Edgar Filing: BEAM INC - Form DEF 14A

Officer Level

2011
Requirements

2010
Requirements

2009
Requirements

Chief Executive Officer

6 times base salary

5 times base salary

4 times base salary

Senior Vice Presidents (Region Presidents, CFO and CMO)

3 times base salary

3 times base salary

2 times base salary

DEF 14A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

(Amendment No. )

Filed by the Registrant x Filed by a Party other than the Registrant ¨

Check the appropriate box:


¨	Preliminary Proxy Statement

¨	Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

x	Definitive Proxy Statement

¨	Definitive Additional Materials

¨	Soliciting Material Pursuant to §240.14a-12

Beam Inc.
(Name of Registrant as Specified In Its Charter)


(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

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x	No fee required.

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¨	Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

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LOGO

March 9, 2012

Dear Fellow Stockholder:

You are cordially invited to attend the Beam Inc. Annual Meeting of Stockholders to be held on Tuesday, April 24, 2012 at 1:30 p.m. (CDT) at the Renaissance Chicago North Shore Hotel, 933 Skokie Boulevard, Northbrook, Illinois. At the Annual Meeting, stockholders will be asked to consider the matters set forth in the accompanying Notice of Annual Meeting and Proxy Statement.

2011 was an extraordinary year for the Company. Beam became a standalone premium spirits company following the separation of Fortune Brands’ businesses, and delivered strong results throughout the year. We look forward to presenting a short program on Beam’s 2011 results and future prospects immediately following the Annual Meeting.

We are extremely grateful for the valuable contributions of Bruce Carbonari, David Thomas, Ronald Waters and Norman Wesley, who departed from the Company’s Board of Directors following the spin-off of Fortune Brands Home & Security. We also express our appreciation to Pierre Leroy, who recently resigned from the Board to pursue a new business opportunity, and Anne Tatlock, who will retire from the Board as of the Annual Meeting following 16 years of distinguished service. We are very pleased that Stephen Golsby, Robert Steele and Matthew Shattock, Beam’s President and Chief Executive Officer, have joined the Beam Board and are nominees this year.

On behalf of the full Board of Directors, thank you for your continued support of Beam.

Sincerely,

A. D. David Mackay

Chairman of the Board of Directors

LOGO

NOTICE OF ANNUAL MEETING

AND PROXY STATEMENT

March 9, 2012

The Beam Inc. (“Beam” or the “Company”) Annual Meeting of Stockholders will be held on Tuesday, April 24, 2012 at 1:30 p.m. (CDT) at the Renaissance Chicago North Shore Hotel, 933 Skokie Boulevard, Northbrook, Illinois. Stockholders will be asked to consider the following matters:


Item 1:		The election of the seven director nominees identified in this Proxy Statement for a one-year term expiring at the 2013 Annual Meeting (see pages 5 to 9 of the Proxy Statement);

Item 2:		The ratification of the appointment by the Company’s Audit Committee of PricewaterhouseCoopers LLP as our independent registered public accounting firm for 2012 (see page 74 of the Proxy Statement);

Item 3:		An advisory vote to approve the compensation paid to the Company’s named executive officers (see pages 75 and 76 of the Proxy Statement);

Item 4:		The approval of the Beam Inc. 2012 Employee Stock Purchase Plan (see pages 76 to 80 of the Proxy Statement);

Item 5:		The re-approval of the Annual Executive Incentive Compensation Plan (see pages 80 to 82 of the Proxy Statement); and

such other business as may properly come before the meeting.

Stockholders of record at the close of business on February 24, 2012, the record date for the meeting, are entitled to vote at the Annual Meeting.

YOUR VOTE IS VERY IMPORTANT. WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE SUBMIT YOUR PROXY OR VOTING INSTRUCTIONS AS SOON AS POSSIBLE. You may submit your proxy (1) by mail using a traditional proxy card, (2) by telephone at 1-800-690-6903, or (3) through the Internet at www.proxyvote.com.

PLEASE CONFIRM YOUR PREFERENCE FOR ELECTRONIC DELIVERY OF FUTURE ANNUAL MEETING MATERIALS. You can expedite delivery of your annual meeting materials and avoid costly mailings by confirming in advance your preferred method of delivery. For further information on how to take advantage of this cost-saving service, please refer to the accompanying proxy card.

This Proxy Statement and accompanying proxy are being distributed on or about March 13, 2012.

LOGO

Kenton R. Rose

Senior Vice President, General Counsel,

Chief Administrative Officer and Secretary

Important Notice Regarding the Availability of Proxy Materials

for the Annual Meeting of Stockholders to be Held on Tuesday, April 24, 2012.

The Notice of Annual Meeting, Proxy Statement and the Annual Report on Form 10-K for the fiscal year ended December 31, 2011 are available at www.proxyvote.com.

TABLE OF CONTENTS


FREQUENTLY ASKED QUESTIONS			1
ITEM 1 – ELECTION OF DIRECTORS			5
CORPORATE GOVERNANCE			9
Spin-Off of Home & Security			9
Corporate Governance Principles			10
Director Independence			10
Policies with Respect to Transactions with Related Persons			10
Certain Relationships and Related Transactions			11
Director Nomination Process			11
Communication with the Board			12
Board Leadership Structure			12
Executive Sessions			13
Meeting Attendance			13
Risk Management			13
Compensation Risks			14
Board Committees			14
Audit Committee			15
Compensation and Benefits Committee			16
Compensation Committee Procedures			17
Compensation Committee Consultant			17
Compensation Committee Interlocks and Insider Participation			18
Corporate Responsibility Committee			18
Executive Committee			19
Nominating and Corporate Governance Committee			19
Other Corporate Governance Resources			19
Director Compensation			20
Stock Ownership of Board Members			21

EXECUTIVE COMPENSATION
Compensation Discussion and Analysis			22
Compensation and Benefits Committee Report			52
2011 Executive Compensation			53
2011 Summary Compensation Table			53
2011 Grants of Plan-Based Awards			57
Outstanding Equity Awards at 2011 Fiscal Year-End			59
2011 Option Exercises and Stock Vested			61
Retirement and Post-Retirement Benefits			62
2011 Nonqualified Deferred Compensation			64
Potential Payments Upon Termination or Change in Control			65

EQUITY COMPENSATION PLAN INFORMATION			72

AUDIT COMMITTEE MATTERS
Report of the Audit Committee			72
Fees of Independent Registered Public Accounting Firm			73
Approval of Audit and Non-Audit Services			74

ITEM 2 – RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM			74

ITEM 3 – ADVISORY VOTE TO APPROVE THE COMPENSATION PAID TO THE COMPANY’S NAMED EXECUTIVE OFFICERS			75

ITEM 4 – APPROVAL OF THE BEAM INC. 2012 EMPLOYEE STOCK PURCHASE PLAN			76

ITEM 5 – RE-APPROVAL OF THE ANNUAL EXECUTIVE INCENTIVE COMPENSATION PLAN			80

SECURITIES OWNERSHIP OF MANAGEMENT, DIRECTORS AND CERTAIN OTHER PERSONS
Certain Information Regarding Security Holdings			83
Section 16(a) Beneficial Ownership Reporting Compliance			84

SUBMISSION OF STOCKHOLDER PROPOSALS AND NOMINATIONS			85

MISCELLANEOUS MATTERS			85

APPENDIX A – Beam Inc. 2012 Employee Stock Purchase Plan			A-1

APPENDIX B – Annual Executive Incentive Compensation Plan			B-1

APPENDIX C – Reconciliation of Non-GAAP Measures			C-1

FREQUENTLY ASKED QUESTIONS

Why am I receiving these materials?

The Company has made these materials available to you on the Internet or has delivered printed versions of these materials to you by mail in connection with the solicitation of proxies on behalf of the Board of Directors for use at our Annual Meeting of Stockholders on April 24, 2012. This Proxy Statement describes the matters on which you, as a stockholder, are entitled to vote. It also gives you information on these matters so that you can make an informed decision.

Why did I receive a one-page Notice in the mail regarding the Internet availability of proxy materials this year instead of printed proxy materials?

The Securities and Exchange Commission (“SEC”) permits companies to furnish proxy materials to stockholders by providing access to these documents over the Internet instead of mailing a printed copy. Accordingly, we mailed a Notice of Internet Availability of Proxy Materials (the “Notice”) to certain stockholders. These stockholders have the ability to access, view and print the proxy materials on a website referred to in the Notice and request a printed set of proxy materials.

If I received a printed copy of the proxy materials, how may I choose to receive future proxy materials by email?

If you received a printed copy of our proxy materials, you may choose to receive future proxy materials by email. Choosing to receive your future proxy materials by email will lower our costs of delivery and will reduce the environmental impact of our Annual Meeting. If you choose to receive our future proxy materials by email, you will receive an email next year with instructions containing a link to view those proxy materials and a link to the proxy voting site. Your election to receive proxy materials by email will remain in effect until you terminate it or for so long as the email address provided by you is valid.

What items will be voted on at the Annual Meeting?

Stockholders will vote on the following items at the Annual Meeting, if each is properly presented at the meeting:

•

the election of the directors identified in this Proxy Statement;

•

the ratification of the appointment of our independent registered public accounting firm for 2012;

•

the compensation paid to the Company’s named executive officers;

•

the Beam Inc. 2012 Employee Stock Purchase Plan;

•

the re-approval of the Annual Executive Incentive Compensation Plan; and

•

such other business as may properly come before the Annual Meeting.

In addition, management will respond to questions from stockholders.

What are the Board’s voting recommendations?

The Board’s recommendation is set forth together with the description of each Item in this Proxy Statement. In summary, the Board recommends a vote FOR:

•

the election of the directors identified in this Proxy Statement;

•

the ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for 2012;

•

the advisory approval of the compensation paid to the Company’s named executive officers;

•

the approval of the Beam Inc. 2012 Employee Stock Purchase Plan; and

•

the re-approval of the Annual Executive Incentive Compensation Plan.

Who is entitled to vote?

Only stockholders who owned the Company’s common stock or $2.67 Convertible Preferred Stock of record at the close of business on February 24, 2012 are entitled to vote. Each holder of common stock is entitled to one vote per share. Each holder of $2.67 Convertible Preferred Stock is entitled to three-tenths (0.3) of one vote per share. The common stock and $2.67 Convertible Preferred Stock are voted together as a single class. There were 157,238,062 shares of common stock and 150,745 shares of $2.67 Convertible Preferred Stock outstanding on February 24, 2012.

What is the difference between being a record holder and a beneficial owner of shares held in street name?

A record holder holds shares directly in his or her own name with the Company’s transfer agent. Shares held in “street name” refer to shares that are held in the name of a bank or broker on a person’s behalf. The majority of stockholders hold their shares in street name. For such shares, the bank or broker is considered the stockholder of record for purposes of voting at the Annual Meeting. As a beneficial owner, you have the right to direct that organization on how to vote the shares held in your account.

How do I vote?

If you received a Notice in the mail, you can either vote by Internet (www.proxyvote.com) or in person at the Annual Meeting. Record holders that received a copy of this Proxy Statement and accompanying proxy card in the mail can vote by filling out the proxy card and returning it in the postage paid return envelope. Record holders that receive these materials in the mail may also vote in person at the Annual Meeting of Stockholders, by telephone (800-690-6903) or by Internet (www.proxyvote.com). Voting instructions are provided on both the Notice of Internet Availability and the proxy card.

If you hold shares in street name, you must vote by giving instructions to your bank or broker. You should follow the voting instructions on the form that you receive from your bank or broker. The availability of telephone or Internet voting will depend on your bank’s or broker’s voting process.

How will my proxy be voted?

Your proxy card, when properly signed and returned to us, or processed by telephone or via the Internet, and not revoked, will be voted in accordance with your instructions. We are not aware of any other matter that may be properly presented other than those described above. If any other matter is properly presented, the persons named in the enclosed proxy card will have discretion to vote in their best judgment.

If you hold shares in street name, your bank or broker is permitted to use its own discretion and vote your shares on certain routine matters (such as Item 2) even if you have not provided voting instructions. Your bank or broker is not permitted to use discretion and vote your shares on non-routine matters (such as Items 1, 3, 4 and 5) if it has not received instructions from you as to how to vote the shares. Therefore, we urge you to give voting instructions to your broker on all five voting items. Shares that are not permitted to be voted by your broker with respect to any matter are called “broker non-votes.” Broker non-votes are not considered votes for or against, or entitled to vote with respect to, a proposal and will have no direct impact on any proposal.

What if I don’t mark the boxes on my proxy?

Unless you give other instructions on your proxy card, or unless you give other instructions when you cast your vote by telephone or the Internet, the persons named as proxies will vote in accordance with the recommendations of the Board of Directors.

How many votes are needed to approve an item?

The nominees for director, in non-contested elections, must receive a majority of the votes cast at the meeting, in person or by proxy, to be elected. Under the Company’s majority vote By-law provision relating to the election of directors, if the number of votes cast “for” a director nominee does not exceed the number of votes cast “against” the director nominee, then the director must tender his or her resignation from the Board promptly after the certification of the stockholder vote. The Board will decide within 90 days of that certification, through a process managed by the Nominating and Corporate Governance Committee and excluding the nominee in question, whether to accept the resignation. The Board’s explanation of its decision will be promptly disclosed in a filing with the SEC. A proxy card marked to abstain authority for the election of one or more directors will not be voted with respect to the director or directors indicated.

The affirmative vote of shares representing a majority in voting power of the common stock and $2.67 Convertible Preferred Stock, voting together as a single class, present in person or represented by proxy at the meeting and entitled to vote is necessary for approval of Items 2, 3, 4 and 5. Proxy cards marked as abstentions on Items 2, 3, 4 and 5 will not be voted and will have the effect of a negative vote.

Can I go to the Annual Meeting if I vote by proxy?

Yes. Attending the meeting does not revoke your proxy.

How can I revoke my proxy?

You may revoke your proxy at any time before it is actually voted by giving written notice to the Secretary of the Company at 510 Lake Cook Road, Deerfield, Illinois 60015 or by delivering a later dated proxy.

Will my vote be public?

As a matter of policy, stockholder proxies, ballots and tabulations that identify individual stockholders are not publicly disclosed, but are available to the independent Inspector of Election, the proxy solicitation firm and certain employees of the Company.

What constitutes a quorum?

The presence at the meeting, in person or by proxy, of the holders of a majority in voting power of the outstanding shares of common stock and $2.67 Convertible Preferred Stock entitled to vote will constitute a quorum. Proxies received but marked as abstentions or broker non-votes will be included in the calculation of the number of shares considered to be present at the meeting.

What if I am a participant in the Beam Retirement Savings Plan?

We are mailing this Proxy Statement and a proxy card to participants in the Beam Retirement Savings Plan (the “Savings Plan”) who invest in the Beam Stock Fund under the Savings Plan. The Trustee, as record holder of Beam’s common stock held in the Savings Plan, will vote whole shares attributable to your interest in the Beam Stock Fund in accordance with your directions given on the proxy card, by telephone or the Internet. If you invest in the Beam Stock Fund under the Savings Plan and you sign and return the enclosed proxy card, we will forward it to the Trustee of the Savings Plan. The proxy card will serve as instructions to the Trustee to vote the whole shares attributable to your interest in the manner you indicate on the proxy card.

Item 1

ELECTION OF DIRECTORS

Our Board of Directors (the “Board”) consists of eight members, all of whom are members of Class II. Our Restated Certificate of Incorporation provides that, from and after the election of directors at the 2012 Annual Meeting of Stockholders, the Board will no longer be classified and each director will be elected for a one-year term expiring at the next Annual Meeting. The Board proposes that the seven nominees described below be re-elected for a new term of one year expiring at the 2013 Annual Meeting of Stockholders and until their successors are duly elected and qualified. In accordance with the Company’s Corporate Governance Principles and retirement age policy, Anne M. Tatlock will retire from the Board at the time of the 2012 Annual Meeting of Stockholders.

Each of the nominees has consented to be named as a nominee and to serve as director if elected. If any of the nominees should become unavailable to serve as a director (which is not now expected), the Board may designate a substitute nominee. In that case, the persons named in your proxy to represent you and vote your shares will vote for the substitute nominee designated by the Board.

The names of the nominees, along with their present positions, their principal occupations and directorships held with other public corporations during the past five years, their ages and the year first elected as a director of the Company, are set forth below.

Summary of Qualification of Directors

The Board believes that it is necessary for each of the Company’s directors to possess many qualities and skills. When searching for new candidates, the Nominating and Corporate Governance Committee (the “Nominating Committee”) considers the evolving needs of the Board and searches for candidates who fill any current or anticipated future need. The Board also believes that all directors must possess a considerable amount of business management experience (such as experience as a chief executive officer, chief financial officer or other senior executive officer) and educational experience. The Nominating Committee first considers a candidate’s management experience and then considers issues of judgment, background, stature, conflicts of interest, integrity, ethics and commitment to the goal of maximizing stockholder value when considering director candidates. The Nominating Committee also focuses on issues of diversity, such as diversity of gender, race and national origin, education, professional experience and differences in viewpoints and skills. The Nominating Committee does not have a formal policy with respect to diversity, but the Board and the Nominating Committee believe that it is essential that the Board members represent diverse viewpoints. In considering candidates for the Board, the Nominating Committee considers the entirety of each candidate’s credentials in the context of these standards. With respect to the nomination of continuing directors for re-election, the individual’s contributions to the Board are also considered.

The process undertaken by the Nominating Committee in recommending qualified director candidates is described below under Corporate Governance – Director Nomination Process (see pages 11 and 12 of this Proxy Statement). The Board believes that there are certain general requirements that are critical for service on the Board, while there are other skills and experiences that should be represented on the Board as a whole but not necessarily by each individual director.

General requirements for all directors:

•

Extensive executive leadership experience

•

Excellent business judgment

•

High level of integrity and ethics

•

Original and entrepreneurial thinking

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Strong commitment to the Company’s goal of maximizing stockholder value

Experiences, qualifications, and backgrounds to be represented on the Board as a whole:

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Financial and/or accounting expertise

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Consumer products expertise

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Diversity of background

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Knowledge of international markets

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Recent Chief Executive Officer/Chief Operating Officer/Chief Financial Officer experience

•

Extensive board experience

Certain individual qualifications and experiences of the director nominees that contribute to the Board’s effectiveness as a whole are described in the following paragraphs.


Name	Present positions and offices with the Company, principal occupations and other directorships during the past five years	Age		Year first elected director

Richard A. Goldstein	Retired since May 2006; Chairman and Chief Executive Officer of International Flavors & Fragrances Inc., a manufacturer of flavor and fragrance products, from June 2000 until May 2006. Currently also a director of The Interpublic Group of Companies, Inc., Fiduciary Trust Company International and Fortune Brands Home & Security, Inc. Formerly a director of International Flavors & Fragrances Inc.		70		2006

Richard Goldstein’s background as a lawyer, and his 30-year background in consumer packaged goods as Chief Executive Officer of a supplier to consumer goods companies, provides a unique perspective to the Board.

Stephen W. Golsby	President and Chief Executive Officer of Mead Johnson Nutrition Company, a manufacturer of pediatric nutrition products, since September 2008; President of Mead Johnson from January 2004 to September 2008; President, International of Mead Johnson from 2001 to 2003. Currently also a director of Mead Johnson Nutrition Company.		57		2011

Stephen Golsby is currently the Chief Executive Officer of a publicly-traded global consumer products company. He brings to the Board extensive consumer products company leadership experience and valuable insights with respect to international operations.

Ann F. Hackett	Founder and President of Horizon Consulting Group, LLC, a provider of business strategy, organizational, and human resources advice, since 1996. Currently also a director of Capital One Financial Corporation and Fortune Brands Home & Security, Inc.		58		2007

Ann Hackett founded a company that provides strategic, organizational and human resource consulting services to boards of directors and senior management teams. She brings to the Board entrepreneurial experience and expertise in strategy and human resources.


Name	Present positions and offices with the Company, principal occupations and other directorships during the past five years	Age		Year first elected director

A.D. David Mackay (Chairman of the Board)	Retired since January 2011; President and Chief Executive Officer of Kellogg Company, a ready-to-eat cereal and convenience foods company, from December 2006 until December 2010; President and Chief Operating Officer of Kellogg Company from September 2003 to December 2006. Currently also a director of Fortune Brands Home & Security, Inc. and Woolworths Limited. Formerly a director of Kellogg Company.		56		2006

David Mackay served as Chief Executive Officer of one of the world’s premier packaged goods companies, bringing to our Board the perspective of a leader who faced similar external economic, social and governance issues to those that face our Company.

