All questions as to the validity, eligibility (including time of receipt) and acceptance of any Securities for repayment will be determined by the Company, whose determination shall be final and binding.] [Section 4.03 [(including subparagraph (4) thereof and [clause (A), but not clause (B),] [clause (B), but not clause (A),] of such subparagraph)] and Section 10.10 [(including subparagraph (5) thereof)] of the Indenture contain provisions applicable to this Security that provide for defeasance at any time of (a) the entire indebtedness on this Security and (b) certain restrictive covenants and certain Events of Default upon compliance by the Company with certain conditions set forth therein.] As provided in the Indenture and subject to certain limitations therein set forth, this Security may be registered for transfer on the Security Register of the Company, upon surrender of this Security for registration of transfer at the office or agency of the Company in the Borough of Manhattan, The City of New York, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company, the Trustee and the Security Registrar duly executed by, the registered Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Securities, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees. 5 The Securities are issuable only as Registered Securities in denominations of [$1,000 and any integral multiple thereof]. As provided in the Indenture, and subject to certain limitations therein set forth, Securities are exchangeable for a like aggregate principal amount of Registered Securities of different authorized denominations, as requested by the Holder surrendering the same. No service charge will be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. The Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Security is registered as the owner hereof for all purposes, whether or not this Security be overdue, and neither the Company or the Trustee nor any such agent shall be affected by notice to the contrary. If an Event of Default, as defined in the Indenture, with respect to the Securities shall occur, that portion of the principal amount equal to the initial public offering price of this Security [plus accrued amortization of the original issue discount calculated using the ["interest"] method (computed in accordance with generally accepted accounting principles in effect on the date of the Indenture) from _________________ to the date of acceleration] may be declared, and upon such declaration shall become due and payable, in the manner with the effect and subject to the conditions provided in the Indenture. The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders of the Securities under the Indenture at any time by the Company with the consent of the Holders of [a majority] [applicable greater percentage] in aggregate principal amount of the then Outstanding Securities of this series and of each other series issued under the Indenture and affected by such amendment or modification. The Indenture also permits the Holders of a majority in aggregate principal amount of the Securities at the time Outstanding, on behalf of the Holders of all the Securities, to waive certain past defaults under the Indenture with respect to the Securities and their consequences. Any such consent or waiver shall be conclusive and binding upon the Holder of this Security and upon all future Holders of this 6 Security and of any Security issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof whether or not a notation of such consent or waiver is made upon this Security. No recourse shall be had for the payment of the principal of [(or premium, if any)] or the interest on this Security, or for any claim based hereon, or otherwise in respect hereof, or based on or in respect of the Indenture or any indenture supplemental thereto, against any incorporator, stockholder, officer or director, as such, past, present or future, of the Company or any successor corporation, either directly or through the Company, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise, all such liability being, by the acceptance hereof and no part of the consideration for the issue hereof, expressly waived and released. Except as otherwise defined herein, all terms used in this Security which are defined in the Indenture shall have the meanings assigned to them in the Indenture. This Security shall be deemed to be a contract made under the laws of the State of New York and for all purposes shall be construed in accordance with and governed by the laws of said State. [FORM OF OPTION TO ELECT REPAYMENT] OPTION TO ELECT REPAYMENT The undersigned hereby irrevocably requests and instructs the Company to repay the within Security (or portion thereof specified below) pursuant to its terms at a price equal to _____% of the principal amount thereof to the undersigned, at ________________________________________________________________________________ ________________________________Tax I.D. No.____________________________________ (Please Print or Typewrite Name, Address and Tax Identification Number of the Undersigned) For this Security to be repaid the Company must receive at the corporate trust office of the Trustee in the Borough of Manhattan, The City of New York, or at such additional place or places of which the Company shall from time to time notify the Holder of the within Security during the period from and including ____________ to and including 7 ___________ or, if ___________ is not a Business Day in The City of New York, the next succeeding Business Day in The City of New York, (i) this Security with this "Option to Elect Repayment" form duly completed or (ii) a telegram, telex, facsimile transmission or letter from a member of a national securities exchange or the National Association of Securities Dealers, Inc. or a commercial bank or trust company in the United States of America setting forth the name of the holder of this Security, the principal amount of this Security, the amount of this Security to be repaid, a statement that the option to elect repayment is being made thereby and a guarantee that this Security with this form entitled "Option to Elect Repayment" duly completed will be received by the Company not later than five Business Days in The City of New York after the date of such telegram, telex, facsimile transmission or letter, and this Security and form duly completed are received by the Company by such fifth Business Day. If less than the entire principal amount of the within Security is to be repaid, specify the portion thereof (which shall be $______ or an integral multiple of $______ in excess of $______) which the Holder elects to have repaid: $______; and specify the denomination or denominations (which shall be $______ or an integral multiple of $______ in excess of $______) of the Security or Securities to be issued to the Holder for the amount of the portion of the within Security not being repaid (in the absence of any such specification, one such Security will be issued for the portion not being repaid): $______. Dated:________________ _________________________________________________ NOTICE: The signature on this Option to Elect Repayment must correspond with the name as written upon the face of this Security in every particular without alteration or enlargement or any other change whatsoever. 8 Exhibit 4e1 [Form of Original Issue Discount Bearer Security] [FORM OF FACE OF ORIGINAL ISSUE DISCOUNT BEARER SECURITY] ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING THE LIMITATIONS PROVIDED IN SECTIONS 165(j) AND 1287(a) OF THE UNITED STATES INTERNAL REVENUE CODE. UNDER THE UNITED STATES INTERNAL REVENUE CODE, THIS SECURITY HAS BEEN ISSUED WITH ORIGINAL ISSUE DISCOUNT OF _____ PER _____ FACE AMOUNT AND THE YIELD TO MATURITY IS _____%[, DETERMINED UNDER THE EXACT METHOD]. THE ISSUE DATE OF THIS SECURITY IS ____________[, AND THE AMOUNT OF ORIGINAL ISSUE DISCOUNT ATTRIBUTABLE TO THE ____________ PERIOD FROM THE ISSUE DATE WOULD BE _____ PER _____ FACE AMOUNT]. No.________________ [U.S.$]______ FORTUNE BRANDS, INC. _____________________ FORTUNE BRANDS, INC., a corporation duly organized and existing under the laws of the State of Delaware (herein referred to as the "Company"), for value received, hereby promises to pay to bearer, the principal sum of ____________________ [United States Dollars] on _______________, and to pay interest thereon, from the date hereof, [annually on _______________ in each year] [semiannually on _______________ and _______________ in each year], commencing _______________, 19___, at the rate of _____% per annum, until the principal hereof is paid or made available for payment. Such payments (including premium, if any) shall be made, subject to any laws or regulations applicable thereto and to the right of the Company (limited as provided in the Indenture referred to on the reverse hereof) to rescind the designation of any of the following Paying Agents, at the [main] offices of _____________ in _____________, _____________ in _____________, _____________ in _____________, _____________ in _____________ and _____________ in _____________, or at such other offices or agencies outside the United States of America, its territories and possessions and areas subject to its jurisdiction and the Commonwealth of Puerto Rico (the "United States") as the Company may designate, at the option of the Holder, by [United States Dollar] check drawn on a bank in [The City of New York] or by transfer of [United States Dollars] to an account maintained by the payee with a bank located outside the United States. Interest on this Security due on or before maturity shall be payable only upon presentation and surrender at such an office or agency of the interest coupons hereto attached (the "Coupons") as they severally mature. No payment of principal [(or premium, if any)] or interest on this Security shall be made at any office or agency of the Company in the United States or by check mailed to any address in the United States or by transfer to an account maintained with a bank located in the United States; provided, however, that -------- ------- payment of principal of [(and premium, if any)] and interest on this Security (including any additional amounts which may be payable as provided below)[,converted for such purpose into United States Dollars as provided in said Indenture,] shall be made at the office of the Company's Paying Agent in the Borough of Manhattan, The City of New York, if (but only if) payment of the full amount of such principal, [(or premium, if any)] interest or additional amounts, as the case may be, [in the currency herein prescribed and, as so converted,] in United States Dollars at all offices or agencies outside the United States maintained for the purpose by the Company in accordance with the Indenture is illegal or effectively precluded by exchange controls or other similar restrictions. Reference is made to the further provisions of this Security set forth on the reverse hereof. Such further provisions shall for all purposes have the same effect as though fully set forth at this place. Unless the certificate of authentication hereon has been executed by the Trustee by the manual signature of one of its authorized officers, neither this Security, nor any Coupon appertaining hereto, shall be entitled to any benefit under said Indenture, or be valid or obligatory for any purpose. 2 IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed under its corporate seal. Dated:_________________ FORTUNE BRANDS, INC. By _______________________ [SEAL] Attest: _______________________ Secretary [FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION] This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture. , as Trustee By:___________________________ Authorized Officer 3 [FORM OF REVERSE OF ORIGINAL ISSUE DISCOUNT BEARER SECURITY] FORTUNE BRANDS, INC. ______________________ This Security is one of a duly authorized issue of Securities of the Company designated as its ____________ (Securities of such series being hereinafter called the "Securities"), [limited, except as provided in the Indenture referred to below, in aggregate principal amount to [U.S.$]____________,] issued and to be issued under an Indenture dated as of _______, 19___ (hereinafter called the "Indenture") between the Company and ______________________, a New York corporation (hereinafter called the "Trustee", which term includes any successor trustee under the Indenture with respect to the Securities of this series), to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights, limitations of rights, obligations, duties and immunities thereunder of the Company, the Trustee and the Holders of the Securities and any Coupons appertaining thereto and of the terms upon which the Securities are, and are to be, authenticated and delivered. No reference herein to the Indenture and no provision of this Security or any Coupon appertaining hereto or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of [(and premium, if any)] and interest on this Security at the times, place and rate, and in the coin and currency, herein prescribed. Except as provided herein, the Securities are not subject to redemption by the Company prior to maturity. The Company will pay to the Holder of any Security or any Coupon appertaining thereto who is a United States Alien (as defined below) such additional amounts ("Additional Amounts") as may be necessary in order that every net payment by the Company or any of its Paying Agents of the principal of [(or premium, if any)] or interest on such Security, after deduction or withholding for or on account of any present or future tax, assessment or other governmental charge imposed upon or as a result of such 4 payment by the United States or any political subdivision or taxing authority thereof or therein, will not be less than the amount provided for in such Security or in such Coupon to be then due and payable; provided, however, that -------- ------- the foregoing obligation to pay Additional Amounts shall not apply to: (a) any tax, assessment or other governmental charge which would not have been so imposed but for (i) the existence of any present or former connection between such Holder (or between a fiduciary, settlor, beneficiary or member or a shareholder of, or possessor of a power over, such Holder if such Holder is an estate, trust, partnership or corporation) and the United States, the Commonwealth of Puerto Rico or any territory or possession of the United States or area subject to its jurisdiction, as the case may be, including, without limitation, such Holder (or such fiduciary, settlor, beneficiary, member, shareholder or possessor) being or having been a citizen or resident or treated as a resident thereof or being or having been engaged in a trade or business therein or being or having been present therein or having or having had a permanent establishment therein, (ii) the failure of such Holder to comply with any certification, identification or other reporting requirement under United States income tax laws or regulations (including backup withholding) to establish entitlement to exemption from such tax, assessment or other governmental charge, or (iii) such Holder's present or former status as a domestic personal holding company or a foreign personal holding company with respect to the United States, as a controlled foreign corporation with respect to the United States, as a corporation which accumulates earnings to avoid United States federal income tax, or as a private foundation or other tax exempt organization; (b) any tax, assessment or other governmental charge which would not have been so imposed but for the presentation by the Holder of such Security or Coupon for payment on a date more than 10 days after the date on which such payment became due and payable or the date on which payment thereof is duly provided for, whichever occurs later; 5 (c) any estate, inheritance, gift, sales, transfer, personal property or any similar tax, assessment or governmental charge; (d) any tax, assessment or other governmental charge which is payable otherwise than by withholding from payment of such Security or Coupon; (e) any tax, assessment or other governmental charge imposed by reason of the Holder, actually or constructively, owning or having owned 10% or more of the total combined voting power of all classes of stock of the Company entitled to vote; or (f) any combination of items (a), (b), (c), (d) and (e); nor will Additional Amounts be paid with respect to payment of the principal of [(or premium, if any)] or interest on any such Security to a person who is a fiduciary or partnership or other than the sole beneficial owner of such payment to the extent such payment would be required by the laws of the United States (or any political subdivision or taxing authority thereof or therein) to be included in the income for tax purposes of a beneficiary or settlor with respect to such fiduciary or a member of such partnership or a beneficial owner who would not have been entitled to the Additional Amounts had such beneficial owner been a Holder of such Security or Coupon. The term "United States Alien" as used herein means any corporation, partnership, individual or fiduciary that, as to the United States (including the Commonwealth of Puerto Rico, any territory or possession of the United States or other area subject to its jurisdiction), and for United States tax purposes, is (i) a foreign corporation, (ii) a foreign partnership one or more of the members of which is, as to the United States, a foreign corporation, a nonresident alien individual or a nonresident alien fiduciary of a foreign estate or trust, (iii) a nonresident alien individual or (iv) a nonresident alien fiduciary of a foreign estate or trust. The Securities may be redeemed at the option of the Company in whole but not in part at any time, at a redemption price equal to their principal amount, together with interest accrued to the date fixed for redemption, if the Company determines that it will be obligated to pay to 6 the Holder of any Security or Coupon on the next succeeding Interest Payment Date Additional Amounts as set forth herein. Prior to the publication of notice of such redemption, the Company shall deliver to the Trustee (i) a certificate stating that the Company is entitled to effect such redemption and setting forth a statement of facts showing that the conditions precedent to the right of the Company so to redeem have occurred, and (ii) an opinion of independent counsel reasonably acceptable to the Trustee to such effect based on such statement of facts. If the Company shall determine, based upon an opinion of independent legal counsel, that any payment made outside the United States by the Company or any of its Paying Agents in respect of any Security or any Coupon appertaining thereto would, under any present or future laws or regulations of the United States, be subject to any certification, documentation, information or other reporting requirement of any kind, the effect of which requirement is the disclosure to the Company, any Paying Agent or any governmental authority of the nationality, residence or identity of a beneficial owner of such Security or Coupon who is a United States Alien (other than such a requirement (a) which would not be applicable to a payment made either by the Company or by any one of its Paying Agents (i) directly to the beneficial owner or (ii) to a custodian, nominee or other agent of the beneficial owner, or (b) which can be satisfied by such custodian, nominee or other agent certifying to the effect that the beneficial owner is a United States Alien; provided, however, that, in any case -------- ------- referred to in clauses (a)(ii) or (b), payment by the custodian, nominee or agent to the beneficial owner is not otherwise subject to any such requirement) the Company shall at its option either (x) redeem the Securities as a whole, at a redemption price equal to the principal amount thereof, together with accrued interest to the date fixed for redemption and any Additional Amounts payable in respect of such principal and accrued interest, or (y) if the conditions of the next succeeding paragraph are satisfied, pay the Additional Amounts specified in such paragraph. The Company shall make such determination as soon as practicable and publish prompt notice thereof (the "Determination Notice"), stating the effective date of such certification, documentation, information or reporting requirement, whether the Company will redeem the Securities or pay the Additional Amounts specified in the next succeeding paragraph, and (if applicable) the last date by which the redemption of the Securities must take place, as provided in the next succeeding sentence. If the Securities are to be redeemed as provided in this paragraph, such redemption shall take place on such date, not later than one year after the publication of the Determination Notice, as the Company shall elect by notice to the Trustee at least 60 days before the date fixed for redemption. Notwithstanding the foregoing, the Company shall not so redeem the Securities if the Company, based upon an opinion of independent legal counsel, shall subsequently determine, not less than 30 days prior to the date fixed for redemption, that subsequent payments on the Securities and any Coupons appertaining thereto would not be subject to any such certification, documentation, information or other reporting requirement, in which case the Company shall publish prompt notice of such subsequent determination and any earlier redemption notice shall be deemed revoked and of no further effect. If and so long as the certification, documentation, information or other reporting requirement referred to in the immediately preceding paragraph would be fully satisfied by payment of a backup withholding tax or similar charge, the Company may elect to pay as Additional Amounts (regardless of clause (a)(ii) of the fourth preceding paragraph) such amounts as may be necessary so that every net payment made outside the United States following the effective date of such requirement by the Company or any of its Paying Agents of principal [(or premium, if any)] or interest in respect of any Security or any Coupon appertaining thereto of which the beneficial owner is a United States Alien (but without any requirement that the nationality, residence or identity of such beneficial owner be disclosed to the Company, any Paying Agent or any governmental authority), after deduction or withholding for or on account of such backup withholding tax or similar charge (other than a backup withholding tax or similar charge which is the result of a requirement referred to in the parenthetical clause of the first sentence of the immediately preceding paragraph), will not be less than the amount provided in such Security or Coupon to be then due and payable. If the Company elects to pay Additional Amounts as provided in this paragraph, the Company shall have the right to redeem the Securities at any time as a whole, subject to the provisions of the last two sentences of the immediately preceding paragraph. If the Company elects to pay Additional Amounts as provided in this paragraph and the condition specified in the first sentence of this paragraph should no longer be satisfied, then the 8 Company shall redeem the Securities pursuant to the provision of the immediately preceding paragraph. [The Securities may also be redeemed at the option of the Company, as a whole or from time to time in part, on or at any time after ______________ and prior to maturity upon publication of a notice as set forth below, at the following Redemption Prices, expressed in percentages of the principal amount, together with accrued interest to the Redemption Date: Year Percentage Year Percentage Beginning of Principal Beginning of Principal Amount Amount ----------- --------------- ------------ ---------------- and at _____% of the principal amount thereafter[; provided, however, that no -------- ------- such optional redemption may be effected, directly or indirectly, prior to _________, from or in anticipation of moneys borrowed by or for the account of the Company at an interest cost (computed in accordance with generally accepted financial practice) of less than _____% per annum].] [The Securities are [also] subject to redemption through the operation of the mandatory and optional sinking funds as provided in the Indenture, on ____________, and on each ____________, thereafter to and including ____________, on notice as set forth below, at a Sinking Fund Redemption Price equal to _____% of the principal amount thereof, together with accrued interest to the Redemption Date. Securities acquired or redeemed by the Company in any manner other than by redemption through the mandatory sinking fund may be credited against future mandatory sinking fund payments.] 9 If the conditions giving rise to an option of the Company to redeem the Securities under more than one of the provisions of this Security are satisfied, the Company's determination, in its sole discretion, as to the provision under which a redemption shall be effected shall be conclusive and binding upon all the holders of Securities. Notice of redemption will be given by publication in an Authorized Newspaper in The City of New York and London and, if the Securities are then listed on the Luxembourg Stock Exchange or any other stock exchange located outside the United States and the Luxembourg Stock Exchange or such other stock exchange shall so require, in Luxembourg or in any city required by such other stock exchange (or, if it shall be impracticable in the opinion of the Trustee to make such publication in Luxembourg or such other city, elsewhere in Europe) on a Business Day at least twice, the first such publication to be not earlier than the 60th day, and not later than the 30th day, prior to the Redemption Date. [Section 4.03 [(including subparagraph (4) thereof and [clause (A), but not clause (B),] [clause (B), but not clause (A),] of such subparagraph)] and Section 10.10 [(including subparagraph (5) thereof)] of the Indenture contain provisions for defeasance at any time of (a) the entire indebtedness on this Security and (b) certain restrictive covenants and certain Events of Default upon compliance by the Company with certain conditions set forth therein, which provisions apply to this Security.] The Securities are issuable [only] as Bearer Securities, with Coupons attached, in denominations of (U.S.$1,000] [U.S.$10,000]. As provided in the Indenture, and subject to certain limitations therein set forth, Bearer Securities are exchangeable for a like aggregate principal amount of Bearer Securities of authorized denominations, as requested by the Holder surrendering the same. No service charge will be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. Title to this Security and any Coupon appertaining hereto will pass by delivery. The Company, the Trustee and any agent of the Company or the Trustee may treat the bearer of any Security and any Coupon appertaining thereto as the 10 absolute owner thereof for all purposes, whether or not such Security or Coupon be overdue, and neither the Company or the Trustee nor any such agent shall be affected by notice to the contrary. If an Event of Default, as defined in the Indenture, with respect to the Securities shall occur, (i) that portion of the principal amount equal to the initial public offering price of this Security plus [accrued amortization of the original issue discount calculated using the ["interest"] method (computed in accordance with generally accepted accounting principles in effect on the date of the Indenture) from ____________, ____________ to the date of acceleration and (ii) any accrued interest to the date of acceleration] may be declared, and upon such declaration shall become, due and payable, in the manner, with the effect and subject to the conditions provided in the Indenture. The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders of the Securities under the Indenture at any time by the Company with the consent of the Holders of [a majority] [applicable greater percentage] in aggregate principal amount of the then Outstanding Securities of this series and of each other series issued under the Indenture and affected by such amendment or modification. The Indenture also permits the Holders of a majority in aggregate principal amount of the Securities at the time Outstanding, on behalf of the Holders of all the Securities, to waive certain past defaults under the Indenture with respect to the Securities and their consequences. Any such consent or waiver shall be conclusive and binding upon the Holder of this Security or any Coupon appertaining hereto and upon all future Holders of this Security or any Coupon appertaining hereto and of any Security issued in exchange herefor or in lieu hereof whether or not a notation of such consent or waiver is made upon this Security. No recourse shall be had for the payment of the principal of [(or premium, if any)] or the interest on this Security, or for any claim based hereon or on any Coupon appertaining hereto, or otherwise in respect hereof or thereto, or based on or in respect of the Indenture or any indenture supplemental thereto, against any incorporator, stockholder, officer or director, as such, past, present or future, of the Company or any successor corporation, either 11 directly or through the Company or any successor corporation, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise, all such liability being, by the acceptance hereof and as part of the consideration for the issue hereof, expressly waived and released. Except as otherwise defined in this Security or any Coupon appertaining hereto, all terms used herein or therein which are defined in the Indenture shall have the meanings assigned to them in the Indenture. This Security and the Coupons appertaining hereto shall each be deemed to be contracts made under the laws of the State of New York and for all purposes shall be construed in accordance with and governed by the laws of said State. 12 [FORM OF FACE OF COUPON] ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING THE LIMITATIONS PROVIDED IN SECTIONS 165(j) AND 1287(a) OF THE UNITED STATES INTERNAL REVENUE CODE. [U.S.