Matthew J. Shattock (President and Chief Executive Officer)	President and Chief Executive Officer of the Company since October 2011; President and Chief Executive Officer of Beam Global Spirits & Wine, Inc. from March 2009 to October 2011; Region President of Cadbury Plc, a confectionary company, from 2003 to 2008; Chief Operating Officer of Unilever Best Foods North America, a leading consumer goods company, from 2000 to 2002; various senior leadership positions at Unilever from 1986 to 2000.		49		2011

Matthew Shattock’s day-to-day leadership as President and Chief Executive Officer of Beam Inc. provides him with intimate knowledge of our business strategy and operations. Matthew Shattock also serves as an important liaison between management and the independent directors of the Board.

Robert A. Steele	Retired since September 2011; Vice Chairman – Global Health and Well Being of Procter & Gamble, a consumer brands company, from July 2007 to September 2011; Group President – Global Household Care of Procter & Gamble from April 2006 to July 2007. Formerly a director of Kellogg Company.		56		2011

Robert Steele possesses particular knowledge and experience in accounting and financial matters. He has extensive understanding of the branded consumer products industry and provides the Board insights into consumer dynamics, manufacturing and supply chain, marketing and the retail environment.


Name	Present positions and offices with the Company, principal occupations and other directorships during the past five years	Age		Year first elected director

Peter M. Wilson	Retired since March 2004; Chairman of Gallaher Group Plc, a UK-based company, from May 1997 through March 2004. Formerly a director of Kesa Electricals plc.		70		1994

In addition to a career of over 45 years in marketing consumer goods, Peter Wilson’s experience as Chief Executive Officer of a UK-based, international consumer goods company provides the Board with a global perspective.

The Board of Directors recommends that you vote FOR, the election of each nominee.

CORPORATE GOVERNANCE

Spin-Off of Home & Security

On October 4, 2011, the Company completed the spin-off of Fortune Brands Home & Security, Inc. (“Home & Security”) by distributing 100% of the outstanding shares of Home & Security common stock to holders of the Company’s common stock (the “Spin-Off”). As a result of the Spin-Off, Home & Security became an independent public company trading under the symbol “FBHS” on the New York Stock Exchange, and the Company changed its name from Fortune Brands, Inc. to Beam Inc.

The Company experienced significant changes on its Board of Directors in connection with the Spin-Off, summarized as follows:

•

Bruce A. Carbonari, David M. Thomas, Ronald V. Waters, III and Norman H. Wesley resigned as members of the Board, effective immediately following the Spin-Off (David Thomas, Ronald Waters and Norman Wesley continued as directors of Home & Security, as did current Company directors David Mackay, Richard Goldstein and Ann Hackett);

•

Matthew Shattock, the Company’s President and Chief Executive Officer, was elected to the Company’s Board of Directors, effective immediately following the Spin-Off;

•

David Mackay was appointed as non-executive Chairman of the Board of the Company, effective immediately following the Spin-Off; and

•

Stephen Golsby and Robert Steele were elected to the Company’s Board of Directors, effective as of December 1, 2011.

In addition, Pierre Leroy resigned from the Board in February 2012 following his change in principal employment. The Board currently consists of eight members as a result of these changes, seven of whom have been nominated for election for a term of one year expiring at the 2013 Annual Meeting of Stockholders. Anne Tatlock will retire from the Board at the time of the 2012 Annual Meeting of Stockholders in accordance with the Company’s Corporate Governance Principles and retirement age policy.

Corporate Governance Principles

The Board has adopted Corporate Governance Principles, which are available at http://investor.beamglobal.com under the tab “Corporate Governance – Company Policies.” The Principles describe our corporate governance practices and address corporate governance issues such as Board composition and responsibilities, compensation of directors and executive succession planning.

Director Independence

The Company’s Corporate Governance Principles provide that a majority of the members of the Board, and each member of the Audit, Compensation and Benefits and Nominating and Corporate Governance Committees, shall be independent directors. The Board applies the definition of independence found in the New York Stock Exchange Listed Company Manual in determining which directors are independent.

Applying that definition, Richard Goldstein, Stephen Golsby, Ann Hackett, David Mackay, Robert Steele and Peter Wilson were affirmatively determined by the Board to be independent. The Board reached the same determination with respect to Pierre Leroy, who served as a director until February 22, 2012. Due to Matthew Shattock’s employment with the Company, he is not considered independent. When considering each director’s independence, the Board determined that none of the non-employee directors has any material relationship with the Company other than being a director and stockholder or has engaged in any transaction or arrangement that interferes with such director’s independence.

Policies with Respect to Transactions with Related Persons

The Nominating Committee has adopted a Code of Conduct and Ethics that sets forth various policies and procedures intended to promote the ethical behavior of the Company’s employees, officers and directors. The Code of Conduct and Ethics describes the Company’s policy on conflicts of interest. The Company has established a Global Risk and Compliance Committee, the members of which are executive officers of the Company, which is responsible for monitoring compliance with the Code of Conduct. The Global Risk and Compliance Committee periodically reports on the Company’s compliance efforts to the Audit Committee and to the Board.

The Company has also established a Conflicts of Interest Committee, the members of which are executive officers of the Company, which distributes a Conflicts of Interest Policy to the Company’s employees, officers and directors. The Conflicts of Interest Policy describes the types of relationships that may constitute a conflict of interest with the Company. Employees, officers and directors are required to periodically complete a questionnaire about potential conflicts of interest and certify compliance with the Company’s policy. The Conflicts of Interest Committee reviews potential conflicts of interest and reports its findings to the Audit Committee.

The executive officers and the directors are also required to complete a questionnaire on an annual basis which requires them to disclose any related person transactions and potential conflicts of interest. The General Counsel reviews the responses to the questionnaires and, if a transaction is reported by a director or executive officer, the questionnaire is submitted to the Chair of the Audit Committee for review. If necessary, the Audit Committee will determine whether the relationship is material and will present a conflict of interest. After making such determination, the Audit Committee will report its recommendation on whether the transaction should be approved or ratified by the entire Board.

Certain Relationships and Related Transactions

During 2011, the Company did not participate in any transactions in which any of its directors, executive officers, any immediate family member of a director or executive officer or any beneficial owner of more than 5% of the Company’s common stock had a direct or indirect material interest.

Director Nomination Process

The Nominating Committee is responsible for, among other things, screening potential director candidates and recommending qualified candidates to the Board for nomination.

When identifying and evaluating candidates, the Nominating Committee first determines whether there are any evolving needs of the Board that require an expert in a particular field. The Nominating Committee may retain a third-party search firm to assist the Committee in identifying qualified candidates that meet the needs of the Board at that time. A search firm provides information on candidates, which the Nominating Committee will discuss. The Nominating Committee Chair and some or all of the members of the Nominating Committee and the Chief Executive Officer will interview potential candidates that the Nominating Committee deems appropriate. If the Nominating Committee determines that a potential candidate meets the needs of the Board and has the appropriate qualifications, it will recommend the nomination of the candidate to the Board. During 2011 and in connection with the Spin-Off, we retained RSR Partners, a third-party search firm, to conduct a search for new members of the Board. RSR Partners reviewed the qualifications of the candidates, including candidates referred to them by members of the Board, and recommended candidates to the Nominating Committee. Following candidate interviews, Stephen Golsby and Robert Steele were nominated by the Nominating Committee. Based on the Nominating Committee’s recommendation, the Board elected Stephen Golsby and Robert Steele to the Board effective December 1, 2011.

It is the Nominating Committee’s policy to consider director candidates recommended by stockholders, if such recommendations are properly submitted to the Company. Stockholders wishing to recommend persons for consideration by the Nominating Committee as nominees for election to the Board can do so by writing to the Secretary of Beam Inc. at 510 Lake Cook Road, Deerfield, Illinois. Recommendations must include the proposed nominee’s name, biographical data and qualifications, as well as a written statement from the proposed nominee consenting to be named and, if nominated and elected, to serve as a director. Recommendations must also follow the Company’s procedures for nomination of directors by stockholders (see page 85 of this Proxy Statement) as provided in our Restated Certificate of Incorporation and By-laws. The

Nominating Committee will consider the candidate and the candidate’s qualifications in the same manner in which it evaluates nominees identified by the Nominating Committee. The Nominating Committee may contact the stockholder making the nomination to discuss the qualifications of the candidate and the stockholder’s reasons for making the nomination. The Nominating Committee may then interview the candidate if it deems the candidate to be appropriate. The Nominating Committee may use the services of a third-party search firm to provide additional information about the candidate prior to making a recommendation to the Board.

The Nominating Committee’s nomination process is designed to ensure that the Nominating Committee fulfills its responsibility to recommend candidates that are properly qualified to serve the Company for the benefit of all of its stockholders, consistent with the standards established by the Nominating Committee under the Company’s Corporate Governance Principles.

Communication with the Board

The Board and management encourage communication from the Company’s stockholders. Stockholders who wish to communicate with the Company’s management should direct their communication to the Chief Executive Officer or the Secretary of Beam Inc. at 510 Lake Cook Road, Deerfield, Illinois 60015. Stockholders, or other interested parties, who wish to communicate with the non-management directors or any individual director should direct their communication care of the Secretary at the address above. The Secretary will forward communications intended for the Board to the Chairman of the Board, or, if intended for an individual director, to that director. If multiple communications are received on a similar topic, the Secretary may, in his discretion, forward only representative correspondence. Any communications that are abusive, harassing, in bad taste or present safety or security concerns may be handled differently.

Board Leadership Structure

The Board believes that its leadership structure is an integral part of the overall governance process and is a matter to be considered based upon all of the relevant facts and circumstances. The Company’s By-laws provide that the Chairman of the Board will be the Chief Executive Officer unless determined otherwise by the Board. Retaining flexibility to allocate the responsibilities of the offices of the Chairman of the Board and Chief Executive Officer in any way that is in the best interests of our Company at a given point in time based upon then-prevailing circumstances is critical. The Board believes that the decision as to who should serve in those roles, and whether the offices should be combined or separate, should be assessed periodically by the Board, and that the Board should not be constrained by a rigid policy mandate when making these determinations.

The positions of Chief Executive Officer and Chairman of the Board are currently held by separate persons, with Matthew Shattock serving as our President and Chief Executive Officer and David Mackay serving as our independent non-executive Chairman of the Board. The Board implemented this leadership structure in connection with the Spin-Off, as described on pages 9 and 10 of the Proxy Statement. We believe this structure is optimal for the Company at this time because it allows Matthew Shattock to focus on his management responsibilities in continuing to lead the Company following its transition to a standalone public company. At the same time, the Chairman can focus on the overall strategy of the business and leadership of the Board of Directors, including presiding at all Board meetings and the Annual Meeting of Stockholders; establishing

Board meeting agendas in consultation with the Chairs of the Board committees; acting as a liaison between the non-employee directors and the Company’s management; advising the Chief Executive Officer of the quality, quantity and timeliness of the flow of information from Company management to enable the independent directors to effectively and responsibly perform their duties; facilitating teamwork and communication among non-employee directors; and maintaining frequent contact with the Chief Executive Officer.

The Company’s Corporate Governance Principles call for the designation of a Lead Director when the positions of Chief Executive Officer and Chairman of the Board are held by the same person. The designation of a Lead Director is unnecessary at this time due to the separation of the Chief Executive Officer and Chairman of the Board positions. Prior to the Spin-Off in 2011, while Bruce Carbonari served as both the Chairman of the Board and the Chief Executive Officer, David Thomas served as the Board’s Lead Director.

Executive Sessions

Pursuant to the Company’s Corporate Governance Principles, non-management directors of the Board are required to meet on a regularly scheduled basis without the presence of management.

Meeting Attendance

Last year there were eleven meetings of the Board. Each incumbent director attended at least 75% of the total meetings of the Board (held during the period for which he or she was a director) and committees of the Board on which he or she served (during the periods that he or she served). In addition to participation at Board and committee meetings, our directors regularly engage throughout the year in personal meetings and other communications, including considerable telephone contact with the Chief Executive Officer and Chairman of the Board (or Lead Director prior to the Spin-Off) and others regarding matters of interest and concern to the Company.

The Company does not have a formal policy requiring members of the Board to attend the Annual Meeting, although all directors are strongly encouraged to attend. Nine of ten directors were present at the 2011 Annual Meeting.

Risk Management

The responsibility for the day-to-day management of risks lies with the Company’s management team; however, the Board of Directors has an active role, as a whole and also at the committee level, in overseeing the strategy and process for managing the Company’s risks. The Board regularly reviews information regarding the Company’s business strategy, leadership development, resource allocation, succession planning, credit, liquidity and operations, as well as the risks associated with each.

Management periodically identifies external, strategic, operational, financial, compliance and other risks, assesses the impact of these risks and determines how to mitigate such risks. The Audit Committee oversees the Company’s risk management program and reviews the results of management’s assessment. Management also provides the Audit Committee with updates on the Company’s risks, changes and/or emerging risks. In addition, the Audit Committee oversees management of the Company’s financial risks. The Company’s Compensation and Benefits Committee (the “Compensation Committee”) is responsible for overseeing the management of risks

relating to the compensation paid to the Company’s executives and the Company’s executive compensation plans and programs. During 2011, the Compensation Committee’s consultant, Meridian Compensation Partners, LLC (“Meridian”), assisted with an assessment of risks associated with the Company’s compensation practices and programs. For more information about that assessment see “Compensation Risks” below. The Nominating and Corporate Governance Committee evaluates risks associated with the independence of the Board of Directors, potential conflicts of interest and the Company’s corporate governance structure. The Corporate Responsibility Committee evaluates risks associated with corporate social responsibility issues. While each committee is responsible for evaluating certain risks and overseeing the management of such risks, the entire Board of Directors is regularly informed through committee reports about such risks. The Board’s assignment of responsibility for the oversight of specific risks to its committees enables the entire Board, under the leadership of the Chairman of the Board, to better monitor the risks of the Company and more effectively develop strategic direction, taking into account the various risks facing the Company, including the magnitude of such risks.

Compensation Risks

We believe that risks arising from our compensation policies and practices for our employees are not reasonably likely to have a material adverse effect on the Company. In addition, the Compensation Committee believes that the mix and design of the elements of executive compensation do not encourage management to assume excessive risks. The Compensation Committee, with assistance from its independent compensation consultant, reviewed the elements of executive compensation extensively to determine whether any portion of the Company’s executive compensation policies and practices encouraged excessive risk taking and concluded:

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significant weighting towards long-term incentive compensation discourages short-term risk taking;

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rolling three-year performance targets discourage short-term risk taking;

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incentive awards are capped by the Compensation Committee to discourage excessive risk taking;

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equity ownership guidelines discourage excessive risk taking; and

•

as a consumer products business, the Company does not face the same level of risks associated with compensation for employees at financial services firms (traders and transactions involving instruments with a high degree of risk) or technology companies (rapidly changing markets).

Furthermore, as described in our Compensation Discussion and Analysis, compensation decisions include independent committee oversight, which restrains the influence of formulae or objective factors on excessive risk taking.

Board Committees

The Board has established an Executive Committee, an Audit Committee, a Compensation and Benefits Committee, a Nominating and Corporate Governance Committee and a Corporate Responsibility Committee. The Audit, Compensation and Benefits, and Nominating and Corporate Governance Committees are composed entirely

of independent directors, as defined under the New York Stock Exchange Listed Company Manual and the Company’s Corporate Governance Principles. The charters of these committees (other than the Executive Committee, which does not have a charter) are available on the Company’s website at http://investor.beamglobal.com under the tab “Corporate Governance – Committees of the Board.”

A list of current Committee memberships may be found on the Company’s website at http://investor.beamglobal.com under the tab “Corporate Governance – Committees of the Board.” The Committee memberships as of the date of this Proxy Statement are set forth below:


Name	Audit	Compensation and Benefits	Corporate Responsibility	Executive	Nominating and Corporate Governance
Richard A. Goldstein(1)	C			X	X
Stephen W. Golsby(2)		X	X
Ann F. Hackett		X			X
A.D. David Mackay(3)	X			C	C
Matthew J. Shattock(4)(5)			X	X
Robert A. Steele(2)(4)	X		X		X
Anne M. Tatlock(6)		C	X	X
Peter M. Wilson		X	C	X

(1)	Richard Goldstein was a member of the Compensation and Benefits Committee and Chair of the Nominating and Corporate Governance Committee prior to the Spin-Off.

(2)	Stephen Golsby and Robert Steele were appointed to the Board effective December 1, 2011.

(3)	David Mackay was appointed Chairman of the Board and Chair of the Executive and Nominating and Corporate Governance Committees following the Spin-Off.

(4)	Matthew Shattock and Robert Steele were appointed to the Corporate Responsibility Committee effective February 22, 2012.

(5)	Matthew Shattock was elected to the Board following the Spin-Off.

(6)	Anne Tatlock will retire from the Board at the time of the Annual Meeting in accordance with our Corporate Governance Principles and retirement age policy.

An “X” indicates membership on the committee.

A “C” indicates that the director serves as the Chair of the committee.

Audit Committee

The Audit Committee held five meetings in 2011. The Audit Committee also held four teleconferences to review and discuss earnings announcements. The Audit Committee’s primary functions are to:

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Select, retain, evaluate and terminate when appropriate a firm of independent auditors to audit our financial statements and approve the scope of the firm’s audit;

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Review reports and recommendations of our independent auditors;

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Review the scope of all internal audits and related reports and recommendations;

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Pre-approve all audit and non-audit services provided by our independent registered public accountants;

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Monitor the integrity of the Company’s financial statements;

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Monitor compliance with financial reporting requirements;

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Monitor the independence and performance of our independent auditors, including the lead partner, and the performance of our internal auditors;

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Discuss the Company’s financial statements and its quarterly and annual reports to be filed with the SEC and the adequacy of the Company’s internal controls and procedures with management and the independent auditors;

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Discuss the Company’s press releases relating to earnings with management;

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Review the Company’s policies regarding risk assessment and risk management;

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Review the Company’s compliance programs;

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Review and approve related person transactions and conflicts of interest involving directors and executive officers;

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Establish procedures for receiving and responding to concerns regarding accounting and auditing matters; and

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Review and approve a report, included in this Proxy Statement, disclosing whether the Committee has recommended to the Board that the audited financial statements be included in the Company’s Form 10-K.

Each member of the Audit Committee, as of the date of this Proxy Statement, is financially literate, has accounting or financial management expertise and is an audit committee financial expert as defined in Item 407(d)(5)(ii) and (iii) of Regulation S-K under the Securities Exchange Act of 1934 (the “Exchange Act”). Each Audit Committee member has also been determined by our Board to be independent as such term is defined in Rule 10A-3 under the Exchange Act and the New York Stock Exchange Listed Company Manual.

Compensation and Benefits Committee

The Compensation and Benefits Committee (the “Compensation Committee”) held nine meetings in 2011. The Compensation Committee’s primary functions are to:

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Approve the Company’s executive pay philosophy;

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Administer our Long-Term Incentive Plans and grant stock options, performance awards, restricted stock units and other stock-based awards under the Long-Term Incentive Plans;

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Review and approve compensation for the Chief Executive Officer and evaluate his or her performance, in consultation with the Company’s non-employee directors;

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Set compensation (including incentive compensation) for elected officers;

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Retain compensation consultants to assist in the evaluation of executive compensation and benefits;

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Assess and, if necessary, attempt to mitigate risks associated with the Company’s compensation plans;

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Oversee management’s administration of supplemental retirement and other benefit arrangements;

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Approve compensation agreements and severance agreements for executive officers;

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Approve any compensation clawback provisions;

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Oversee and monitor management’s administration of perquisites provided to executives;

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Review and approve the Compensation Discussion and Analysis and Compensation Committee Report included in this Proxy Statement; and

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Review and evaluate any stockholder votes relating to a proposal that seeks approval of the Company’s executive compensation.

Compensation Committee Procedures

The Compensation Committee directs management to prepare financial data used by the Compensation Committee in determining executive compensation. In addition, members of the Company’s human resources department assist in the preparation of executive compensation tally sheets and historical information on compensation paid to executives. The Compensation Committee is presented with recommendations from management and from the Committee’s independent compensation consultant as to the level and type of compensation to provide to elected officers. Members of the Company’s legal department provide the Compensation Committee with general advice on laws applicable to executive compensation and the directors’ fiduciary duties in setting compensation.

The Chief Executive Officer typically attends meetings of the Compensation Committee. The Chief Executive Officer’s feedback about each officer’s performance is essential in the Compensation Committee’s determination of the officer’s salary and target incentive compensation determinations. See pages 29 to 33 of this Proxy Statement for more information about how the Compensation Committee determines the executive officers’ compensation.