$_______] Due ________,19__ FORTUNE BRANDS, INC. Unless the Security to which this Coupon appertains shall have been called for previous redemption and payment thereof duly provided for, on the date set forth hereon, Fortune Brands, Inc., a Delaware corporation (the "Company"), will pay to the bearer, upon surrender hereof, the amount shown hereon (together with any additional amounts in respect thereof which the company may be required to pay according to the terms of said Security and the Indenture referred to therein), subject to any applicable laws and regulations, at the option of the bearer either (a) at the office of the Paying Agent in London set forth on the reverse hereof, or (b) subject to the limitations set forth in said Security and Indenture and as prescribed thereon and therein, at the offices of the other Paying Agents set out on the reverse hereof or at such other places outside the United States of America, its territories and possessions and areas subject to its jurisdiction and the Commonwealth of Puerto Rico (the "United States") as the Company may determine from time to time, by a [United States Dollar] check drawn on a bank located in [The City of New York] or, at the option of the bearer, by transfer to a [United States 13 Dollar] account maintained by the bearer with a bank located outside the United States, being interest then payable on said Security. FORTUNE BRANDS, INC. By:_________________________ [FORM OF REVERSE OF COUPON] PAYING AGENTS 14 Exhibit 4e1 [Form of Original Issue Discount Bearer Security] [FORM OF FACE OF ORIGINAL ISSUE DISCOUNT REGISTERED SECURITY] UNDER THE UNITED STATES INTERNAL REVENUE CODE, THIS SECURITY HAS BEEN ISSUED WITH ORIGINAL ISSUE DISCOUNT OF _____ PER _____ FACE AMOUNT AND THE YIELD TO MATURITY IS _____% [,DETERMINED UNDER THE EXACT METHOD]. THE ISSUE DATE OF THIS SECURITY IS ___________ [, AND THE AMOUNT OF ORIGINAL ISSUE DISCOUNT ATTRIBUTABLE TO THE ___________ PERIOD FROM THE ISSUE DATE WOULD BE ___________ PER _________ FACE AMOUNT]. No.________________ $______ FORTUNE BRANDS, INC. _______________________ FORTUNE BRANDS, INC., a corporation duly organized and existing under the laws of the State of Delaware (herein referred to as the "Company"), for value received, hereby promises to pay to __________________ or registered assigns, the principal sum of ______________ Dollars on ___________, and to pay interest, semiannually on ___________ and ___________ of each year, on said principal sum at the rate of _____% per annum, from the___________ or ___________, as the case may be, next preceding the date of this Security to which interest has been paid, unless the date hereof is a date to which interest has been paid, in which case from the date of this Security, or unless no interest has been paid on the Securities, in which case from ___________, until payment of said principal sum has been made or duly provided for. Notwithstanding the foregoing, if the date hereof is after a ___________ or ___________, as the case may be, and before the following ___________ or ___________, this Security shall bear interest from such ___________ or ___________; provided, however, that if the Company shall default in the payment -------- ------- of interest due on such ___________ or ___________, then this Security shall bear interest from the next preceding ___________ or ___________ to which interest has been paid, or, if no interest has been paid on the Securities, from ___________. The interest so payable on any ___________ or ___________ will, subject to certain exception provided in the Indenture referred to on the reverse hereof, be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on the ___________ or ___________, as the case may be, next preceding such ___________ or ___________. The principal of [(and premium, if any)] and interest on this Security are payable at the office or agency of the Company in the Borough of Manhattan, The City of New York, in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts; provided that interest may be paid, at the option of the Company, by check - -------- mailed to the Person entitled thereto at his address appearing on the Security Register. Any interest not punctually paid or duly provided for shall be payable as provided in said Indenture. Reference is made to the further provisions of this Security set forth on the reverse hereof. Such further provisions shall for all purposes have the same effect as though fully set forth at this place. Unless the certificate of authentication hereon has been executed by the Trustee by the manual signature of one of its authorized officers, this Security shall not be entitled to any benefit under said Indenture, or be valid or obligatory for any purpose. IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed under its corporate seal. Dated:_________________ FORTUNE BRANDS, INC. By _______________________ [SEAL] Attest: _______________________ Secretary 2 [FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION] This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture. , as Trustee By ____________________ Authorized Officer [FORM OF REVERSE OF ORIGINAL ISSUE DISCOUNT REGISTERED SECURITY] FORTUNE BRANDS, INC. ____________________ This Security is one of a duly authorized issue of Securities of the Company designated as its _______________ (Securities of such series being hereinafter called the "Securities"), [limited, except as provided in the Indenture referred to below, in aggregate principal amount to $______,] issued and to be issued under an Indenture dated as of July ____, 19___ (hereinafter called the "Indenture") between the Company and ___________________________________, a New York corporation (hereinafter called the "Trustee", which term includes any successor trustee under the Indenture with respect to the Securities of this series), to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights, limitations of rights, obligations, duties and immunities thereunder of the Company, the Trustee and the Holders of the Securities, and the terms upon which the Securities are, and are to be, authenticated and delivered. No reference herein to the Indenture and no provision of this Security or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of [(and premium, if any)] and interest on this Security at the times, place and rate, and in the coin and currency, herein prescribed. [The Securities are not subject to redemption by the Company prior to maturity.] [The Securities may be redeemed at the option of the Company, as a whole or from time to time in part, on or 3 at any time after ___________ and prior to maturity upon mailing a notice of such redemption not less than 30 nor more than 60 days prior to the Redemption Date to the Holders of Securities, all as provided in the Indenture, at the following Redemption Prices, expressed in percentages of the principal amount, together with accrued interest to the Redemption Date: Year Percentage Year Percentage Beginning of Principal Beginning of Principal Amount Amount --------------- ---------------- ------------- --------------- and at _____% of the principal amount thereafter[; provided, however, that no -------- ------- such optional redemption may be effected, directly or indirectly, prior to _______________, from or in anticipation of moneys borrowed by or for the account of the Company at an interest cost (computed in accordance with generally accepted financial practice) of less than _____% per annum].] [The Securities are [also] subject to redemption through the operation of the mandatory and optional sinking funds as provided in the Indenture, on ______________, and on each _________________ thereafter to and including ______________ [,on notice as set forth above,] at a Sinking Fund Redemption Price equal to _____% of the principal amount thereof, together with accrued interest to the Redemption Date. Securities acquired or redeemed by the Company in any manner other than by redemption through the mandatory sinking fund may be credited against future mandatory sinking fund payments.] [The Securities are [also] subject to repayment on ___________, in whole or in part, in increments of $_____ or integral multiples of $_____ in excess of $_____, provided that the portion of the principal amount of any Security not 4 being repaid shall be at least $_____, at the option of the Holders thereof at a repayment price equal to _____% of the principal amount thereof to be repaid, together with interest payable thereon to the repayment date. For this Security to be repaid at the option of the Holder, the Company must receive at the corporate trust office of the Trustee in the Borough of Manhattan, The City of New York, during the period from and including _____________ to and including _____________ or, if _____________ is not a Business Day in The City of New York, the next succeeding Business Day in The City of New York, (i) this Security with the form entitled "Option to Elect Repayment" below duly completed or (ii) a telegram, telex, facsimile transmission or letter from a member of a national securities exchange or the National Association of Securities Dealers, Inc. or a commercial bank or trust company in the United States of America setting forth the name of the Holder of this Security, the principal amount of this Security, the amount of this Security to be repaid, a statement that the option to elect repayment is being made thereby and a guarantee that this Security with the form entitled "Option to Elect Repayment" on the reverse hereof duly completed will be received by the Company no later than five Business Days in The City of New York after the date of such telegram, telex, facsimile transmission or letter, and this Security and such form duly completed are received by the Company by such fifth Business Day. Either form of notice duly received during the period from and including ____________ to and including ____________ shall be irrevocable. All questions as to the validity, eligibility (including time of receipt) and acceptance of any Securities for repayment will be determined by the Company, whose determination shall be final and binding.] [Section 4.03 [(including subparagraph (4) thereof and [clause (A), but not clause (B),] (clause (B), but not clause (A),] of such subparagraph)] and Section 10.10 [(including subparagraph (5) thereof)] of the Indenture contain provisions applicable to this Security that provide for defeasance at any time of (a) the entire indebtedness on this Security and (b) certain restrictive covenants and certain Events of Default upon compliance by the Company with certain conditions set forth therein.] As provided in the Indenture and subject to certain limitations therein set forth, this Security may be registered for transfer on the Security Register of the Company, upon surrender of this Security for registration of 5 transfer at the office or agency of the Company in the Borough of Manhattan, The City of New York, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company, the Trustee and the Security Registrar duly executed by, the registered Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Securities, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees. The Securities are issuable only as Registered Securities in denominations of [$1,000 and any integral multiple thereof]. As provided in the Indenture, and subject to certain limitations therein set forth, Securities are exchangeable for a like aggregate principal amount of Registered Securities of different authorized denominations, as requested by the Holder surrendering the same. No service charge will be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. The Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Security is registered as the owner hereof for all purposes, whether or not this Security be overdue, and neither the Company or the Trustee nor any such agent shall be affected by notice to the contrary. If an Event of Default, as defined in the Indenture, with respect to the Securities shall occur, (i) that portion of the principal amount equal to the initial public offering price of this Security plus [accrued amortization of the original issue discount calculated using the ["interest"] method (computed in accordance with generally accepted accounting principles in effect on the date of the Indenture) from ___________, ___________ to the date of acceleration and (ii) any accrued interest to the date of acceleration] may be declared, and upon such declaration shall become, due and payable, in the manner, with the effect and subject to the conditions provided in the Indenture. The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders of the Securities under the Indenture at any 6 time by the Company with the consent of the Holders of [a majority] [applicable greater percentage] in aggregate principal amount of the then Outstanding Securities of this series and of each other series issued under the Indenture and affected by such amendment or modification. The Indenture also permits the Holders of a majority in aggregate principal amount of the Securities at the time Outstanding, on behalf of the Holders of all the Securities, to waive certain past defaults under the Indenture with respect to the Securities and their consequences. Any such consent or waiver shall be conclusive and binding upon the Holder of this Security and upon all future Holders of this Security and if any Security issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof whether or not a notation of such consent or waiver is made upon this Security. No recourse shall be had for the payment of the principal of [(or premium, if any)] or the interest on this Security, or for any claim based hereon, or otherwise in respect hereof, or based on or in respect of the Indenture or any indenture supplemental thereto, against any incorporator, stockholder, officer or director, as such, past, present or future, of the Company or any successor corporation, either directly or through the Company, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise, all such liability being, by the acceptance hereof and as part of the consideration for the issue hereof, expressly waived and released. Except as otherwise defined herein, all terms used in this Security which are defined in the Indenture shall have the meanings assigned to them in the Indenture. This Security shall be deemed to be a contract made under the laws of the State of New York and for all purposes shall be construed in accordance with and governed by the laws of said State. [FORM OF OPTION TO ELECT REPAYMENT] OPTION TO ELECT REPAYMENT The undersigned hereby irrevocably requests and instructs the Company to repay the within Security (or portion thereof specified below) pursuant to its terms at a price equal to _____% of the principal amount thereof, 7 together with interest to the repayment date, to the undersigned, at ____________________________________________________________ ________________________________Tax I.D. No.________________ (Please Print or Typewrite Name, Address and Tax Identification Number of the Undersigned) For this Security to be repaid the Company must receive at the corporate trust office of the Trustee in the Borough of Manhattan, The City of New York, or at such additional place or places of which the Company shall from time to time notify the Holder of the within Security during the period from and including _____________ to and including _____________ or, if _____________ is not a Business Day in The City of New York, the next succeeding Business Day in The City of New York, (i) this Security with this "Option to Elect Repayment" form duly completed or (ii) a telegram, telex, facsimile transmission or letter from a member of a national securities exchange or the National Association of Securities Dealers, Inc. or a commercial bank or trust company in the United States of America setting forth the name of the holder of this Security, the principal amount of this Security, the amount of this Security to be repaid, a statement that the option to elect repayment is being made thereby and a guarantee that this Security with this form entitled "Option to Elect Repayment" duly completed will be received by the Company not later than five Business Days in The City of New York after the date of such telegram, telex, facsimile transmission or letter, and this Security and form duly completed are received by the Company by such fifth Business Day. If less than the entire principal amount of the within Security is to be repaid, specify the portion thereof (which shall be $_____ or an integral multiple of $_____ in excess of $_____) which the Holder elects to have repaid: $_____; and specify the denomination or denominations (which shall be $_____ or an integral multiple of $_____ in excess of $_____) of the Security or Securities to be issued to the Holder for the amount of the portion of the within Security not being repaid (in the absence of any such specification, 8 one such Security will be issued for the portion not being repaid): $_____. Dated:________________ _________________________________________________ NOTICE: The signature on this Option to Elect Repayment must correspond with the name as written upon the face of this Security in every particular without alteration or enlargement or any other change whatsoever. 9 EX-4.F.1 5 FORMS OF DEBT WARRANT AGREEMENTS Exhibit 4fl [Form of Debt Warrant Agreement for Warrants Sold Attached to Debt Securities] FORTUNE BRANDS, INC. and ____________________, as Warrant Agent _______________________________ DEBT WARRANT AGREEMENT Dated as of _______________ ________________________________ Warrants to Purchase __________ _________________________ TABLE OF CONTENTS/*/ --------------------
Page ---- ARTICLE I ISSUANCE OF WARRANTS [AND TEMPORARY GLOBAL SECURITY] AND EXECUTION AND DELIVERY OF WARRANT CERTIFICATES........................... 2 SECTION 1.01. Issuance of Warrants.................................... 2 SECTION 1.02. Execution and Delivery of Warrant Certificates.......... 2 SECTION 1.03. Issuance of Warrant Certificates........................ 4 SECTION 1.04. Temporary Global Security............................... 5 ARTICLE II WARRANT PRICE, DURATION AND EXERCISE OF WARRANTS........... 6 SECTION 2.01. Warrant Price........................................... 6 SECTION 2.02. Duration of Warrants.................................... 6 SECTION 2.03. Exercise of Warrants.................................... 6 ARTICLE III OTHER PROVISIONS RELATING TO RIGHTS OF HOLDERS OF WARRANT CERTIFICATES....................... 11 SECTION 3.01. No Rights as Warrant Securityholder Conferred by Warrants or Warrant Certificates......................................... 11 SECTION 3.02. Lost, Mutilated, Stolen or Destroyed Warrant Certificates....................... 11 SECTION 3.03. Enforcement of Rights................................... 12 SECTION 3.04. Merger, Consolidation, Conveyance or Transfer........... 12 ARTICLE IV EXCHANGE AND TRANSFER...................................... 13 SECTION 4.01. Exchange and Transfer................................... 13 SECTION 4.02. Treatment of Holders of Warrant Certificates............ 14 SECTION 4.03. Cancellation of Warrant Certificates.................... 15 ARTICLE V CONCERNING THE WARRANT AGENT................................ 16
/*/ The Table of Contents is not a part of the Agreement. i SECTION 5.01. Warrant Agent........................................... 16 SECTION 5.02. Conditions of Warrant Agent's Obligations............... 16 SECTION 5.03. Resignation and Appointment of Successor................ 18 ARTICLE VI MISCELLANEOUS.............................................. 20 SECTION 6.01. Amendment............................................... 20 SECTION 6.02. Notices and Demands to the Company and Warrant Agent.... 20 SECTION 6.03. Addresses............................................... 20 SECTION 6.04. Applicable Law.......................................... 21 SECTION 6.05. Delivery of Prospectus.................................. 21 SECTION 6.06. Obtaining of Governmental Approval...................... 21 SECTION 6.07. Persons Having Rights Under Warrant Agreement........... 21 SECTION 6.08. Headings................................................ 21 SECTION 6.09. Counterparts............................................ 22 SECTION 6.10. Inspection of Agreement................................. 22 SECTION 6.11. Notices to Holders of Warrants.......................... 22
EXHIBIT A - Form of Warrant Certificates [in Registered Form] [EXHIBIT B - Form of Global Warrant Certificates in Bearer Form] [EXHIBIT C - Form of Certificate to be Delivered to the Warrant Agent by the Euro-clear Operator or CEDEL] [EXHIBIT D - Form of Warrant Exercise Notice] ii DEBT WARRANT AGREEMENT/*/ THIS AGREEMENT dated as of ____________ between FORTUNE BRANDS, INC., a corporation duly organized and existing under the laws of the State of Delaware (the "Company"), and _______________________________, a [bank] [trust company] duly incorporated and existing under the laws of _______________, as Warrant Agent (the "Warrant Agent"), W I T N E S S E T H : - - - - - - - - - - WHEREAS, the Company has entered into an Indenture dated as of [ ], 1999, as amended (the "Indenture"), between the Company and [The Chase Manhattan Bank], as Trustee (the "Trustee"), providing for the issuance from time to time of its unsecured debt securities to be issued in one or more series as provided in the Indenture; and WHEREAS, the Company proposes to sell [Title of such debt securities being offered] (the "Offered Securities") with one or more warrants (the "Warrants") representing the right to purchase [title of such debt securities purchasable through exercise of Warrants] (the "Warrant Securities"), the Warrants to be evidenced by warrant certificates issued pursuant to this Agreement (the "Warrant Certificates"); and WHEREAS, the Company desires the Warrant Agent to act on behalf of the Company in connection with the ______________________ . Complete or modify the provisions of this form as appropriate to reflect ------------------------------------------------------------------------ the terms of the Warrants and Warrant Securities. Monetary amounts may be ------------------------------------------------------------------------- in U.S. dollars, in a foreign currency or in a composite currency, ----------------------------------------------------------------- including but not limited to the European Currency Unit. ------------------------------------------------------- Bracketed language here and throughout this Agreement should be inserted as --------------------------------------------------------------------------- follows: ------- 1: If Warrants are immediately detachable from the Offered Securities; ------------------------------------------------------------------- and --- 2: If Warrants are detachable from the Offered Securities only after the --------------------------------------------------------------------- Detachable Date. --------------- issuance, transfer, exchange, exercise and replacement of the Warrant Certificates, and in this Agreement wishes to set forth, among other things, the form[s] and provisions of the Warrant Certificates and the terms and conditions on which they may be issued, transferred, exchanged, exercised and replaced; NOW, THEREFORE, in consideration of the premises and of the mutual agreements herein contained, the parties hereto agree as follows: ARTICLE I ISSUANCE OF WARRANTS AND EXECUTION AND DELIVERY OF WARRANT CERTIFICATES SECTION 1.01. Issuance of Warrants. The Warrants shall be evidenced -------------------- by one or more Warrant Certificates. Each Warrant evidenced thereby shall represent the right, subject to the provisions contained herein and therein, to purchase a Warrant Security in the principal amount of and shall be initially issued in connection with the issuance of the Offered Securities [1: and shall be separately transferable immediately thereafter] [2: but shall not be separately transferable until on and after , 19 (the "Detachable Date")]. The Warrants shall be initially issued [in units] with the Offered Securities, and each Warrant [included in such a unit] shall evidence the right, subject to the provisions contained herein and in the Warrant Certificates, to purchase [ ] principal amount of Warrant Securities [included in such a unit]. SECTION 1.02. Execution and Delivery of Warrant Certificates. Each ---------------------------------------------- Warrant, whenever issued, shall be evidenced by a Warrant Certificate in registered form [or a global Warrant Certificate in bearer form (the "Global Warrant Certificate")] [the form to be the same as that of the Warrant Security in connection with which the Warrant Certificate is issued], substantially in the form[s] set forth in Exhibit A [and Exhibit B, respectively,] hereto, shall be dated ________ and may have such letters, numbers or other marks of identification or designation and such legends or endorsements printed, lithographed or engraved thereon as the officers of the Company executing the same may approve (execution thereof to be conclusive evidence of such approval) and as are not inconsistent with the provisions of this Agreement, or as may be required to comply with any law or with any rule or regulation made pursuant thereto or with any rule or regulation of any stock exchange on which the Warrants may be listed, or to conform 2 to usage. The Warrant Certificates shall be signed on behalf of the Company by its Chairman of the Board (or its Chairman of the Executive Committee), any Vice Chairman, its President, its principal financial officer, its principal accounting officer, its general counsel, any Vice President or its Treasurer, in each case under its corporate seal, which may but need not be attested by its Secretary or one of its Assistant Secretaries [, except that the Global Warrant Certificate may be executed by any such officer without any necessity that such signature be under seal as aforesaid]. Such signatures may be manual or facsimile signatures of such authorized officers and may be imprinted or otherwise reproduced on the Warrant Certificates. The corporate seal of the Company may be in the form of a facsimile thereof and may be impressed, affixed, imprinted or otherwise reproduced on the Warrant Certificates. No Warrant Certificate shall be valid for any purpose, and no Warrant evidenced thereby shall be exercisable, until such Warrant Certificate has been countersigned by the Warrant Agent by manual signature. Such signature by the Warrant Agent upon any Warrant Certificate executed by the Company shall be conclusive evidence, and the only evidence, that the Warrant Certificate so countersigned has been duly issued hereunder. [The Global Warrant Certificate shall be and remain subject to the provisions of this Agreement until such time as all of the Warrants evidenced thereby shall have been duly exercised or shall have expired or been cancelled in accordance with the terms thereof.] In case any officer of the Company who shall have signed any of the Warrant Certificates either manually or by facsimile signature shall cease to be such officer before the Warrant Certificates so signed shall have been countersigned and delivered by the Warrant Agent as provided herein, such Warrant Certificates may be countersigned and delivered notwithstanding that the person who signed such Warrant Certificates ceased to be such officer of the Company; and any Warrant Certificate may be signed on behalf of the Company by such persons as, at the actual date of the execution of such Warrant Certificate, shall be the proper officers of the Company, although at the date of the execution of this Agreement any such person was not such officer. The term "Holder", when used with respect to any Warrant Certificate [in registered form], shall mean any person in whose name at the time such Warrant Certificate shall be registered upon the books to be maintained by the 3 Warrant Agent for that purpose [2: or, prior to the Detachable Date, any person in whose name at the time the Offered Security to which such Warrant Certificate is attached is registered upon the register of the Offered Securities. Prior to the Detachable Date, the Company will or will cause the registrar of the offered Securities to, make available at all times to the Warrant Agent such information as to holders of the Offered Securities with Warrants as may be necessary to keep the Warrant Agent's records up to date]. [The term "Holder", when used with respect to the Global Warrant Certificate, shall mean [2:, prior to the Detachable Date, the bearer of the Temporary Global Security (as defined in Section 1.04) evidencing the Offered Securities to which the Warrants evidenced by the Global Warrant Certificate were initially attached and, after the Detachable Date,] the bearer of the Global Warrant Certificate.] SECTION 1.03. Issuance of Warrant Certificates. Warrant Certificates -------------------------------- evidencing the right to purchase an aggregate principal amount not exceeding _____ aggregate principal amount of _____ Warrant Securities (except as provided in Sections 2.03, 3.02 and 4.01) may be executed by the Company and delivered to the Warrant Agent upon the execution of this Warrant Agreement or from time to time thereafter. The Warrant Agent shall, upon receipt of Warrant Certificates duly executed on behalf of the Company, countersign Warrant Certificates evidencing ________ Warrants representing the right to purchase up to ________ aggregate principal amount of Warrant Securities and shall[, in the case of Warrant Certificates in registered form,] deliver such Warrant Certificates to or upon the order of the Company [and, in the case of the Global Warrant Certificate, upon the order of the Company, deposit the Global Warrant Certificate with _______________________, as common depositary (the "Common Depositary") for Morgan Guaranty Trust Company of New York, Brussels office (or any successor), as operator of the Euro-clear System (the "Euro-clear Operator"), and for Centrale de Livraison de Valeurs Mobilieres S.A. ("CEDEL") for credit to the accounts of persons appearing from time to time on the records of the Euro-clear Operator or of CEDEL as being entitled to any portion thereof. [2: the Temporary Global Security [, as defined in Section 1.04,] will at the same time be deposited with the Common Depositary.] [The Global Warrant Certificate shall be held by the Common Depositary outside the United Kingdom.]] Subsequent to such original issuance of the Warrant Certificates, the Warrant Agent shall countersign a Warrant Certificate only if the Warrant Certificate is 4 issued in exchange or substitution for one or more previously countersigned Warrant Certificates or [, with respect to Warrant Certificates in registered form,] in connection with their transfer as hereinafter provided or as provided in the antepenultimate paragraph of Section 2.03. Pending the preparation of definitive Warrant Certificates [in registered form] evidencing Warrants, the Company may execute and the Warrant Agent shall countersign and deliver temporary Warrant Certificates [in registered form] evidencing such Warrants (printed, lithographed, typewritten or otherwise produced, in each case in form satisfactory to the Warrant Agent). Such temporary Warrant Certificates shall be issuable substantially in the form of the definitive Warrant Certificates [in registered form] but with such omissions, insertions and variations as may be appropriate for temporary Warrant Certificates, all as may be determined by the Company with the concurrence of the Warrant Agent. Such temporary Warrant Certificates may contain such reference to any provisions of this Warrant Agreement as may be appropriate. Every such temporary Warrant Certificate shall be executed by the Company and shall be countersigned by the Warrant Agent upon the same conditions and in substantially the same manner, and with like effect, as the definitive Warrant Certificates [in registered form]. Without unreasonable delay, the Company shall execute and shall furnish definitive Warrant Certificates [in registered form] and thereupon such temporary Warrant Certificates may be surrendered in exchange therefor without charge pursuant to and subject to the provisions of Section 4.01, and the Warrant Agent shall countersign and deliver in exchange for such temporary Warrant Certificates definitive Warrant Certificates [in registered form] of authorized denominations evidencing a like aggregate number of Warrants evidenced by such temporary Warrant Certificates. Until so exchanged, such temporary Warrant Certificates shall be entitled to the same benefits under this Warrant Agreement as definitive Warrant Certificates [in registered form]. [2: SECTION 1.04. Temporary Global Security. Prior to the Detachable ------------------------- Date, each Offered Security to be issued with Warrants evidenced by the Global Warrant Certificate shall, whenever issued, be evidenced by a single temporary global Offered Security in bearer form without interest coupons (the "Temporary Global Security") to be issued by the Company as provided in the Indenture.] 5 ARTICLE II WARRANT PRICE, DURATION AND EXERCISE OF WARRANTS SECTION 2.01. Warrant Price. On __________, 19__, the exercise price ------------- of each Warrant will be ____________. During the period from _____________, 19__ through and including _____________, 19__, the exercise price of each warrant Will be _____ plus ______ [accrued amortization of the original issue discount] [accrued interest] from ___________, 19__. On _____________, 19__ the exercise price of each Warrant will be ________. During the period from ___________, 19__ through and including ______________, 19__, the exercise price of each Warrant will be _____ plus [accrued amortization of the original issue discount] [accrued interest] from _____________, 19__. [In each case, the original issue discount will be amortized at a ___% annual rate, computed on an annual basis using the "interest" method and using a 360-day year consisting of twelve 30-day months]. Such exercise price of Warrant Securities is referred to in this Agreement as the "Warrant Price". [The original issue discount for each principal amount of Warrant Securities is ___________]. SECTION 2.02. Duration of Warrants. Subject to Section 4.03(b), each -------------------- Warrant may be exercised [in whole but not in part] [in whole or in part] [at any time, as specified herein, on or after [the date thereof] [_____________, 19__] and at or before [time, location] on _____________, 19__ (each day during such period may hereinafter be referred to as an "Exercise Date")] [on [list of specific dates] (each, an "Exercise Date")], or such later date as the Company may designate by notice to the Warrant Agent and the Holders of Warrant Certificates [in registered form and to the beneficial owners of the Global Warrant Certificate] (the "Expiration Date"). Each Warrant not exercised at or before [time, location] on the Expiration Date shall become void, and all rights of the Holder [and any beneficial owners] of the Warrant Certificate evidencing such Warrant under this Agreement shall cease. SECTION 2.03. Exercise of Warrants. [During] [With respect to -------------------- Warrants evidenced by Warrant Certificates in registered form, during] the period specified in Section 2.02, any whole number of Warrants may be exercised by providing certain information as set forth on the reverse side of the Warrant Certificates evidencing such Warrants and by paying in full [in lawful money of the United States of America] [in applicable currency] [in cash] [by certified check or official bank check or by bank wire transfer, in each case,] [by bank wire transfer] [in immediately 6 available funds,] the Warrant Price for each Warrant exercised (plus accrued interest, if any, on the Warrant Securities to be issued upon exercise of such Warrant from and including the Interest Payment Date (as defined in the Indenture), if any, in respect of such Warrant Securities immediately preceding the Exercise Date to and including the Exercise Date (unless the Exercise Date is after the Regular Record Date (as defined in the Indenture), if any, for such Interest Payment Date, but on or before the immediately succeeding Interest Payment Date for such Warrant Securities, in which event no such accrued interest shall be payable)) to the Warrant Agent at its corporate trust office at [address] [or at _____________], provided that such exercise is subject to receipt within five business days of such [payment] [wire transfer] by the Warrant Agent of the Warrant Certificate evidencing each Warrant exercised with the form of election to purchase Warrant Securities set forth on the reverse side of the Warrant Certificate properly completed and duly executed. [With respect to Warrants evidenced by the Global Warrant Certificate, during the period specified in Section 2.02, any whole number of Warrants may be exercised by the Holder by presentation to the Warrant Agent at its office at [address located outside the United States [and the United Kingdom]], at or prior to [time], on any day on which the Warrants are exercisable, of (i) the Global Warrant Certificate [2: together with, if prior to the Detachable Date, the Temporary Global Security] (or written confirmation reasonably satisfactory to the Warrant Agent that the Global Warrant Certificate [1: is] [2: and, if prior to the Detachable Date, the Temporary Global Security are] held by the Euro-clear Operator and CEDEL and will be duly endorsed to reflect the exercise of Warrants [2: and, if prior to the Detachable Date, the surrender to the Warrant Agent of the Offered Securities to which the Warrants are attached] by the Euro-clear Operator and CEDEL), (ii) a duly executed certification from the Euro-clear Operator or CEDEL, as the case may be, substantially in the form set forth in Exhibit C hereto and (iii) payment in full [in lawful money of the United States of America] [in applicable currency] [in cash] [by certified check or official bank check or by bank wire transfer, in each case,] [by bank wire transfer] [in immediately available funds,] of the Warrant Price for each Warrant exercised (plus accrued interest, if any, on the Warrant Securities to be issued upon exercise of such Warrant from and including the Interest Payment Date, if any, in respect of such Warrant Securities immediately preceding the Exercise Date to and including the Exercise Date (unless the Exercise Date is after the Regular Record Date, if any, for such Interest Payment Date, but on or before the immediately succeeding Interest Payment Date for such Warrant Securities, in which event no such accrued interest shall be payable in respect of Warrant Securities to be issued in registered form)). Notwithstanding the foregoing, the Holder may exercise Warrants as aforesaid on the Expiration Date at any time prior to [time] in [city of Warrant Agent's office]. Any Warrants exercised as set forth in this paragraph shall be deemed exercised at the [country] office of the Warrant Agent.] [The Warrant Agent shall retain each certificate received by it from the Euro-clear Operator or CEDEL through the Expiration Date (or such earlier date by which all of the Warrants may have been exercised or cancelled) and thereafter shall dispose of them or deliver them to the Company pursuant to the instructions of the Company.] [The delivery to the Warrant Agent by the Euro-clear Operator or CEDEL of any certification referred to above may be relied upon by the Company, the Warrant Agent and the Trustee as conclusive evidence that a corresponding certificate or certificates substantially in the form of Exhibit D hereto has or have been delivered to the Euro-clear Operator or CEDEL, as the case may be.] [The Company will maintain in [location] (or in such other city [in western Europe] as the Company may deem advisable), until the right to exercise the Warrants shall expire or be earlier cancelled as hereinafter provided, an agency where the Global Warrant Certificate [2: and, if prior to the Detachable Date, the Temporary Global Security] may be presented for exercise of the Warrants represented thereby [2: and, if prior to the Detachable Date, for surrender for cancellation of the Offered Securities to which such Warrants are attached] and notices and demands to or upon the Company in respect of the Warrants or of this Agreement may be made.] The date on which payment in full of the Warrant Price (plus any such accrued interest) is received by the Warrant Agent shall, subject to receipt of the Warrant Certificate [in registered form or, as the case may be, the Global Warrant Certificate [2: and, if required, the Temporary Global Security] and the certification of the Euro-clear Operator or CEDEL] as aforesaid, be deemed to be the date on which the Warrant is exercised. The Warrant Agent shall deposit all funds received by it in payment for the exercise of Warrants in an account of the Company maintained with it (or in such other account as may be 8 designated by the Company) and shall advise the Company, by telephone or by facsimile transmission or other form of electronic communication available to both parties, at the end of each day on which a payment for the exercise of Warrants is received of the amount so deposited to its account. The Warrant Agent shall promptly confirm such advice to the Company in writing. If a day on which Warrants may be exercised in the city in which such Warrants are to be exercised shall be a Saturday or Sunday or a day on which banking institutions in such city are authorized or required to be closed, then, notwithstanding any other provision of this Agreement or the Warrant Certificate evidencing such Warrants, but subject to the limitation that no Warrant may be exercised after the Expiration Date, the Warrants shall be exercisable on the next succeeding day which in such city is not a Saturday or Sunday or a day on which banking institutions in such city are authorized or required to be closed. The Warrant Agent shall, from time to time, as promptly as practicable, advise the Company [and][,] the Trustee [and the Common Depositary at [both] its London [and location] office[s]] in writing [(which, in the case of exercised Warrants represented by the Global Warrant Certificate, shall be tested telex with appropriate answerback received,)] of (i) the number of Warrants exercised, (ii) the instructions of each Holder of the Warrant Certificates [in registered form] evidencing such Warrants [or of the Euro-clear Operator or CEDEL, as the case may be,] with respect to delivery of the Warrant Securities to be issued upon such exercise, (iii) delivery of any Warrant Certificates [in registered form] evidencing the balance, if any, of the Warrants remaining after such exercise, and (iv) such other information as the Company or the Trustee shall reasonably require. [In addition, in the case of exercised Warrants evidenced by the Global Warrant Certificate, the Warrant Agent shall, as promptly as practicable, endorse, or cause the Common Depositary, [location] office, or one of the Warrant Agent's agents to endorse, Schedule A annexed to the Global Warrant Certificate to reflect the exercise of such Warrants [2: and the Temporary Global Security to reflect the surrender for cancellation of the Offered Securities to which such Warrants are attached] and, if applicable, return the Global Warrant Certificate [2: and the Temporary Global Security] to the Common Depositary or to its order.] As soon as practicable after the exercise of any Warrant [evidenced by a Warrant Certificate in registered form], but subject to receipt by the Warrant Agent of the 9 Warrant Certificate evidencing such Warrant as provided in this Section, the Company shall issue, pursuant to the Indenture, in authorized denominations to or upon the order of the Holder of the Warrant Certificate evidencing each Warrant, the Warrant Securities to which such Holder is entitled, in fully registered form, registered in such name or names as may be directed by such Holder. If fewer than all of the Warrants evidenced by such Warrant Certificate are exercised, the Company shall execute, and an authorized officer of the Warrant Agent shall manually countersign and deliver, a new Warrant Certificate [in registered form] evidencing the number of such Warrants remaining unexercised. [As soon as practicable after the exercise of any Warrant evidenced by the Global Warrant Certificate, but, in the case of any Warrant Securities to be issued in bearer form as provided in this sentence, on the date of the applicable certification of the Euro-clear Operator or CEDEL referred to in the second paragraph of this Section 2.03, the Company shall issue, pursuant to the Indenture, the Warrant Securities issuable upon such exercise, in authorized denominations (i) in fully registered form, registered in such name or names as may be directed by the Euro-clear Operator or CEDEL, as the case may be, to or upon order of the Euro-clear Operator or CEDEL, as the case may be, or (ii) in bearer form to the Common Depositary to be held for the account of the Euro- clear Operator or CEDEL, as the case may be; provided, however, that no Warrant -------- ------- Security in bearer form shall be mailed or otherwise delivered to any location in the United States of America, its territories or possessions or areas subject to its jurisdiction or the Commonwealth of Puerto Rico.] The Company shall not be required to pay any stamp or other tax or other governmental charge required to be paid in connection with any transfer involved in the issuance of the Warrant Securities, and in the event that any such transfer is involved, the Company shall not be required to issue or deliver any Warrant Security until such tax or other charge shall have been paid or it has been established to the Company's satisfaction that no such tax or other charge is due. 10 ARTICLE III OTHER PROVISIONS RELATING TO RIGHTS OF HOLDERS OF WARRANT CERTIFICATES SECTION 3.01. No Rights as Warrant Securityholder Conferred by ------------------------------------------------ Warrants or Warrant Certificates. No Warrant Certificate or Warrant evidenced - -------------------------------- thereby shall entitle the Holder or any beneficial owner thereof to any of the rights of a holder or beneficial owner of Warrant Securities, including, without limitation, the right to receive the payment of principal of (premium, if any) or interest, if any, on Warrant Securities or to enforce any of the covenants in the Indenture. SECTION 3.02. Lost, Mutilated, Stolen or Destroyed Warrant -------------------------------------------- Certificates. Upon receipt by the Warrant Agent of evidence reasonably - ------------ satisfactory to it and the Company of the ownership of and the loss, mutilation, theft or destruction of any Warrant Certificate and of such security or indemnity as may be required by the Company and the Warrant Agent to hold each of them and any agent of them harmless and, in the case of mutilation of a Warrant Certificate, upon surrender thereof to the Warrant Agent for cancellation, then, in the absence of notice to the Company or the Warrant Agent that such Warrant Certificate has been acquired by a bona fide purchaser, the Company shall execute, and an authorized officer of the Warrant Agent shall manually countersign and deliver, in exchange for or in lieu of the lost, mutilated, stolen or destroyed Warrant Certificate, a new Warrant Certificate of the same tenor and evidencing a like number of Warrants[; provided, however, -------- ------- that any Global Warrant Certificate shall be so delivered only to the Common Depositary]. Upon the issuance of any new Warrant Certificate under this Section, the Company may require the payment of a sum sufficient to cover any stamp or other tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Warrant Agent) in connection therewith. Every substitute Warrant Certificate executed and delivered pursuant to this Section in lieu of any lost, mutilated, stolen or destroyed Warrant Certificate shall represent an additional contractual obligation of the Company, whether or not the lost, stolen or destroyed Warrant Certificate shall be at any time enforceable by anyone, and shall be entitled to the benefits of this Agreement equally and proportionately with any and all other Warrant Certificates duly executed and delivered hereunder. The provisions of this Section are exclusive and shall preclude (to the extent lawful) all other rights and 11 remedies with respect to the replacement of lost, mutilated, stolen or destroyed Warrant Certificates. SECTION 3.03. Enforcement of Rights. Notwithstanding any of the --------------------- provisions of this Agreement, any Holder of a Warrant Certificate [in registered form or the beneficial owner of any Warrant evidenced by the Global Warrant Certificate], without the consent of [the Common Depositary,] the Warrant Agent, the Trustee, the holder of any Offered Securities or the Holder of any other Warrant Certificate, may, in its own behalf and for its own benefit, enforce, and may institute and maintain any suit, action or proceeding against the Company suitable to enforce, or otherwise in respect of, its right to exercise its Warrants in the manner provided in its Warrant Certificate [or the Global Warrant Certificate, as the case may be,] and in this Agreement. [Neither the Company nor the Warrant Agent shall be required to treat any person as a beneficial owner of any Warrant evidenced by the Global Warrant Certificate unless such person is so certified as such a beneficial owner by the Euro-clear Operator or CEDEL.] SECTION 3.04. Merger, Consolidation, Conveyance or Transfer. (a) If --------------------------------------------- at any time there shall be a merger or consolidation of the Company or a conveyance or transfer of its property and assets substantially as an entirety as permitted under the Indenture, then in any such event the successor or assuming corporation referred to therein shall succeed to and be substituted for the Company, with the same effect, subject to the Indenture, as if it had been named herein and in the Warrant Certificates as the Company; the Company shall thereupon, except in the case of a transfer by way of lease, be relieved of any further obligation hereunder and under the Warrants and the Warrant Certificates, and the Company as the predecessor corporation, except in the case of a transfer by way of lease, may thereupon or at any time thereafter be dissolved, wound up or liquidated. Such successor or assuming corporation may thereupon cause to be signed, and may issue either in its own name or in the name of the Company, Warrant Certificates evidencing any or all of the Warrants issuable hereunder which theretofore shall not have been signed by the Company, and may execute and deliver Warrant Securities in its own name pursuant to the Indenture, in fulfillment of its obligations to deliver Warrant Securities upon exercise of the Warrants. All the Warrants so issued shall in all respects have the same legal rank and benefit under this Agreement as the Warrants theretofore or thereafter issued in accordance with the terms of this Agreement as though all of such Warrants had been issued at the date of the execution hereof. In any case of any such 12 merger, consolidation, conveyance or transfer, such changes in phraseology and form (but not in substance) may be made in the Warrant Certificates representing the warrants thereafter to be issued as may be appropriate. (b) The Warrant Agent may receive a written opinion of legal counsel (who shall be acceptable to the Warrant Agent) as conclusive evidence that any such merger, consolidation, conveyance or transfer complies with the provisions of this Section and the Indenture. ARTICLE IV EXCHANGE AND TRANSFER SECTION 4.01. Exchange and Transfer. (a) [1: Upon] [2: Prior to the Detachable Date, a Warrant Certificate [in registered form] may be exchanged or transferred only together with the Offered Security to which such Warrant Certificate was initially attached, and only for the purpose of effecting, or in conjunction with, an exchange or transfer of such Offered Security. Prior to the Detachable Date, the transfer of the beneficial ownership of any Warrant evidenced by the Global Warrant Certificate shall effect and shall be deemed to effect the transfer of the beneficial ownership of any Offered Securities evidenced by the Temporary Global Security that are attached to such Warrants. Prior to any Detachable Date, each transfer of the Offered Security [on the register maintained with respect to the Offered Securities, in the case of an Offered Security that is in regisered from], shall operate also to transfer the related Warrant Certificates. Similarly, prior to the Detachable Date, the transfer of the beneficial ownership of any Offered Security evidenced by the Temporary Global Security shall be deemed to be the transfer of the benefical ownership of any Warrants evidenced by the Global Warrant Certificate that are attached to such Offered Securities. The transfer of the beneficial ownership of Warrants and Warrant Securities hereunder shall be effected only as provided in Section 4.01. On or after the Detachable Date, upon] surrender at the corporate trust office of the Warrant Agent at [address] [or __________], Warrant Certificates [in registered form] evidencing Warrants may be exchanged for Warrant Certificates [in registered form] in other authorized denominations evidencing such Warrants or the transfer thereof may be registered in whole or in part; provided, however, that such other Warrant Certificates shall evidence -------- ------- the same aggregate number of Warrants as the Warrant Certificates so surrendered. 13 (b) The Warrant Agent shall keep, at its corporate trust office at [address] [and at ______________], books in which, subject to such reasonable regulations as it may prescribe, it shall register Warrant Certificates [in registered form] and exchanges and transfers of outstanding Warrant Certificates [in registered form] upon surrender of such Warrant Certificates to the Warrant Agent at its corporate trust office at [address] or [_______________] for exchange or registration of transfer, properly endorsed [or accompanied by appropriate instruments of registration of transfer and written instructions for transfer, all in form satisfactory to the Company and the Warrant Agent.] (c) No service charge shall be made for any exchange or registration of transfer of Warrant Certificates [in registered form], but the Company may require payment of a sum sufficient to cover any stamp or other tax or other governmental charge that may be imposed in connection with any such exchange or registration of transfer. (d) Whenever any Warrant Certificates [in registered form], are so surrendered for exchange or registration of transfer, an authorized officer of the Warrant Agent shall manually countersign and deliver to the person or persons entitled thereto a Warrant Certificate or Warrant Certificates [in registered form], duly authorized and executed by the Company, as so requested. The Warrant Agent shall not effect any exchange or registration of transfer which will result in the issuance of a Warrant Certificate [in registered form], evidencing a fraction of a Warrant or a number of full Warrants and a fraction of a Warrant. (e) All Warrant Certificates [in registered form], issued upon any exchange or registration of transfer of Warrant Certificates shall be the valid obligations of the Company, evidencing the same obligations, and entitled to the same benefits under this Agreement, as the Warrant Certificates surrendered for such exchange or registration or transfer. SECTION 4.02. Treatment of Holders of Warrant Certificates. [With -------------------------------------------- respect to the Global Warrant Certificate, the Holder thereof may be treated by the Company, the Warrant Agent and all other persons dealing with such Holder as the absolute owner thereof for any purpose and as the person entitled to exercise the rights represented by the Warrants evidenced thereby, any notice to the contrary notwithstanding.] [Each] [With respect to Warrant Certificates in registered form, each] Holder of a Warrant Certificate, by accepting the same, consents and 14 agrees with the Company, the Warrant Agent and every subsequent Holder of such Warrant Certificate that until the transfer of such Warrant Certificate is registered on the books of such Warrant Agent, [2 : or, prior to the Detachable Date, until the transfer of the Offered Security to which such Warrant Certificate is attached, is registered in the register of the Offered Securities], the Company and the Warrant Agent may treat the registered Holder of such Warrant Certificate as the absolute owner thereof for any purpose and as the person entitled to exercise the rights represented by the Warrants evidenced thereby, any notice to the contrary notwithstanding. SECTION 4.03. Cancellation of Warrant Certificates. (a) Any Warrant ------------------------------------ Certificate surrendered for exchange or registration of transfer or exercise of the Warrants evidenced thereby shall, if surrendered to the Company, be delivered to the Warrant Agent, and all Warrant Certificates surrendered or so delivered to the Warrant Agent shall be promptly cancelled by the Warrant Agent and shall not be reissued and, except as expressly permitted by this Agreement, no Warrant Certificate shall be issued hereunder in exchange therefor or in lieu thereof. The Warrant Agent shall cause all cancelled Warrant Certificates to be destroyed and shall deliver a certificate of such destruction to the Company. (b) If the Company notifies the Trustee of its election to redeem [2: prior to the Detachable Date][, as a whole but not in part,] [2: the Offered Securities [or] [and]] the Warrant Securities pursuant to the Indenture or the terms thereof, the Company may elect, and shall give notice to the Warrant Agent of its election, to cancel the unexercised Warrants, the Warrant Certificates and the rights evidenced thereby. Promptly after receipt of such notice by the Warrant Agent, the Company shall, or, at the Company's request, the Warrant Agent shall in the name of and at the expense of the Company, give notice of such cancellation to the Holders of the Warrant Certificates [in registered form and to the beneficial owners of the Global Warrant Certificate (except that such notice shall be required to be published only once)], such notice to be so given not less than 30 nor more than 60 days prior to the date fixed for the redemption of [2: the Offered Securities [or] [and]] the Warrant Securities pursuant to Indenture or the terms thereof. The unexercised Warrants, the Warrant Certificates and the rights evidenced thereby shall be cancelled and become void on the 15th day prior to such date fixed for redemption. 15 ARTICLE V CONCERNING THE WARRANT AGENT SECTION 5.01. Warrant Agent. The Company hereby appoints __________ ------------- as Warrant Agent of the Company in respect of the Warrants and the Warrant Certificates upon the terms and subject to the conditions herein and in the Warrant Certificates set forth; and __________ hereby accepts such appointment. The Warrant Agent shall have the powers and authority granted to and conferred upon it in the Warrant Certificates and herein and such further powers and authority to act on behalf of the Company as the Company may hereafter grant to or confer upon it. All of the terms and provisions with respect to such powers and authority contained in the Warrant Certificates are subject to and governed by the terms and provisions hereof. SECTION 5.02. Conditions of Warrant Agent's Obligations. The Warrant ----------------------------------------- Agent accepts its obligations herein set forth upon the terms and conditions hereof, including the following, to all of which the Company agrees and to all of which the rights hereunder of the Holders from time to time of the Warrant Certificates shall be subject: (a) Compensation and Indemnification. The Company agrees promptly to -------------------------------- pay the Warrant Agent the compensation to be agreed upon with the Company for all services rendered by the Warrant Agent and to reimburse the Warrant Agent for reasonable out-of-pocket expenses (including reasonable attorneys' fees) incurred by the Warrant Agent without negligence, bad faith or breach of this Agreement on its part in connection with the services rendered hereunder by the Warrant Agent. The Company also agrees to indemnify the Warrant Agent for, and to hold it harmless against, any loss, liability or expense incurred without negligence or bad faith on the part of the Warrant Agent, arising out of or in connection with its acting as Warrant Agent hereunder, as well as the reasonable costs and expenses of defending against any claim of such liability. (b) Agent for the Company. In acting under this Agreement and in --------------------- connection with the Warrants and the Warrant Certificates, the Warrant Agent is acting solely as agent of the Company and does not assume any obligation or relationship of agency or trust for or with any of the Holders of Warrant Certificates or beneficial owners of Warrants. 