Compensation Committee Consultant

The Compensation Committee is empowered to engage the services of an outside compensation consultant without the involvement of Company management. In 2011, Meridian served as the Compensation Committee’s outside compensation consultant. Meridian was retained by, and reported directly to, the Compensation Committee during its engagement as compensation consultant. As outside compensation consultant, Meridian provided the following services and information to the Compensation Committee:

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Made recommendations regarding executive compensation (including the amount and form of compensation) consistent with the Company’s business needs, pay philosophy, market trends and latest legal and regulatory considerations;

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Provided market data (including compiling the peer group and related performance data) as background for decisions regarding Chief Executive Officer and senior management compensation;

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Advised the Compensation Committee as to executive compensation considerations relating to the Spin-Off;

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Advised the Compensation Committee as to best practices for structuring executive pay arrangements; and

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Attended meetings as requested and summarized alternatives for compensation arrangements that may have been considered in formulating final recommendations, as well as the consultant’s rationale for supporting or opposing management’s proposals.

Meridian does not provide any other services to the Company or to management directly. Pursuant to its terms of engagement, and to assure the ongoing independent status of Meridian as the Compensation Committee’s independent compensation consultant, Meridian is prohibited from providing other services to the Company or its management, although Meridian may accept engagements from other committees of the Board.

Compensation Committee Interlocks and Insider Participation

No person who served as a member of our Board’s Compensation Committee during the last fiscal year has (i) served as one of our officers or employees; or (ii) any relationship requiring disclosure under Item 404 of the SEC’s Regulation S-K. None of our executive officers serve as a member of the board of directors or as a member of a compensation committee of any other company that has an executive officer serving as a member of our Company’s Board or our Company’s Compensation Committee.

Corporate Responsibility Committee

The Corporate Responsibility Committee held four meetings in 2011. The Corporate Responsibility Committee’s primary functions are to review and recommend to the Board policies on the Company’s responsibilities to its employees and the community. The Committee meets periodically with the Company’s personnel to review and discuss programs, policies and performance in the areas of:

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Alcohol responsibility, alcohol education, and marketing initiatives;

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Employee health and safety;

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Diversity and equal employment opportunity;

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Global citizenship;

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Sustainability and the effect of Company operations on the environment; and

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Philanthropic activities.

Executive Committee

The Executive Committee held one meeting in 2011. The Executive Committee has all the authority of the full Board, except for specific powers that are required by law to be exercised by the full Board. The Executive Committee may not amend the Certificate of Incorporation, adopt an agreement of merger, recommend actions for stockholder approval, amend the By-laws, elect, appoint or remove an officer or director, amend or repeal any resolutions of the Board, fix the Board’s compensation, and unless expressly authorized by the Board, declare a dividend, authorize the issuance of stock or adopt a certificate of ownership and merger.

Nominating and Corporate Governance Committee

The Nominating and Corporate Governance Committee met eight times in 2011. The Nominating Committee’s primary functions are to:

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Identify, recruit and screen potential director nominees and recommend such nominees for election as members of the Board;

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Review criteria and policies relating to director independence, service and tenure;

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Recommend directors for membership on the Audit, Compensation, Corporate Responsibility, Executive and Nominating Committees, including their Chairs;

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Recommend directors, secretaries and employees for membership on other committees established by the Board;

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Recommend compensation arrangements (including the level and composition of such compensation) for non-employee directors;

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Develop and recommend a set of corporate governance principles designed to foster an effective corporate governance environment;

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Administer non-employee director equity compensation plans;

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Review the charters of Board committees; and

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Manage the performance review process of the Board, its committees and the Chief Executive Officer.

Other Corporate Governance Resources

The charter of each committee (other than the Executive Committee, which does not have a charter), the Company’s Corporate Governance Principles, the Company’s Code of Conduct and Ethics and the Company’s Code of Ethics for the CEO and Senior Financial Officers are available on the Company’s website (http://investor.beamglobal.com) under the tabs “Corporate Governance – Committees of the Board” and “Corporate Governance – Company Policies.”

Director Compensation

The following table sets forth information regarding 2011 compensation for each of our non-employee directors.


Name^*	Fees Earned or Paid in Cash ($)		Stock Awards ($)(1)		All Other Compensation ($)(2)		Total ($)
Richard A. Goldstein		102,500		114,760		—		217,260
Stephen W. Golsby(3)		7,292		—		—		7,292
Ann F. Hackett		87,500		114,760		—		202,260
Pierre E. Leroy(4)		95,000		114,760		—		209,760
A. D. David Mackay		141,250		114,760		—		256,010
Robert A. Steele(3)		7,292		—		—		7,292
Anne M. Tatlock		102,500		114,760		—		217,260
Peter M. Wilson		102,500		114,760		—		217,260

^*	Although Matthew Shattock serves as a member of the Board, he does not receive any additional compensation for such service.

(1)

The amounts in this column represent the aggregate grant date fair value computed in accordance with FASB ASC Topic 718. The grant date fair value was $64.05 per share. See “Certain Information Regarding Security Holdings” on pages 83 and 84 of this Proxy Statement for the number of shares of stock held by each current director as of the record date, February 24, 2012.

Ann Hackett elected to defer receipt of these shares until the January following the calendar year in which she no longer serves as a director of the Company.

(2)	The aggregate amount of perquisites and personal benefits give to each named director valued on the basis of aggregate incremental cost to the Company was less than $10,000 and, accordingly, is not reported in this column.

Under our charitable award program, the Company will make contributions of up to $500,000 to a charitable, educational or other qualified organization designated by each eligible non-employee director elected prior to December 9, 2003, the date on which the program was frozen. The contributions are made to the designated organization(s) on behalf of the director after the death of the director. Only Pierre Leroy and Anne Tatlock are eligible to participate in this program.

(3)	Stephen Golsby and Robert Steele joined the Board effective December 1, 2011.

(4)	Pierre Leroy resigned from the Board effective February 22, 2012.

The annual fee for services as a non-employee director of the Company was $80,000 during 2011. Members of the Audit Committee and the Compensation and Benefits Committee received an additional $7,500 for their service on these Committees. The Company’s non-executive Chairman receives an annual fee of $200,000. The Chair of each of the Audit, Compensation and Benefits, Corporate Responsibility and Nominating and Corporate Governance Committees received an additional fee of $15,000 for such service. When the Company had a Lead Director in 2011, his annual fee was $20,000. All director fees were pro-rated during 2011 for the portion of the year in which each director served on the Board or its respective committees.

Each non-employee director receives an annual stock grant that is based on a set dollar value. The number of shares granted is determined by dividing the closing price of the Company’s common stock on the grant date into the annual dollar value. In April 2011, the Nominating Committee set the dollar value at $115,000 and each non-employee director received 1,792 shares of our common stock under the 2010 Non-Employee Director Stock Plan (Ann Hackett deferred receipt of these shares until the January following the calendar year in which she no longer serves as a director of the Company).

2002 Non-Employee Director Stock Option Plan. The 2002 Non-Employee Director Stock Option Plan expired on December 31, 2006. Stock options have not been granted to non-employee directors since 2005; however, some of the non-employee directors continue to hold outstanding stock options granted under this plan (see “Certain Information Regarding Security Holdings” on pages 83 and 84 of this Proxy Statement). Under the terms of the plan and prior to its expiration, each non-employee director who was first elected to the Board after April 30, 1997 was eligible to receive an annual grant of nonqualified stock options to purchase shares of our common stock.

Stock Ownership of Board Members

In order to more directly align the Board’s interests with those of stockholders, the Company expects directors to establish and maintain a significant level of stock ownership. Stock ownership guidelines have been established for directors. The guideline for directors is three times their annual fee. The guidelines allow directors five years from the date of the director’s election to the Board to meet the guidelines. All of the directors who have been on the Board at least five years satisfy the guidelines. For information on the beneficial ownership of securities of the Company by directors and executive officers see “Certain Information Regarding Security Holdings” on pages 83 and 84.

COMPENSATION DISCUSSION AND ANALYSIS

Introduction

This Compensation Discussion and Analysis (“CD&A”) describes our executive compensation philosophy and the pay program applicable to our named executive officers (the “NEOs”) during 2011.

In 2011, the Company demonstrated its commitment to stockholder-value creation in powerful ways. In order to maximize long-term stockholder value, we successfully executed a dramatic and fundamental structural change. And reflecting the immediate success of this value-creation strategy, we delivered a total shareholder return of 22% from the date we became a standalone spirits company through year end.

We began the year as Fortune Brands, Inc., a diversified consumer company operating in three distinct segments – distilled spirits, home and security products, and golf equipment – and we completed the year as a high-performance, pure-play spirits company delivering outstanding results and offering excellent long-term prospects. To maximize long-term shareholder value, we separated our three businesses to enable them to compete as focused companies with scale and strength in their markets. Accordingly, we sold the golf business (Acushnet Company) in July for a cash purchase price of $1.225 billion, and we spun off the home and security products business (Home & Security) to shareholders in October. We renamed the remaining company Beam Inc., which now competes as a leading publicly-traded pure-play spirits company and the successor company to Fortune Brands. During this year of fundamental structural change, the Company continued to execute its growth strategy and deliver outstanding results.

As used in this CD&A, the term “Company” refers both to Beam Inc. and its predecessor company, Fortune Brands, Inc., as in effect prior to the Spin-Off. The term “Beam Global” refers to the spirits operating segment of Fortune Brands, Inc. prior to the Spin-Off.

The Compensation Committee administers our executive compensation program. In this CD&A, you will find information regarding the compensation and benefits provided to the following NEOs who are currently executive officers of the Company:

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Matthew J. Shattock – President and Chief Executive Officer

•

Robert F. Probst – Senior Vice President and Chief Financial Officer

•

William A. Newlands – Senior Vice President and President, North America

•

Philip Baldock – Senior Vice President and President, Asia-Pacific/South America

•

Albert Baladi – Senior Vice President and President, Europe/Middle East/Africa

You will also find information regarding the compensation and benefits provided to the following NEOs who were executive officers of Fortune Brands, Inc. prior to the Spin-Off:

•

Bruce A. Carbonari – Former Fortune Brands, Inc. Chairman of the Board & Chief Executive Officer

•

Craig P. Omtvedt – Former Fortune Brands, Inc. Senior Vice President and Chief Financial Officer

SEC rules regarding proxy disclosures require us to provide information for each individual who served in the capacity of Chief Executive Officer (the “CEO”) and Chief Financial Officer (the “CFO”) at any time during the fiscal year. In this case, Mr. Carbonari served as CEO and Mr. Omtvedt served as CFO until completion of the separation of the Company’s businesses on October 3, 2011, when both stepped down from their positions in connection with the Spin-Off. Mr. Shattock and Mr. Probst became CEO and CFO of Beam Inc., respectively, effective October 4, 2011. In addition, the CD&A includes the three other most highly compensated executive officers serving as executive officers of the Company at the end of 2011: Messrs. Newlands, Baldock and Baladi. Throughout this CD&A and in the compensation tables that follow, Messrs. Carbonari and Omtvedt are referred to as “FB NEOs” and Messrs. Shattock, Probst, Newlands, Baldock and Baladi are referred to as “Beam NEOs.” The FB NEOs and the Beam NEOs are collectively referred to as the “NEOs.”

Certain financial results included in this CD&A are presented on a non-GAAP basis due to the separation of Fortune Brands’ businesses during 2011 and other factors. Reconciliations of these non-GAAP measures, which are identified by an asterisk (*) or a cross (†), to the most closely comparable GAAP measures are presented in Appendix C to this Proxy Statement.

Executive Summary

2011 Business Highlights

2011 was an exceptional year in which the Company met or exceeded all of its operational, financial and strategic objectives. We launched Beam Inc. as a leading standalone spirits company, successfully executed our growth strategy, and primed our business for sustainable, profitable, long-term growth. Beam significantly outperformed its markets, delivered all-time record sales from innovations, successfully completed two synergy-driven acquisitions, strengthened its capital structure, and entered 2012 with excellent prospects.

The Company has long believed in a pay-for-performance approach to compensation. The Company’s financial results, performance against targets, and achievement of strategic goals were important considerations for the Compensation Committee as it made compensation decisions in 2011. Beam Inc. evaluates overall Company performance and geographic performance for the following regions: North America; Europe/Middle East/Africa (“EMEA”); and Asia-Pacific/South America (“APSA”).

•

In order to maximize long-term stockholder value, the Company completed the separation of its businesses first announced in December of 2010. The Company sold the Acushnet Company golf business in July of 2011, using the after-tax proceeds from the $1.225 billion sale to pay down debt, thereby strengthening the capital structures of the two remaining businesses. In October of 2011, the Company completed the Spin-Off of Home & Security and emerged as a pure-play spirits company renamed Beam Inc.

•

The separation plan was an intensive undertaking that was executed with precision and in a timely manner. It required the enhancement of public-

company corporate functions, including financial reporting systems and controls, the establishment of a new corporate identity, deeper employee engagement, and the sustained focus of the workforce on delivering results.

•

Throughout the execution of the separation plan, the Company continued to execute its growth strategy to Create Famous Brands, Build Winning Markets, and Fuel Our Growth. This strategy delivered strong results in 2011.

•

Beam delivered record full-year sales. Net sales, on an adjusted pro forma basis, increased 8%* to $2.3 billion.*

•

These results significantly outperformed our global market, which we estimate grew 3%.

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Our stepped up brand-building investments helped drive growth for our priority brands. Beam’s global Power Brands grew 9%* and the Rising Star brands grew 42%.*

•

A record year of innovations contributed to the Company’s strong sales performance and market share gains.

•

Sales growth was broad-based. Sales were strong across all three geographic regions. On a comparable basis, sales increased 8% in each region (North America, EMEA and APSA).*

•

Beam was the leading share gainer in the U.S., the world’s #1 premium spirits market.

•

We benefitted from establishing a new high-performance manufacturing and distribution partnership in Australia, our second largest market.

•

We generated strong double-digit growth in Germany, the world’s #3 bourbon market, as well as in the emerging markets, led by India, Brazil and Russia.

•

Beam delivered double-digit growth in earnings per share. Diluted earnings per share, on an adjusted pro forma basis, increased 10%* to $2.12*, exceeding the Company’s target to deliver diluted EPS growth at a high-single-digit rate.

•

We achieved our goal to convert 90%* of our earnings into free cash flow.

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The Company continued its strong stewardship of capital. As planned, we reduced our debt-to-EBITDA ratio to 2.5 times*, while completing the acquisition of Skinnygirl cocktails in the fast-growing ready-to-serve category and announcing an agreement to purchase Cooley Distillery, a unique asset that gives us a strong platform in the fast-growing Irish Whiskey category. Return on invested capital was 7%* and was 24% excluding intangibles.*

*	See Appendix C under the heading “Beam Inc. Non-GAAP Performance Measures” for reconciliations to GAAP.

•

Beam Inc.’s common stock, including dividends, returned 22% from the date of the Spin-Off through year end, significantly outperforming the major indices.

•

Beam entered 2012 primed to deliver sustainable, profitable long-term growth.

Key 2011 Compensation Actions

The former Fortune Brands, Inc. was a diversified multi-business consumer brands holding company. As a result of the Spin-Off and the Company’s new focus as a standalone global spirits business, the former business model underlying the Company’s operations has fundamentally changed. Accordingly, during 2011 the Company made changes to its compensation plans and programs to reflect the Company’s emergence as a publicly-traded pure-play spirits company. In addition, these changes align the compensation plans and programs with new and expanded responsibilities for several of the Beam NEOs due to the elimination of the former Fortune Brands corporate structure. These changes also facilitate the Company’s retention of key employees. The changes continue the Company’s long-standing commitment to a pay-for-performance culture and enhance the alignment of performance objectives with the goals of Beam Inc. The following are key compensation changes that occurred during 2011, each of which is specifically designed to address the unique concerns and priorities that resulted from the Spin-Off:

Development of Beam Inc. Peer Group – Given the change in business size, structure and focus resulting from the Spin-Off, the Compensation Committee determined that it should establish a unique peer group applicable to Beam Inc., and consulted with its independent compensation consultant to determine the appropriate companies to include in that peer group. The Compensation Committee selected the new peer group consisting of companies whose operations are focused on branded consumer packaged goods and whose annual revenue and market capitalization were similar to that of Beam Inc. The Beam Inc. peer group is described in more detail on pages 31 and 32 of this Proxy Statement.

Founders Grants – At the time of the Spin-Off, the Compensation Committee approved the award of founders grants to the Beam NEOs. Founders grants are one-time awards to the Company’s key executives that are intended to further align the long-term financial interests of key executives of the Company with those of stockholders following the Spin-Off, increase the equity stake in the Company of each executive, and aid in retention of the Company’s key executives. The Compensation Committee established the value of founders grants based on the advice of its independent compensation consultant, taking into consideration market-competitive data and the prevalence of such grants under similar circumstances. These founders grants were awarded in the form of stock options and restricted stock units, and are predicated on an extended vesting schedule to promote the Company’s long-term objectives. Please see page 47 of this Proxy Statement for more detail with respect to the founders grants and the rationale for providing those grants to the Beam NEOs.

Compensation Adjustments for NEOs – Following the Spin-Off, the Compensation Committee approved compensation increases for Messrs. Shattock and Probst that were intended to reflect the expanded roles and

responsibilities of each executive as a result of the Spin-Off, particularly relating to the operation of Beam Inc. as a standalone public company, and to ensure competitive compensation in the marketplace relative to similar positions within the Beam Inc. peer group. These compensation adjustments are described in more detail on pages 41 to 43 of this Proxy Statement.

Pay-for-Performance in 2011

The Compensation Committee and the Company strive to create a pay-for-performance culture. The Compensation Committee’s and the Company’s compensation actions for 2011 reflected the Company’s strong financial results, as described below:

•

On average, more than 65% of each of the Beam NEOs’ total compensation is dependent on business results.

•

Each NEO participated in an annual incentive plan that provides compensation contingent on the performance of the organization: FB NEOs participated in the Fortune Brands Annual Incentive Plan, which awarded compensation based on Fortune Brands, Inc.’s performance against earnings per share (“EPS”) targets. Beam NEOs participated in the Beam Annual Incentive Plan, which awarded compensation based on revenue, operating income and return on net tangible assets for Beam Inc. Performance in 2011 under the Beam Inc. incentive plan outperformed 2011 targets.

•

Each NEO participated in a long-term incentive plan that annually awards a combination of some or all of the following: performance share awards, stock options, restricted stock units and cash-settled performance units. These awards more directly align management’s interests with those of the Company’s stockholders, and create a long-term ownership culture.

Compensation Philosophy

The Company’s compensation philosophy supports a strong pay-for-performance culture that is intended to attract, retain and reward high performing employees who are motivated to excel and drive the Company to success. The Compensation Committee strives to provide a total compensation package to each NEO that is performance-based and market competitive, taking into consideration location, position, unique skill set and other individual and position-specific criteria and information.

The Compensation Committee believes that the majority of an NEO’s total compensation (i.e., base salary, annual incentive and long-term incentive) should be dependent on attainment of Company performance objectives that advance the Company’s business strategy. Under this approach, exceptional performance should result in increased compensation, while sub-par performance should result in reduced or no performance-based compensation. The charts on page 34 of this CD&A illustrate the allocation of base salary and performance-based compensation for NEOs.

Objectives

The Compensation Committee has established the following objectives that apply to the Company’s executive compensation program:


Objective		Rationale

Align the interests of management with those of the Company’s stockholders		To assure that management takes both an immediate and long-term approach to the Company, the equity program is aligned with the Company’s long-term performance goals, which the Compensation Committee believes align the interests of executives with those of stockholders. The Company’s stock ownership guidelines also reinforce the alignment of executive interests with those of the Company and its stockholders.
Maintain a total rewards strategy that supports the Company’s overall business strategy		The Company’s total rewards strategy encourages and rewards a cooperative approach to developing innovative business solutions, while aligning employee behavior with the Company’s priorities and values.
Reinforce the pay-for-performance culture at the Company		Pay-for-performance is a key principle in our compensation philosophy; it is not only important that NEOs and key executives exemplify the pay-for-performance culture, but that their actions, both individually and collectively, as key business drivers, are reinforced through the attainment of positive business outcomes.
Attract, retain and motivate superior executive talent through competitive salary and total compensation		Key to the Company’s continued success is the ability to outperform competition in all areas. To do so, the Company holds as a core value the need to regularly evaluate, improve and innovate. Therefore, the Company’s ability to continuously attract and retain key talent is critical to the Company’s goal of continued outperformance.
Provide incentive compensation that promotes desired behavior without encouraging excessive risk		While the Company recognizes the importance of sustained excellence in performance, we neither encourage nor tolerate behavior that results in excessive risk to the Company. Our plans and programs are designed to encourage innovation and entrepreneurial thinking and behavior in a manner that does not put the Company at unnecessary risk.

Principles

The Compensation Committee has further developed the following principles that it believes support the objectives outlined above:


Principle		Rationale

An independent compensation committee should establish and review total executive compensation		Our pay-for-performance culture requires ongoing measurement of business and individual performance against goals. Therefore, it is important to assure through independent assessment that executive compensation plans and arrangements align individual and Company performance with the stated objectives of the Company.
Compensation should be competitive with our peers, and allow flexibility to attract key personnel while reflecting the global nature of our workforce		To attract the highest caliber talent, it is important that we provide a total compensation package that not only allows the Company to maintain its current workforce, but also attract and retain other key personnel, particularly in market segments that create the most value.
Incentive compensation should align with and help reinforce business strategy and objectives and the Company’s desired culture		A key component in our pay-for-performance culture is incentive compensation. Short-term and long-term incentive compensation directly connects individual compensation with the attainment of the Company’s financial and strategic goals, including sales, operating income, earnings per share performance and desired behaviors.
A significant portion of executive compensation should be equity-based		To increase the executive’s focus on the Company’s long-term performance, align their interests with those of our stockholders and create an ownership culture, it is important that a significant portion of executive compensation be in the form of equity-based compensation.
Share ownership guidelines should be followed		To foster an ownership mentality and, specifically, to further align the economic interests of key executives with those of our stockholders, it is important that such executives hold a meaningful level of the Company’s stock throughout their tenure with the Company.

Process for Establishing Executive Compensation

Roles in the Executive Compensation Process

The table below identifies the various internal and external parties that participated in the Company’s 2011 executive compensation review and approval process:


Party		Role

Board of Directors		• Annually reviews CEO’s performance with respect to specified performance goals • Reviews CEO compensation and goals as approved and reported by the Compensation Committee • Independent non-executive members of the Board consult with the Compensation Committee upon request with respect to CEO compensation

Compensation Committee		• Reviews Company and CEO performance and establishes CEO compensation taking into consideration peer group compensation, Company pay objectives and performance and CEO performance against established goals • Establishes target compensation and goals for the CEO in consultation with independent non-executive members of the Board • Reports CEO compensation (as established by the Compensation Committee) to the Board in executive session • Meets with the CEO to discuss annual performance and appropriate compensation • Evaluates the performance of the direct reports to the CEO and executive officers and approves compensation actions, with the input of the CEO • Administers employee compensation and benefit programs delegated to the Compensation Committee as reflected in its charter, including approval of performance goals under incentive plans and annual equity program designs and grants
		• Reviews and approves the Company’s executive compensation philosophy, to assure consistency with the Company’s business strategy, and assures that compensation decisions are consistent with the stated philosophy • Reviews and approves the compensation peer group, including selection criteria and relative performance assessment.


Party		Role

Chief Executive Officer		• Reviews each direct report to the CEO and executive officer’s performance with the Compensation Committee • Recommends compensation actions to the Compensation Committee with respect to the direct reports to the CEO and other executive officers, taking into consideration benchmarking data and performance • Recommends performance metrics to the Compensation Committee for various performance-based compensation items for the direct reports to the CEO and other executive officers

Human Resources		• Provides supporting materials and resources to the Compensation Committee and CEO • Provides materials to the Compensation Committee in support of compensation recommendations

Independent Compensation Consultant		• Assists Compensation Committee in establishing peer group and compiling and providing market-competitive data • Provides comprehensive competitive market studies and analysis to the Compensation Committee regarding executive pay
		• Provides input in relation to short-term and long-term incentive plan designs • Advises the Committee on executive pay trends, technical developments and regulatory issues • Participates in Compensation Committee meetings, as requested by the Compensation Committee

It is important to note that, under the prior Fortune Brands corporate structure – with the exception of Mr. Shattock in his previous role as a President of a Fortune Brands business segment – the Compensation Committee was not involved in compensation adjustments for the Beam NEOs (with the exception of Fortune Brands stock-option grants) prior to July 2011. Under the prior structure, compensation adjustments for the Beam Global leadership team were approved by an internal Fortune Brands, Inc. committee, led by Mr. Carbonari, former Chairman & CEO of Fortune Brands, Inc.

In establishing executive compensation, the Compensation Committee reviews tally sheets that include data on individual items of compensation and each executive’s total compensation package. The review considers compensation currently payable, as well as contingent compensation, including incentive compensation and compensation payable only if certain circumstances occur, such as involuntary termination of employment without cause or certain terminations of employment following a change in control.

Under no circumstances does the CEO participate in the Board and Compensation Committee’s process whereby the CEO’s compensation is established. While the Compensation Committee and/or the Board may request that the CEO provide information that it deems helpful in reviewing and establishing compensation, the CEO does not participate in the Compensation Committee’s review and establishment of CEO compensation nor does the CEO participate in the Board’s review of the CEO’s performance.

Independent Compensation Consultant

The Compensation Committee retains Meridian Compensation Partners, LLC (“Meridian”) as its independent compensation consultant. Meridian provides advice and recommendations to the Compensation Committee regarding the amount and form of executive compensation. Meridian regularly communicated with the Compensation Committee during 2011 and participated in nine Compensation Committee meetings during 2011. Meridian provides advice and guidance to the Compensation Committee, including market-competitive data that assists the committee in evaluating and establishing executive pay.

Pursuant to its terms of engagement, and to assure the ongoing independent status of Meridian, Meridian is prohibited from providing other services to the Company or its management, although Meridian may accept engagements from other committees of the Board. The Compensation Committee reviewed Meridian’s terms of engagement, its compensation during the year and its performance during 2011 and concluded that Meridian was and continues to remain independent.

Peer Group Companies

The Compensation Committee, with Meridian’s assistance, reviews current compensation against compensation of similarly situated public companies and direct competitors (the “peer group”). The Compensation Committee works with Meridian to review the Company’s peer group selection criteria and ultimately the peer group selected. The Compensation Committee, considering the advice of Meridian, regularly reviews the peer group to reflect what the Compensation Committee believes to be an accurate representation of market comparators. The Compensation Committee and Meridian consider company size, revenue, market capitalization, relative performance, market segment and whether the company is a direct competitor of the Company, among other factors, when reviewing and establishing the peer group. After careful review and consideration, the Compensation Committee provides final approval of the peer group.

Given the unique circumstances in 2011 and, specifically, the separation of Fortune Brands’ businesses, the Compensation Committee established and referenced different peer groups for Fortune Brands, Inc. and Beam Inc. compensation decisions. Compensation for FB NEOs was determined considering information from the Fortune Brands, Inc. peer group, and compensation for Beam NEOs was determined considering information from the Beam Inc. peer group.

In 2011, the Fortune Brands, Inc. peer group (the “FB peer group”) consisted of 19 consumer products companies with median 2010 revenue of $7.69 billion, compared

to the Company’s 2010 revenue of $7.14 billion (including discontinued operations). The companies in the FB peer group were either primary competitors of Fortune Brands, Inc. or premier consumer products companies of a similar size and scale, including global operations. The 2011 FB peer group consisted of the following:


Alberto-Culver Company		Masco Corporation
Brunswick Corporation		Molson Coors Brewing Company
Campbell Soup Company		Newell Rubbermaid, Inc.
Colgate-Palmolive Company		Nike, Inc.
Diageo plc		S.C. Johnson & Sons, Inc.
General Mills, Inc.		Sara Lee Corporation
Hershey Foods Company		The Sherwin Williams Company
Illinois Tool Works		Stanley Black & Decker Corporation
Kellogg Company		Whirlpool Corporation
Kohler Co.

In early 2011, the Compensation Committee was asked by the Board to evaluate the compensation paid to executives of Beam Global, then an operating segment of Fortune Brands, Inc., in the event that the Spin-Off was completed as anticipated, with Beam Global remaining as the sole business of Fortune Brands, Inc. Recognizing that the FB peer group was not suited to Beam Inc. post-Spin-Off as a stand-alone spirits business because of the difference in revenue and sharper focus of Beam Inc. as compared to Fortune Brands, Inc., the Compensation Committee consulted with Meridian to establish an appropriate peer group for Beam Inc. post-Spin-Off. As there are very few direct competitors in the spirits industry of similar size and scope, companies included in the 2011 Beam Inc. peer group (the “Beam peer group”) were selected based on a pre-established set of criteria. The selected group included companies from a variety of industries with the following characteristics: (i) operations focused on branded consumer packaged goods, including food, beverages and distilled spirits; and (ii) annual revenue and market capitalization generally within one-half to two times that of Beam Inc. The 2011 Beam peer group consisted of the following:


Brown-Forman Corporation		H.J. Heinz Co.
Campbell Soup Co.		The Hershey Co.
Constellation Brands, Inc.		Hormel Foods Co.
Dean Foods Co.		Lorillard Co.
Del Monte Foods Co.		McCormick & Co. Inc.
Diageo plc		Molson Coors Brewing Co.
Dr. Pepper Snapple Group Inc.		Ralcorp Holdings Inc.
Flowers Foods, Inc.		Reynolds America Inc.
Green Mountain Coffee Roasters		The J.M. Smucker Co.
Hansen Natural Corp.

Benchmarking

The Compensation Committee annually reviews the compensation provided to NEOs and other key executives, benchmarking individual executive compensation and the overall executive compensation programs against the peer group. In early 2011, the Compensation Committee benchmarked FB NEO compensation against the FB peer group. In 2011, in anticipation of the Spin-Off, the Compensation Committee benchmarked

Beam’s executive compensation, reflecting the group of executives who would likely be NEOs once the Beam Global executive team assumed operation of the renamed Fortune Brands, Inc., against the Beam peer group.

With respect to both Fortune Brands, Inc. and Beam Inc., the Compensation Committee targeted total compensation (i.e., the sum of base salary, target annual incentive opportunity, and target long-term incentive opportunity) around the 50^th percentile of peer group compensation, based on size-adjusted data reflecting Beam Inc.’s positioning at approximately the 50^th percentile of peer group revenue. While the Compensation Committee generally aims to provide compensation within the targeted range, factors unique to a particular executive, including his or her employment situation or special skills, experience and performance may affect the executive’s base salary and total compensation either positively or negatively compared to the targeted range. The Compensation Committee considers the following factors when establishing an executive’s compensation in addition to market data:

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Role and responsibilities within the organization;

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Experience and value to the organization;

•

Individual performance;

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Retention concerns;

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Tenure with the organization; and

•

Ability to replicate the executive’s knowledge, skills and abilities.

The total target compensation (i.e., the sum of base salary, target annual incentive opportunity and target long-term incentive opportunity) for the NEOs other than Messrs. Baladi, Baldock and Omtvedt were between the 47^th and 52^nd percentile of market comparability data. Mr. Baladi’s total target compensation was at the 61^st percentile of market comparability data, Mr. Baldock’s total target compensation was at the 74^th percentile of market comparability data and Mr. Omtvedt’s total target compensation was above the 75^th percentile of market comparability data. Further information regarding the total target compensation for the NEOs, including the rationale for total target compensation approved for Messrs. Baladi, Baldock and Omtvedt in 2011, is provided on pages 41 to 47 of this Proxy Statement.

Stockholder Input

The Compensation Committee also seeks to ensure that the Company’s executive compensation program is aligned with the interests of its stockholders. In that respect, as part of its ongoing review of the Company’s executive compensation program, the Compensation Committee considered the affirmative stockholder “say on pay” vote at the Company’s 2011 Annual Meeting of Stockholders and determined that the Company’s executive compensation philosophy, compensation objectives, and compensation elements continued to be appropriate and did not make any changes to the Company’s executive compensation program in response to such stockholder vote. At the April 2011 Annual Meeting of Stockholders, over 92% of votes cast were voted in favor of the compensation paid to the Company’s NEOs.

Elements of NEO Compensation

NEOs of the Company are eligible for various types of compensation including base salary, incentive compensation and retirement and severance benefits. Included below are charts depicting the relative weighting of base salary and target annual and long-term incentives for Beam NEOs. The charts do not reflect founders grants provided to Beam NEOs in 2011 because founders grants are one-time awards and their presence in the charts would skew the compensation mix provided to each Beam NEO rendering year-over-year comparison meaningless. Founders grants are described in more detail on page 47 of this Proxy Statement.

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Base Salary

The Compensation Committee reviews base salary levels for NEOs annually. The Compensation Committee may adjust base salaries up or down from the targeted percentile to reflect a particular NEO’s unique skill set, experience, performance, tenure with the Company and expertise. The base salary for the NEOs was as follows as of December 31, 2011:


Beam NEO		Base Salary
Matthew J. Shattock		$950,000
Robert F. Probst		$550,000
William A. Newlands		$550,000
Philip Baldock		AUD $678,000 (USD $692,170)¹
Albert Baladi		EUR $375,000 (USD $486,000)²

FB NEO		Base Salary
Bruce A. Carbonari		$1,200,000
Craig P. Omtvedt		$668,000

Annual Incentive

The Company maintains an annual incentive plan that pays cash compensation to the NEOs if specific financial and operational performance objectives are achieved. In 2011, the FB NEOs participated in the Fortune Brands, Inc. Annual Plan (the “Fortune Annual Plan”), which provided annual incentive compensation based on attainment of certain Fortune Brands, Inc. EPS targets. The Compensation Committee approved EPS as the appropriate measure under the Fortune Annual Plan because it aligned FB NEO interests with those of Fortune Brands, Inc. and its stockholders. Further, the EPS target reflected the operations of Fortune Brands, Inc. as a whole, rather than the performance of any one of its business segments, which helped to align FB NEO compensation and interests with those of the broader Fortune Brands, Inc. holding company performance.

The Beam NEOs participated in the Beam Inc. Executive Incentive Plan (the “Beam Annual Plan”). The Company established targets and executive awards under the Beam Annual Plan based on a combination of performance metrics, including operating income, an applicable sales and operating income matrix and/or return on net tangible assets (“RONTA”). Net tangible assets are calculated as the total assets of a company, minus any intangible assets such as goodwill, patents and trademarks, less all liabilities including accounts payable. The particular metrics applicable to each executive were evaluated and approved by the Company to align the compensation of each executive with Company-wide business segment or regional performance, depending on the executive’s role within the organization. Executive awards under the Beam Annual Plan are subject to adjustment based on individual performance and execution against individually established performance goals.

¹	Reflects conversion to U.S. dollars on December 30, 2011 based on the conversion rate in effect on that date, 1.0209 AUD/USD.

²	Reflects conversion to U.S. dollars on December 30, 2011 based on the conversion rate in effect on that date, 1.2952 EUR/USD.

NEOs participated in the respective plans with evaluation metrics allocated as specified in the following:


Beam NEOs	Plan	2011 Metrics
Matthew J. Shattock	Beam Annual Plan	75% Beam Global Operating Income; 25% Beam Global RONTA

Robert F. Probst	Beam Annual Plan	75% Beam Global Sales-Operating Income Matrix; 25% Beam Global RONTA

William A. Newlands	Beam Annual Plan	75% North America Sales-Operating Income Matrices; 25% Beam Global RONTA

Philip Baldock	Beam Annual Plan	75% Asia-Pacific/South America Sales-Operating Income Matrices; 25% Beam Global RONTA

Albert Baladi	Beam Annual Plan	75% Europe/Middle East/Africa Sales-Operating Income Matrix; 25% Beam Global RONTA

FB NEOs	Plan	2011 Metrics

Bruce A. Carbonari	Fortune Annual Plan	EPS 100%

Craig P. Omtvedt	Fortune Annual Plan	EPS 100%

To the extent applicable, a particular performance matrix is built around targets for sales and operating income performance for the particular business segment or region, which produces an operating income margin focus. The business segment or region must achieve at least target operating income growth in order to receive a payout at target or higher. The business segment or region also must achieve at least the minimum sales growth target to receive a payout. For 2011, the minimum and maximum award opportunities were 20% and 200% of target, respectively.

The Beam Global matrix is included below:

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The Company determined the Beam Global matrix to be appropriate because at the time of grant, target performance goals were believed to be challenging but achievable through sound management and execution against Beam Global strategy. Award levels at the higher levels of performance (e.g., the upper right hand corner of the matrix) were established as stretch goals for the Company and the leadership team.

Individual award targets were established as a percentage of each NEO’s base salary under the applicable annual plan. Targets were developed based on each NEO’s role within the organization and the assessment of the NEO’s total compensation relative to market. Following the Spin-Off, adjustments were made to bonus targets for Messrs. Shattock, Probst and Newlands to enhance the alignment of their target total compensation with the peer group size-adjusted market median for each respective position. The annual incentive targets for the NEOs were as follows as of December 31, 2011:


Beam NEO	Annual Incentive Target
Matthew J. Shattock		110	%
Robert F. Probst		75	%
William A. Newlands		80	%
Philip Baldock		45	%
Albert Baladi		55	%


FB NEO	Annual Incentive Target
Bruce A. Carbonari		130	%
Craig P. Omtvedt		75	%

For 2011, the Compensation Committee set an EPS target under the Fortune Annual Plan of $3.06 for the fiscal year ending December 31, 2011, with a maximum payout if EPS equaled or exceeded $3.90 for the full year. In recognition of the Spin-Off, the Compensation Committee approved that the payout applicable to participants in the

Fortune Annual Plan would be based on actual performance up to the Spin-Off date and target performance after the Spin-Off date. The Company’s EPS for 2011 through the Spin-Off date was $2.17†, resulting in a payout of 93.6% of target for the portion of the award attributable to pre-Spin-Off performance and a payout of 95.2% of target for the full year.

Long-Term Performance Incentives

Overview

In 2011, stockholders of Fortune Brands, Inc. approved the 2011 Fortune Brands, Inc. Long-Term Incentive Plan (“LTIP”). The Company designed the LTIP to allow for flexibility in rewarding the attainment of Company goals, while also assuring the alignment of NEO interests with those of stockholders, and particularly the long-term profitability of the Company and the performance of Company stock. The LTIP also plays an important role in promoting an ownership culture among the employees of the Company while supporting the overall goal of a pay-for-performance culture. Under the LTIP, the Compensation Committee has the authority to grant performance shares, stock options, restricted stock, restricted stock units, and cash-based incentive awards. As discussed in more detail below, the Compensation Committee did not award performance shares in 2011 due to the unique business circumstances in the year, notably the sale of the Acushnet Company golf business and the Spin-Off. The Company will award performance shares in 2012.

In 2011, the Compensation Committee awarded stock options and restricted stock units to Messrs. Shattock, Carbonari and Omtvedt. The Compensation Committee also awarded cash-settled performance units to Mr. Shattock. The value of equity awards for each executive was determined by the Compensation Committee based on the advice of its compensation consultant, taking into consideration market-competitive data. The Compensation Committee believes that the selected mix of awards for each NEO allows the Company to appropriately weight certain aspects of long-term incentive compensation to drive performance and further align the interests of the NEOs with the Company’s long-term goals of profitability and performance, and the interests of stockholders.

^†	See Appendix C under the heading “Incentive Plan Non-GAAP Performance Measures” for reconciliations to GAAP.

With the exception of Mr. Shattock, the Beam NEOs did not receive forms of equity compensation other than stock options prior to the award of the founders grants in 2011. The limited amount of equity holdings at the operating segment level was a significant factor in determining to award founders grants to the Beam NEOs, as discussed in more detail below. The primary forms of long-term incentive compensation for the Beam NEOs, excluding Mr. Shattock, were stock options and cash-settled performance units based on Beam Global performance against target. Prior to the Spin-Off, Mr. Baldock’s long-term cash plan was based on a percentage of base salary rather than on a number of units as provided to the other Beam NEOs. This award system was consistent with other executives at Mr. Baldock’s level. The following table summarizes the long-term incentive awards granted to the NEOs during 2011 and the rationale for providing each form of award:


Award		Rationale
Performance Shares		Creates pay-for-performance culture; ties magnitude of award (if any) to performance; allows tailoring of performance criteria; creates retention mechanism with vesting schedule
Stock Options		Creates long-term ownership culture; aligns interests of executives with those of stockholders; creates retention mechanism with vesting schedule
Restricted Stock Units		Emphasizes retention; market competitive practice; creates ownership culture when settled in Company stock
Cash-Settled Performance Units		Reward for attainment of specified performance goals; can be used to motivate specific behavior

Performance Share Awards

While the Company values a strong pay-for-performance culture, the Compensation Committee recognized when it evaluated compensation options under the LTIP for 2011 that the possible sale of the Acushnet Company golf business and the possible spin-off of Home & Security would make it difficult to set targets for Company performance for the 2011 portion of any performance period. Therefore, the Compensation Committee determined that it was appropriate to not grant performance share awards for 2011. Following the successful sale of the Acushnet Company golf business and the Spin-Off, the Compensation Committee revisited performance shares and will grant performance shares to Beam NEOs and other executives and employees of the Company in 2012.