16 (c) Counsel. The Warrant Agent may consult with counsel satisfactory ------- to it in its reasonable judgment, and the advice of such counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in accordance with the advice of such counsel. (d) Documents. The Warrant Agent shall be protected and shall incur --------- no liability for or in respect of any action taken or thing suffered by it in reliance upon any Warrant Certificate, notice, direction, consent, certificate, affidavit, statement or other paper or document reasonably believed by it to be genuine and to have been presented or signed by the proper parties. (e) Certain Transactions. The Warrant Agent, and its officers, -------------------- directors and employees, may become the owner of, or acquire any interest in, Warrants, with the same rights that it or they would have if it were not the Warrant Agent hereunder, and, to the extent permitted by applicable law, it or they may engage or be interested in any financial or other transaction with the Company and may act on, or as depositary, trustee or agent for, any committee or body of holders of Warrant Securities or other obligations of the Company as freely as if it were not the Warrant Agent hereunder. Nothing in this Warrant Agreement shall be deemed to prevent the Warrant Agent from acting as Trustee under the Indenture. (f) No Liability for Interest. The Warrant Agent shall have no ------------------------- liability for interest on any monies at any time received by it pursuant to any of the provisions of this Agreement or of the Warrant Certificates. (g) No Liability for Invalidity. The Warrant agent shall not be --------------------------- under any responsibility with respect to the validity or sufficiency of this Agreement or the execution and delivery hereof (except the due authorization to execute this Agreement and the due execution and delivery hereof by the Warrant Agent) or with respect to the validity or execution of any Warrant Certificates (except its countersignature thereof). (h) No Liability for Recitals. The recitals contained herein shall ------------------------- be taken as the statements of 17 Company and the Warrant Agent assumes no liability for the correctness of the same. (i) No Implied Obligations. The Warrant Agent shall be obligated to ---------------------- perform only such duties as are herein and in the Warrant Certificates specifically set forth and no implied duties or obligations shall be read into this Agreement or the Warrant Certificates against the Warrant Agent. The Warrant Agent shall not be under any obligation to take any action hereunder which may tend to involve it in any expense or liability, the payment of which within a reasonable time is not, in its reasonable opinion, assured to it. The Warrant Agent shall not be accountable or under any duty or responsibility for the use by the Company of any of the Warrant Certificates countersigned by the Warrant Agent and delivered by it to the Company pursuant to this Agreement or for the application by the Company of the proceeds of the Warrant Certificates. The Warrant Agent shall have no duty or responsibility in case of any default by the Company in the performance of its covenants or agreements contained herein or in the Warrant Certificates or in the case of the receipt of any written demand from a Holder of a Warrant Certificate with respect to such default, including, without limiting the generality of the foregoing, any duty or responsibility to initiate or attempt to initiate any proceedings at law or otherwise or, except as provided in Section 6.02, to make any demand upon the Company. SECTION 5.03. Resignation and Appointment of Successor. (a) The ---------------------------------------- Company agrees, for the benefit of the Holders from time to time of the Warrant Certificates, that there shall at all times be a Warrant Agent hereunder until all the Warrants have been exercised or are no longer exercisable. (b) The Warrant Agent may at any time resign as such by giving written notice of its resignation to the Company, specifying the desired date on which its resignation shall become effective; provided, however, that such date -------- ------- shall be not less than 90 days after the date on which such notice is given unless the Company agrees to accept shorter notice. Upon receiving such notice of resignation, the Company shall promptly appoint a successor Warrant Agent (which shall be a bank or trust company in good standing, authorized under the laws of the jurisdiction of its organization to exercise corporate trust powers) by written instrument in duplicate signed on behalf of the Company, one copy of which shall be delivered to the 18 resigning Warrant Agent and one copy to the successor Warrant Agent. The Company may, at any time and for any reason, remove the Warrant Agent and appoint a successor Warrant Agent (qualified as aforesaid) by written instrument in duplicate signed on behalf of the Company and specifying such removal and the date when it is intended to become effective, one copy of which shall be delivered to the Warrant Agent being removed and one copy to the successor Warrant Agent. Any resignation or removal of the Warrant Agent and any appointment of a successor Warrant Agent shall become effective upon acceptance of appointment by the successor Warrant Agent as provided in this subsection (b). In the event a successor Warrant Agent has not been appointed and accepted its duties within 90 days of the Warrant Agent's notice of resignation, the Warrant Agent may apply to any court of competent jurisdiction for the designation of a successor Warrant Agent. Upon its resignation or removal, the Warrant Agent shall be entitled to the payment by the Company of the compensation and to the reimbursement of all reasonable out-of-pocket expenses (including reasonable attorneys' fees) incurred by it hereunder as agreed to in Section 5.02(a). (c) The Company shall remove the Warrant Agent and appoint a successor Warrant Agent if the Warrant Agent (i) shall become incapable of acting, (ii) shall be adjudged bankrupt or insolvent, (iii) shall commence a voluntary case or other proceeding seeking liquidation, reorganization or other relief with respect to it or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect or seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official of it or any substantial part of its property, (iv) shall consent to, or shall have had entered against it a court order for, any such relief or to the appointment of or taking possession by any such official in any involuntary case or other proceedings commenced against it, (v) shall make a general assignment for the benefit of creditors or (vi) shall fail generally to pay its debts as they become due. Upon the appointment as aforesaid of a successor Warrant Agent and acceptance by it of such appointment, the predecessor Warrant Agent shall, if not previously disqualified by operation of law, cease to be Warrant Agent hereunder. (d) Any successor Warrant Agent appointed hereunder shall execute, acknowledge and deliver to its predecessor and the Company an instrument accepting such appointment hereunder, and thereupon such successor Warrant Agent, without any further act, deed or conveyance, shall become vested with all the authority, rights, powers, immunities, duties and obligations of such predecessor with 19 like effect as if originally named as Warrant Agent hereunder, and such predecessor shall thereupon become obligated to transfer, deliver and pay over, and such successor Warrant Agent shall be entitled to receive, all monies, securities and other property on deposit with or held by such predecessor as Warrant Agent hereunder. (e) Any corporation into which the Warrant Agent hereunder may be merged or converted or any corporation with which the Warrant Agent may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Warrant Agent shall be a party, or any corporation to which the Warrant Agent shall sell or otherwise transfer all or substantially all the assets and business of the Warrant Agent, provided that it shall be qualified as aforesaid, shall be the successor Warrant Agent under this Agreement without the execution or filing of any paper or any further act on the part of any of the parties hereto. ARTICLE VI MISCELLANEOUS SECTION 6.01. Amendment. This Agreement and the terms of the --------- Warrants and the Warrant Certificates may be amended by the parties hereto, without the consent of the Holder of any Warrant Certificate or the beneficial owner of any Warrant, for the purpose of curing any ambiguity, or of curing, correcting or supplementing any defective or inconsistent provision contained herein or in the Warrant Certificates, or making any other provisions with respect to matters or questions arising under this Agreement as the Company and the Warrant Agent may deem necessary or desirable, provided that such action -------- shall not affect adversely the interests of the Holders of the Warrant Certificates or the beneficial owners of Warrants in any material respect. SECTION 6.02. Notices and Demands to the Company and Warrant Agent. ---------------------------------------------------- If the Warrant Agent shall receive any notice or demand addressed to the Company by the Holder of a Warrant Certificate pursuant to the provisions of the Warrant Certificates, the Warrant Agent shall promptly forward such notice or demand to the Company. SECTION 6.03. Addresses. Any communication from the Company to the --------- Warrant Agent with respect to this Agreement shall be addressed to __________________, Attention: ________________, and any communication from the Warrant Agent to 20 the Company with respect to this Agreement shall be addressed to Fortune Brands, Inc., 1700 East Putnam Avenue, Old Greenwich, Connecticut 06870-0811, Attention: Treasurer (or such other address as shall be specified in writing by the Warrant Agent or by the Company). SECTION 6.04. Applicable Law. The validity, interpretation and -------------- performance of this Agreement and each Warrant Certificate issued hereunder and of the respective terms and provisions hereof and thereof shall be governed by, and construed in accordance with, the laws of the State of New York. SECTION 6.05. Delivery of Prospectus. The Company will furnish to ---------------------- the Warrant Agent sufficient copies of a prospectus relating to the Warrant Securities deliverable upon exercise of Warrants (the "Prospectus"), and the Warrant Agent agrees that upon the exercise of any Warrant, the Warrant Agent will deliver to the Holder of the Warrant Certificate evidencing such Warrant, prior to or concurrently with the delivery of the Warrant Securities issued upon such exercise, a Prospectus. The Warrant Agent shall not, by reason of any such delivery, assume any responsibility for the accuracy or adequacy of such Prospectus. SECTION 6.06. Obtaining of Governmental Approval. The Company will ---------------------------------- from time to time take all action which may be necessary to obtain and keep effective any and all permits, consents and approvals of governmental agencies and authorities and securities acts filings under United States federal and state laws (including without limitation a registration statement in respect of the Warrants and Warrant Securities under the Securities Act of 1933), which may be or become requisite in connection with the issuance, sale, transfer and delivery of the Warrant Certificates, the exercise of the Warrants, the issuance, sale, transfer and delivery of the Warrant Securities issued upon exercise of the Warrants or upon the expiration of the period during which the Warrants are exercisable. SECTION 6.07. Persons Having Rights Under Warrant Agreement. [Except --------------------------------------------- as otherwise provided in Section 3.03, nothing] [Nothing] in this Agreement shall give to any person other than the Company, the Warrant Agent and the Holders of the Warrant Certificates any right, remedy or claim under or by reason of this Agreement. SECTION 6.08. Headings. The descriptive headings of the several -------- Articles and Sections of this Agreement are inserted for convenience only and shall not control or 21 affect the meaning or construction of any of the provisions hereof. SECTION 6.09. Counterparts. This Agreement may be executed in any ------------ number of counterparts, each of which as so executed shall be deemed to be an original, but such counterparts shall together constitute but one and the same instrument. SECTION 6.10. Inspection of Agreement. A copy of this Agreement ----------------------- shall be available at all reasonable times at the principal corporate trust office of the Warrant Agent for inspection by the Holder of any Warrant Certificate. The Warrant Agent may require such Holder to submit his Warrant Certificate for inspection by it. SECTION 6.11. Notices to Holders of Warrants. Any notice to Holders ------------------------------ of Warrants evidenced by Warrant Certificates [in registered form] which by any provisions of this Warrant Agreement is required or permitted to be given shall be given by first class mail prepaid at such Holder's address as it appears on the books of the Warrant Agent. [Any notice to beneficial owners of Warrants evidenced by the Global Warrant Certificate which by any provisions of this Warrant Agreement is required or permitted to be given shall be given in the manner provided with respect to Warrant Securities in bearer form in Section 1.06 of the Indenture]. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and their respective corporate seals to be hereunto affixed and attested, all as of the date first above written. FORTUNE BRANDS, INC. [SEAL] By____________________________ Name: Title: Attest: ___________________________ Name: Title: 22 [WARRANT AGENT] [SEAL] By___________________________ Name: Title: Attest: ________________________ Name: Title: 23 Exhibit A ---------- [Attached] FORM OF WARRANT CERTIFICATE [IN REGISTERED FORM] [Face of Warrant Certificate] [[1: This][2: Prior to ______ this] Warrant Certificate cannot be transferred unless attached to a [Title of Offered Securities].] EXERCISABLE ONLY IF COUNTERSIGNED BY THE WARRANT AGENT AS PROVIDED HEREIN FORTUNE BRANDS, INC. WARRANTS TO PURCHASE [Title of Warrant Securities] VOID AFTER 5:00 P.M., NEW YORK CITY TIME, ON , 19__ No.___ _______ Warrants This certifies that or registered assigns (the "Registered Holder") is the registered owner of the above indicated number of Warrants, each Warrant entitling such owner to purchase, at any time [after 5:00 P.M., New York City time, on , 19 and] on or before 5:00 P.M., New York City time, on , 19 , principal amount of [Title of Warrant Securities] (the "Warrant Securities") of Fortune Brands, Inc. (the "Company") issued and to be issued under the Indenture (as hereinafter defined), on the following basis: [on , 19 the exercise price of each Warrant will be ; during the period from , 19 through and including ,19 , the exercise price of each Warrant will be plus [accrued amortization of the original issue discount] [accrued interest] from _____, 19 ; on , 19 the exercise price of each Warrant will be _____; during the period from _____, 19 through and including , 19 , the exercise price of each Warrant will be plus [accrued amortization of the original issue discount] [accrued interest] from 19 [; in each case, the original issue discount will be amortized at a % annual rate, computed on an annual basis using the "interest" method and using a 360-day year consisting of twelve 30-day months] (the "Warrant Price"). [The original issue discount for each principal amount of Warrant Securities is .] The Registered Holder may exercise the Warrants evidenced hereby by providing certain information set forth on the back hereof and by paying in full, [in lawful money of the United States of America] [in applicable currency] [in cash] [by certified check or official bank check or by bank wire transfer, in each case,] [by bank wire transfer] [in immediately available funds,] the Warrant Price for each Warrant exercised (plus accrued interest, if any, on the Warrant Securities to be issued upon exercise of such Warrant from and including the Interest Payment Date (as defined in the Indenture), if any, in respect of such Warrant Securities immediately preceding the Exercise Date to and including the Exercise Date (unless the Exercise Date is after the Regular Record Date (as defined in the Indenture), if any, for such Interest Payment Date, but on or before the immediately succeeding Interest Payment Date for such Warrant Securities, in which event no such accrued interest shall be payable)) to the Warrant Agent (as hereinafter defined) and by surrendering this Warrant Certificate, with the form of election to purchase on the reverse hereof completed and duly executed, at the corporate trust office of [name of Warrant Agent], or its successor, as warrant agent (the "Warrant Agent"), [or ] currently at the address specified on the reverse hereof, and upon compliance with and subject to the conditions set forth herein and in the Warrant Agreement (as hereinafter defined). Any whole number of Warrants evidenced by this Warrant Certificate may be exercised to purchase Warrant Securities in fully registered form in denominations of ____ and any integral multiples thereof. Upon any exercise of fewer than all of the Warrants evidenced by this Warrant Certificate, there shall be issued to the Registered Holder hereof a new Warrant Certificate in registered form evidencing the number of Warrants remaining unexercised. This Warrant Certificate is issued under and in accordance with the Warrant Agreement dated as of _______________ 19__ (the "Warrant Agreement") between the Company and the Warrant Agent and is subject to the terms and provisions contained in the Warrant Agreement, to all of which terms and provisions the Registered Holder consents by acceptance hereof. Copies of the Warrant Agreement are on file at the above-mentioned office of the Warrant Agent [and at ]. A-2 The Warrant Securities to be issued and delivered upon the exercise of the Warrants evidenced by this Warrant Certificate will be issued under and in accordance with an Indenture dated as of [ ], 1999, as amended (the "Indenture"), between the Company and The Chase Manhattan Bank, as Trustee (the "Trustee"), and will be subject to the terms and provisions contained in the Indenture. Copies of the Indenture and the form of the Warrant Securities are on file at the corporate trust office of the Trustee [and at ]. [1: This Warrant] [2: Prior to _________, 19__ this] Certificate may be transferred [2: only together with the [Title of Offered Securities] (the "Offered Securities") to which the Warrant Certificate was initially attached, and only for the purpose of effecting, or in conjunction with, a transfer of such Offered Securities,] at the corporate trust office of the Warrant Agent [or ] by the Registered Holder or its assigns, in person or by an attorney duly authorized in writing, in the manner and subject to the limitations provided in the Warrant Agreement. [1: After] [2: Except as otherwise provided in the immediately preceding paragraph, after] countersignature by the Warrant Agent and prior to the expiration of this Warrant Certificate, this Warrant Certificate may be exchanged at the corporate trust office of the Warrant Agent [or ] for Warrant Certificates in registered form representing the same aggregate number of Warrants. This Warrant Certificate shall not entitle the Registered Holder hereof to any of the rights of a holder of the Warrant Securities, including, without limitation, the right to receive payments of principal of (premium, if any) or interest, if any, on the Warrant Securities or to enforce any of the covenants of the Indenture. A-3 This Warrant Certificate shall not be valid or obligatory for any purpose until countersigned by the Warrant Agent. Dated as of , 19 . FORTUNE BRANDS, INC. [SEAL] By___________________________ Name: Title: Attest: ___________________________ Countersigned: ___________________________ As Warrant Agent By_________________________ Authorized Signature A-4 [Reverse of Warrant Certificate] Instructions for Exercise of Warrant To exercise the Warrants evidenced hereby, the Registered Holder must pay in full [in lawful money of the United States of America] [in applicable currency] [in cash] [by certified check or official bank check or by bank wire transfer, in each case,] [by bank wire transfer] [in immediately available funds,] the Warrant Price for Warrants exercised (plus any accrued interest as specified in this Warrant Certificate) to [insert name of Warrant Agent] [corporate trust department] [insert address of Warrant Agent], Attn: [or ], which [payment] [wire transfer] must specify the name of the Registered Holder and the number of Warrants exercised by such Registered Holder. In addition, the Registered Holder must complete the information required below and present this Warrant Certificate in person or by mail (certified or registered mail is recommended) to the Warrant Agent at the appropriate address set forth below. This Warrant Certificate, completed and duly executed, must be received by the Warrant Agent within five business days of the [payment] [wire transfer]. To be Executed Upon Exercise of Warrant The undersigned hereby irrevocably elects to exercise ________ Warrants, evidenced by this Warrant Certificate, to purchase ______________ principal amount of the [Title of Warrant Securities] (the "Warrant Securities") of Fortune Brands, Inc. and represents that he has tendered payment for such Warrant Securities [in lawful money of the United States of America) [in applicable currency] [in cash] [by certified check or official bank check or by bank wire transfer, in each case,] [by bank wire transfer] [in immediately available funds] to the order of Fortune Brands, Inc., c/o [insert name and address of Warrant Agent], in the amount of _____ in accordance with the terms hereof. The undersigned requests that said principal amount of Warrant Securities be in registered form in the authorized denominations, registered in such names and delivered all as specified in accordance with the instructions set forth below. If the number of Warrants exercised is fewer than all of the Warrants evidenced hereby, the undersigned requests that a new Warrant Certificate representing the remaining Warrants evidenced hereby be issued in registered A-5 form and delivered either to the undersigned or as otherwise specified in the instructions below. Dated________________________ Name___________________________ (Please Print) _____________________________ (Insert Social Security Address________________________ or Other Identifying Number of Holder) ________________________ Signature______________________ The Warrants evidenced hereby may be exercised at the following addresses: By hand at________________________________________________ ________________________________________________ ________________________________________________ ________________________________________________ By mail at________________________________________________ ________________________________________________ ________________________________________________ ________________________________________________ [Instructions as to delivery of Warrant Securities and, if applicable, Warrant Certificates evidencing unexercised Warrants - complete as appropriate.] A-6 Assignment (Form of Assignment to be Executed if Holder Desires to Transfer Warrants Evidenced Hereby) FOR VALUE RECEIVED hereby sells, assigns and transfers unto Please insert social security or other identifying number --------------------------- ___________________________ __________________________________________________________________ (Please print name and address including zip code) ______________________________________________________________________________ the Warrants represented by the within Warrant Certificate and does hereby irrevocably constitute and appoint ______________________ Attorney, to transfer said Warrant Certificate on the books of the Warrant Agent with full power of substitution in the premises. Dated: _________________________________ Signature (Signature must conform in all respects to name of Registered Holder as specified on the face of this Warrant Certificate and must bear a signature guarantee by a bank, trust company or member broker of the New York, Midwest or Pacific Stock Exchange). Signature Guaranteed ________________________ A-7 EXHIBIT B --------- [Attached] [DELETE THIS EXHIBIT IF WARRANT CERTIFICATES IN ONLY REGISTERED FORM ARE TO BE ISSUED] [FORM OF GLOBAL WARRANT CERTIFICATE IN BEARER FORM] [Face of Global Warrant Certificate] [[1: The] [2: Prior to , the ] beneficial ownership of any Warrants evidenced by this Global Warrant Certificate may be transferred only together with the beneficial ownership of the Temporary Global Security referred to herein to which this Global Warrant Certificate was initially attached.] EXERCISABLE ONLY IF COUNTERSIGNED BY THE WARRANT AGENT AS PROVIDED HEREIN FORTUNE BRANDS, INC. GLOBAL WARRANT CERTIFICATE REPRESENTING _________ WARRANTS TO PURCHASE OF UP TO ________ PRINCIPAL AMOUNT OF [Title of Warrant Securities] VOID AFTER [TIME], ON , 19 . This Global Warrant Certificate evidences warrants (the "Warrants") representing the right to purchase, subject to the terms and conditions hereof and of the Debt Warrant Agreement referred to below, at any time [after [time] on l9 , and] on or before the [time] in [location] on , 19 , up to aggregate principal amount of [Title of Warrant Securities] (the "Warrant Securities") of Fortune Brands, Inc. (the "Company") issued and to be issued under the Indenture (as hereinafter defined), on the following basis: on , 19 the exercise price of each Warrant will be ; during the period from , 19 through and including , 19 , the exercise price of each Warrant will be plus [accrued amortization of the original issue discount] [accrued interest] from , 19 ; on , 19 the exercise price of each Warrant will be ; during the period from , 19 through and including , 19 , the exercise price of each Warrant will be plus [accrued amortization of the original issue discount] [accrued interest] from , 19 [; in each case, the original issue discount will be amortized at a % annual rate, computed on an annual basis using the "interest" method and using a 360-day year consisting of twelve 30-day months] (the "Warrant Price"). [The original issue discount for each principal amount of Warrant Securities is .] Beneficial owners of Warrants represented by this Global Warrant Certificate may cause such Warrants to be exercised only by transmitting by tested telex or by delivering or causing to be delivered to Morgan Guaranty Trust Company of New York, Brussels office (or any successor), as operator of the Euro-clear System (the "Euro-clear Operator"), in Brussels, Belgium, or to Centrale de Livraison de Valeurs Mobilieres S.A. ("CEDEL") in Luxembourg, a warrant exercise notice, substantially in the form attached as Exhibit D to the Debt Warrant Agreement referred to below (the "Warrant Exercise Notice"), copies of which will be available from the Euro-clear Operator or CEDEL or from [name of Warrant Agent], or its successor as warrant agent (the "Warrant Agent") under the Debt Warrant Agreement (the "Debt Warrant Agreement") dated as of , 19 between the Company and the Warrant Agent. The Warrant Exercise Notice shall specify, among other things, the aggregate principal amount of Warrant Securities to be purchased on exercise of the Warrants, the account number or numbers on the records of the Euro-clear Operator or CEDEL to which the Warrants being exercised [2: and, if prior to , 19 , the Offered Securities (as defined below)] to which such Warrants are attached are credited, the account number to be debited for the Warrant Price of each Warrant being exercised (plus accrued interest, if any, on the Warrant Securities to be issued upon exercise of such Warrant from and including the Interest Payment Date (as defined in the Indenture), if any, in respect of such Warrant Securities immediately preceding the Exercise Date to and including the Exercise Date (unless the Exercise Date is after the Regular Record Date (as defined in the Indenture), if any, for such Interest Payment Date, but on or before the immediately succeeding Interest Payment Date for such Warrant Securities, in which event no such accrued interest shall be payable in respect of Warrant Securities to be issued in registered form)), the account number to which the Warrant Securities issued on exercise of the Warrants are to be credited and the form in which Warrant Securities are to be issued. A Warrant Exercise Notice must be received by the Euro-clear Operator or CEDEL prior to [time] (Brussels or Luxembourg time, as the case may be) on the business day next preceding the Exercise Date (as defined in such Warrant Exercise Notice). The delivery B-2 to the Euro-clear Operator or CEDEL, as the case may be, of a Warrant Exercise Notice shall constitute an irrevocable election to purchase the aggregate principal amount of Warrant Securities specified therein. Any whole number of Warrants evidenced by this Global Warrant Certificate may be exercised to purchase Warrant Securities in bearer or registered form in denominations of [ or ], in the case of Warrant Securities in bearer form, and of and any integral multiple thereof, in the case of Warrant Securities in registered form; provided, however, that no -------- ------- Warrant Security in bearer form shall be mailed or otherwise delivered to any location in the United States of America, its territories or possessions or areas subject to its jurisdiction or the Commonwealth of Puerto Rico (the "United States"). The Warrants evidenced by this Global Warrant Certificate, this Global Warrant Certificate and the rights evidenced hereby may be cancelled in the manner and under the circumstances described in the Debt Warrant Agreement. Notice of cancellation of the Warrants evidenced by this Global Warrant Certificate, this Global Warrant Certificate and the rights evidenced hereby shall be given by publication in the manner described in the Debt Warrant Agreement. This Global Warrant Certificate is issued under and in accordance with the Debt Warrant Agreement between the Company and the Warrant Agent and is subject to the terms and provisions contained in the Debt Warrant Agreement, to all of which terms and provisions the holder hereof consents by acceptance hereof. Copies of the Debt Warrant Agreement are on file at the above-mentioned office of the Warrant Agent [and at ]. The Warrant Securities to be issued and delivered upon the exercise of the Warrants evidenced by this Global Warrant Certificate will be issued under and in accordance with an Indenture dated as of [ ], 1999, as amended (the "Indenture"), between the Company and [The Chase Manhattan Bank], as Trustee (the "Trustee"), and will be subject to the terms and provisions contained in the Indenture. Copies of the Indenture and the form of the Warrant Securities are on file at the corporate trust office of the Trustee [and at ]. B-3 [1: The] [2: Prior to , 19 , the] beneficial ownership of any Warrants evidenced by this Global Warrant Certificate may be transferred only together with the beneficial ownership of the Temporary Global Security (as defined in the Debt Warrant Agreement) evidencing the [Title of Offered Securities] (the "Offered Securities") to which this Global Warrant Certificate was initially attached, and only for the purpose of effecting, or in conjunction with, a transfer of such Temporary Global Security. After such date, the Global Warrant Certificate, and all rights hereunder, may be transferred by delivery, and the Company and the Warrant Agent may treat the holder hereof as the owner for all purposes. The Global Warrant Certificate shall not entitle the Holder hereof to any of the rights of a holder of the Warrant Securities, including, without limitation, the right to receive payments of principal of, premium, if any, or interest, if any, on the Warrant Securities or to enforce any of the covenants of the Indenture. B-4 This Global Warrant Certificate shall not be valid or obligatory for any purpose until countersigned by the Warrant Agent. Dated as of , 19 . FORTUNE BRANDS, INC. By_____________________________ Name: Title: Attest: __________________________ Countersigned: __________________________ As Warrant Agent By________________________ Authorized Signature B-5 Schedule A (additional continuation sheets may be attached if required) Exercises of Warrants The following exercises of a portion of this Global Warrant Certificate for Warrant Securities have been made: Number of Warrants Remaining Number of Date of Exercised Warrants Following Notation Exercise for Warrant Securities Such Exercise Made By: - -------- ---------------------- ------------------- -------- ________ ______________________ ___________________ ________ ________ ______________________ ___________________ ________ ________ ______________________ ___________________ ________ ________ ______________________ ___________________ ________ ________ ______________________ ___________________ ________ ________ ______________________ ___________________ ________ ________ ______________________ ___________________ ________ ________ ______________________ ___________________ ________ ________ ______________________ ___________________ ________ ________ ______________________ ___________________ ________ ________ ______________________ ___________________ ________ ________ ______________________ ___________________ ________ ________ ______________________ ___________________ ________ ________ ______________________ ___________________ ________ ________ ______________________ ___________________ ________ ________ ______________________ ___________________ ________ ________ ______________________ ___________________ ________ B-6 Number of Warrants Remaining Number of Date of Exercised Warrants Following Notation Exercise for Warrant Securities Such Exercise Made By: - -------- ---------------------- ------------------- -------- ________ ______________________ ___________________ ________ ________ ______________________ ___________________ ________ ________ ______________________ ___________________ ________ ________ ______________________ ___________________ ________ ________ ______________________ ___________________ ________ ________ ______________________ ___________________ ________ ________ ______________________ ___________________ ________ ________ ______________________ ___________________ ________ ________ ______________________ ___________________ ________ ________ ______________________ ___________________ ________ ________ ______________________ ___________________ ________ ________ ______________________ ___________________ ________ ________ ______________________ ___________________ ________ ________ ______________________ ___________________ ________ ________ ______________________ ___________________ ________ ________ ______________________ ___________________ ________ ________ ______________________ ___________________ ________ B-7 Exhibit C --------- [Attached] [DELETE THIS EXHIBIT IF WARRANT CERTIFICATES IN ONLY REGISTERED FORM ARE TO BE ISSUED] [FORM OF CERTIFICATE TO BE DELIVERED TO WARRANT AGENT BY THE EURO-CLEAR OPERATOR OR CEDEL] FORTUNE BRANDS, INC. Warrants (the "Warrants") to Purchase [Title of Warrant Securities] [Name of Warrant Agent] [Address] Dear Sirs: The undersigned hereby irrevocably elects to exercise __________________ Warrants to purchase as of _____________________ (the "Exercise Date") ______ principal amount of the [Title of Warrant Securities] (the "Warrant Securities") of Fortune Brands, Inc. and represents that it has tendered payment for such Warrant Securities [in lawful money of the United States of America] [in applicable currency] [in cash] [by certified check or official bank check or by bank wire transfer, in each case,] [by bank wire transfer] [in immediately available funds] to the order of Fortune Brands, Inc., c/o [insert name and address of Warrant Agent], in the amount of ______ in accordance with the terms hereof and the Debt Warrant Agreement dated as of , 19__ between Fortune Brands, Inc. and you (the "Debt Warrant Agreement"). In connection with the Undersigned's request that you deliver to us any Warrant Securities in bearer form, the undersigned hereby certifies that as of the date hereof, and except as set forth below, the Warrant Securities in bearer form which are to be delivered to the Common Depositary referred to below for our account (i) are being acquired by a person that is not a citizen or resident of the United States, a domestic partnership, a domestic corporation or an estate or trust the income of which is subject to United States Federal income taxation regardless of its source (a "United States person"), (ii) are being acquired by a United States person that is (A) the foreign branch of a United States financial institution (as defined in U.S. Treasury Regulations Section l.165-12(c)(l)(v)(a "financial institution"), purchasing for its own account or for resale, or (B) a United States person acquiring the Warrant Securities through the foreign branch of a financial institution on the date hereof (and in either case (A) or (B), the financial institution hereby agrees to comply with the requirements of Section 165(j)(3)(A), (B) or (C) of the Internal Revenue Code of 1986, as amended, and the regulations thereunder), or (iii) are being acquired by a financial institution for purposes of resale during the restricted period (as defined in U.S. Treasury Regulations Section 1.163-5(c)(2)(i)(D)(7)), and such financial institution is not acquiring the Warrant Securities for purposes of resale directly or indirectly to a United States person or to a person within the United States or its possessions. As a clearing organization within the meaning of Section 1.163- 5(c)(2)(i)(D)(8) of the regulations promulgated under the Internal Revenue Code of 1986, as amended, the undersigned further certifies that (a) the above certification is based solely on statements received from member organizations appearing in our records (our "Account Holders") in certificates in the form set forth in Exhibit D to the Debt Warrant Agreement and (b) as of the date hereof we have not received any notification from any of our Account Holders to the effect that the statements made by such Account Holders in such certificates are no longer true. "United States" means the United States of America, its territories and possessions and areas subject to its jurisdiction and the Commonwealth of Puerto Rico. We hereby undertake to notify you immediately by telex if any of the statements of our Account Holders referred to above is not correct at any time on or before the Warrant Securities in bearer form are delivered, and in the absence of any such notification it may be assumed that this Certificate applies as of such date. We further agree to cause a [confirmation substantially in the form of Exhibit E to the Debt Warrant Agreement and a] copy of the prospectus relating to the Warrant Securities delivered to us as contemplated by Section 6.05 of the Debt Warrant Agreement to be delivered to our Account Holders entitled to such Warrant Securities prior to or contemporaneously with our transfer of such Warrant Securities to or to the account of such Account Holders. C-2 We understand that this Certificate is required in connection with United States laws, tax laws and regulations. We irrevocably authorize you to produce this Certificate or a copy hereof to any interested party in any administrative or legal proceedings with respect to the matters covered by this Certificate. The undersigned requests that said principal amount of Warrant Securities be [in registered form in the authorized denominations, registered in such names and delivered all as specified in accordance with the instructions set forth below] [bearer form in the authorized denominations and delivered to _______, as Common Depositary under the Debt Warrant Agreement, to be held for our account].* [Instructions as to delivery of Warrant Securities to be issued in registered form]. Dated:_______, 19__** Very truly yours, [MORGAN GUARANTY TRUST COMPANY OF NEW YORK, Brussels Office, as operator of the Euro-clear System]* By_________________________________ Title: [CENTRALE DE LIVRAISONS DE VALEURS MOBILIERES S.A.]* By_________________________________ Title: ___________________ * Delete inapplicable reference. ** To be dated no earlier than the fifteenth day prior to the certification date. C-3 Exhibit D --------- [Attached] [DELETE THIS EXHIBIT IF WARRANT CERTIFICATES IN ONLY REGISTERED FORM ARE TO BE ISSUED] [FORM OF WARRANT EXERCISE NOTICE] Morgan Guaranty Trust Company of New York, Brussels Office, as operator of the Euro-clear System* [Address] Centrale de Livraison de Valeurs Mobilieres S.A.* [Address] FORTUNE BRANDS, INC. WARRANTS (THE "WARRANTS") TO PURCHASE [Title of Warrant Securities] (the "Warrant Securities") Dear Sirs: We hereby irrevocably elect to exercise ____________ Warrants to purchase _____ (being _____ or an integral multiple thereof) aggregate principal amount of Warrant Securities of Fortune Brands, Inc. (the "Company") on _____________________, 19__ (the "Exercise Date"). The account number(s) on your books in which the Warrants being exercised [and the [Title of Offered Securities] to which such Warrants are attached]** are held is (are) _______ __________________. The Warrant Securities to be issued to us on exercise of the Warrants are to be credited to such account, unless otherwise indicated below and shall _________________. * Delete inapplicable reference. ** Delete if dated on or after , 19 . be in [registered] [bearer]* form in the following authorized denominations: ________________. We hereby request that you complete a certification in the form required by the Debt Warrant Agreement hereinafter referred to make payment directly to [ ], as Warrant Agent (the "Warrant Agent", which term shall include its successors as such Warrant Agent), under the Debt Warrant Agreement dated as of [ ] between the Company and the Warrant Agent (the "Debt Warrant Agreement") at or prior to [time] on the Exercise Date, or if the Exercise Date is the last day on which Warrants may be exercised under the Debt Warrant Agreement, prior to [time] in [location] on the Exercise Date, [in lawful money of the United States of America] [in applicable currency] [in cash] [by certified check or official bank check or by bank wire transfer, in each case,] [by bank wire transfer] [in immediately available funds] of _____________, such amount being the Warrant Price (as defined in the Global Warrant Certificate representing the Warrants, as provided in Section 1.02 of the Debt Warrant Agreement) for Warrants exercised (plus any accrued interest as specified in such Global Warrant Certificate) on the Exercise Date, and debit account number ____________ for said amount. The undersigned hereby certifies that as of the date hereof, and except as set forth below, the Warrant Securities held by you for our account (i) are being acquired by a person that is not a citizen or resident of the United States, a domestic partnership, a domestic corporation or an estate or trust the income of which is subject to United States Federal income taxation regardless of its source (a "United States person"), (ii) are being acquired by a United States person that is (A) the foreign branch of a United States financial institution (as defined in U.S. Treasury Regulations Section l.165- 12(c)(l)(v))(a "financial institution") purchasing for its own account or for resale, or (B) a United States person who is acquiring the Warrant Securities through the foreign branch of a financial institution on the date hereof (and in either case (A) or (B), the financial institution hereby agrees to comply with the requirements of Section 165(j)(3)(A), (B) or (C) of the Internal Revenue Code of 1986, as amended, and the regulations thereunder), or (iii) are being acquired by a financial institution for purposes of resale during the restricted period (as defined in U.S. Treasury Regulations Section 1.163-5(c)(2)(i)(D)(7)), and such financial D-2 institution is not acquiring the Warrant Securities for purposes of resale directly or indirectly to a United States person or to a person within the United States or its possessions. If this Certificate is being provided by a clearing organization, it is based on statements provided to it by its member organizations. As used herein, a "clearing organization" is an entity which is in the business of holding obligations for member organizations and transferring obligations among such members by credit or debit to the account of a member without the necessity of physical delivery of the obligation. We undertake to advise you immediately by telex if the foregoing statement as to beneficial ownership is not correct on or before the date of delivery of such Warrant Securities as to the entire principal amount of the Warrant Securities to be issuable upon exercise then appearing on your books as being held for our account, and in the absence of any such notification it may be assumed that this Certificate applies as of such date. This Certificate excepts and does not relate to [ ] of such interest in the above Warrants in respect of which we are not able to certify and as to which we understand exchange and delivery of Warrant Securities cannot be made until we do so certify. We understand that this Certificate is required in connection with certain tax regulations in the United States. If administrative or legal proceedings are commenced or threatened in connection with which this Certificate is or would be relevant, we irrevocably authorize you to produce this certificate or a copy thereof to any interested party in such proceedings. "United States" means the United States of America, its territories and possessions and areas subject to its jurisdiction and the Commonwealth of Puerto Rico. D-3 Dated: ______________, l9__* Very truly yours, [Name and, if appropriate, title] As the beneficial owner(s) of the interest in the Warrants to which this Warrant Exercise Notice relates. By______________________________ Title: * To be dated no earlier than the fifteenth day prior to the certification date. D-4 Exhibit 4fl [Form of Debt Warrant Agreement for Warrants Sold Alone] FORTUNE BRANDS, INC. and ____________________, as Warrant Agent DEBT WARRANT AGREEMENT Dated as of _______________ Warrants to Purchase __________ _____________________ TABLE OF CONTENTS/*/ --------------------
Page ---- ARTICLE I ISSUANCE OF WARRANTS AND EXECUTION AND DELIVERY OF WARRANT CERTIFICATES................ 2 SECTION 1.01. Issuance of Warrants............................................................... 2 SECTION 1.02. Execution and Delivery of Warrant Certificates..................................... 2 SECTION 1.03. Issuance of Warrant Certificates................................................... 3 ARTICLE II WARRANT PRICE, DURATION AND EXERCISE OF WARRANTS...................................... 5 SECTION 2.01. Warrant Price...................................................................... 5 SECTION 2.02. Duration of Warrants............................................................... 5 SECTION 2.03. Exercise of Warrants............................................................... 6 ARTICLE III OTHER PROVISIONS RELATING TO RIGHTS OF HOLDERS OF WARRANT CERTIFICATES............... 10 SECTION 3.01. No Rights as Warrant Securityholder Conferred by Warrants or Warrant Certificates.. 10 SECTION 3.02. Lost, Mutilated, Stolen or Destroyed Warrant Certificates.......................... 10 SECTION 3.03. Enforcement of Rights.............................................................. 11 SECTION 3.04. Merger, Consolidation, Conveyance or Transfer...................................... 11
_______________ /*/ The Table of Contents is not part of the Agreement. ARTICLE IV EXCHANGE AND TRANSFER................................................................. 12 SECTION 4.01. Exchange and Transfer.............................................................. 12 SECTION 4.02. Treatment of Holders of Warrant Certificates....................................... 13 SECTION 4.03. Cancellation of Warrant Certificates............................................... 14 ARTICLE V CONCERNING THE WARRANT AGENT........................................................... 15 SECTION 5.01. Warrant Agent...................................................................... 15 SECTION 5.02. Conditions of Warrant Agent's Obligations.......................................... 15 SECTION 5.03. Resignation and Appointment of Successor........................................... 17 ARTICLE VI MISCELLANEOUS......................................................................... 19 SECTION 6.01. Amendment.......................................................................... 19 SECTION 6.02. Notices and Demands to the Company and Warrant Agent............................... 19 SECTION 6.03. Addresses.......................................................................... 20 SECTION 6.04. Applicable Law..................................................................... 20 SECTION 6.05. Delivery of Prospectus............................................................. 20 SECTION 6.06. Obtaining of Governmental Approval................................................. 20 SECTION 6.07. Persons Having Rights Under Warrant Agreement...................................... 20 SECTION 6.08. Headings........................................................................... 21 SECTION 6.09. Counterparts....................................................................... 21 SECTION 6.10. Inspection of Agreement............................................................ 21 SECTION 6.11. Notices to Holders of Warrants..................................................... 21
3 DEBT WARRANT AGREEMENT * THIS AGREEMENT dated as of ____________ between FORTUNE BRANDS, INC., a corporation duly organized and existing under the laws of the State of Delaware (the "Company"), and _______________________________, a [bank] [trust company] duly incorporated and existing under the laws of _______________, as Warrant Agent (the "Warrant Agent"), W I T N E S S E T H : - - - - - - - - - - WHEREAS, the Company has entered into an Indenture dated as of [ ], 1999, as amended (the "Indenture"), between the Company and [The Chase Manhattan Bank], as Trustee (the "Trustee"), providing for the issuance from time to time of its unsecured debt securities to be issued in one or more series as provided in the Indenture; and WHEREAS, the Company proposes to sell [title of such debt securities being offered] (the "Offered Securities") with one or more warrants (the "Warrants") representing the right to purchase [title of such debt securities purchasable through exercise of Warrants] (the "Warrant Securities"), the Warrants to be evidenced by warrant certificates issued pursuant to this Agreement (the "Warrant Certificates"); and WHEREAS, the Company desires the Warrant Agent to act on behalf of the Company in connection with the issuance, transfer, exchange, exercise and replacement of the Warrant Certificates, and in this Agreement wishes to set forth, among other things, the form[s] and provisions of _______________________ * Complete or modify the provisions of this form as appropriate to reflect the terms of the Warrants and Warrant Securities. Monetary amounts may be in U.S. dollars, in a foreign currency or in a composite currency, including but not limited to the European Currency Unit. the Warrant Certificates and the terms and conditions on which they may be issued, transferred, exchanged, exercised and replaced; NOW, THEREFORE, in consideration of the premises and of the mutual agreements herein contained, the parties hereto agree as follows: ARTICLE I ISSUANCE OF WARRANTS AND EXECUTION AND DELIVERY OF WARRANT CERTIFICATES SECTION 1.01. Issuance of Warrants. The Warrants shall be evidenced -------------------- by one or more Warrant Certificates. Each Warrant evidenced thereby shall represent the right, subject to the provisions contained herein and therein, to purchase a Warrant Security in the principal amount of ______________. SECTION 1.02. Execution and Delivery of Warrant Certificates. Each ---------------------------------------------- Warrant, whenever issued, shall be evidenced by a Warrant Certificate in registered form [or a global Warrant Certificate in bearer form (the "Global Warrant Certificate")] [the form to be the same as that of the Warrant Security in connection with which the Warrant Certificate is issued], substantially in the form[s] set forth in Exhibit A [and Exhibit B, respectively,] hereto, shall be dated ________ and may have such letters, numbers or other marks of identification or designation and such legends or endorsements printed, lithographed or engraved thereon as the officers of the Company executing the same may approve (execution thereof to be conclusive evidence of such approval) and as are not inconsistent with the provisions of this Agreement, or as may be required to comply with any law or with any rule or regulation made pursuant thereto or with any rule or regulation of any stock exchange on which the Warrants may be listed, or to conform to usage. The Warrant Certificates shall be signed on behalf of the Company by its Chairman of the Board (or its Chairman of the Executive Committee), any Vice Chairman, its President, its principal financial officer, its principal accounting officer, its general counsel, any Vice President or its Treasurer, in each case under its corporate seal, which may but need not be attested by its Secretary or one of its Assistant Secretaries [, except that the Global Warrant Certificate may be executed by any such officer 2 without any necessity that such signature be under seal as aforesaid]. Such signatures may be manual or facsimile signatures of such authorized officers and may be imprinted or otherwise reproduced on the Warrant Certificates. The corporate seal of the Company may be in the form of a facsimile thereof and may be impressed, affixed, imprinted or otherwise reproduced on the Warrant Certificates. No Warrant Certificate shall be valid for any purpose, and no Warrant evidenced thereby shall be exercisable, until such Warrant Certificate has been countersigned by the Warrant Agent by manual signature. Such signature by the Warrant Agent upon any Warrant Certificate executed by the Company shall be conclusive evidence, and the only evidence, that the Warrant Certificate so countersigned has been duly issued hereunder. [The Global Warrant Certificate shall be and remain subject to the provisions of this Agreement until such time as all of the Warrants evidenced thereby shall have been duly exercised or shall have expired or been cancelled in accordance with the terms thereof.] In case any officer of the Company who shall have signed any of the Warrant Certificates either manually or by facsimile signature shall cease to be such officer before the Warrant Certificates so signed shall have been countersigned and delivered by the Warrant Agent, such Warrant Certificates may be countersigned and delivered notwithstanding that the person who signed such Warrant Certificates ceased to be such officer of the Company; and any Warrant Certificate may be signed on behalf of the Company by such persons as, at the actual date of the execution of such Warrant Certificate, shall be the proper officers of the Company, although at the date of the execution of this Agreement any such person was not such officer. The term "Holder", when used with respect to any Warrant Certificate [in registered form], shall mean any person in whose name at the time such Warrant Certificate shall be registered upon the books to be maintained by the Warrant Agent for that purpose. [The term "Holder", when used with respect to the Global Warrant Certificate, shall mean the bearer thereof.] SECTION 1.03. Issuance of Warrant Certificates. Warrant Certificates -------------------------------- evidencing the right to purchase an 3 aggregate principal amount not exceeding _____ aggregate principal amount of Warrant Securities (except as provided in Sections 2.03, 3.02 and 4.01) may be executed by the Company and delivered to the Warrant Agent upon the execution of this Warrant Agreement or from time to time thereafter. The Warrant Agent shall, upon receipt of Warrant Certificates duly executed on behalf of the Company, countersign Warrant Certificates evidencing ________ Warrants representing the right to purchase up to ________ aggregate principal amount of Warrant Securities and shall[, in the case of Warrant Certificates in registered form,] deliver such Warrant Certificates to or upon the order of the Company [and, in the case of the Global Warrant Certificate, upon the order of the Company, deposit the Global Warrant Certificate with _______________________, as common depositary (the "Common Depositary") for Morgan Guaranty Trust Company of New York, Brussels office (or any successor), as operator of the Euro-clear System (the "Euro-clear Operator"), and for Centrale de Livraison de Valeurs Mobilieres S.A. ("CEDEL") for credit to the accounts of persons appearing from time to time on the records of the Euro-clear Operator or of CEDEL as being entitled to any portion thereof. [The Global Warrant Certificate shall be held by the Common Depositary outside the United Kingdom.]] Subsequent to such original issuance of the Warrant Certificates, the Warrant Agent shall countersign a Warrant Certificate only if the Warrant Certificate is issued in exchange or substitution for one or more previously countersigned Warrant Certificates or [, with respect to Warrant Certificates in registered form,] in connection with their transfer as hereinafter provided or as provided in the antepenultimate paragraph of Section 2.03. Pending the preparation of definitive Warrant Certificates [in registered form] evidencing Warrants, the Company may execute and the Warrant Agent shall countersign and deliver temporary Warrant Certificates [in registered form] evidencing such Warrants (printed, lithographed, typewritten or otherwise produced, in each case in form satisfactory to the Warrant Agent). Such temporary Warrant Certificates shall be issuable substantially in the form of the definitive Warrant Certificates [in registered form] but with such omissions, insertions and variations as may be appropriate for temporary Warrant Certificates, all as may be determined by the Company with the concurrence of the Warrant Agent. Such temporary Warrant Certificates may contain such reference to any provisions of this Warrant 4 Agreement as may be appropriate. Every such temporary Warrant Certificate shall be executed by the Company and shall be countersigned by the Warrant Agent upon the same conditions and in substantially the same manner, and with like effect, as the definitive Warrant Certificates [in registered form]. Without unreasonable delay, the Company shall execute and shall furnish definitive Warrant Certificates [in registered form] and thereupon such temporary Warrant Certificates may be surrendered in exchange therefor without charge pursuant to and subject to the provisions of Section 4.01, and the Warrant Agent shall countersign and deliver in exchange for such temporary Warrant Certificates definitive Warrant Certificates [in registered form] of authorized denominations evidencing a like aggregate number of Warrants evidenced by such temporary Warrant Certificates. Until so exchanged, such temporary Warrant Certificates shall be entitled to the same benefits under this Warrant Agreement as definitive Warrant Certificates [in registered form]. ARTICLE II WARRANT PRICE, DURATION AND EXERCISE OF WARRANTS SECTION 2.01. Warrant Price. On __________, 19__, the exercise price ------------- of each Warrant will be ____________. During the period from _____________, 19__ through and including _____________, 19__, the exercise price of each warrant Will be _____ plus ______ [accrued amortization of the original issue discount] [accrued interest] from ___________, 19__. On _____________, 19__ the exercise price of each Warrant will be ________. During the period from ___________, 19__ through and including ______________, 19__, the exercise price of each Warrant will be _____ plus [accrued amortization of the original issue discount] [accrued interest] from _____________, 19__. [In each case, the original issue discount will be amortized at a ___% annual rate, computed on an annual basis using the "interest" method and using a 360-day year consisting of twelve 30-day months]. Such exercise price of Warrant Securities is referred to in this Agreement as the "Warrant Price". [The original issue discount for each principal amount of Warrant Securities is ___________]. 