Performance shares historically have been awarded based on achievement of return on invested capital (“ROIC”) and cumulative EPS targets. These two measures were selected because the Compensation Committee believes that they drive long-term stockholder value creation by capturing growth through the EPS measure and returns through the ROIC measure. The Company has historically granted performance share awards with payout determined following the end of a three-year performance period. Performance share awards with respect to the 2009-2011 and 2010-2012 performance periods, which were outstanding at the time of the Spin-Off, were first determined as performance shares based on actual performance as of the Spin-Off date and target performance for the balance of the performance period (as described in more detail below) and then converted to RSUs.

The following table sets forth the percentage of performance shares that could be earned by the NEOs for the 2009-2011 and 2010-2012 performance periods:


*Diluted* *Cumulative EPS*		% of Performance Shares Earned Based on Performance
	Maximum Target Minimum	75		125		150
		50		100		125
		0		50		75
			Minimum		Target		Maximum
	*Average* *Annual ROIC*

The following table sets forth the targets for the 2009-2011 and 2010-2012 performance share awards, reflecting minimum, target and maximum performance goals for the performance years prior to and in which the Spin-Off occurred:


Performance Period	2009-2011 Metric	Minimum		Target		Maximum
2009	Diluted Cumulative EPS		$0.83		$2.32		$2.61
	Average ROIC		2.8%		5.2%		5.7%
2010	Diluted Cumulative EPS		$1.68		$2.43		$3.09
	Average ROIC		4.4%		5.6%		6.7%
2011	Diluted Cumulative EPS		$2.40		$3.06		$3.90
	Average ROIC		5.4%		6.6%		8.0%


Performance Period	2010-2012 Metric	Minimum		Target		Maximum
2010	Diluted Cumulative EPS		$1.68		$2.43		$3.09
	Average ROIC		4.4%		5.6%		6.7%
2011	Diluted Cumulative EPS		$2.40		$3.06		$3.90
	Average ROIC		5.4%		6.6%		8.0%

In recognition of the Spin-Off, the Compensation Committee revised the EPS and ROIC minimum, target and maximum levels for 2011. Under the 2009-2011 and the 2010-2012 performance periods, the 2011 target goal for EPS was $3.06, adjusted to $2.20 for the pre-Spin-Off portion of the year, and the target goal for ROIC was 6.6%, adjusted to 4.74% for the pre-Spin-Off portion of the year.

In 2011, as a result of the Spin-Off, performance shares for employees, including NEOs, were converted to RSUs. The number of performance shares converted in each case was the sum of (a) the number of performance shares that would be awarded to the holder for the full performance period based on Company performance through the Spin-Off date, prorated to reflect the portion of the performance period that has elapsed as of the Spin-Off date; and (b) the number of performance shares that would be awarded to the holder for the full performance period assuming target performance, prorated to reflect the portion of

the performance period between the Spin-Off date and the end of the performance period. When 2011 adjusted performance was combined with the 2009 and 2010 performance for the 2009-2011 performance period and 2010 performance and 2012 target performance for the 2010-2012 performance period, respective weighted payout percentages for each performance period were 115% and 112.1%. The resulting number of shares were converted into RSUs in a manner that preserved the value of the award following the Spin-Off, as follows: (1) performance shares held by the FB NEOs were split and converted into an equal number of Beam Inc. and Home & Security RSUs; and (2) performance shares held by Mr. Shattock were converted into Beam Inc. RSUs. The RSUs have a vesting period beginning on the date of the Spin-Off and ending on the last day of the applicable performance period. See footnote (3) on page 61 of this Proxy Statement for a summary of the conversion of performance shares into RSUs.

Stock Options

The Company’s practice has been to grant stock option awards to employees in February of each year. In February of 2011, the Compensation Committee granted stock options to each of the NEOs. The number of stock options granted to each NEO in 2011 is listed in the table on page 57 of this Proxy Statement. Stock options are provided to executives to align the interests of executives with those of stockholders. Stock options foster a long-term ownership culture and also create a retention mechanism by virtue of their vesting schedule of at least three years and long-term potential value.

Restricted Stock Units

RSUs are time-vested grants that award shares of common stock to executives who satisfy applicable vesting periods. Each RSU is settled in one share of Company common stock. It is a market-competitive practice in the Company’s peer group to issue RSUs, and the Compensation Committee believes that RSUs provide stability to the Company’s executive workforce by providing an incentive to the executive to remain employed with the Company. The Compensation Committee believes that RSUs also encourage long-tem value creation and align NEO financial interests with those of stockholders.

The Compensation Committee approved the award of RSUs to Messrs. Shattock, Carbonari and Omtvedt at its February 2011 meeting. The RSUs “cliff” vest on the third anniversary of the date of grant and are also subject to a performance metric specifically designed to qualify the awards for the performance-based exemption under Section 162(m) of the Internal Revenue Code.

Cash-Settled Performance Units

Cash-settled performance units are typically provided at the business segment level, and are intended to reward intermediate and long-term performance goals specific to the operating company. For 2011, the Beam NEOs other than Mr. Baldock received performance unit awards with respect to Beam Global performance. Performance was evaluated based 50% on operating income results and 50% on RONTA results. The target value for each unit is $400. In Mr. Baldock’s case, target cash-settled performance awards are valued as a percentage of base salary rather than as performance units. His cash-settled performance awards were targeted at 60% of base salary, and measured in the same equally weighted operating income and RONTA measures applicable to other Beam NEOs. For the 2009-2011 performance period, operating income and RONTA results produced a result of 113% of target for the entire period. For the 2011 portion of the 2010-2012 performance period, operating income and RONTA results produced a result of 146% of target.

2011 Base Salary and Incentive Compensation — Beam NEOs

Matthew J. Shattock

Mr. Shattock received an annual base salary increase of 4.9% as of March 1, 2011 moving his base salary from $788,000 to $827,000. This increase was due to the 2010 performance of Beam Global, which exceeded financial targets as a business segment of Fortune Brands, Inc.

As of October 3, 2011, concurrent with the emergence of Beam Inc. as a standalone publicly traded spirits company, Mr. Shattock’s base salary, as CEO of Beam Inc., was increased by 14.9% to $950,000 and his annual incentive target was increased from 80% to 110%. These adjustments reflect the substantial increase in his responsibility as CEO of Beam Inc. and were made to better align his target total compensation with the peer group size-adjusted market median for public company chief executive officers and also to recognize the successful Spin-Off and Beam Global’s results to date.

In 2011, Mr. Shattock was instrumental in launching Beam Inc. as a leading standalone spirits company. At the same time, he led the execution of a highly successful growth strategy that delivered results meeting or exceeding all of the Company’s 2011 targets, and positioning Beam for sustainable, profitable long-term growth. Reflecting stepped up brand investments and a sharp focus on impactful brand communication and innovation, Beam delivered net sales growth of 8%*, far outpacing its market, which the Company estimates grew approximately 3%. Underscoring the Company’s successful investments, including in superior marketing talent, the Company’s Power Brands grew 9%* and the Rising Star brands grew 42%.* Results were particularly strong in Beam’s heartland category of bourbon. Net sales, and sales from new products, were all-time records for Beam. The Company also exceeded its earnings target by delivering 10%* growth in adjusted pro forma diluted earnings per share. The Company achieved its goal to convert 90%* of earnings into free cash, and continued its strong stewardship of capital. With the benefits from the separation of Fortune Brands’ businesses and its strong cash flow, Beam reduced debt by $1.8 billion, while also undertaking two synergy-driven acquisitions – Skinnygirl Cocktails (completed March 2011) and Cooley Distillery (agreement announced December 2011). In the period from the Spin-Off through the end of 2011, Beam delivered a total shareholder return of 22%.

For 2011, the Compensation Committee set a Beam Global operating income target of $606.8 million and a RONTA target of 26.5% for Mr. Shattock’s award under the Beam Annual Plan. Actual operating income and RONTA were $623 million^† and 27.2%^†, respectively, resulting in an operating income rating of 136% and a RONTA

rating of 135%. This resulted in an overall annual incentive rating of 136%. When combined with the individual performance modifier, Mr. Shattock’s Beam Annual Plan award was set at 150% of target.

For long-term performance incentives in 2011, Mr. Shattock was awarded with 1,750 cash-settled performance units with a target value of $400 per unit for the 2011-2013 cycle. He was also awarded 41,600 stock options, one-third of which vest each year during a three-year period, and 15,200 RSUs, which vest on the third anniversary of the date of grant.

Robert F. Probst

Mr. Probst’s annual base salary was increased by 10% from $500,000 to $550,000 and his annual incentive target was increased from 60% to 75%, both as of October 3,

*	See Appendix C under the heading “Beam Inc. Non-GAAP Performance Measures” for reconciliations to GAAP.

†	See Appendix C under the heading “Incentive Plan Non-GAAP Performance Measures” for reconciliations to GAAP.

2011, to recognize the significant increase in his responsibilities as CFO of Beam Inc. and to better align his target total compensation with the peer group size-adjusted market median for public company chief financial officers, and also to recognize the successful Spin-Off and Beam Global’s results to date.

As with Mr. Shattock, Mr. Probst played a key role in launching Beam Inc. as a leading standalone spirits company with a strong financial foundation. He was instrumental in implementing financial controls and public company accounting procedures at the corporate and business unit level to ensure a successful transition to public company status. During the year, Mr. Probst managed the Company’s balance sheet and led establishment of the Company’s strong capital structure. The Company achieved its goal to convert 90%* of earnings into free cash and closed 2011 with a net-debt-to-EBITDA ratio of 2.5 times.* While simultaneously managing rigorous Spin-Off duties, Mr. Probst and his team played an important role in supporting the Company’s substantial brand investments to drive market outperformance and to also complete the 2011 acquisition of Skinnygirl and the early 2012 acquisition of Cooley.

The Company set a RONTA target of 26.5% for Mr. Probst under the Beam Annual Plan. Based on actual RONTA results, the percentage of target payout for this component was 135%. The Company set a sales target of $2.724 billion and an operating income target of $606.8 million for Beam Global’s annual incentive plan matrix. Actual sales and operating income were $2.826 billion† and $623 million†, respectively, resulting in a sales and operating income rating of 136%. This resulted in an overall annual incentive rating of 136%. When combined with the individual performance modifier, Mr. Probst’s Beam Annual Plan award was set at 150% of target.

For long-term performance incentives in 2011, Mr. Probst was awarded 400 cash-settled performance units with a target value of $160,000 for the 2011-2013 cycle. He was also awarded 20,000 stock options, vesting one-third each year over three years.

William A. Newlands

Mr. Newlands’ annual base salary was increased by 7.8% from $510,000 to $550,000 and his target annual incentive was increased from 60% to 80%, both as of October 3, 2011, to better align his target total compensation with the peer group size-adjusted market median for regional business leaders.

In 2011, Mr. Newlands played a pivotal role in the Company’s growth as president of North America, our largest business unit. Our comparable sales in North America grew 8%*, nearly three times the growth rate of our market. Beam was the leading market-share gainer in the United States, the world’s #1 premium spirits market. Mr. Newlands led the North American business to very strong growth for our bourbon brands, including a return to strong sales growth for the flagship Jim Beam brand, as well as for our Rising Stars. Mr. Newlands was instrumental in both the acquisition of the Skinnygirl cocktails brand and in its explosive 486% growth rate* as we capitalized on considerable distribution synergies. Mr. Newlands also plays a pivotal role in driving our innovation agenda, and 2011 was a record year of innovations for Beam. He effectively managed our

*	See Appendix C under the heading “Beam Inc. Non-GAAP Performance Measures” for reconciliations to GAAP.

†	See Appendix C under the heading “Incentive Plan Non-GAAP Performance Measures” for reconciliations to GAAP.

incentive-based distribution alliances in the United States and managed a distributor transition in Mexico that we believe will substantially improve our route to market. Mr. Newlands also managed the bounce-back of our Canadian business, which delivered sales and market share growth for the first time in several years.

The Company set a RONTA target of 26.5% for Mr. Newlands under the executive incentive plan. Based on actual RONTA results, the percentage of target payout for this component was 135%. The Company set sales and operating income targets for the separate country matrices that make up the North America region. The actual sales and operating results for North America resulted in a sales and operating income rating of 162%. This resulted in an overall annual incentive rating of 155%. When combined with the individual performance modifier, Mr. Newlands’ Beam Annual Plan award was set at 160% of target.

For long-term performance incentives in 2011, Mr. Newlands was awarded 400 cash-settled performance units with a target value of $160,000 for the 2011-2013 cycle. He was also awarded 20,000 stock options, vesting one-third each year over three years.

Philip Baldock

Mr. Baldock’s annual base salary for 2011 was AUD 678,000 (USD $692,170).³ Mr. Baldock’s incentive target for 2011 was 45%.

Despite several large-scale natural disasters in various countries in our APSA region, Mr. Baldock, president of our APSA business unit, led APSA to deliver market-beating performance while accelerating our Build Winning Markets strategy in the region. On a comparable basis, sales in APSA grew 8%*, reflecting mid-single-digit growth in developed markets and strong double-digit growth in emerging markets. In Australia, our second largest market, Mr. Baldock developed and executed an enhanced long-term manufacturing and distribution partnership with Coca-Cola Amatil that leverages their unrivalled customer reach and expertise and our consumer understanding in an agreement that provides mutual incentives to further drive profitable growth. The Australian businesses seamlessly adjusted to this new arrangement and outperformed the market, strengthening key Power Brands, including Jim Beam’s position as the market’s #1 spirits brand and Canadian Club as the fastest-growing ready to drink brand. APSA also has our greatest emerging markets exposure, and Mr. Baldock led an aggressive strategic investment program to support brand-building and infrastructure in emerging markets, such as strengthening distribution and launching new Teacher’s RTD products in India and priming markets like Brazil and China for accelerated growth.

The Company set a RONTA target of 26.5% for Mr. Baldock under the executive incentive plan. Based on actual RONTA results, the percentage of target payout for this component was 135%. The APSA combined sales and operating income matrices resulted in a target payout for this component of 159%. This resulted in an overall annual incentive rating of 153% and an award of 153% of target.

³	Reflects conversion to U.S. dollars on December 30, 2011 based on the conversion rate in effect on that date, 1.0209 AUD/USD.

*	See Appendix C under the heading “Beam Inc. Non-GAAP Performance Measures” for reconciliations to GAAP.

For long-term performance incentives in 2011, Mr. Baldock was granted a target performance cash award equal to 60% of his base salary or AUD $406,800 (USD $415,302) for the 2011-2013 cycle. He was also awarded 20,000 stock options, vesting one-third each year over three years.

Mr. Baldock’s total target compensation in 2011 was at the 74^th percentile of market comparability data. While Mr. Baldock’s total target compensation exceeded the 50^th percentile of peer group compensation targeted by the Compensation Committee, the Compensation Committee determined that the total target compensation level was appropriate based on Mr. Baldock’s industry experience, tenure with the organization, function in a key growth segment of our business and significant and ongoing contribution to the organization. Mr. Baldock’s long-term performance with the Company has been exceptional, and his ability to repeatedly deliver results in a challenging and growing segment of the Company’s business are key drivers of the Company’s success in the APSA region.

Albert Baladi

Mr. Baladi was hired in 2011 to lead Beam Global’s EMEA business region. He was recruited from a leadership position in Australia from one of the world’s leading restaurant companies. Mr. Baladi was hired at an initial base salary of EUR 375,000 (USD $486,000)⁴ and an annual incentive target of 55%. Mr. Baladi’s annual incentive award will be prorated for his time with the Company in 2011. The Company took into consideration Mr. Baladi’s base salary and target total compensation at his prior employer, as well as his relocation from Australia to Europe, when approving a total target compensation package with the Company.

As a new region president, Mr. Baladi quickly made a very positive impact on our EMEA business. Under his leadership, EMEA delivered 8%* comparable sales growth and even faster operating income growth. These results significantly outperformed EMEA’s mix of slow-growth Western European markets and fast-growing emerging markets like Russia. EMEA’s results included outperformance in the challenging UK and Spain markets, and strong double-digit growth in Germany, Russia and the travel retail channel. Performance in Germany, the world’s third largest bourbon market, benefited from our strong route to market, brand-building investments behind Jim Beam, and the launch of successful new products that exceeded our expectations. Mr. Baladi also enhanced the region’s marketing talent and led a realignment of the commercial organization into three focused regional clusters to promote greater organizational effectiveness and better position EMEA for continued outperformance.

The Company set a RONTA target of 26.5% for Mr. Baladi under the executive incentive plan. Based on actual RONTA results, the percentage of target payout for this component was 135%. The EMEA sales and operating income matrix resulted in a target payout for this component equal to 126%. This resulted in an overall annual incentive rating of 128%. When combined with the individual performance modifier, Mr. Baladi’s Beam Annual Plan award was set at 136% of target.

Mr. Baladi also received a sign-on bonus of USD $400,000 and 15,000 stock options to partially offset the value of his unvested long-term equity awards at his previous employer. The stock options will vest one-third each year over three years.

⁴	Reflects conversion to U.S. dollars on December 30, 2011 based on the conversion rate in effect on that date, 1.2952 EUR/USD.

*	See Appendix C under the headings “Beam Inc. Non-GAAP performance measures” for reconciliations to GAAP.

For long-term performance incentives in 2011, Mr. Baladi was awarded 400 performance units with a target value of $160,000 for the 2011-2013 cycle.

Mr. Baladi’s total target compensation in 2011 was at the 61^st percentile of market comparability data. Mr. Baladi was a new hire to the Company in 2011 and his total target compensation reflects a market-competitive compensation package offered to Mr. Baladi to attract him from his then current employer. The Company reviewed the compensation package proposed for Mr. Baladi prior to his hire and determined that it was appropriate in light of Mr. Baladi’s skill set, his success at his prior employer and the Company’s desire to relocate him to Europe and head a fast-growing segment of the business.

2011 Base Salary and Incentive Compensation – FB NEOs

Bruce A. Carbonari

Mr. Carbonari received an annual base salary increase of 5.9% as of March 1, 2011 moving his base salary from $1,133,000 to $1,200,000. The increase reflected Mr. Carbonari’s sustained leadership, high performance, including his pivotal role in building three strong businesses able to compete on their own, tenure with the organization, and his important role in developing and executing the plan to separate the Company’s businesses.

For 2011, the Compensation Committee set an EPS target under the Fortune Annual Plan of $3.06, with a maximum payout if EPS equaled or exceeded $3.90 for the full year. In recognition of the Spin-Off, the Committee approved that the payout applicable to participants in the Fortune Annual Plan would be based on actual performance up to the Spin-Off date and target performance after the Spin-Off date. The Company’s actual EPS for 2011 through the Spin-Off date was $2.17†, resulting in a payout of 93.6% of target. When combined with 100% target for the balance of 2011 (i.e., October 4, 2011 through December 31, 2011), Mr. Carbonari’s total annual incentive payout equaled 95.2% of target.

For long-term performance incentives in 2011, Mr. Carbonari was awarded 146,700 stock options, one-third of which vest each year during a three-year period, and 53,600 RSUs, which vest on the third anniversary of the date of grant.

Craig P. Omtvedt

Mr. Omtvedt received an annual base salary increase of 2.9% as of March 1, 2011 moving his base salary from $649,000 to $668,000. The increase reflected Mr. Omtvedt’s high performance, tenure with the organization, leadership and important role in executing the plan to separate the Company’s businesses.

For 2011, targets applicable to Mr. Omtvedt under the Fortune Annual Plan with respect to Company performance were the same as detailed above for Mr. Carbonari. Based on Company performance for 2011, Mr. Omtvedt’s total annual incentive payout equaled 95.2% of target.

For long-term performance incentives in 2011, Mr. Omtvedt was awarded 45,200 stock options, one-third of which vest each year during a three-year period, and 16,500 RSUs, which vest on the third anniversary of the date of grant.

†	See Appendix C under the heading “Incentive Plan Non-GAAP performance measure” for reconciliations to GAAP.

Mr. Omtvedt’s total target compensation in 2011 was above the 75^th percentile of market comparability data. The Compensation Committee reviewed Mr. Omtvedt’s total target compensation in 2011 and determined that the total target compensation was appropriate given Mr. Omtvedt’s substantial experience with the organization and his prominent role with respect to the sale of the Acushnet Company golf business and the Spin-Off.