5 SECTION 2.02. Duration of Warrants. Subject to Section 4.03(b), each -------------------- Warrant may be exercised [in whole but not in part] [in whole or in part] [at any time, as specified herein, on or after [the date thereof] [_____________, 19__] and at or before [time, location] on _____________, 19__ (each day during such period may hereinafter be referred to as an "Exercise Date")] [on [list of specific dates] (each, an "Exercise Date")], or such later date as the Company may designate by notice to the Warrant Agent and the Holders of Warrant Certificates [in registered form and to the beneficial owners of the Global Warrant Certificate] (the "Expiration Date"). Each Warrant not exercised at or before [time, location] on the Expiration Date shall become void, and all rights of the Holder [and any beneficial owners] of the Warrant Certificate evidencing such Warrant under this Agreement shall cease. SECTION 2.03. Exercise of Warrants. [With respect to Warrants -------------------- evidenced by Warrant Certificates in registered form, during] [During] the period specified in Section 2.02, any whole number of Warrants may be exercised by providing certain information as set forth on the reverse side of the Warrant Certificates evidencing such Warrants and by paying in full [in lawful money of the United States of America] [in applicable currency] [in cash] [by certified check or official bank check or by bank wire transfer, in each case,] [by bank wire transfer] [in immediately available funds,] the Warrant Price for each Warrant exercised (plus accrued interest, if any, on the Warrant Securities to be issued upon exercise of such Warrant from and including the Interest Payment Date (as defined in the Indenture), if any, in respect of such Warrant Securities immediately preceding the Exercise Date to and including the Exercise Date (unless the Exercise Date is after the Regular Record Date (as defined in the Indenture), if any, for such Interest Payment Date, but on or before the immediately succeeding Interest Payment Date for such Warrant Securities, in which event no such accrued interest shall be payable)) to the Warrant Agent at its corporate trust office at [address] [or at _____________], provided that such exercise is subject to receipt within five business days of such [payment] [wire transfer] by the Warrant Agent of the Warrant Certificate evidencing each Warrant exercised with the form of election to purchase Warrant Securities set forth on the reverse side of the Warrant Certificate properly completed and duly executed. 6 [With respect to Warrants evidenced by the Global Warrant Certificate, during the period specified in Section 2.02, any whole number of Warrants may be exercised by the Holder by presentation to the Warrant Agent at its office at [address located outside the United States [and the United Kingdom]], at or prior to [time], on any day on which the Warrants are exercisable, of (i) the Global Warrant Certificate (or written confirmation reasonably satisfactory to the Warrant Agent that the Global Warrant Certificate is held by the Euro-clear Operator and CEDEL and will be duly endorsed to reflect the exercise of Warrants by the Euro-clear Operator and CEDEL), (ii) a duly executed certification from the Euro-clear Operator or CEDEL, as the case may be, substantially in the form set forth in Exhibit C hereto and (iii) payment in full [in lawful money of the United States of America] [in applicable currency] [in cash] [by certified check or official bank check or by bank wire transfer, in each case,] [by bank wire transfer] [in immediately available funds,] of the Warrant Price for each Warrant exercised (plus accrued interest, if any, on the Warrant Securities to be issued upon exercise of such Warrant from and including the Interest Payment Date, if any, in respect of such Warrant Securities immediately preceding the Exercise Date to and including the Exercise Date (unless the Exercise Date is after the Regular Record Date, if any, for such Interest Payment Date, but on or before the immediately succeeding Interest Payment Date for such Warrant Securities, in which event no such accrued interest shall be payable in respect of Warrant Securities to be issued in registered form)). Notwithstanding the foregoing, the Holder may exercise Warrants as aforesaid on the Expiration Date at any time prior to [time] in [city of Warrant Agent's office]. Any Warrants exercised as set forth in this paragraph shall be deemed exercised at the [country] office of the Warrant Agent.] [The Warrant Agent shall retain each certificate received by it from the Euro-clear Operator or CEDEL through the Expiration Date (or such earlier date by which all of the Warrants may have been exercised or cancelled) and thereafter shall dispose of them or deliver them to the Company pursuant to the instructions of the Company.] [The delivery to the Warrant Agent by the Euro-clear Operator or CEDEL of any certification referred to above may be relied upon by the Company, the Warrant Agent and the Trustee as conclusive evidence that a corresponding certificate or certificates substantially in the form of 7 Exhibit D hereto has or have been delivered to the Euro-clear Operator or CEDEL, as the case may be.] [The Company will maintain in [location] (or in such other city [in western Europe] as the Company may deem advisable), until the right to exercise the Warrants shall expire or be earlier cancelled as hereinafter provided, an agency where the Global Warrant Certificate may be presented for exercise of the Warrants represented thereby and notices and demands to or upon the Company in respect of the Warrants or of this Agreement may be made.] The date on which payment in full of the Warrant Price (plus any such accrued interest) is received by the Warrant Agent shall, subject to receipt of the Warrant Certificate [in registered form or, as the case may be, the Global Warrant Certificate and the certification of the Euro-clear Operator or CEDEL] as aforesaid, be deemed to be the date on which the Warrant is exercised. The Warrant Agent shall deposit all funds received by it in payment for the exercise of Warrants in an account of the Company maintained with it (or in such other account as may be designated by the Company) and shall advise the Company, by telephone or by facsimile transmission or other form of electronic communication available to both parties, at the end of each day on which a payment for the exercise of Warrants is received of the amount so deposited to its account. The Warrant Agent shall promptly confirm such advice to the Company in writing. If a day on which Warrants may be exercised in the city in which such Warrants are to be exercised shall be a Saturday or Sunday or a day on which banking institutions in such city are authorized or required to be closed, then, notwithstanding any other provision of this Agreement or the Warrant Certificate evidencing such Warrants, but subject to the limitation that no Warrant may be exercised after the Expiration Date, the Warrants shall be exercisable on the next succeeding day which in such city is not a Saturday or Sunday or a day on which banking institutions in such city are authorized or required to be closed. The Warrant Agent shall, from time to time, as promptly as practicable, advise the Company [and][,] the Trustee [and the Common Depositary at [both] its London [and location] office[s]] in writing [(which, in the case of exercised Warrants represented by the Global Warrant Certificate, shall be tested telex with appropriate 8 answerback received,)] of (i) the number of Warrants exercised, (ii) the instructions of each Holder of the Warrant Certificates [in registered form] evidencing such Warrants [or of the Euro-clear Operator or CEDEL, as the case may be,] with respect to delivery of the Warrant Securities to be issued upon such exercise, (iii) delivery of any Warrant Certificates [in registered form] evidencing the balance, if any, of the Warrants remaining after such exercise, and (iv) such other information as the Company or the Trustee shall reasonably require. [In addition, in the case of exercised Warrants evidenced by the Global Warrant Certificate, the Warrant Agent shall, as promptly as practicable, endorse, or cause the Common Depositary, [location] office, or one of the Warrant Agent's agents to endorse, Schedule A annexed to the Global Warrant Certificate to reflect the exercise of such Warrants and, if applicable, return the Global Warrant Certificate to the Common Depositary or to its order.] As soon as practicable after the exercise of any Warrant [evidenced by a Warrant Certificate in registered form], but subject to receipt by the Warrant Agent of the Warrant Certificate evidencing such Warrant as provided in this Section, the Company shall issue, pursuant to the Indenture, in authorized denominations to or upon the order of the Holder of the Warrant Certificate evidencing each Warrant, the Warrant Securities to which such Holder is entitled, in fully registered form, registered in such name or names as may be directed by such Holder. If fewer than all of the Warrants evidenced by such Warrant Certificate are exercised, the Company shall execute, and an authorized officer of the Warrant Agent shall manually countersign and deliver, a new Warrant Certificate [in registered form] evidencing the number of such Warrants remaining unexercised. [As soon as practicable after the exercise of any Warrant evidenced by the Global Warrant Certificate, but, in the case of any Warrant Securities to be issued in bearer form as provided in this sentence, on the date of the applicable certification of the Euro-clear Operator or CEDEL referred to in the second paragraph of this Section 2.03, the Company shall issue, pursuant to the Indenture, the Warrant Securities issuable upon such exercise, in authorized denominations (i) in fully registered form, registered in such name or names as may be directed by the Euro-clear Operator or CEDEL, as the case may 9 be, to or upon order of the Euro-clear Operator or CEDEL, as the case may be, or (ii) in bearer form to the Common Depositary to be held for the account of the Euro-clear Operator or CEDEL, as the case may be; provided, however, that no -------- ------- Warrant Security in bearer form shall be mailed or otherwise delivered to any location in the United States of America, its territories or possessions or areas subject to its jurisdiction or the Commonwealth of Puerto Rico.] The Company shall not be required to pay any stamp or other tax or other governmental charge required to be paid in connection with any transfer involved in the issuance of the Warrant Securities, and in the event that any such transfer is involved, the Company shall not be required to issue or deliver any Warrant Security until such tax or other charge shall have been paid or it has been established to the Company's satisfaction that no such tax or other charge is due. ARTICLE III OTHER PROVISIONS RELATING TO RIGHTS OF HOLDERS OF WARRANT CERTIFICATES SECTION 3.01. No Rights as Warrant Securityholder Conferred by ------------------------------------------------ Warrants or Warrant Certificates. No Warrant Certificate or Warrant evidenced - -------------------------------- thereby shall entitle the Holder or any beneficial owner thereof to any of the rights of a holder or beneficial owner of Warrant Securities, including, without limitation, the right to receive the payment of principal of (premium, if any) or interest, if any, on Warrant Securities or to enforce any of the covenants in the Indenture. SECTION 3.02. Lost, Mutilated, Stolen or Destroyed Warrant -------------------------------------------- Certificates. Upon receipt by the Warrant Agent of evidence reasonably - ------------ satisfactory to it and the Company of the ownership of and the loss, mutilation, theft or destruction of any Warrant Certificate and of such security or indemnity as may be required by the Company and the Warrant Agent to hold each of them and any agent of them harmless and, in the case of mutilation of a Warrant Certificate, upon surrender thereof to the Warrant Agent for cancellation, then, in the absence of notice to the Company or the Warrant Agent that such Warrant Certificate has been acquired by a bona fide purchaser, the Company shall execute, and an authorized officer of the Warrant Agent shall manually countersign and deliver, in exchange for or 10 in lieu of the lost, mutilated, stolen or destroyed Warrant Certificate, a new Warrant Certificate of the same tenor and evidencing a like number of Warrants[; provided, however, that any Global Warrant Certificate shall be so delivered - -------- ------- only to the Common Depositary]. Upon the issuance of any new Warrant Certificate under this Section, the Company may require the payment of a sum sufficient to cover any stamp or other tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Warrant Agent) in connection therewith. Every substitute Warrant Certificate executed and delivered pursuant to this Section in lieu of any lost, mutilated, stolen or destroyed Warrant Certificate shall represent an additional contractual obligation of the Company, whether or not the lost, stolen or destroyed Warrant Certificate shall be at any time enforceable by anyone, and shall be entitled to the benefits of this Agreement equally and proportionately with any and all other Warrant Certificates duly executed and delivered hereunder. The provisions of this Section are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement of lost, mutilated, stolen or destroyed Warrant Certificates. SECTION 3.03. Enforcement of Rights. Notwithstanding any of the --------------------- provisions of this Agreement, any Holder of a Warrant Certificate [in registered form or the beneficial owner of any Warrant evidenced by the Global Warrant Certificate], without the consent of [the Common Depositary,] the Warrant Agent, the Trustee, the holder of any Offered Securities or the Holder of any other Warrant Certificate, may, in its own behalf and for its own benefit, enforce, and may institute and maintain any suit, action or proceeding against the Company suitable to enforce, or otherwise in respect of, its right to exercise its Warrants in the manner provided in its Warrant Certificate [or the Global Warrant Certificate, as the case may be,] and in this Agreement. [Neither the Company nor the Warrant Agent shall be required to treat any person as a beneficial owner of any Warrant evidenced by the Global Warrant Certificate unless such person is so certified as such a beneficial owner by the Euro-clear Operator or CEDEL.] SECTION 3.04. Merger, Consolidation, Conveyance or Transfer. (a) If --------------------------------------------- at any time there shall be a merger or consolidation of the Company or a conveyance or transfer of its property and assets substantially as an entirety as permitted under the Indenture, then in any such event the 11 successor or assuming corporation referred to therein shall succeed to and be substituted for the Company, with the same effect, subject to the Indenture, as if it had been named herein and in the Warrant Certificates as the Company; the Company shall thereupon, except in the case of a transfer by way of lease, be relieved of any further obligation hereunder and under the Warrants and the Warrant Certificates, and the Company as the predecessor corporation, except in the case of a transfer by way of lease, may thereupon or at any time thereafter be dissolved, wound up or liquidated. Such successor or assuming corporation may thereupon cause to be signed, and may issue either in its own name or in the name of the Company, Warrant Certificates evidencing any or all of the Warrants issuable hereunder which theretofore shall not have been signed by the Company, and may execute and deliver Warrant Securities in its own name pursuant to the Indenture, in fulfillment of its obligations to deliver Warrant Securities upon exercise of the Warrants. All the Warrants so issued shall in all respects have the same legal rank and benefit under this Agreement as the Warrants theretofore or thereafter issued in accordance with the terms of this Agreement as though all of such Warrants had been issued at the date of the execution hereof. In any case of any such merger, consolidation, conveyance or transfer, such changes in phraseology and form (but not in substance) may be made in the Warrant Certificates representing the warrants thereafter to be issued as may be appropriate. (b) The Warrant Agent may receive a written opinion of legal counsel (who shall be acceptable to the Warrant Agent) as conclusive evidence that any such merger, consolidation, conveyance or transfer complies with the provisions of this Section and the Indenture. ARTICLE IV EXCHANGE AND TRANSFER SECTION 4.01. Exchange and Transfer. (a) Upon surrender at the --------------------- corporate trust office of the Warrant Agent at [address] [or __________], Warrant Certificates [in registered form] evidencing Warrants may be exchanged for Warrant Certificates [in registered form] in other authorized denominations evidencing such Warrants or the transfer thereof may be registered in whole or in part; provided, however, that such other Warrant Certificates -------- ------- 12 shall evidence the same aggregate number of Warrants as the Warrant Certificates so surrendered. (b) The Warrant Agent shall keep, at its corporate trust office at [address] [and at ______________], books in which, subject to such reasonable regulations as it may prescribe, it shall register Warrant Certificates [in registered form] and exchanges and transfers of outstanding Warrant Certificates [in registered form] upon surrender of such Warrant Certificates to the Warrant Agent at its corporate trust office at [address] or [_______________] for exchange or registration of transfer, properly endorsed [or accompanied by appropriate instruments of registration of transfer and written instructions for transfer, all in form satisfactory to the Company and the Warrant Agent.] (c) No service charge shall be made for any exchange or registration of transfer of Warrant Certificates [in registered form], but the Company may require payment of a sum sufficient to cover any stamp or other tax or other governmental charge that may be imposed in connection with any such exchange or registration of transfer. (d) Whenever any Warrant Certificates [in registered form], are so surrendered for exchange or registration of transfer, an authorized officer of the Warrant Agent shall manually countersign and deliver to the person or persons entitled thereto a Warrant Certificate or Warrant Certificates [in registered form], duly authorized and executed by the Company, as so requested. The Warrant Agent shall not effect any exchange or registration of transfer which will result in the issuance of a Warrant Certificate [in registered form], evidencing a fraction of a Warrant or a number of full Warrants and a fraction of a Warrant. (e) All Warrant Certificates [in registered form], issued upon any exchange or registration of transfer of Warrant Certificates shall be the valid obligations of the Company, evidencing the same obligations, and entitled to the same benefits under this Agreement, as the Warrant Certificates surrendered for such exchange or registration or transfer. SECTION 4.02. Treatment of Holders of Warrant Certificates. [With -------------------------------------------- respect to the Global Warrant Certificate, the Holder thereof may be treated by the Company, the Warrant Agent and all other persons dealing 13 with such Holder as the absolute owner thereof for any purpose and as the person entitled to exercise the rights represented by the Warrants evidenced thereby, any notice to the contrary notwithstanding.] [With respect to Warrant Certificates in registered form, each] [Each] Holder of a Warrant Certificate, by accepting the same, consents and agrees with the Company, the Warrant Agent and every subsequent Holder of such Warrant Certificate that until the transfer of such Warrant Certificate is registered on the books of such Warrant Agent, the Company and the Warrant Agent may treat the registered Holder of such Warrant Certificate as the absolute owner thereof for any purpose and as the person entitled to exercise the rights represented by the Warrants evidenced thereby, any notice to the contrary notwithstanding. SECTION 4.03. Cancellation of Warrant Certificates. (a) Any Warrant ------------------------------------ Certificate surrendered for exchange or registration of transfer or exercise of the Warrants evidenced thereby shall, if surrendered to the Company, be delivered to the Warrant Agent, and all Warrant Certificates surrendered or so delivered to the Warrant Agent shall be promptly cancelled by the Warrant Agent and shall not be reissued and, except as expressly permitted by this Agreement, no Warrant Certificate shall be issued hereunder in exchange therefor or in lieu thereof. The Warrant Agent shall cause all cancelled Warrant Certificates to be destroyed and shall deliver a certificate of such destruction to the Company. (b) If the Company notifies the Trustee of its election to redeem [, as a whole but not in part,] the Warrant Securities pursuant to the Indenture or the terms thereof, the Company may elect, and shall give notice to the Warrant Agent of its election, to cancel the unexercised Warrants, the Warrant Certificates and the rights evidenced thereby. Promptly after receipt of such notice by the Warrant Agent, the Company shall, or, at the Company's request, the Warrant Agent shall in the name of and at the expense of the Company, give notice of such cancellation to the Holders of the Warrant Certificates [in registered form and to the beneficial owners of the Global Warrant Certificate (except that such notice shall be required to be published only once)], such notice to be so given not less than 30 nor more than 60 days prior to the date fixed for the redemption of the Warrant Securities pursuant to Indenture or the terms thereof. The unexercised Warrants, the Warrant Certificates and the rights evidenced thereby 14 shall be cancelled and become void on the 15th day prior to such date fixed for redemption. ARTICLE V CONCERNING THE WARRANT AGENT SECTION 5.01. Warrant Agent. The Company hereby appoints __________ ------------- as Warrant Agent of the Company in respect of the Warrants and the Warrant Certificates upon the terms and subject to the conditions herein and in the Warrant Certificates set forth; and __________ hereby accepts such appointment. The Warrant Agent shall have the powers and authority granted to and conferred upon it in the Warrant Certificates and herein and such further powers and authority to act on behalf of the Company as the Company may hereafter grant to or confer upon it. All of the terms and provisions with respect to such powers and authority contained in the Warrant Certificates are subject to and governed by the terms and provisions hereof. SECTION 5.02. Conditions of Warrant Agent's Obligations. The Warrant ----------------------------------------- Agent accepts its obligations herein set forth upon the terms and conditions hereof, including the following, to all of which the Company agrees and to all of which the rights hereunder of the Holders from time to time of the Warrant Certificates shall be subject: (a) Compensation and Indemnification. The Company agrees promptly to -------------------------------- pay the Warrant Agent the compensation to be agreed upon with the Company for all services rendered by the Warrant Agent and to reimburse the Warrant Agent for reasonable out-of-pocket expenses (including reasonable attorneys' fees) incurred by the Warrant Agent without negligence, bad faith or breach of this Agreement on its part in connection with the services rendered hereunder by the Warrant Agent. The Company also agrees to indemnify the Warrant Agent for, and to hold it harmless against, any loss, liability or expense incurred without negligence or bad faith on the part of the Warrant Agent, arising out of or in connection with its acting as Warrant Agent hereunder, as well as the reasonable costs and expenses of defending against any claim of such liability. (b) Agent for the Company. In acting under this Agreement and in --------------------- connection with the Warrants and the Warrant Certificates, the Warrant Agent is acting solely as 15 agent of the Company and does not assume any obligation or relationship of agency or trust for or with any of the Holders of Warrant Certificates or beneficial owners of Warrants. (c) Counsel. The Warrant Agent may consult with counsel satisfactory ------- to it in its reasonable judgment, and the advice of such counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in accordance with the advice of such counsel. (d) Documents. The Warrant Agent shall be protected and shall incur --------- no liability for or in respect of any action taken or thing suffered by it in reliance upon any Warrant Certificate, notice, direction, consent, certificate, affidavit, statement or other paper or document reasonably believed by it to be genuine and to have been presented or signed by the proper parties. (e) Certain Transactions. The Warrant Agent, and its officers, -------------------- directors and employees, may become the owner of, or acquire any interest in, Warrants, with the same rights that it or they would have if it were not the Warrant Agent hereunder, and, to the extent permitted by applicable law, it or they may engage or be interested in any financial or other transaction with the Company and may act on, or as depositary, trustee or agent for, any committee or body of holders of Warrant Securities or other obligations of the Company as freely as if it were not the Warrant Agent hereunder. Nothing in this Warrant Agreement shall be deemed to prevent the Warrant Agent from acting as Trustee under the Indenture. (f) No Liability for Interest. The Warrant Agent shall have no ------------------------- liability for interest on any monies at any time received by it pursuant to any of the provisions of this Agreement or of the Warrant Certificates. (g) No Liability for Invalidity. The Warrant agent shall not be --------------------------- under any responsibility with respect to the validity or sufficiency of this Agreement or the execution and delivery hereof (except the due authorization to execute this Agreement and the due execution and delivery hereof by the Warrant Agent) or with respect to the validity or execution of any Warrant Certificates (except its countersignature thereof). 16 (h) No Liability for Recitals. The recitals contained herein shall ------------------------- be taken as the statements of the Company and the Warrant Agent assumes no liability for the correctness of the same. (i) No Implied Obligations. The Warrant Agent shall be obligated to ---------------------- perform only such duties as are herein and in the Warrant Certificates specifically set forth and no implied duties or obligations shall be read into this Agreement or the Warrant Certificates against the Warrant Agent. The Warrant Agent shall not be under any obligation to take any action hereunder which may tend to involve it in any expense or liability, the payment of which within a reasonable time is not, in its reasonable opinion, assured to it. The Warrant Agent shall not be accountable or under any duty or responsibility for the use by the Company of any of the Warrant Certificates countersigned by the Warrant Agent and delivered by it to the Company pursuant to this Agreement or for the application by the Company of the proceeds of the Warrant Certificates. The Warrant Agent shall have no duty or responsibility in case of any default by the Company in the performance of its covenants or agreements contained herein or in the Warrant Certificates or in the case of the receipt of any written demand from a Holder of a Warrant Certificate with respect to such default, including, without limiting the generality of the foregoing, any duty or responsibility to initiate or attempt to initiate any proceedings at law or otherwise or, except as provided in Section 6.02, to make any demand upon the Company. SECTION 5.03. Resignation and Appointment of Successor. (a) The ---------------------------------------- Company agrees, for the benefit of the Holders from time to time of the Warrant Certificates, that there shall at all times be a Warrant Agent hereunder until all the Warrants have been exercised or are no longer exercisable. (b) The Warrant Agent may at any time resign as such by giving written notice of its resignation to the Company, specifying the desired date on which its resignation shall become effective; provided, however, that such date -------- ------- shall be not less than 90 days after the date on which such notice is given unless the Company agrees to accept shorter notice. Upon receiving such notice of resignation, the Company shall promptly appoint a successor Warrant Agent (which shall be a bank or trust company in good standing, authorized under the laws of the jurisdiction 17 of its organization to exercise corporate trust powers) by written instrument in duplicate signed on behalf of the Company, one copy of which shall be delivered to the resigning Warrant Agent and one copy to the successor Warrant Agent. The Company may, at any time and for any reason, remove the Warrant Agent and appoint a successor Warrant Agent (qualified as aforesaid) by written instrument in duplicate signed on behalf of the Company and specifying such removal and the date when it is intended to become effective, one copy of which shall be delivered to the Warrant Agent being removed and one copy to the successor Warrant Agent. Any resignation or removal of the Warrant Agent and any appointment of a successor Warrant Agent shall become effective upon acceptance of appointment by the successor Warrant Agent as provided in this subsection (b). In the event a successor Warrant Agent has not been appointed and accepted its duties within 90 days of the Warrant Agent's notice of resignation, the Warrant Agent may apply to any court of competent jurisdiction for the designation of a successor Warrant Agent. Upon its resignation or removal, the Warrant Agent shall be entitled to the payment by the Company of the compensation and to the reimbursement of all reasonable out-of-pocket expenses (including reasonable attorneys' fees) incurred by it hereunder as agreed to in Section 5.02(a). (c) The Company shall remove the Warrant Agent and appoint a successor Warrant Agent if the Warrant Agent (i) shall become incapable of acting, (ii) shall be adjudged bankrupt or insolvent, (iii) shall commence a voluntary case or other proceeding seeking liquidation, reorganization or other relief with respect to it or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect or seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official of it or any substantial part of its property, (iv) shall consent to, or shall have had entered against it a court order for, any such relief or to the appointment of or taking possession by any such official in any involuntary case or other proceedings commenced against it, (v) shall make a general assignment for the benefit of creditors or (vi) shall fail generally to pay its debts as they become due. Upon the appointment as aforesaid of a successor Warrant Agent and acceptance by it of such appointment, the predecessor Warrant Agent shall, if not previously disqualified by operation of law, cease to be Warrant Agent hereunder. 18 (d) Any successor Warrant Agent appointed hereunder shall execute, acknowledge and deliver to its predecessor and the Company an instrument accepting such appointment hereunder, and thereupon such successor Warrant Agent, without any further act, deed or conveyance, shall become vested with all the authority, rights, powers, immunities, duties and obligations of such predecessor with like effect as if originally named as Warrant Agent hereunder, and such predecessor shall thereupon become obligated to transfer, deliver and pay over, and such successor Warrant Agent shall be entitled to receive, all monies, securities and other property on deposit with or held by such predecessor as Warrant Agent hereunder. (e) Any corporation into which the Warrant Agent hereunder may be merged or converted or any corporation with which the Warrant Agent may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Warrant Agent shall be a party, or any corporation to which the Warrant Agent shall sell or otherwise transfer all or substantially all the assets and business of the Warrant Agent, provided that it shall be qualified as aforesaid, shall be the successor Warrant Agent under this Agreement without the execution or filing of any paper or any further act on the part of any of the parties hereto. ARTICLE VI MISCELLANEOUS SECTION 6.01. Amendment. This Agreement and the terms of the --------- Warrants and the Warrant Certificates may be amended by the parties hereto, without the consent of the Holder of any Warrant Certificate or the beneficial owner of any Warrant, for the purpose of curing any ambiguity, or of curing, correcting or supplementing any defective or inconsistent provision contained herein or in the Warrant Certificates, or making any other provisions with respect to matters or questions arising under this Agreement as the Company and the Warrant Agent may deem necessary or desirable, provided that such action -------- shall not affect adversely the interests of the Holders of the Warrant Certificates or the beneficial owners of Warrants in any material respect. 19 SECTION 6.02. Notices and Demands to the Company and Warrant Agent. ---------------------------------------------------- If the Warrant Agent shall receive any notice or demand addressed to the Company by the Holder of a Warrant Certificate pursuant to the provisions of the Warrant Certificates, the Warrant Agent shall promptly forward such notice or demand to the Company. SECTION 6.03. Addresses. Any communication from the Company to the --------- Warrant Agent with respect to this Agreement shall be addressed to __________________, Attention: ________________, and any communication from the Warrant Agent to the Company with respect to this Agreement shall be addressed to Fortune Brands, Inc., 1700 East Putnam Avenue, Old Greenwich, Connecticut 06870-0811, Attention: Treasurer (or such other address as shall be specified in writing by the Warrant Agent or by the Company). SECTION 6.04. Applicable Law. The validity, interpretation and -------------- performance of this Agreement and each Warrant Certificate issued hereunder and of the respective terms and provisions hereof and thereof shall be governed by, and construed in accordance with, the laws of the State of New York. SECTION 6.05. Delivery of Prospectus. The Company will furnish to ---------------------- the Warrant Agent sufficient copies of a prospectus relating to the Warrant Securities deliverable upon exercise of Warrants (the "Prospectus"), and the Warrant Agent agrees that upon the exercise of any Warrant, the Warrant Agent will deliver to the Holder of the Warrant Certificate evidencing such Warrant, prior to or concurrently with the delivery of the Warrant Securities issued upon such exercise, a Prospectus. The Warrant Agent shall not, by reason of any such delivery, assume any responsibility for the accuracy or adequacy of such Prospectus. SECTION 6.06. Obtaining of Governmental Approval. The Company will ---------------------------------- from time to time take all action which may be necessary to obtain and keep effective any and all permits, consents and approvals of governmental agencies and authorities and securities acts filings under United States federal and state laws (including without limitation a registration statement in respect of the Warrants and Warrant Securities under the Securities Act of 1933), which may be or become requisite in connection with the issuance, sale, transfer and delivery of the Warrant Certificates, the exercise of the Warrants, the issuance, sale, transfer and 20 delivery of the Warrant Securities issued upon exercise of the Warrants or upon the expiration of the period during which the Warrants are exercisable. SECTION 6.07. Persons Having Rights Under Warrant Agreement. [Except --------------------------------------------- as otherwise provided in Section 3.03, nothing] [Nothing] in this Agreement shall give to any person other than the Company, the Warrant Agent and the Holders of the Warrant Certificates any right, remedy or claim under or by reason of this Agreement. SECTION 6.08. Headings. The descriptive headings of the several -------- Articles and Sections of this Agreement are inserted for convenience only and shall not control or affect the meaning or construction of any of the provisions hereof. SECTION 6.09. Counterparts. This Agreement may be executed in any ------------ number of counterparts, each of which as so executed shall be deemed to be an original, but such counterparts shall together constitute but one and the same instrument. SECTION 6.10. Inspection of Agreement. A copy of this Agreement ----------------------- shall be available at all reasonable times at the principal corporate trust office of the Warrant Agent for inspection by the Holder of any Warrant Certificate. The Warrant Agent may require such Holder to submit his Warrant Certificate for inspection by it. SECTION 6.11. Notices to Holders of Warrants. Any notice to Holders ------------------------------ of Warrants evidenced by Warrant Certificates [in registered form] which by any provisions of this Warrant Agreement is required or permitted to be given shall be given by first class mail prepaid at such Holder's address as it appears on the books of the Warrant Agent. [Any notice to beneficial owners of Warrants evidenced by the Global Warrant Certificate which by any provisions of this Warrant Agreement is required or permitted to be given shall be given in the manner provided with respect to Warrant Securities in bearer form in Section 1.06 of the Indenture]. 21 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and their respective corporate seals to be hereunto affixed and attested, all as of the date first above written. FORTUNE BRANDS, INC. [SEAL] By________________________ Name: Title: Attest: __________________________________ Name: Title: [WARRANT AGENT] [SEAL] By________________________ Name: Title: Attest: __________________________________ Name: Title: 22 Exhibit A --------- FORM OF WARRANT CERTIFICATE [IN REGISTERED FORM] [Face of Warrant Certificate] EXERCISABLE ONLY IF COUNTERSIGNED BY THE WARRANT AGENT AS PROVIDED HEREIN FORTUNE BRANDS, INC. WARRANTS TO PURCHASE [Title of Warrant Securities] VOID AFTER 5:00 P.M., NEW YORK CITY TIME, ON , 19 No.___ _______ Warrants This certifies that or registered assigns (the "Registered Holder") is the registered owner of the above indicated number of Warrants, each Warrant entitling such owner to purchase, at any time [after 5:00 P.M., New York City time, on , 19 and] on or before 5:00 P.M., New York City time, on , 19 , principal amount of [Title of Warrant Securities] (the "Warrant Securities") of Fortune Brands, Inc. (the "Company") issued and to be issued under the Indenture (as hereinafter defined), on the following basis: [on , 19 the exercise price of each Warrant will be ; during the period from , 19 through and including ,19 , the exercise price of each Warrant will be plus [accrued amortization of the original issue discount] [accrued interest] from , 19 ; on , 19 the exercise price of each Warrant will be ; during the period from 19 through and including , 19 , the exercise price of each Warrant will be plus [accrued amortization of the original issue discount] [accrued interest] from 19 [; in each case, the original issue discount will be amortized at a % annual rate, computed on an annual basis using the "interest" method and using a 360-day year consisting of twelve 30-day months] (the "Warrant Price"). [The original issue discount for each principal amount of Warrant Securities is .] The Registered Holder may exercise the Warrants evidenced hereby by providing certain information set forth on the back hereof and by paying in full, [in lawful money of the United States of America] [in applicable currency] [in cash] [by certified check or official bank check or by bank wire transfer, in each case,] [by bank wire transfer] [in immediately available funds,] the Warrant Price for each Warrant exercised (plus accrued interest, if any, on the Warrant Securities to be issued upon exercise of such Warrant from and including the Interest Payment Date (as defined in the Indenture), if any, in respect of such Warrant Securities immediately preceding the Exercise Date to and including the Exercise Date (unless the Exercise Date is after the Regular Record Date (as defined in the Indenture), if any, for such Interest Payment Date, but on or before the immediately succeeding Interest Payment Date for such Warrant Securities, in which event no such accrued interest shall be payable)) to the Warrant Agent (as hereinafter defined) and by surrendering this Warrant Certificate, with the form of election to purchase on the reverse hereof completed and duly executed, at the corporate trust office of [name of Warrant Agent], or its successor, as warrant agent (the "Warrant Agent"), [or ] currently at the address specified on the reverse hereof, and upon compliance with and subject to the conditions set forth herein and in the Warrant Agreement (as hereinafter defined). Any whole number of Warrants evidenced by this Warrant Certificate may be exercised to purchase Warrant Securities in fully registered form in denominations of ____ and any integral multiples thereof. Upon any exercise of fewer than all of the Warrants evidenced by this Warrant Certificate, there shall be issued to the Registered Holder hereof a new Warrant Certificate in registered form evidencing the number of Warrants remaining unexercised. This Warrant Certificate is issued under and in accordance with the Warrant Agreement dated as of _______________ 19__ (the "Warrant Agreement") between the Company and the Warrant Agent and is subject to the terms and provisions contained in the Warrant Agreement, to all of which terms and provisions the Registered Holder consents by acceptance hereof. Copies of the Warrant Agreement are on file at the above-mentioned office of the Warrant Agent [and at ]. The Warrant Securities to be issued and delivered upon the exercise of the Warrants evidenced by this Warrant Certificate will be issued under and in accordance with an Indenture dated as of [ ], 1999, as amended (the "Indenture"), between the Company and [The Chase Manhattan Bank], as Trustee (the "Trustee"), and will be subject to the terms and provisions contained in the Indenture. Copies of the Indenture and the form of the Warrant Securities are A-2 on file at the corporate trust office of the Trustee [and at ]. This Warrant Certificate may be transferred when surrendered at the corporate trust office of the Warrant Agent [or ] by the Registered Holder or its assigns, in person or by an attorney duly authorized in writing, in the manner and subject to the limitations provided in the Warrant Agreement. After countersignature by the Warrant Agent and prior to the expiration of this Warrant Certificate, this Warrant Certificate may be exchanged at the corporate trust office of the Warrant Agent [or ] for Warrant Certificates in registered form representing the same aggregate number of Warrants. This Warrant Certificate shall not entitle the Registered Holder hereof to any of the rights of a holder of the Warrant Securities, including, without limitation, the right to receive payments of principal of (premium, if any) or interest, if any, on the Warrant Securities or to enforce any of the covenants of the Indenture. A-3 This Warrant Certificate shall not be valid or obligatory for any purpose until countersigned by the Warrant Agent. Dated as of , 19 . FORTUNE BRANDS, INC. [SEAL] By_____________________________ Name: Title: Attest: __________________________ Countersigned: __________________________ As Warrant Agent By________________________ Authorized Signature A-4 [Reverse of Warrant Certificate] Instructions for Exercise of Warrant To exercise the Warrants evidenced hereby, the Registered Holder must pay in full [in lawful money of the United States of America] [in applicable currency] [in cash] [by certified check or official bank check or by bank wire transfer, in each case,] [by bank wire transfer] [in immediately available funds,] the Warrant Price for Warrants exercised (plus any accrued interest as specified in this Warrant Certificate) to [insert name of Warrant Agent] [corporate trust department] [insert address of Warrant Agent], Attn: [or ], which [payment] [wire transfer] must specify the name of the Registered Holder and the number of Warrants exercised by such Registered Holder. In addition, the Registered Holder must complete the information required below and present this Warrant Certificate in person or by mail (certified or registered mail is recommended) to the Warrant Agent at the appropriate address set forth below. This Warrant Certificate, completed and duly executed, must be received by the Warrant Agent within five business days of the [payment] [wire transfer]. To be Executed Upon Exercise of Warrant The undersigned hereby irrevocably elects to exercise ________ Warrants, evidenced by this Warrant Certificate, to purchase principal amount of the [Title of Warrant Securities] (the "Warrant Securities") of Fortune Brands, Inc. and represents that he has tendered payment for such Warrant Securities [in lawful money of the United States of America) [in applicable currency] [in cash] [by certified check or official bank check or by bank wire transfer, in each case,] [by bank wire transfer] [in immediately available funds] to the order of Fortune Brands, Inc., c/o [insert name and address of Warrant Agent], in the amount of _____ in accordance with the terms hereof. The undersigned requests that said principal amount of Warrant Securities be in registered form in the authorized denominations, registered in such names and delivered all as specified in accordance with the instructions set forth below. If the number of Warrants exercised is fewer than all of the Warrants evidenced hereby, the undersigned requests that a new Warrant Certificate representing the remaining Warrants evidenced hereby be issued in registered A-5 form and delivered either to the undersigned or as otherwise specified in the instructions below. Dated_____________________ Name _____________________ (Please Print) __________________________ (Insert Social Security Address __________________ or Other Identifying Number of Holder) __________________ Signature ________________ The Warrants evidenced hereby may be exercised at the following addresses: By hand at _____________________________________________ _____________________________________________ _____________________________________________ _____________________________________________ By mail at _____________________________________________ _____________________________________________ _____________________________________________ _____________________________________________ [Instructions as to delivery of Warrant Securities and, if applicable, Warrant Certificates evidencing unexercised Warrants - complete as appropriate.] A-6 Assignment (Form of Assignment to be Executed if Holder Desires to Transfer Warrants Evidenced Hereby) FOR VALUE RECEIVED hereby sells, assigns and transfers unto Please insert social security or other identifying number ------------------------------- ________________________________ ___________________________________________________________________ (Please print name and address including zip code) ___________________________________________________________________________ the Warrants represented by the within Warrant Certificate and does hereby irrevocably constitute and appoint ______________________ Attorney, to transfer said Warrant Certificate on the books of the Warrant Agent with full power of substitution in the premises. Dated: _________________________________ Signature (Signature must conform in all respects to name of Registered Holder as specified on the face of this Warrant Certificate and must bear a signature guarantee by a bank, trust company or member broker of the New York, Midwest or Pacific Stock Exchange). Signature Guaranteed _________________________ A-7 Exhibit B --------- [alone] [DELETE THIS EXHIBIT IF WARRANT CERTIFICATES IN ONLY REGISTERED FORM ARE TO BE ISSUED] [FORM OF GLOBAL WARRANT CERTIFICATE IN BEARER FORM] [Face of Global Warrant Certificate] EXERCISABLE ONLY IF COUNTERSIGNED BY THE WARRANT AGENT AS PROVIDED HEREIN FORTUNE BRANDS, INC. GLOBAL WARRANT CERTIFICATE REPRESENTING _________ WARRANTS TO PURCHASE OF UP TO ________ PRINCIPAL AMOUNT OF [Title of Warrant Securities] VOID AFTER [TIME], ON , 19 . This Global Warrant Certificate evidences warrants (the "Warrants") representing the right to purchase, subject to the terms and conditions hereof and of the Debt Warrant Agreement referred to below, at any time [after [time] on ___________ 19___, and] on or before the [time] in [location] on __________, 19___, up to _________ aggregate principal amount of [Title of Warrant Securities] (the "Warrant Securities") of Fortune Brands, Inc. (the "Company") issued and to be issued under the Indenture (as hereinafter defined), on the following basis: on _________, 19__ the exercise price of each Warrant will be __________; during the period from ___________, 19___ through and including _______, 19___, the exercise price of each Warrant will be _____ plus [accrued amortization of the original issue discount] [accrued interest] from _____________, 19___; on _____________, 19___ the exercise price of each Warrant will be _____________; during the period from ___________, 19___ through and including ___________, 19___, the exercise price of each Warrant will be ___________ plus [accrued amortization of the original issue discount] [accrued interest] from ____________, 19___ [; in each case, the original issue discount will be amortized at a ___% annual rate, computed on an annual basis using the "interest" method and using a 360-day year consisting of twelve 30-day months] (the "Warrant Price"). [The original issue discount for each ____ principal amount of Warrant Securities is ____________.] Beneficial owners of Warrants represented by this Global Warrant Certificate may cause such Warrants to be exercised only by transmitting by tested telex or by delivering or causing to be delivered to Morgan Guaranty Trust Company of New York, Brussels office (or any successor), as operator of the Euro-clear System (the "Euro-clear Operator"), in Brussels, Belgium, or to Centrale de Livraison de Valeurs Mobilieres S.A. ("CEDEL") in Luxembourg, a warrant exercise notice, substantially in the form attached as Exhibit D to the Debt Warrant Agreement referred to below (the "Warrant Exercise Notice"), copies of which will be available from the Euro- clear Operator or CEDEL or from [name of Warrant Agent], or its successor as warrant agent (the "Warrant Agent") under the Debt Warrant Agreement (the "Debt Warrant Agreement") dated as of __________, 19___ between the Company and the Warrant Agent. The Warrant Exercise Notice shall specify, among other things, the aggregate principal amount of Warrant Securities to be purchased on exercise of the Warrants, the account number or numbers on the records of the Euro-clear Operator or CEDEL to which the Warrants being exercised are credited, the account number to be debited for the Warrant Price of each Warrant being exercised (plus accrued interest, if any, on the Warrant Securities to be issued upon exercise of such Warrant from and including the Interest Payment Date (as defined in the Indenture), if any, in respect of such Warrant Securities immediately preceding the Exercise Date to and including the Exercise Date (unless the Exercise Date is after the Regular Record Date (as defined in the Indenture), if any, for such Interest Payment Date, but on or before the immediately succeeding Interest Payment Date for such Warrant Securities, in which event no such accrued interest shall be payable in respect of Warrant Securities to be issued in registered form)) the account number to which the Warrant Securities issued on exercise of the Warrants are to be credited and the form in which Warrant Securities are to be issued. A Warrant Exercise Notice must be received by the Euro-clear Operator or CEDEL prior to [time] (Brussels or Luxembourg time, as the case may be) on the business day next preceding the Exercise Date (as defined in such Warrant Exercise Notice). The delivery to the Euro-clear Operator or CEDEL, as the case may be, of a Warrant Exercise Notice shall constitute an irrevocable election to purchase the aggregate principal amount of Warrant Securities specified therein. Any whole number of Warrants evidenced by this Global Warrant Certificate may be exercised to purchase Warrant Securities in bearer or registered form in B-2 denominations of [____ or ____], in the case of Warrant Securities in bearer form, and of _______ and any integral multiple thereof, in the case of Warrant Securities in registered form; provided, however, that no Warrant Security in -------- ------- bearer form shall be mailed or otherwise delivered to any location in the United States of America, its territories or possessions or areas subject to its jurisdiction or the Commonwealth of Puerto Rico (the "United States"). The Warrants evidenced by this Global Warrant Certificate, this Global Warrant Certificate and the rights evidenced hereby may be cancelled in the manner and under the circumstances described in the Debt Warrant Agreement. Notice of cancellation of the Warrants evidenced by this Global Warrant Certificate, this Global Warrant Certificate and the rights evidenced hereby shall be given by publication in the manner described in the Debt Warrant Agreement. This Global Warrant Certificate is issued under and in accordance with the Debt Warrant Agreement between the Company and the Warrant Agent and is subject to the terms and provisions contained in the Debt Warrant Agreement, to all of which terms and provisions the holder hereof consents by acceptance hereof. Copies of the Debt Warrant Agreement are on file at the above-mentioned office of the Warrant Agent [and at ___________]. The Warrant Securities to be issued and delivered upon the exercise of the Warrants evidenced by this Global Warrant Certificate will be issued under and in accordance with an Indenture dated as of [ ], 1999, as amended (the "Indenture"), between the Company and [The Chase Manhattan Bank], as Trustee (the "Trustee"), and will be subject to the terms and provisions contained in the Indenture. Copies of the Indenture and the form of the Warrant Securities are on file at the corporate trust office of the Trustee [and at ____________]. The Global Warrant Certificate, and all rights hereunder, may be transferred by delivery, and the Company and the Warrant Agent may treat the holder hereof as the owner for all purposes. The Global Warrant Certificate shall not entitle the Holder hereof to any of the rights of a holder of the Warrant Securities, including, without limitation, the right to receive payments of principal of, premium, if any, or B-3 interest, if any, on the Warrant Securities or to enforce any of the covenants of the Indenture. This Global Warrant Certificate shall not be valid or obligatory for any purpose until countersigned by the Warrant Agent. Dated as of ____________, 19__. FORTUNE BRANDS, INC. By Attest: __________________________ Countersigned: __________________________ As Warrant Agent By________________________ Authorized Signature B-4 Schedule A (additional continuation sheets may be attached if required) Exercises of Warrants The following exercises of a portion of this Global Warrant Certificate for Warrant Securities have been made:
Number of Warrants Remaining Number of Date of Exercised for Warrants Following Notation Exercise Warrant Securities Such Exercise Made By: - -------- ------------------ ------------------- -------- - -------- ------------------ ------------------- -------- - -------- ------------------ ------------------- -------- - -------- ------------------ ------------------- -------- - -------- ------------------ ------------------- -------- - -------- ------------------ ------------------- -------- - -------- ------------------ ------------------- -------- - -------- ------------------ ------------------- -------- - -------- ------------------ ------------------- -------- - -------- ------------------ ------------------- -------- - -------- ------------------ ------------------- -------- - -------- ------------------ ------------------- -------- - -------- ------------------ ------------------- -------- - -------- ------------------ ------------------- -------- - -------- ------------------ ------------------- -------- - -------- ------------------ ------------------- -------- - -------- ------------------ ------------------- --------
B-5
Number of Warrants Remaining Number of Date of Exercised for Warrants Following Notation Exercise Warrant Securities Such Exercise Made By: - -------- ------------------ ------------------- -------- - -------- ------------------ ------------------- -------- - -------- ------------------ ------------------- -------- - -------- ------------------ ------------------- -------- - -------- ------------------ ------------------- -------- - -------- ------------------ ------------------- -------- - -------- ------------------ ------------------- -------- - -------- ------------------ ------------------- -------- - -------- ------------------ ------------------- -------- - -------- ------------------ ------------------- -------- - -------- ------------------ ------------------- -------- - -------- ------------------ ------------------- -------- - -------- ------------------ ------------------- -------- - -------- ------------------ ------------------- -------- - -------- ------------------ ------------------- -------- - -------- ------------------ ------------------- -------- - -------- ------------------ ------------------- -------- - -------- ------------------ ------------------- -------- - -------- ------------------ ------------------- -------- - -------- ------------------ ------------------- -------- - -------- ------------------ ------------------- --------