Other Compensation and Benefits

Founders Grants

In recognition of the changing role of members of the Beam Inc. executive team, the Compensation Committee awarded one-time founders grants to the Beam NEOs effective as of the date of the Spin-Off. In determining that it was in the best interest of the Company and its stockholders to award founders grants to the Beam NEOs, the Compensation Committee considered the following: the increased demands that will be placed on these individuals as executives of a standalone public company, aligning the economic interests of the Beam NEOs with those of the Company and its stockholders, creating a mechanism to retain executives critical to the success of the Company, and increasing the equity interest of the executives in the Company. With the exception of Mr. Shattock, prior to the Spin-Off, the Beam NEOs were not provided incentive compensation in the form of Company equity other than stock options, and therefore the founders grants serve to materially increase their stake in the Company. The value of founders grants awarded to each Beam NEO was determined by the Compensation Committee based on the advice of its compensation consultant, taking into consideration market-competitive data and the prevalence of similar grants in comparable situations, and considering the value of the founders grants when added to other target total compensation provided by the Company. The founders grants were issued in the form of stock options and RSUs, each weighted equally in economic value. The grant date fair values of stock options and RSUs granted to the Beam NEOs are detailed on page 57 of this Proxy Statement.

Spin-Off Success Bonus and Consulting Payments

At the onset of discussions regarding the possible Spin-Off, the Company recognized that it would be important to retain the services of Messrs. Carbonari and Omtvedt throughout the duration of the Spin-Off process. On several occasions, the Compensation Committee discussed mechanisms to assure the retention of Messrs. Carbonari and Omtvedt, recognizing that their ongoing employment and leadership in the process were crucial to the successful completion of the plan to separate the Company’s businesses. After reviewing the various alternatives, taking into consideration market practice and prevalence of success payments in similar situations, the Compensation Committee determined that success bonuses would be appropriate.

On September 8, 2011, the Company executed Success Bonus Agreements with Messrs. Carbonari and Omtvedt with respect to the potential spin-off of the Home & Security business. Under these agreements, the Company agreed to pay Mr. Carbonari a success bonus equal to $1,200,000 (one times salary) and Mr. Omtvedt a success bonus equal to $668,000 (also one times salary) if the Spin-Off was completed by December 31, 2011. The Company entered into a consulting agreement with Mr. Omtvedt requiring that he provide consulting services to the Company on a reduced time basis following his termination of employment. The fee for his services during this period is $500,000 per

year. The Compensation Committee felt that ongoing access to Mr. Omtvedt’s expertise, insights, and knowledge of the Company and its financial operations was critical to a smooth transition for the new management team.

Retirement and Deferred Compensation Benefits

Based on its review of peer companies and market practices, the Company believes that retirement benefits are an important element of its compensation package to key executives. The Company provides retirement benefits to NEOs in the United States through a combination of a tax-qualified defined benefit plan, a tax-qualified defined contribution plan, and a nonqualified deferred compensation plan, which includes a defined benefit plan and a defined contribution plan element. The nonqualified plans are excess benefit plans that allow participating executives to accrue benefits that are otherwise limited under the Internal Revenue Code. The Company provides retirement benefits to NEOs in Spain and Australia through locally maintained defined contribution plans. On December 31, 2011, the Company froze the United States tax-qualified defined benefit plan and the corresponding defined benefit plan element of the nonqualified deferred compensation plan with respect to future benefit accruals.

Messrs. Carbonari and Omtvedt were the only NEOs eligible for the United States defined benefit plan. Other United States-based NEOs receive retirement benefits through the defined contribution plans. The amount of benefits provided to NEOs by each retirement plan and the pension formulae applicable to NEOs are described in more detail on pages 62 to 64 of this Proxy Statement.

Perquisites

The Company provides its NEOs with perquisites and other personal benefits which are consistent with market practice and the Compensation Committee’s philosophy of attracting and retaining exemplary executive talent. The Compensation Committee periodically reviews the levels of perquisites and other personal benefits provided to NEOs to ensure that such benefits are consistent with the Company’s executive compensation philosophy.

As a continuation of an historical benefit, the Company permitted use of the Company aircraft by certain FB NEOs prior to the Spin-Off. In 2011, use of the Company aircraft was provided to Messrs. Carbonari and Omtvedt, who reimbursed the Company for such personal use. As of the Spin-Off date, the Company no longer owns corporate aircraft and, therefore, this benefit is no longer available. Beam Global as an operating company provided certain perquisites to executives and Beam Inc. will continue to do so as a public company. These perquisites consisted of a car allowance and reimbursement for financial counseling, executive physical examinations and health facility membership.

Severance and Change In Control Agreements

The Company maintains a severance and change in control agreement with each Beam NEO. The Company maintains these agreements to protect the Company and assure the continuity of key management in the event of a change in control situation, and to allow management to focus on the potential events resulting in a change in control without concern for their continued employment. These agreements generally provide for severance pay in the event of involuntary termination of employment by the Company without cause or voluntary termination of employment by a Beam NEO in the event of “good reason.” No severance is available if a Beam NEO’s employment is terminated due to death, disability or by the Company for cause. Enhanced benefits are available to Beam

NEOs if their termination event occurs within a specified period following a change in control. The change in control severance pay is a “double trigger” severance benefit, meaning that both a change in control must occur, and the executive must either voluntarily terminate employment for “good reason” following the change in control, or be terminated by the Company or its successor without cause following the change in control. In addition, the severance pay and benefits provided do not include a tax gross-up, as was the case with the Company’s form of executive severance agreement in effect prior to the Spin-Off. The agreements also limit the ability of executives to work for competitors after their employment with the Company has ended. The Company entered into these agreements with the Beam NEOs in 2011 based on a review of market practices and the advice of Meridian. These agreements are described in more detail on pages 70 and 71 of this Proxy Statement.

The Company also previously established and continued to maintain severance and change in control agreements with the FB NEOs. The FB NEO agreements generally provided for severance benefits in the event of involuntary termination of employment without cause or voluntary termination of employment by the executive for “good reason.” The agreements also provided for a double-trigger change in control benefit, requiring both a change in control and the executive’s termination of employment. Due to the elimination of the Company’s holding company structure and related positions, Messrs. Carbonari and Omtvedt became entitled to severance pay in connection with the termination of their employment at year-end. The amounts received by Messrs. Carbonari and Omtvedt are described on page 71 of this Proxy Statement.

Retention Agreement for Mr. Carbonari

Mr. Carbonari was also subject to a retention agreement that provided a payment equal to three times his then current base salary if he were to remain employed through his normal retirement date or, if approved by the Compensation Committee, an early retirement date. The retention agreement was initially established in 2002 to assure Mr. Carbonari’s ongoing service to the Company. Mr. Carbonari was a longtime key employee of the organization who served in various leadership capacities of increasing responsibility throughout his tenure. Mr. Carbonari’s demonstrated leadership capabilities, length of service and institutional knowledge were instrumental in the successful operation of the Company. He was, and continued to be throughout his employment with the Company, an executive whose services were in demand. Accordingly, the Compensation Committee, at the time the agreement was established, determined that the retention agreement was necessary to secure the long-term services of Mr. Carbonari. The Compensation Committee certified Mr. Carbonari’s retirement date as December 31, 2011 and approved payment to Mr. Carbonari pursuant to the terms of that agreement equal to $3,600,000.

Clawback Policy

In 2010, the Company instituted a clawback policy that empowers the Board to seek recoupment of incentive compensation paid to NEOs and other key employees in the event of a material restatement of the Company’s financial statements (other than changes required to comply with applicable accounting principles). The Compensation Committee regularly reviews the clawback policy to assure compliance with applicable laws, including the Dodd-Frank Wall Street Reform and Consumer Protection Act, and the Compensation Committee will revise the policy as appropriate to assure compliance with applicable law. The clawback policy applies to the Company’s annual incentive plan and long-term incentive plan.

Stock Ownership Guidelines

In 2010 and 2011, the Compensation Committee amended its stock ownership guidelines, keeping in mind the desire to align executive economic interests with those of the Company’s stockholders through meaningful levels of stock ownership. The table below sets forth the stock ownership guidelines for 2011, 2010 and 2009:

Consistent with the prior guidelines, the revised guidelines allow covered executives five years from the date of hire or promotion to achieve the recommended ownership levels. In 2011, Messrs. Carbonari and Omtvedt satisfied their ownership requirements. Mr. Shattock’s previous guideline was three times base salary and he will have five years to satisfy the new guideline of six times base salary. Messrs. Probst, Newlands, Baldock and Baladi were not previously subject to stock ownership guidelines and, accordingly, they will have five years to achieve a stock ownership level equivalent to three times their respective base salaries.

The guidelines also prohibit directors, officers and certain subsidiary employees from hedging the risk of owning Company stock or from trading in derivatives of the Company’s stock.

Insider Trading Policy

The Company maintains an insider trading policy that applies to NEOs, Section 16 officers, and other key personnel who have access to information that could be considered “insider information” under applicable securities laws and regulations. The policy advises covered individuals of the Company’s policy and their responsibilities under the law. While the scope of the Insider Trading Policy extends well beyond the purchase and sale of shares under just the LTIP and other Company programs, NEOs must comply with this policy in regard to their participation in such plans and programs.

Tax Treatment

Section 162(m) of the Internal Revenue Code limits the income tax deduction that is available to public companies for compensation paid to each of the chief executive officer and the other three most highly compensated executive officers, other than the chief financial officer, unless the compensation is performance-based. The Company intends to avail itself of the exemption from Section 162(m) for performance-based compensation when practicable, but reserves the right to award compensation that may not be fully deductible if payment of such compensation is determined to be in the best interests of the Company and its stockholders. Presently, the annual incentive bonuses, performance share awards, stock options, and performance-based restricted stock unit awards are expected to be fully deductible by the Company when paid or settled as performance-based compensation exempt from the limitation contained in Section 162(m).

2012 Compensation Actions

The following section summarizes changes to the Company’s executive compensation program after the close of the reporting period. We have included the following information to assist in understanding the direction of the Company’s compensation policies and because, in some instances, the 2012 changes directly follow from the Spin-Off.

Changes to Annual Incentive Plan for 2012

For 2012, the Compensation Committee approved changes to the Beam Annual Plan that more closely align the performance objectives of Beam NEOs with those of Beam Inc. In 2012, Messrs. Shattock and Probst will be evaluated based on the sales-operating income matrix and Company cash flow, while Messrs. Newlands, Baldock and Baladi will be evaluated on the Beam Inc. sales-operating income matrix combined with a specific regional matrix and Company cash flow.

Changes to the LTIP in 2012

The Compensation Committee approved a change in the award structure under the LTIP to better align the overall compensation program of Beam Inc. applicable to the recently promoted Beam NEOs and other executives with Beam Inc.’s strategy. The change takes into consideration the significant shift in focus of the Company business as well as prevalent practices in the peer group and reflects two important points: standardization of long-term award mix across NEOs and the elimination of cash and cash equivalent awards, each as described in more detail below.

For 2012, the long-term incentive awards generally will consist of 40% performance shares, 30% stock options and 30% restricted stock units. Mr. Shattock’s awards will consist of 50% performance shares, 25% stock options and 25% restricted stock units. The Committee approved this mix in order to more strongly emphasize pay-for-performance and alignment of management interests with the interests of stockholders. The performance share component will utilize EPS and return on invested capital as performance metrics. While the Compensation Committee determined that performance shares should not be awarded for 2011 given the sale of the Acushnet Company golf business and the Spin-Off, the Compensation Committee recognized the importance of performance shares in a pay-for-performance compensation program, and therefore determined in its redesign of the long-term incentive award program for Beam NEOs that performance shares should be more heavily weighted than stock options and restricted stock units.

In addition, the Compensation Committee also eliminated the cash aspect of the long-term program, excluding dividends and dividend equivalents connected to other stock-based awards under the LTIP. The Compensation Committee believes this change to grant only equity-based long-term incentives, coupled with changes to the Stock Ownership Guidelines described earlier, and other aspects of the overall executive compensation program will help to further align the interests of the Beam NEOs and other executives with those of our stockholders and will create a top-down ownership culture in the Company while also emphasizing key long-term goals of profitability and stock performance.

COMPENSATION AND BENEFITS COMMITTEE REPORT

The Compensation and Benefits Committee (the “Compensation Committee”) has reviewed and discussed the Compensation Discussion and Analysis with management and, based on the review and discussions, the Compensation Committee recommended to the Board that the Compensation Discussion and Analysis be included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2011 and the Company’s Proxy Statement.

Compensation and Benefits Committee

Anne M. Tatlock, Chair

Stephen W. Golsby

Ann F. Hackett

Peter M. Wilson

2011 EXECUTIVE COMPENSATION

The Summary Compensation Table below sets forth accounting values for both fixed and variable elements of compensation for the NEOs, including unvested and/or unpaid stock awards and unexercised stock options. For example, stock options granted to each of the NEOs during 2011 are presented in the Option Awards column of the table below based on the awards’ grant date fair value as determined under applicable accounting rules. However, the amount each NEO realizes from these equity awards may differ materially from the amounts shown in the table below and the related footnotes (in certain circumstances, the NEOs may realize no value under these awards). Similarly, restricted stock unit awards that have been granted to each of the NEOs during 2011 are presented in the Stock Awards column of the table below based on the awards’ grant date fair value as determined under applicable accounting rules, even though the executive may later forfeit the award. Investors should note that equity compensation awards granted or paid to the NEOs are reported in several different tables in this Proxy Statement as required by the SEC’s executive compensation disclosure rules. Compensation provided to Messrs. Carbonari and Omtvedt is described in the following tables because they served in their respective capacities as CEO and CFO during 2011 although each executive terminated his employment with the Company on December 31, 2011.

2011 SUMMARY COMPENSATION TABLE


Name and Principal Position	Year		Salary ($)(1)		Bonus ($)(2)		Stock Awards ($)(3)(4)		Option Awards ($)(4)(5)		Non-Equity Incentive Plan Compensation ($)(6)		Change in Pension Value & NQ Deferred Comp Earnings ($)(7)		All Other Compensation ($)(8)		Total ($)
	A		B		C		D		E		F		G		H		I
Matthew Shattock		2011		851,250		—		4,659,073		4,206,388		2,037,875		—		222,289		11,976,875
President & CEO

Robert Probst		2011		512,500		—		1,054,808		1,339,690		784,700		—		129,147		3,820,845
SVP & Chief Financial Officer

William Newlands		2011		520,000		400,000		1,054,808		1,339,690		830,800		—		144,869		4,290,167
SVP & President, North America

Philip Baldock		2011		692,170		—		790,988		1,089,697		1,012,031		—		56,446		3,641,332
SVP & President, APSA

Albert Baladi		2011		404,750		400,000		790,988		1,000,147		302,900		—		498,946		3,397,731
SVP & President, EMEA

Bruce Carbonari		2011		1,188,833		4,800,000		3,411,640		2,490,966		1,599,400		9,311,965		457,420		23,260,224
Fortune Brands CEO		2010		1,127,500		0		4,203,943		1,572,244		2,387,571		1,655,542		291,740		11,238,540
Fortune Brands CEO		2009		1,100,000		0		7,040,703		1,465,298		2,529,440		432,468		167,995		12,735,904

Craig Omtvedt		2011		664,833		668,000		1,050,225		767,496		477,000		1,692,394		274,715		5,594,663
Fortune Brands SVP & CFO		2010		645,883		0		1,545,432		578,595		789,022		491,992		187,455		4,238,379
Fortune Brands SVP & CFO		2009		630,300		0		2,371,063		576,387		597,524		320,033		163,116		4,658,423

(1)

Salary: The amounts listed in Column B reflect base salaries received by the NEOs. In the case of Messrs. Baldock and Baladi, base salary amounts have been converted to U.S. dollars from local currency on December 30, 2011 based on the conversion rate in effect on that date: 1.0209 AUD/USD for Mr. Baldock and 1.2952 EUR/USD for Mr. Baladi.

(2)

Bonus: The amounts listed in Column C include payment of a $3.6 million retention bonus to Mr. Carbonari under the Special Retention Agreement extended to Mr. Carbonari in 2002. Also included are success bonus payments for the completion of the Spin-Off prior to year end in the amount of $1.2 million for Mr. Carbonari and $668,000 for Mr. Omtvedt. Additionally, this column includes a $400,000 sign-on bonus paid to Mr. Baladi and a $400,000 retention bonus paid to Mr. Newlands pursuant to a 2009 retention agreement.

(3)	Stock Awards: The amounts listed in Column D for 2011 reflect the grant date fair values calculated in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation – Stock Compensation

(“FASB ASC Topic 718”) for restricted stock units awarded. For assumptions used in determining these values, see footnote 5 to the consolidated financial statements contained in the Company’s Form 10-K for the year(s) ended December 31, 2011 (2010 and 2009).

(4)	Founders Grants: The values in columns D and E include one-time founders grants to Beam NEO’s. For a description of founders grants, see page 47 of this Proxy Statement and the 2011 Grants of Plan-Based Awards table.

(5)

Option Awards: The amounts listed in Column E reflect the grant date fair values calculated in accordance with FASB ASC Topic 718. For assumptions used in determining these values, see footnote 5 to the consolidated financial statements contained in the Company’s Form 10-K for the year(s) ended December 31, 2011 (2010 and 2009).

(6)

Non-Equity Incentive Plan: Column F lists amounts earned under the respective annual incentive plans. Also included for Messrs Shattock, Probst, Newlands and Baldock are the amounts earned under the Beam long-term incentive program for the 2009-2011 performance period and, for Messrs. Probst, Newlands and Baldock, the 2011 portion of the 2010-2012 performance period. Refer to the Compensation Discussion and Analysis on pages 35 to 38 of this Proxy Statement for more details on the Fortune Brands, Inc. and the Beam Inc. annual incentive plans.

(7)

Increase in Actuarial Value of Defined Benefit Pension: Column G includes an estimate of the increases in actuarial value of tax-qualified and non-qualified defined benefit pension plan benefits for Messrs. Carbonari and Omtvedt. The normal retirement benefit is unreduced at age 60 for Mr. Omtvedt and unreduced at age 62 for Mr. Carbonari. The narrative and footnotes following the Pension Benefits table on page 62 provide additional detail about the Company’s pension plans. The Beam NEOs do not participate in the Company’s tax-qualified defined benefit plan.

Pension benefits for Messrs. Carbonari and Omtvedt are provided under the Beam Supplemental Plan (the “Supplemental Plan”) on a non-qualified basis. Employee grantor trust arrangements fund Supplemental Plan benefits for Messrs. Carbonari and Omtvedt. The amount shown in Column G includes the increase in the pre-tax value of Mr. Carbonari’s and Mr. Omtvedt’s Supplemental Plan benefit resulting from the retirement enhancement under their respective severance arrangements. The employee grantor trust arrangements are described in greater detail on page 64 of this Proxy Statement. Messrs Shattock, Probst, Newlands, Baldock and Baladi are not eligible for defined benefit plan benefits under the Company’s Supplemental Plan, nor are they recipients of grantor trusts.

In 2011, contributions were made to grantor trusts (net of tax withholding) in the following amounts: $886,111 for Mr. Carbonari and $99,532 for Mr. Omtvedt. These executives were reimbursed for taxes on earnings of the trust related to pension benefits in the following amounts: $77,369 for Mr. Carbonari and $109,599 for Mr. Omtvedt. Contributions to the grantor trusts are not listed in column H because they were made to fund supplemental retirement benefits that are disclosed in the Pension Benefits table on page 62 and the narrative that follows it. However, the reimbursements for taxes on the contributions are included in Column H.

(8)

Perquisites and All Other Compensation: In 2011, the Company provided an annual car allowance, financial planning, health club membership and physical examination to Messrs. Shattock, Probst, and Newlands. The annual value of the benefits provided to each executive was as follows: $24,342 for Mr. Shattock, $14,980 for Mr. Probst, and $22,372 for Mr. Newlands. The Company also provided a car allowance to Mr. Baldock and relocation assistance to Mr. Baladi. The value of these perquisites was $30,627 for Mr. Baldock and $497,021 for Mr. Baladi.

In 2011, limited use of the Company aircraft was provided to Messrs. Carbonari and Omtvedt, who reimbursed the Company for their hours of personal flight time.

The aggregate incremental cost of perquisites is generally the cost of such items to the Company. Although Messrs. Carbonari and Omtvedt used Company aircraft for personal use in 2011, 2010 and 2009, they reimbursed the Company for their hours of personal flight time. The difference between the Company’s aggregate incremental cost of personal aircraft usage and the amount paid by the executive is due in part to the incremental cost to reposition Company aircraft; this difference is included in column H. Specifically, for 2011, the Company’s cost of personal aircraft usage not reimbursed by executives is $47,786 for Mr. Carbonari and $124 for Mr. Omtvedt. The calculation of incremental cost of personal aircraft usage is based on variable cost to the Company, including fuel costs, crew expenses, landing fees and other miscellaneous variable costs.

Long-Term Disability and Life Insurance: The amounts in column H include the amount of all life insurance premiums paid by the Company. For 2011 these amounts were: $37,141 for Mr. Carbonari, $14,070 for Mr. Omtvedt, $2,152 for Mr. Shattock, $895 for Mr. Probst, and $2,527 for Mr. Newlands. Also included is the amount of long-term disability insurance coverage premiums paid by the Company. For 2011 these amounts were: $1,033 for Mr. Carbonari, $1,033 for Mr. Omtvedt, $1,152 for Mr. Shattock, $1,152 for Mr. Probst and $1,152 for Mr. Newlands.

Defined Contribution Benefits, Nonqualified Plan Earnings and Tax Reimbursements: The amount in column H also includes: (a) Company contributions to the tax-qualified defined contribution plan of the Company, (b) profit-sharing contributions under the Supplemental Plan, and (c) tax reimbursements with respect to defined contribution benefits. We describe these benefits below.

(a)

Defined Contribution Plan Contributions: Company contributions for 2011 to the Company’s tax-qualified defined contribution plan were $31,605 for each of Messrs. Shattock, Probst and Newlands and $24,123 for each of Messrs. Carbonari and Omtvedt.

(b)

Supplemental Plan: The Supplemental Plan credits certain executives with amounts that would have been contributed to their profit sharing accounts under the tax qualified defined contribution plan but for the limitations on contributions imposed by the Internal Revenue Code. Profit sharing credits earned under the Supplemental Plan for 2011 were $150,262 for Mr. Shattock, $70,063 for Mr. Probst, $76,592 for Mr. Newlands, $249,855 for Mr. Carbonari and $90,664 for Mr. Omtvedt. These amounts were credited to executives’ accounts in early 2012. For Messrs. Carbonari and Omtvedt, to meet the Company’s obligations to provide these profit sharing benefits under the Supplemental Plan, the Company partially funded these benefits through employee grantor trusts described on page 64 of this Proxy Statement. The Company funds only the amount sufficient to provide the expected after-tax profit sharing benefit for Messrs. Carbonari and Omtvedt.

(c)

Tax Reimbursements: The defined contribution credits to the Supplemental Plan are subject to Medicare tax. In 2011, the Company reimbursed the NEOs for Medicare taxes. In 2011, the Company reimbursed the NEOs as follows: $3,677 for Mr. Shattock, $6,114 for Mr. Carbonari, $1,714 for Mr. Probst, $2,219 for Mr. Omtvedt and $1,874 for Mr. Newlands.

Taxable Compensation Reported

The following supplemental table shows the amount of compensation reported for federal tax purposes for each of the NEOs for each of the indicated tax years. These amounts reflect the amounts reported for each individual in Box 1 of their respective Forms W-2 for each reporting year. We are providing this supplemental table to highlight the difference between compensation reported under the SEC rules and compensation amounts realized and reported as taxable income on Form W-2.


Name	Year		W-2 Box 1 Compensation		Total Compensation Reported in Summary Compensation Table

Matthew Shattock		2011	$	1,788,854	$	11,976,875

Robert Probst		2011	$	1,291,962	$	3,820,845

William Newlands		2011	$	1,993,765	$	4,290,167

Philip Baldock		2011	$	1,480,348	$	3,641,332

Albert Baladi		2011	$	1,298,170	$	3,397,731

Bruce Carbonari		2011	$	9,721,806	$	16,666,008
		2010	$	3,784,189	$	11,238,540
		2009	$	1,268,264	$	12,735,904

Craig Omtvedt		2011	$	4,059,719	$	4,602,136
		2010	$	1,712,812	$	4,238,378
		2009	$	765,489	$	4,658,423

Amounts reported in Box 1 of the Form W-2 for each of the NEOs, as listed above, include, among other items: (1) total cash wages and bonuses paid to the NEOs for the taxable year, less amounts deferred under tax-qualified 401(k) plans; (2) the value of Company-paid life insurance in excess of $50,000 and any taxable pension accruals provided to the NEOs; (3) the value of any performance share awards, restricted stock awards or restricted stock units that were paid out or became vested during the taxable year; (4) the gain recognized upon the exercise of stock option awards exercised during the taxable year; and (5) annual contributions to their respective grantor trusts. Mr. Baladi earned compensation in the U.S. from March 5, 2011 to June 15, 2011; the balance of his compensation was paid in Spain. In each of Mr. Baldock’s and Mr. Baladi’s case, the amounts reported under “W-2 Box 1 Compensation” reflect W-2 Box 1 Compensation reported in the U.S., if any, plus the amount reported in their country of employment.

Amounts reported in Box 1 of the Forms W-2 for the NEOs, as listed above, do not include any value for: (1) unvested performance share awards, restricted stock awards or restricted stock unit awards; or (2) outstanding but unexercised stock option awards. These items are contingent and may never materialize; however, in accordance with the SEC rules, values for these items are included in the Summary Compensation Table on page 53 in the year of grant, as well as in the tables below on pages 57 to 61.

2011 GRANTS OF PLAN-BASED AWARDS

The following table summarizes grants of plan-based awards at the time of grant. The awards described in the following table do not reflect the conversion of awards granted prior to the Spin-Off. See the table entitled “Outstanding Equity Awards at Fiscal Year End” for a description of the conversion of awards that were granted prior to the Spin-Off and the number of awards outstanding on December 31, 2011.


Name	Grant Date			Estimated Future Payouts Under Non-Equity Incentive Plan Awards (2011 Annual Bonus + 2011 - 2013 Cash LTIP)						Estimated Future Payouts Under Equity Incentive		All Other Option Awards: Number of Securities Underlying Options (#)		Exercise or Base Price of Option Awards ($/Sh)		Grant Date Fair Value of Stock & Option Awards (1)
Name	Grant Date			Threshold ($)		Target ($)		Maximum ($)		Target (#)				Exercise or Base Price of Option Awards ($/Sh)		Grant Date Fair Value of Stock & Option Awards (1)
Matthew Shattock
Annual Bonus		2/22/2011	(2)		0		831,250		1,622,500
RSUs		2/22/2011	(3)								15,200						931,000
Cash LTIP		2/22/2011	(4)				700,000		1,750,000
Options		2/22/2011	(5)										41,600	$	61.54		706,368
Founders Options		10/4/2011	(6)										296,110	$	44.75		3,500,020
Founders RSUs		10/4/2011	(7)								78,220						3,500,345

Robert Probst
Annual Bonus		2/22/2011	(2)		0		350,625		701,250
Cash LTIP		2/22/2011	(4)				160,000		400,000
Options		2/22/2011	(5)										20,000	$	61.54		339,600
Founders Options		10/4/2011	(6)										84,610	$	44.75		1,000,090
Founders RSUs		10/4/2011	(7)								22,350						1,000,163

William Newlands
Annual Bonus		2/22/2011	(2)		0		357,500		715,000
Cash LTIP		2/22/2011	(4)				160,000		400,000
Options		2/22/2011	(5)										20,000	$	61.54		339,600
Founders Options		10/4/2011	(6)										84,610	$	44.75		1,000,090
Founders RSUs		10/4/2011	(7)								22,350						1,000,163

Philip Baldock
Annual Bonus		2/22/2011	(2)		0		311,400		622,800
Cash LTIP		2/22/2011	(4)				415,302		830,604
Options		2/22/2011	(5)										20,000	$	61.54		339,600
Founders Options		10/4/2011	(6)										63,460	$	44.75		750,097
Founders RSUs		10/4/2011	(7)								16,760						750,010

Albert Baladi
Annual Bonus		3/28/2011	(2)		0		222,750		445,500
Cash LTIP		3/28/2011	(4)				160,000		400,000
Options		3/28/2011	(5)										15,000	$	60.16		250,050
Founders Options		10/4/2011	(6)										63,460	$	44.75		750,097
Founders RSUs		10/4/2011	(7)								16,760						750,010

Bruce Carbonari
Annual Bonus		2/22/2011	(2)		0		1,680,000		3,360,000
RSUs		2/22/2011	(3)								53,600						3,283,000
Options		2/22/2011	(5)										146,700	$	61.54		2,490,966

Craig Omtvedt
Annual Bonus		2/22/2011	(2)		0		501,000		1,002,000
RSUs		2/22/2011	(3)								16,500						1,010,625
Options		2/22/2011	(5)										45,200	$	61.54		767,496

(1)

The grant date fair value of stock option awards is based on the Black-Scholes value on the date of grant: $16.98 for the February 22, 2011 grant, $16.67 for the March 28, 2011 grant and $11.82 for the October 4, 2011 grant. The grant date fair value of restricted stock units is determined based on the mean price of Company stock on the grant date: $61.25 on February 22, 2011 and $44.75 on October 4, 2011. Grant date fair values are computed in accordance with FASB ASC Topic 718. For assumptions used in determining these values, see footnote 5 to the consolidated financial statements contained in the Company’s Form 10-K for the year(s) ended December 31, 2011 (2010 and 2009).

(2)	The numbers in this row reflect the range of potential payments under the Fortune Annual Incentive Plan or the Beam Annual Incentive Plan, as applicable.

(3)	The numbers in this row reflect the number of restricted stock units that were awarded and will vest and become payable on the third anniversary of the grant date, subject to continued employment and the achievement of an EPS goal of $1.00 cumulatively over the three-year vesting period.

(4)	The numbers in this row reflect the range of potential payments under the 2011-2013 cash-settled performance unit LTIP grant subject to achievement of operating income and RONTA goals during 2011, 2012 and 2013.

(5)	Numbers in this row reflect the regular annual stock option awards granted in February 2011 and the grant awarded to Mr. Baladi on March 28, 2011.

(6)	Numbers in this row reflect stock options granted as part of the founders grants in October 2011.

(7)

Numbers in this row reflect the number of restricted stock units that were awarded and will vest and become payable one-third on each of the second, third and fourth anniversaries of the date of grant, subject to continued employment and an EPS goal of $0.50 during the first two years of the vesting period.

Non-Equity Incentive Plan

The Fortune Annual Incentive Plan and the Beam Annual Incentive Plan are cash-based, pay-for-performance incentive plans. Under the Fortune Annual Incentive Plan and the Beam Annual Incentive Plan, participants are eligible to receive a bonus if the performance goal established for the year is met or exceeded. Under the long-term incentive cash plan participants are eligible to receive a cash payment if performance goals for the three-year performance period are met or exceeded. See pages 65 to 71 of this Proxy Statement for a description of the treatment of non-equity incentive awards upon termination of employment.

Long-Term Equity Incentive Plan

The LTIP allows the Company to award executives a variety of forms of equity compensation using the Company’s common stock. In 2011, the Company awarded regular annual grants of stock options and restricted stock units. In addition, in connection with the Spin-Off, the Company awarded founders grants consisting of stock options and restricted stock units to Messrs. Shattock, Probst, Newlands, Baldock and Baladi. See pages 65 to 71 of this Proxy Statement for a description of the treatment of equity awards upon termination of employment.

OUTSTANDING EQUITY AWARDS AT 2011 FISCAL YEAR-END

The outstanding Fortune Brands, Inc. stock options at the time of the Spin-Off were converted into Beam Inc. and Home & Security stock options, and the outstanding Fortune Brands, Inc. restricted stock units and performance shares were converted into Beam Inc. and Home & Security restricted stock units in accordance with the methodology approved by the Compensation Committee. The number of options and restricted stock units listed in the table below are the Beam Inc. stock options and restricted stock units outstanding on December 31, 2011.


	Option Awards								Stock Awards
Name	Number of Securities Underlying Unexercised Options (#) Exercisable (1)		Number of Securities Underlying Unexercised Options (#) Unexercisable (2)		Option Exercise Price ($)		Option Expiration Date		Number of Shares of Stock or Units that Have Not Vested (#) (3)		Market Value of Shares or Units of Stock that Have Not Vested ($) (4)		Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) (5)		Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) (4)
Matthew Shattock		39,232		24,898	$	35.67		9/30/2016		21,203	$	1,086,230		129,783	$	6,648,783
		14,016		35,581	$	36.25		2/22/2017
				50,119	$	51.08		2/22/2021
				296,110	$	44.75		10/4/2021
Robert Probst		71,186			$	47.32		9/29/2015						22,350	$	1,144,991
		11,706		14,055	$	35.67		9/30/2016
		12,656		32,127	$	36.25		2/22/2017
				24,095	$	51.08		2/22/2021
				84,610	$	44.75		10/4/2021
William Newlands		23,729			$	67.19		2/25/2015						22,350	$	1,144,991
		23,729			$	64.95		2/25/2015
		23,729			$	61.74		2/25/2015
		28,473			$	47.32		9/29/2015
		11,073		14,055	$	35.67		9/30/2016
				28,111	$	36.25		2/22/2017
				24,095	$	51.08		2/22/2021
				84,610	$	44.75		10/4/2021
Philip Baldock		8,467			$	57.18		9/28/2014						16,760	$	858,615
		8,542			$	68.19		9/27/2012
		8,542			$	61.74		9/26/2013
		8,542			$	67.19		9/24/2014
		2,846			$	47.32		9/29/2015
		3,970		5,039	$	35.67		9/30/2016
				12,046	$	36.25		2/22/2017
				24,095	$	51.08		2/22/2021
				63,460	$	44.75		10/4/2021
Albert Baladi				18,071	$	49.93		3/28/2021						16,760	$	858,615
				63,460	$	44.75		10/4/2021
Bruce Carbonari		32,531			$	38.83		9/23/2012		55,489	$	2,842,701		149,000	$	7,633,270
		97,890			$	45.44		9/29/2013
		118,628			$	57.18		9/28/2014
		102,509			$	68.19		9/27/2012
		113,898			$	61.74		9/26/2013
		146,360			$	67.19		9/24/2014
		189,831			$	55.44		2/25/2015
		189,831			$	47.32		9/29/2015
		128,610			$	35.67		9/30/2016
		132,312			$	36.25		2/22/2017
		139,242			$	51.08		2/22/2021
Craig Omtvedt		92,908			$	45.44		9/29/2013		20,402	$	1,045,195		52,900	$	2,710,067
		94,641			$	57.18		9/28/2014
		80,678			$	68.19		9/27/2012
		80,678			$	61.74		9/26/2013
		57,518			$	67.19		9/24/2014
		74,793			$	47.32		9/29/2015
		50,589			$	35.67		9/30/2016
		48,691			$	36.25		2/22/2017
		42,902			$	51.08		2/22/2021

(1)	Each outstanding stock option granted that is currently vested and exercisable is listed in this column. These stock option grants vested ratably on the first three anniversaries of the grant date. Options converted at the Spin-Off were calculated as follows:


Fortune Brands					Beam (converted)				FBHS (converted)
Grant Date	#		Price		#		Price		#		Price
Matthew Shattock
9/30/2009		62,000	$	42.98		64,130	$	35.67		39,232	$	9.61
2/22/2010		44,300	$	43.67		49,597	$	36.25		14,016	$	9.76
2/22/2011		41,600	$	61.54		50,119	$	51.08

Robert Probst
9/29/2008		75,000	$	57.01		71,186	$	47.32		71,186	$	12.74
9/30/2009		24,000	$	42.98		25,761	$	35.67		11,706	$	9.61
2/22/2010		40,000	$	43.67		44,783	$	36.25		12,656	$	9.76
2/22/2011		20,000	$	61.54		24,095	$	51.08

William Newlands
2/25/2008		25,000	$	78.25		23,729	$	64.95		23,729	$	17.49
2/25/2008		25,000	$	74.39		23,729	$	61.74		23,729	$	16.63
2/25/2008		25,000	$	80.95		23,729	$	67.19		23,729	$	18.10
9/29/2008		30,000	$	57.01		28,473	$	47.32		28,473	$	12.74
9/30/2009		23,333	$	42.98		25,128	$	35.67		11,073	$	9.61
2/22/2010		23,333	$	43.67		28,111	$	36.25
2/22/2011		20,000	$	61.54		24,095	$	51.08

Philip Baldock
9/28/2004		8,921	$	68.89		8,467	$	57.18		8,467	$	15.40
9/27/2005		9,000	$	82.16		8,542	$	68.19		8,542	$	18.37
9/26/2006		9,000	$	74.39		8,542	$	61.74		8,542	$	16.63
9/24/2007		9,000	$	80.95		8,542	$	67.19		8,542	$	18.10
9/29/2008		2,999	$	57.01		2,846	$	47.32		2,846	$	12.74
9/30/2009		8,366	$	42.98		9,009	$	35.67		3,970	$	9.61
2/22/2010		9,999	$	43.67		12,046	$	36.25
2/22/2011		20,000	$	61.54		24,095	$	51.08

Albert Baladi
3/28/2011		15,000	$	60.16		18,071	$	49.93

Bruce Carbonari
9/23/2002		34,274	$	46.78		32,531	$	38.83		32,531	$	10.46
9/29/2003		103,133	$	54.75		97,890	$	45.44		97,890	$	12.24
9/28/2004		124,983	$	68.89		118,628	$	57.18		118,628	$	15.40
9/27/2005		108,000	$	82.16		102,509	$	68.19		102,509	$	18.37
9/26/2006		120,000	$	74.39		113,898	$	61.74		113,898	$	16.63
9/24/2007		154,200	$	80.95		146,360	$	67.19		146,360	$	18.10
2/25/2008		200,000	$	66.79		189,831	$	55.44		189,831	$	14.93
9/29/2008		200,000	$	57.01		189,831	$	47.32		182,831	$	12.74
9/30/2009		135,500	$	42.98		128,610	$	35.67		128,610	$	9.61
2/22/2010		139,400	$	43.67		132,312	$	36.25		132,312	$	9.76
2/22/2011		146,700	$	61.54		139,242	$	51.08		139,242	$	13.76

Craig Omtvedt
9/29/2003		97,885	$	54.75		92,908	$	45.44		92,908	$	12.24
9/28/2004		99,711	$	68.89		94,641	$	57.18		94,641	$	15.40
9/27/2005		85,000	$	82.16		80,678	$	68.19		80,678	$	18.37
9/26/2006		85,000	$	74.39		80,678	$	61.74		80,678	$	16.63
9/24/2007		60,600	$	80.95		57,518	$	67.19		57,518	$	18.10
9/29/2008		78,800	$	57.01		74,793	$	47.32		74,793	$	12.74
9/30/2009		53,300	$	42.98		50,589	$	35.67		50,589	$	9.61
2/22/2010		51,300	$	43.67		48,691	$	36.25		48,691	$	9.76
2/22/2011		45,200	$	61.54		42,902	$	51.08		42,902	$	13.76

(2)

Each outstanding stock option that is not yet vested and exercisable is listed in this column. Unvested options that were converted at Spin-Off are noted in the chart in footnote 1. The chart below reflects the vesting schedule for each outstanding stock option grant awarded to the NEOs (assuming continued employment):


	Options Vesting in 2012 (dates refer to grant date)								Total Num- ber of Opti- ons Vest- ing in 2012		Options Vesting in 2013 (dates refer to grant date)								Total Num- ber of Opti- ons Vest- ing in 2013		Options Vesting in 2014 (dates refer to grant date)						Total Number of Opti- ons Vesting in 2014		Options Vesting in 2015 (dates refer to grant date)		Total Num- ber of Opti- ons Vest- ing in 2015
	9/30/ 2009		2/22/ 2010		2/22/ 2011		3/28/ 2011		Total Num- ber of Opti- ons Vest- ing in 2012		2/22/ 2010		2/22/ 2011		3/28/ 2011		10/4/ 2011		Total Num- ber of Opti- ons Vest- ing in 2013		2/22/ 2011		3/28/ 2011		10/4/ 2011		Total Number of Opti- ons Vesting in 2014		10/4/ 2011		Total Num- ber of Opti- ons Vest- ing in 2015
Matthew Shattock		24,898		17,791		16,706				59,395		17,790		16,707				98,704		133,201		16,706				98,703		115,409		98,703		98,703
Robert Probst		14,055		16,063		8,032				38,150		16,064		8,032				28,204		52,300		8,031				28,203		36,234		28,203		28,203
William Newlands		14,055		14,056		8,032				36,143		14,055		8,032				28,204		50,291		8,031				28,203		36,234		28,203		28,203
Philip Baldock		5,039		6,023		8,032				19,094		6,023		8,032				21,154		35,209		8,031				21,153		29,184		21,153		21,153
Albert Baladi								6,025		6,025						6,024		21,154		27,178				6,022		21,153		27,175		21,153		21,153
Bruce Carbonari										0										0								0				0
Craig Omtvedt										0										0								0				0

(3)	This column reflects 2010-2012 performance share awards converted into restricted stock units. The total performance share awards converted into restricted stock units are reflected in the following table:


Performance Shares 2009 - 2011	Fortune Brands				Converted to RSUs
Performance Shares 2009 - 2011	Granted		Earned		BEAM		FBHS
Matthew Shattock		16,900		19,435		23,415		-
Bruce Carbonari		63,200		72,680		72,680		72,680
Craig Omtvedt		24,800		28,520		28,520		28,520

2010 - 2012
Matthew Shattock		15,700		17,599		21,203		—
Bruce Carbonari		49,500		55,489		55,489		55,489
Craig Omtvedt		18,200		20,402		20,402		20,402

(4)	This column reflects the value of restricted stock units (using the December 30, 2011 closing price of the Company’s common stock of $51.23).