B-6 EXHIBIT C [alone] [DELETE THIS EXHIBIT IF WARRANT CERTIFICATES IN ONLY REGISTERED FORM ARE TO BE ISSUED] [FORM OF CERTIFICATE TO BE DELIVERED TO WARRANT AGENT BY THE EURO-CLEAR OPERATOR OR CEDEL] FORTUNE BRANDS, INC. Warrants (the "Warrants") to Purchase [Title of Warrant Securities] [Name of Warrant Agent] [Address] Dear Sirs: The undersigned hereby irrevocably elects to exercise __________________ Warrants to purchase as of _____________________ (the "Exercise Date") ______ principal amount of the [Title of Warrant Securities] (the "Warrant Securities") of Fortune Brands, Inc. and represents that it has tendered payment for such Warrant Securities [in lawful money of the United States of America] [in applicable currency] [in cash] [by certified check or official bank check or by bank wire transfer, in each case,] [by bank wire transfer] [in immediately available funds] to the order of Fortune Brands, Inc., c/o [insert name and address of Warrant Agent], in the amount of ______ in accordance with the terms hereof and the Debt Warrant Agreement dated as of _________, 19__ between Fortune Brands, Inc. and you (the "Debt Warrant Agreement"). In connection with the Undersigned's request that you deliver to us any Warrant Securities in bearer form, the undersigned hereby certifies that as of the date hereof, and except as set forth below, the Warrant Securities in bearer form which are to be delivered to the Common Depositary referred to below for our account (i) are being acquired by a person that is not a citizen or resident of the United States, a domestic partnership, a domestic corporation or an estate or trust the income of which is subject to United States Federal income taxation regardless of its source (a "United States person"), (ii) are being acquired by a United States person that is (A) the foreign branch of a United States financial institution (as defined in U.S. Treasury Regulations Section l.165-12(c)(l)(v)(a "financial institution"), purchasing for its own account or for resale, or (B) a United States person acquiring the Warrant Securities through the foreign branch of a financial institution on the date hereof (and in either case (A) or (B), the financial institution hereby agrees to comply with the requirements of Section 165(j)(3)(A), (B) or (C) of the Internal Revenue Code of 1986, as amended, and the regulations thereunder), or (iii) are being acquired by a financial institution for purposes of resale during the restricted period (as defined in U.S. Treasury Regulations Section 1.163-5(c)(2)(i)(D)(7)), and such financial institution is not acquiring the Warrant Securities for purposes of resale directly or indirectly to a United States person or to a person within the United States or its possessions. As a clearing organization within the meaning of Section 1.163- 5(c)(2)(i)(D)(8) of the regulations promulgated under the Internal Revenue Code of 1986, as amended, the undersigned further certifies that (a) the above certification is based solely on statements received from member organizations appearing in our records (our "Account Holders") in certificates in the form set forth in Exhibit D to the Debt Warrant Agreement and (b) as of the date hereof we have not received any notification from any of our Account Holders to the effect that the statements made by such Account Holders in such certificates are no longer true. "United States" means the United States of America, its territories and possessions and areas subject to its jurisdiction and the Commonwealth of Puerto Rico. We hereby undertake to notify you immediately by telex if any of the statements of our Account Holders referred to above is not correct at any time on or before the Warrant Securities in bearer form are delivered. We further agree to cause [a confirmation substantially in the form of Exhibit E to the Debt Warrant Agreement and] a copy of the prospectus relating to the Warrant Securities delivered to us as contemplated by Section 6.05 of the Debt Warrant Agreement to be delivered to our Account Holders entitled to such warrant Securities prior to or contemporaneously with our transfer of such Warrant Securities to or to the account of such Account Holders. We understand that this Certificate is required in connection with United States laws, tax laws and regulations. We irrevocably authorize you to produce this C-2 Certificate or a copy hereof to any interested party in any administrative or legal proceedings with respect to the matters covered by this Certificate. The undersigned requests that said principal amount of Warrant Securities be [in registered form in the authorized denominations, registered in such names and delivered all as specified in accordance with the instructions set forth below] [bearer form in the authorized denominations and delivered to _______, as Common Depositary under the Debt Warrant Agreement, to be held for our account]* [Instructions as to delivery of Warrant Securities to be issued in registered form]. Dated: _______________, 19__/**/ Very truly yours, [MORGAN GUARANTY TRUST COMPANY OF NEW YORK, Brussels Office, as operator of the Euro-clear System]/*/ By_____________________________________________ Title: [CENTRALE DE LIVRAISONS DE VALEURS MOBILIERES S.A.]* By_____________________________________________ Title: ___________________ * Delete inapplicable reference. ** To be dated no earlier than the fifteenth day prior to the certification date. C-3 Exhibit D [alone] [DELETE THIS EXHIBIT IF WARRANT CERTIFICATES IN ONLY REGISTERED FORM ARE TO BE ISSUED] [FORM OF WARRANT EXERCISE NOTICE] Morgan Guaranty Trust Company of New York, Brussels Office, as operator of the Euro-clear System* [Address] Centrale de Livraison de Valeurs Mobilieres S.A./*/ [Address] FORTUNE BRANDS, INC. WARRANTS (THE "WARRANTS") TO PURCHASE [Title of Warrant Securities] (the "Warrant Securities") Dear Sirs: We hereby irrevocably elect to exercise ____________ Warrants to purchase _____ (being _____ or an integral multiple thereof) aggregate principal amount of Warrant Securities of Fortune Brands, Inc. (the "Company") on _____________________, 19__ (the "Exercise Date"). The account number(s) on your books in which the Warrants being exercised [and the [Title of Offered Securities] to which such Warrants are attached]/**//*/ are held is (are) _______ __________________. The Warrant Securities to be issued to us on exercise of the Warrants are to be credited to such account, unless otherwise indicated below and shall be in [registered] [bearer]* form in the following authorized denominations: ________________. We hereby request that you complete a certification in the form required by the Debt Warrant Agreement hereinafter referred to make payment directly to [ ], as Warrant Agent (the "Warrant Agent", /*/ Delete inapplicable reference. /**/ Delete if dated on or after , 19 . which term shall include its successors as such Warrant Agent), under the Debt Warrant Agreement dated as of [ ] between the Company and the Warrant Agent (the "Debt Warrant Agreement") at or prior to [time] on the Exercise Date, or if the Exercise Date is the last day on which Warrants may be exercised under the Debt Warrant Agreement, prior to [time] in [location] on the Exercise Date, [in lawful money of the United States of America] [in applicable currency] [in cash] [by certified check or official bank check or by bank wire transfer, in each case,] [by bank wire transfer] [in immediately available funds] of _____________, such amount being the Warrant Price (as defined in the Global Warrant Certificate representing the Warrants, as provided in Section 1.02 of the Debt Warrant Agreement) for Warrants exercised (plus any accrued interest as specified in such Global Warrant Certificate) on the Exercise Date, and debit account number ____________ for said amount. The undersigned hereby certifies that as of the date hereof, and except as set forth below, the Warrant Securities held by you for our account are being acquired by a person that is not a citizen or resident of the United States, a domestic partnership, a domestic corporation or an estate or trust the income of which is subject to United States Federal income taxation regardless of its source (a "United States person"), (ii) are being acquired by a United States person that is (A) the foreign branch of a United States financial institution (as defined in U.S. Treasury Regulations Section l.165- 12(c)(l)(v))(a "financial institution"), purchasing for its own account or for resale, or (B) a United States person who is acquiring the Warrant Securities through the foreign branch of a financial institution on the date hereof (and in either case (A) or (B), the financial institution hereby agrees to comply with the requirements of Section 165(j)(3)(A), (B) or (C) of the Internal Revenue Code of 1986, as amended, and the regulations thereunder), or (iii) are being acquired by a financial institution for purposes of resale during the restricted period (as defined in U.S. Treasury Regulations Section 1.163-5(c)(2)(i)(D)(7)), and such financial institution is not acquiring the Warrant Securities for purposes of resale directly or indirectly to a United States person or to a person within the United States or its possessions. If this Certificate is being provided by a clearing organization, it is based on statements provided to it by its member organizations. As used herein, a "clearing organization" is an entity which is in the business of holding obligations for member organizations and transferring obligations among such members by credit or D-2 debit to the account of a member without the necessity of physical delivery of the obligation. We undertake to advise you immediately by telex if the foregoing statement as to beneficial ownership is not correct on or before the date of delivery of such Warrant Securities as to the entire principal amount of the Warrant Securities to be issuable upon exercise then appearing on your books as being held for our account, and in the absence of any such notification it may be assumed that this Certificate applies as of such date. [This Certificate excepts and does not relate to [ ] of such interest in the above Warrants in respect of which we are not able to certify and as to which we understand exchange and delivery of Warrant Securities cannot be made until we do so certify.] We understand that this Certificate is required in connection with certain tax regulations in the United States. If administrative or legal proceedings are commenced or threatened in connection with which this Certificate is or would be relevant, we irrevocably authorize you to produce this Certificate or a copy thereof to any interested party in such proceedings. "United States" means the United States of America, its territories and possessions and areas subject to its jurisdiction and the Commonwealth of Puerto Rico. Dated: ______________, l9__/*/ Very truly yours, [Name and, if appropriate, title] As, or as agent for, the beneficial owner(s) of the interest in the Warrants to which this Warrant Exercise Notice relates. By______________________________ Title: _____________ /*/ To be dated no earlier than the fifteenth day prior to the certification date. D-3 EX-5 6 OPINION OF CHADBOURNE & PARKE LLP EXHIBIT 5 LETTERHEAD OF CHADBOURNE & PARKE LLP 30 ROCKEFELLER PLAZA NEW YORK, NEW YORK 10112 (212) 408-5100 April 15, 1999 Fortune Brands, Inc. 1700 East Putnam Avenue Old Greenwich, Connecticut 06870-0811 Dear Sirs: In connection with the registration under the Securities Act of 1933, as amended (the "Act"), by Fortune Brands, Inc. (the "Company") of its debt securities in an aggregate principal amount (or net proceeds, in the case of debt securities issued at an original issue discount) of up to $550,000,000 and warrants to purchase such debt securities (the debt securities in such principal amount and the warrants to purchase such debt securities, together with the remaining unissued $450,000,000 aggregate principal amount of such debt securities and warrants to purchase such debt securities presently registered under the Act under the Company's Registration Statement on Form S-3 bearing Fortune Brands, Inc. -2- April 15, 1999 Registration No. 33-50832, being herein referred to as the "Debt Securities" and the "Debt Warrants", respectively) to be offered and sold by the Company from time to time in accordance with Rule 415 under the Act, and the shares of Common Stock, par value $3.125 per share, of the Company ("Common Stock") and any accompanying Preferred Share Purchase Rights of the Company ("Rights") issuable or deliverable upon conversion of any convertible Debt Securities, we advise as follows: We are familiar with the Restated Certificate of Incorporation and By- laws of the Company as amended to the date hereof, and we have reviewed (i) the Registration Statement on Form S-3 to be filed by the Company under the Act with respect to the Debt Securities, the Debt Warrants and the shares of Common Stock and any Rights issuable or deliverable upon conversion of any convertible Debt Securities (the "Registration Statement"), (ii) the form of Indenture to be dated as of April 15, 1999 between the Company and The Chase Manhattan Bank, as Trustee, under which Debt Securities may be issued (the "Indenture") and (iii) the forms of Debt Warrant Agreements (the "Debt Warrant Agreements") between the Company and each debt warrant agent to be named therein under which Debt Warrants may be issued. We are familiar with the various corporate proceedings Fortune Brands, Inc. -3- April 15, 1999 heretofore taken and additional proceedings proposed to be taken by the Company in connection with the authorization, registration, issuance and sale of the Debt Securities, the Debt Warrants and the shares of Common Stock and any accompanying Rights issuable or deliverable upon conversion of any convertible Debt Securities. We have also examined originals, or copies certified to our satisfaction, of such corporate records of the Company and other instruments, certificates of public officials and representatives of the Company and other documents as we have deemed necessary as a basis for the opinion hereinafter expressed. In such examination, we have assumed the genuineness of all signatures, the authenticity of all documents submitted to us as originals and the conformity with the originals of all documents submitted to us as copies. As to questions of fact material to this opinion, we have, when relevant facts were not independently established, relied upon certificates of officers of the Company and appropriate public officials. On the basis of the foregoing, and having regard for such legal considerations as we deem relevant and subject to (1) the terms of the Debt Securities and the Debt Warrants being otherwise in compliance with applicable law at the time of issuance thereof, (2) the authorization by the Trustee of the Indenture under which the Debt Securities Fortune Brands, Inc. -4- April 15, 1999 of each series are issued and the due execution and delivery thereof by the Company and the Trustee, and (3) the authorization by the relevant debt warrant agents of the Debt Warrant Agreements under which the Debt Warrants are issued and the due execution and delivery thereof by the Company and the relevant debt warrant agents, we are of the opinion that when (i) the Registration Statement has become effective under the Act, (ii) the Indenture has been qualified under the Trust Indenture Act of 1939, as amended, (iii) the Debt Securities have been duly authorized, executed and authenticated as provided in the Indenture and delivered against payment therefor, and (iv) the Debt Warrants have been duly authorized and executed as provided in the Debt Warrant Agreements and delivered against payment therefor: A. The Debt Securities will be legally and validly issued and will constitute the valid and binding obligations of the Company, enforceable against the Company in accordance with their terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to or affecting the enforcement of creditors' rights in general and general principles of equity (regardless of whether such Fortune Brands, Inc. -5- April 15, 1999 enforceability is considered in a proceeding in equity or at law). B. The Debt Warrants will be legally and validly issued and will constitute the valid and binding obligations of the Company, enforceable against the Company in accordance with their terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to or affecting the enforcement of creditors' rights in general and general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law). C. The shares of Common Stock issuable or deliverable upon conversion of any convertible Debt Securities, when and if issued or delivered in accordance with the Indenture and the terms of such Debt Securities and in accordance with resolutions of the Board of Directors of the Company or the Executive Committee thereof, will be legally and validly issued, fully paid and nonassessable and any accompanying Rights issuable or deliverable with such shares of Common Stock upon conversion of any convertible Debt Securities, when and if issued or delivered in accordance with resolutions of the Board of Directors of the Fortune Brands, Inc. -6- April 15, 1999 Company or the Executive Committee thereof, will be legally and validly issued. We express no opinion herein as to any laws other than the laws of the State of New York, the General Corporation Law of the State of Delaware and the Federal laws of the United States. We hereby consent to the filing of this opinion as an exhibit to the Registration Statement, to the reference to this firm under the captions "Legal Opinion" in each of the Prospectus constituting a part of the Registration Statement and the form of Prospectus Supplement to be filed therewith. Very truly yours, CHADBOURNE & PARKE LLP EX-23.A 7 CONSENT OF PRICEWATERHOUSECOOPERS LLP Exhibit 23a ----------- CONSENT OF INDEPENDENT ACCOUNTANTS ---------------------------------- We hereby consent to the incorporation by reference in this Registration Statement on Form S-3 of our report dated February 3, 1999 relating to the consolidated financial statements, appearing in the 1998 Annual Report to Stockholders of Fortune Brands, Inc. (the "Company"), which is incorporated by reference in the Company's Annual Report on Form 10-K for the year ended December 31, 1998. We also consent to the incorporation by reference in this Registration Statement on Form S-3 of our report on the financial statement schedule, which appears in such Annual Report on Form 10-K. We also consent to the references to us under the heading "Experts" in such Registration Statement. PricewaterhouseCoopers LLP 11 Madison Avenue New York, New York 10010 April 15, 1999 EX-24 8 POWER OF ATTORNEY Exhibit 24 ---------- POWER OF ATTORNEY The undersigned, acting in the capacity or capacities stated with their respective names below, hereby constitute and appoint MARK A. ROCHE, EDWARD P. SMITH and A. ROBERT COLBY, and each of them severally, the attorneys-in-fact of the undersigned with full power to them and each of them to do any and all acts and things and to execute any and all instruments which said attorneys-in-fact may deem necessary or advisable to comply with the Securities Act of 1933, as amended, and any rules, regulations and requirements of the Securities and Exchange Commission in respect thereof in connection with the filing under the Securities Act of 1933, as amended, of (a) all such registration statements, amendments, post-effective amendments or supplements thereto, or any new or revised prospectuses relating thereto or supplements thereto, as may be necessary or desirable in connection with the registration by Fortune Brands, Inc. of (i) its debt securities ("Debt Securities") in an aggregate principal amount of up to $550,000,000 in aggregate net proceeds (or the equivalent thereof if any Debt Securities are denominated in a foreign currency or currencies or a composite currency), (ii) its warrants to purchase Debt Securities in such aggregate principal amount and (iii) such number of shares of its Common Stock, par value $3.125 per share, and accompanying Preferred Share Purchase Rights as may be issuable from time to time upon conversion of any Debt Securities in such aggregate principal amount, or any Debt Securities in the aggregate principal amount of $450,000,000 remaining registered under the registration statements referred to in clause (b), which are convertible into such Common Stock and (b) all such post-effective amendments to the Registration Statement on Form S-3 (Registration No. 33-50832) of Fortune Brands, Inc., and all amendments or supplements thereto, or any new or revised prospectuses relating thereto or supplements thereto, as may be necessary or desirable, including specifically in each case, but without limiting the generality of the foregoing, the power and authority to sign the name of Fortune Brands, Inc. and the names of the undersigned directors and officers in the capacities indicated below to all such registration statements, amendments, post-effective amendments or supplements thereto: Signature Title Date Thomas C. Hays ---------------------- Chairman of the Board April 9, 1999 Thomas C. Hays and Chief Executive Officer (principal executive officer) and Director Norman H. Wesley ---------------------- President and Chief April 9, 1999 Norman H. Wesley Operating Officer and Director John T. Ludes ---------------------- Vice Chairman and April 9, 1999 John T. Ludes Director Gilbert L. Klemann, II ---------------------- Executive Vice April 9, 1999 Gilbert L. Klemann, II President - Corporate and Director Dudley L. Bauerlein, Jr. ---------------------- Senior Vice President April 9, 1999 Dudley L. Bauerlein, Jr. and Chief Financial Officer (principal financial officer) Craig P. Omtvedt ---------------------- Senior Vice President April 12, 1999 Craig P. Omtvedt and Chief Accounting Officer (principal accounting officer) Eugene R. Anderson ---------------------- Director April 10, 1999 Eugene R. Anderson Patricia O. Ewers ---------------------- Director April 10, 1999 Patricia O. Ewers John W. Johnstone, Jr. ---------------------- Director April 9, 1999 John W. Johnstone, Jr. Sidney Kirschner ---------------------- Director April 10, 1999 Sidney Kirschner PAGE 2 OF 3 Gordon R. Lohman ---------------------- Director April 10, 1999 Gordon R. Lohman ---------------------- Director April , 1999 Charles H. Pistor, Jr. Eugene A. Renna ---------------------- Director April 12, 1999 Eugene A. Renna Anne M. Tatlock ---------------------- Director April 11, 1999 Anne M. Tatlock John W. Thompson ---------------------- Director April 10, 1999 John W. Thompson Peter M. Wilson ---------------------- Director April 12, 1999 Peter M. Wilson PAGE 3 OF 3 EX-25 9 FORM T-1 EXHIBIT 25 ________________________________________________________________ SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 _________________________ FORM T-1 STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE ___________________________________________ CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) ________ ________________________________________ THE CHASE MANHATTAN BANK (Exact name of trustee as specified in its charter) NEW YORK 13-4994650 (State of incorporation (I.R.S. employer if not a national bank) identification No.) 270 PARK AVENUE NEW YORK, NEW YORK 10017 (Address of principal executive offices) (Zip Code) William H. McDavid General Counsel 270 Park Avenue New York, New York 10017 Tel: (212) 270-2611 (Name, address and telephone number of agent for service) ____________________________________________ FORTUNE BRANDS, INC. (Exact name of obligor as specified in its charter) DELAWARE 13-3295276 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification No.) 1700 EAST PUTNAM AVENUE OLD GREENWICH, CONNECTICUT 06870-0811 (Address of principal executive offices) (Zip Code) ____________________________________________ DEBT SECURITIES (Title of the indenture securities) ______________________________________________________ GENERAL Item 1. General Information. Furnish the following information as to the trustee: (a) Name and address of each examining or supervising authority to which it is subject. New York State Banking Department, State House, Albany, New York 12110. Board of Governors of the Federal Reserve System, Washington, D.C., 20551 Federal Reserve Bank of New York, District No. 2, 33 Liberty Street, New York, N.Y. Federal Deposit Insurance Corporation, Washington, D.C., 20429. (b) Whether it is authorized to exercise corporate trust powers. Yes. Item 2. Affiliations with the Obligor. If the obligor is an affiliate of the trustee, describe each such affiliation. None. -2- Item 16. List of Exhibits List below all exhibits filed as a part of this Statement of Eligibility. 1. A copy of the Articles of Association of the Trustee as now in effect, including the Organization Certificate and the Certificates of Amendment dated February 17, 1969, August 31, 1977, December 31, 1980, September 9, 1982, February 28, 1985, December 2, 1991 and July 10, 1996 (see Exhibit 1 to Form T-1 filed in connection with Registration Statement No. 333-06249, which is incorporated by reference). 2. A copy of the Certificate of Authority of the Trustee to Commence Business (see Exhibit 2 to Form T-1 filed in connection with Registration Statement No. 33-50010, which is incorporated by reference. On July 14, 1996, in connection with the merger of Chemical Bank and The Chase Manhattan Bank (National Association), Chemical Bank, the surviving corporation, was renamed The Chase Manhattan Bank). 3. None, authorization to exercise corporate trust powers being contained in the documents identified above as Exhibits 1 and 2. 4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to Form T-1 filed in connection with Registration Statement No. 333-06249, which is incorporated by reference). 5. Not applicable. 6. The consent of the Trustee required by Section 321(b) of the Act (see Exhibit 6 to Form T-1 filed in connection with Registration Statement No. 33-50010, which is incorporated by reference. On July 14, 1996, in connection with the merger of Chemical Bank and The Chase Manhattan Bank (National Association), Chemical Bank, the surviving corporation, was renamed The Chase Manhattan Bank). 7. A copy of the latest report of condition of the Trustee, published pursuant to law or the requirements of its supervising or examining authority. 8. Not applicable. 9. Not applicable. SIGNATURE Pursuant to the requirements of the Trust Indenture Act of 1939 the Trustee, The Chase Manhattan Bank, a corporation organized and existing under the laws of the State of New York, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in the City of New York and State of New York, on the 14th day of April, 1999. THE CHASE MANHATTAN BANK By /s/ Wanda Eiland --------------------------------- Assistant Vice President -3- Exhibit 7 to Form T-1 Bank Call Notice RESERVE DISTRICT NO. 2 CONSOLIDATED REPORT OF CONDITION OF The Chase Manhattan Bank of 270 Park Avenue, New York, New York 10017 and Foreign and Domestic Subsidiaries, a member of the Federal Reserve System, at the close of business December 31, 1998, in accordance with a call made by the Federal Reserve Bank of this District pursuant to the provisions of the Federal Reserve Act. DOLLAR AMOUNTS ASSETS IN MILLIONS Cash and balances due from depository institutions: Noninterest-bearing balances and currency and coin................................ $ 13,915 Interest-bearing balances........................ 7,805 Securities:......................................... Held to maturity securities......................... 1,429 Available for sale securities....................... 56,327 Federal funds sold and securities purchased under agreements to resell............................. 21,733 Loans and lease financing receivables: Loans and leases, net of unearned income......... $131,095 Less: Allowance for loan and lease losses........ 2,711 Less: Allocated transfer risk reserve............ 0 -------- Loans and leases, net of unearned income, allowance, and reserve........................... 128,384 Trading Assets...................................... 48,949 Premises and fixed assets (including capitalized leases).......................................... 3,095 Other real estate owned............................. 239 Investments in unconsolidated subsidiaries and associated companies............................ 199 Customers' liability to this bank on acceptances outstanding..................................... 1,209 Intangible assets................................... 2,081 Other assets........................................ 11,352 -------- TOTAL ASSETS........................................ $296,717 ======== -4- LIABILITIES Deposits In domestic offices................................... $105,879 Noninterest-bearing .................................. $39,175 Interest-bearing ..................................... 66,704 In foreign offices, Edge and Agreement, ------ subsidiaries and IBF's................................ 79,294 Noninterest-bearing .................................. $ 4,082 Interest-bearing ..................................... 75,212 Federal funds purchased and securities sold under agree- ments to repurchase...................................... 32,546 Demand notes issued to the U.S. Treasury................. 629 Trading liabilities...................................... 36,807 Other borrowed money (includes mortgage indebtedness and obligations under capitalized leases): With a remaining maturity of one year or less.......... 4,478 With a remaining maturity of more than one year . through three years................................. 213 With a remaining maturity of more than three years.. 115 Bank's liability on acceptances executed and outstanding 1,209 Subordinated notes and debentures........................ 5,408 Other liabilities........................................ 10,855 TOTAL LIABILITIES........................................ 277,433 -------- EQUITY CAPITAL Perpetual preferred stock and related surplus 0 Common stock............................................... 1,211 Surplus (exclude all surplus related to preferred stock).. 11,016 Undivided profits and capital reserves..................... 6,762 Net unrealized holding gains (losses) on available-for-sale securities........................... 279 Cumulative foreign currency translation adjustments........ 16 TOTAL EQUITY CAPITAL....................................... 19,284 -------- TOTAL LIABILITIES AND EQUITY CAPITAL....................... $296,717 ======== I, Joseph L. Sclafani, E.V.P. & Controller of the above-named bank, do hereby declare that this Report of Condition has been prepared in conformance with the instructions issued by the appropriate Federal regulatory authority and is true to the best of my knowledge and belief. JOSEPH L. SCLAFANI We, the undersigned directors, attest to the correctness of this Report of Condition and declare that it has been examined by us, and to the best of our knowledge and belief has been prepared in conformance with the instructions issued by the appropriate Federal regulatory authority and is true and correct. WALTER V. SHIPLEY ) THOMAS G. LABRECQUE ) DIRECTORS WILLIAM B. HARRISON, JR.) -5- -----END PRIVACY-ENHANCED MESSAGE-----