(5)

The numbers in this column include the unvested restricted stock units (as of December 31, 2011) from the 2009, 2010 and 2011 grants that were converted from Fortune Brands Inc. restricted stock units to Beam restricted stock units. Also included in this column are unvested founders grant restricted stock units granted in 2011 to the Beam NEOs.

The total converted restricted stock units are reflected in the table below. The converted restricted stock units include restricted stock units granted to Messrs. Shattock, Carbonari and Omtvedt in 2009 equaling 17,228, 53,500 and 21,000 restricted stock units respectively, in 2010 equaling 16,023, 41,900 and 15,400 restricted stock units respectively and in 2011 equaling 18,312, 53,600 and 16,500 restricted stock units respectively.


RSUs	Fortune Brands		Converted
RSUs	Fortune Brands		BEAM		FBHS
Matthew Shattock		42,800		51,563		—
Bruce Carbonari		149,000		149,000		149,000
Craig Omtvedt		52,900		52,900		52,900

The unvested founders grants restricted stock units included in the column are as follows: Mr. Shattock – 78,220; Mr. Probst – 22,350; Mr. Newlands – 22,350; Mr. Baldock – 16,760 and Mr. Baladi – 16,760.

2011 OPTION EXERCISES AND STOCK VESTED


	Option Awards				Stock Awards
Name of Executive Officer	Number of Shares Acquired on Exercise (#)(1)		Value Realized on Exercise ($)(2)		Number of Shares Acquired on Vesting (#)(3)		Value Realized on Vesting ($)(3)
Matthew Shattock		0	$	0		23,415	$	1,199,550
Robert Probst		11,000	$	209,522		0	$	0
William Newlands		23,334	$	435,632		0	$	0
Philip Baldock		22,182	$	251,865		0	$	0
Bruce Carbonari		1,662	$	3,674		72,680	$	3,723,396
Craig Omtvedt		0	$	0		28,520	$	1,461,080

(1)	This column reflects stock options exercised during 2011.

(2)	This column reflects the difference between the market value of the shares on the date of exercise and the exercise price of the stock options.

(3)	This column reflects the number of 2009-2011 performance shares that were converted into restricted stock units and vested on 12/31/2011 and the value (using the December 30, 2011 closing price of the Company’s common stock of $51.23).

RETIREMENT AND POST-RETIREMENT BENEFITS

2011 PENSION BENEFITS


Name	Plan Name	Number of Years Credited Service (#)(1)		Present Value of Accumulated Benefit ($) (3)(4)(5)(6)(7)		Payments During Last Fiscal Year(8)
Bruce A. Carbonari	Beam Supplemental Plan (fka Fortune Brands Supplemental Plan)		31.00	$	15,414,158	$	1,495,546
	Moen Incorporated Retirement Income Plan(2)		26.00	$	710,236		0

Craig P. Omtvedt	Beam Pension Plan (fka Fortune Brands Pension Plan)		6.25	$	215,240		0
	Beam Supplemental Plan (fka Fortune Brands Supplemental Plan)		22.25	$	6,997,537	$	167,986

The Fortune Brands Pension Plan and the Fortune Brands Supplemental Plan were respectively merged into the Beam Pension Plan (the “Pension Plan”) and the Beam Supplemental Plan (the “Supplemental Plan”) on December 31, 2011.

(1)

Neither Messrs. Carbonari nor Omtvedt are currently accruing additional benefits under the Company’s tax-qualified defined benefit plan. Messrs. Shattock, Probst, Newlands, Baldock and Baladi were and continue to be ineligible for the Company’s tax-qualified defined benefit plan. With respect to the Pension Plan, this column reflects service credited prior to January 1, 1996 (the date as of which Messrs. Carbonari and Omtvedt were excluded from further benefit accruals) and not their actual years of service with the Company.

(2)

Mr. Carbonari accrued benefits under the Moen Incorporated Retirement Income Plan and Moen Incorporated Supplemental Retirement Income Plan prior to transferring to the Company in January 2007. Liability for the benefit he earned under the Moen Incorporated Supplemental Retirement Income Plan was transferred to the Beam Supplemental Plan and is included in the benefit amount listed for that plan.

(3)	The amounts listed are based on the executives’ compensation and service as of December 31, 2011.

(4)	The earliest age at which an unreduced pension can be paid is generally 62 under the Pension Plan. However, a grandfathered provision allowing an unreduced pension at age 60 applies to Mr. Omtvedt.

(5)

The benefit amounts listed reflect the present value of the annual benefit payable in the form of a single life annuity where payments continue for the life of the executive but cease upon his death. The Pension Plan, the Supplemental Plan and the Moen Incorporated Retirement Income Plan allow participants to elect a reduced annuity in the joint and survivor form, which provides payments over the life of the participant and a named beneficiary. Elections of payment form are made at the time of retirement.

(6)

The present value of accumulated plan benefits is calculated based on the following assumptions used to calculate the plan’s accumulated benefit obligation in accordance with FASB ASC Topic 715; a 4.50% discount rate, a 3.00% lump sum interest rate and the 2012 static mortality table. The normal retirement benefit is unreduced at age 60 for Mr. Omtvedt and unreduced at age 62 for Mr. Carbonari.

(7)	The amount shown includes the increase in the pre-tax value of Mr. Carbonari’s and Mr. Omtvedt’s Supplemental Plan benefit resulting from the retirement enhancement under their respective severance arrangements.

(8)

The Pension Plan, the Supplemental Plan and the Moen Incorporated Retirement Income Plan do not allow in-service distributions. Accordingly, no payments were made to the NEOs under the plans. No other withdrawals were made in 2011. As disclosed in footnote 8 to the Summary Compensation Table beginning on page 53 of this Proxy Statement, the pension benefits of Messrs. Carbonari and Omtvedt are funded by contributions to employee grantor trusts which are taxable to these executives in the year of the contribution. Contributions to these trusts were made in 2011.

The Pension Plan is a tax-qualified defined benefit plan. In 2008, the Pension Plan was closed to newly hired employees, and the formula for accruing pension benefits was changed. In 2011, the Pension Plan was frozen and no additional pension benefits will accrue after December 31, 2011.

•

For service on and after January 1, 2008, pension benefits grow under the following formula: 1% of compensation multiplied by years of benefit service on and after January 1, 2008; and

•

For service prior to 2008, a normal retirement benefit is determined under the following formula: (a) 1.75% of compensation multiplied by years of benefit service up to 15 years of service, plus (b) 1% of compensation multiplied by years of benefit service in excess of 15 years of service.

Total service taken into account under the Pension Plan is capped at 35 years. In addition, participants will not receive less than a protected benefit that was “grandfathered” as of December 31, 2001 when the Company previously changed the pension plan formula. The estimated retirement benefits in the preceding table include any offset for Social Security benefits. The compensation used to calculate retirement benefits generally includes the categories of “Salary” and “Non-Equity Incentive Plan Compensation” from the Summary Compensation Table shown above on page 53, averaged over the five highest consecutive years.

With respect to Mr. Carbonari, the Moen Incorporated Retirement Income Plan is a tax-qualified defined benefit plan. The formula for determining monthly pension benefits is (a) 1.05% of compensation multiplied by years of benefit service up to 30 years, plus (b) 0.40% of compensation in excess of covered compensation multiplied by years of benefit service up to 30 years, plus (c) 1.00% of compensation multiplied by years of benefit service in excess of 30 years.

The Supplemental Plan pays the difference between the benefits payable under our tax-qualified defined benefit plan (the Pension Plan and, for Mr. Carbonari, the Moen Incorporated Retirement Income Plan) and the amount that would have been paid if the Internal Revenue Code did not limit the amount of compensation taken into account under, or benefits that may be paid from, a tax-qualified defined benefit plan. In addition, the Supplemental Plan provides the full pension benefit earned in years in which an executive is ineligible for the tax-qualified defined benefit plan. In calculating benefits, no credit is given for service in excess of 35 years. Through December 31, 2007, the Supplemental Plan also provided that certain senior officers of the Company (those who were Vice Presidents or more senior officers prior to 1999) receive an annual benefit equal to 52¹/2 % of average compensation during the five highest-paid consecutive years of employment. Mr. Omtvedt is entitled to this enhanced retirement benefit. This retirement benefit is reduced by 1¹/2% of such average compensation for each year between the officer’s retirement and attainment of age 65, unless he has completed 35 years of service. This benefit is also reduced by 1/2% of such average compensation for each year of service on and after January 1, 2008, since beginning on January 1, 2008, these executives will earn additional pension benefits at the same rate that applies to all employees in the Company’s tax-qualified pension plan (1% of compensation per year of service). The Supplemental Plan benefit is reduced by benefits under the Pension Plan and the retirement plans of our subsidiaries or any prior employer, including an executive’s prior employers who are unrelated to the Company.

Payments of early retirement annual benefits under the Fortune Brands plans are calculated assuming a reduction of 6% per year prior to age 62 (unreduced at age 62) for Mr. Carbonari and 7% per year prior to age 60 (unreduced at age 60) for Mr. Omtvedt. Mr. Carbonari’s pension reduction is calculated differently than Mr. Omtvedt’s because Mr. Omtvedt was grandfathered under a plan provision applicable to certain employees who were employed as of December 31, 2001. Mr. Carbonari was employed by one of the Company’s subsidiaries until January 1, 2007. Mr. Carbonari’s annual early retirement benefit under the Moen Incorporated Retirement Income Plan is calculated assuming a 6% reduction per year from age 60 to 62 and a 4% reduction per year prior to age 60 (the benefit is unreduced at age 62).

The pension benefits earned by Messrs. Carbonari and Omtvedt under the Supplemental Plan cannot be secured in a manner similar to the tax-qualified pension benefits earned by other Company employees. To provide for the security of these non-qualified benefits, the Company, prior to 1999, established “grantor trusts” for a limited number of executives, including Messrs. Carbonari and Omtvedt. These trusts were approved by stockholders. The Company has not established any new grantor trusts since 1999 and no longer provides them to new executives.

2011 NONQUALIFIED DEFERRED COMPENSATION


	Executive Contributions in Last FY $		Registrant Contributions in Last FY $ (1)(2)		Aggregate Earnings in Last FY $ (1)(3)		Aggregate Withdrawals/ Distributions $		Aggregate Balance at Last FYE $
Matthew Shattock		0		150,262		6,297		0		236,782
Robert Probst		0		70,063		4,592		0		133,148
William Newlands		0		76,592		9,126		0		201,967
Philip Baldock		0		0		0		0		0
Albert Baladi		0		0		0		0		0
Bruce Carbonari		0		249,855		70,573		0		1,380,300
Craig Omtvedt		0		90,664		9,688		0		807,490

(1)

Amounts listed in the Registrant Contributions column were reported as compensation in the last fiscal year in the “All Other Compensation” column of the Summary Compensation Table on page 53. No amounts listed in the Aggregate Earnings column were reported in the “All Other Compensation” column of the Summary Compensation Table on page 53.

(2)	The supplemental nonqualified profit sharing benefit of Messrs. Carbonari and Omtvedt are funded by contributions to an employee grantor trust which is taxable to the executive in the year of contribution. A contribution to the trust was made in 2011.

(3)

Earnings are credited to the accounts of executives based on the Citigroup U.S. Broad Investment Grade Bond Index (for Messrs. Shattock, Carbonari, Probst, Newlands, Baldock and Baladi). For those executives with employee grantor trusts for supplemental nonqualified profit sharing contributions (Mr. Omtvedt), earnings are credited based on the election of the executive among the following: Fidelity Blue Chip Growth Fund, Fidelity Equity Income Fund, Fidelity International Discovery Fund, MFS New Discovery Fund, Northern Trust Institutional Funds Diversified Asset Portfolio, PIMCO Total Return Fund, Vanguard 500 Index Fund, Fidelity Value Fund and the Spartan Total Market Index Fund.

The Company’s nonqualified deferred compensation plan is a supplemental plan that pays the difference between the profit sharing contribution provided under the tax-qualified defined contribution plan and the contribution that would have been made if the Internal Revenue Code did not limit the compensation that may be taken into account under tax-qualified retirement plans. The contribution amount in 2009, 2010 and 2011 was equal to 6% of adjusted compensation for Messrs. Carbonari and Omtvedt and 7.8% for Messrs. Shattock, Probst and Newlands, which generally includes salary and annual bonus. Compensation is adjusted by multiplying amounts in excess of the Social Security taxable wage base ($106,800 in 2011) by 1.25. The pertinent profit sharing formula applies uniformly to all eligible employees in the applicable plan and is not enhanced for executives. Nonqualified profit-sharing benefits are paid in a lump sum upon termination of an executive’s employment.

POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL⁽¹⁾


Compensation Program	Voluntary				Involuntary				Death		Disability		Retirement		Involuntary Termination (or for Good Reason) After Change in Control
Compensation Program	For Good Reason		For No Good Reason		Other Than for Good Reason		Without Cause		Death		Disability		Retirement
Cash Severance
Matthew Shattock		4,162,209		0		0		4,162,209		0		0		0		6,243,313
Robert Probst		1,557,287		0		0		1,557,287		0		0		0		2,076,382
William Newlands		1,604,259		0		0		1,604,259		0		0		0		2,139,012
Philip Baldock		1,516,500		0		0		1,516,500		0		0		0		2,022,000
Albert Baladi		1,200,000		0		0		1,200,000		0		0		0		1,600,000

Health and Welfare Related Benefits(2)
Matthew Shattock		21,793		0		0		21,793		1,900,000		0		0		32,689
Robert Probst		14,449		0		0		14,449		1,100,000		0		0		19,265
William Newlands		16,910		0		0		16,910		1,100,000		0		0		22,547
Philip Baldock		0		0		0		0		1,394,000		0		0		0
Albert Baladi		0		0		0		0		1,032,000		0		0		0

Options(3)
Matthew Shattock		0		0		0		0		0		0		0		2,846,727
Robert Probst		0		0		0		0		0		0		0		1,251,845
William Newlands		0		0		0		0		0		0		0		1,191,686
Philip Baldock		0		0		0		0		0		0		0		673,691
Albert Baladi		0		0		0		0		0		0		0		434,713

RSUs
Matthew Shattock		0		0		0		0		0		0		0		6,574,711
Robert Probst		0		0		0		0		0		0		0		1,161,977
William Newlands		0		0		0		0		0		0		0		1,161,977
Philip Baldock		0		0		0		0		0		0		0		871,352
Albert Baladi		0		0		0		0		0		0		0		871,352

Cash LTIP
Matthew Shattock		0		0		0		0		0		0		0		1,750,000
Robert Probst		0		0		0		0		0		0		0		53,333
William Newlands		0		0		0		0		0		0		0		53,333
Philip Baldock		0		0		0		0		0		0		0		139,397
Albert Baladi		0		0		0		0		0		0		0		53,333

Total Potential Payments Upon Termination or Change in Control
Matthew Shattock		4,184,002		0		0		4,184,002		1,900,000		0		0		17,447,440
Robert Probst		1,571,736		0		0		1,571,736		1,100,000		0		0		4,562,802
William Newlands		1,621,169		0		0		1,621,169		1,100,000		0		0		4,568,555
Philip Baldock		1,516,500		0		0		1,516,500		1,394,000		0		0		3,706,440
Albert Baladi		1,200,000		0		0		1,200,000		1,032,000		0		0		2,959,398

(1)

This table assumes the specified termination events occurred on December 31, 2011. It uses the Company’s closing share price on the last day of its 2011 fiscal year to calculate the value of the equity awards that would vest or be settled in connection with a termination event prior to or following a change in control. The closing price of Company stock on December 30, 2011 (the last trading day of 2011) was $51.23.

(2)	The Health and Related Benefits listed under the “Death” column reflect the incremental value of life insurance benefits above the benefit level applicable to all employees generally.

(3)	In all cases except following a change in control there is no incremental option value above the value applicable to all employees with options. In the event of a change in control, the values listed reflect the value of unvested options that would vest in connection with such change in control.

A number of Company employee benefit and incentive plans provide for payment or vesting of benefits upon termination of employment of any participant, including the NEOs. If terminated on December 31, 2011, the NEOs would receive benefits and payments under these plans in addition to the amounts described in the table above. Messrs. Carbonari and Omtvedt terminated employment on December 31, 2011 and unless otherwise noted below received retirement treatment under the plans and programs below.

Annual Incentive Plan Awards. The following table shows the treatment of annual awards under the applicable annual incentive plan following a termination of employment, depending upon the reason for such termination.


REASON FOR TERMINATION

Termination by the Company	Voluntary Termination	Death, Disability or Retirement
Executive forfeits his annual bonus.	Executive forfeits his annual bonus.	Executive (or his estate) is paid his prorated annual bonus at the same time bonuses are paid to other executives of the Company.

LTIP Awards. The following table shows the treatment of LTIP awards following a termination of employment, depending upon the reason for such termination.


AWARD	REASON FOR TERMINATION
AWARD	Voluntary Termination	Death	Disability or Retirement
Stock Options	Vested options expire three months after the termination date, or, if sooner, on the regularly- scheduled expiration date.	Vested options granted after 2005 expire at the end of the three- year period following death or, if sooner, on the regularly-scheduled expiration date, provided that options may be exercised for at least one year following death even if this extends past the regularly-scheduled expiration date. Vested options granted before 2005 expire on the regularly-scheduled expiration date. Founders grant options vest in full upon death, and remain exercisable for three years following death or, if sooner, on the regularly-scheduled expiration date, provided that options may be exercised for at least one year following death even if this extends past the regularly-scheduled expiration date.	Vested options granted from September 2005 to September 2008 expire three years after employment terminates, or on the regularly- scheduled expiration date, if earlier. All other vested options expire in their regularly-scheduled expiration date, provided the executive has been employed for one year following grant (the one-year requirement does not apply to founders grants). Founders grant options vest in full at termination resulting from disability if the executive has been employed for a least six months from the date of grant; and unvested founders grants are forfeited in the event of retirement.


AWARD	REASON FOR TERMINATION
	Voluntary Termination	Death	Disability or Retirement
Cash Awards	Outstanding cash awards are forfeited.	Prorated based on actual performance.	Prorated based on actual performance.

The following chart explains the treatment of LTIP awards in the event of a change in control:


AWARD		TREATMENT UPON CHANGE IN CONTROL
Stock Options		All stock options; including founders grants, become fully vested.
RSUs		In the event of termination of employment by the Company without cause or by the executive for good reason following a change in control, all outstanding founders grant RSUs vest and are paid out on the date employment terminates; all other awards vest on a pro-rata basis.
Cash Awards		In the event of termination of employment by the Company without cause or by the executive for good reason following a change in control, awards are calculated at target and prorated; Mr. Shattock’s awards are calculated at maximum and prorated.

Retirement Benefits. Upon termination of employment, participants in the Company’s defined contribution plans (both tax-qualified and nonqualified) may receive a distribution of their account balances. The Nonqualified Deferred Compensation table on page 64 of this Proxy Statement lists each executive officer’s balance under the nonqualified defined contribution plan as of the last fiscal year end. The Company’s tax-qualified defined benefit plan and Supplemental Plan both provide pension benefits upon retirement (as defined in the plans). Messrs. Carbonari and Omtvedt were retirement-eligible under the Supplemental Plan and are entitled to receive nonqualified pension benefits in connection with their retirements. The Pension Benefits table on page 62 of this Proxy Statement and the narrative and footnotes that follow it provide additional detail on the amount and terms of these pension benefits.

Health and Related Benefits. In addition to the dollar values in the table above for health and related benefit continuation pursuant to severance and change in control agreements, the NEOs will receive health and related benefits pursuant to the Company’s benefit plans applicable to employees generally. In connection with their retirements, Messrs. Carbonari and Omtvedt will receive retiree medical coverage (until Medicare eligible). The retiree medical coverage program was closed to new hires in 1999 and, accordingly, Messrs. Shattock, Probst, Newlands, Baldock and Baladi are not eligible to receive retiree medical coverage.

Change in Control Agreements. In 2007, the Company entered into new agreements with Messrs. Carbonari and Omtvedt, to provide each of them with benefits if they are terminated following a change in control of the Company. These agreements replaced similar agreements that had been in place for many years. However, the new agreements incorporated changes due to new tax regulations governing deferred compensation. The new agreements also reflect modifications to certain provisions to make the agreements more favorable to the Company and shareholders.

Each agreement states that if, subsequent to a change in control, (1) the Company terminates the executive’s employment for a reason other than disability or cause, or (2) the executive decides to terminate his employment for good reason, the executive will receive:

(i)

2.99 times his base salary, 2.99 times the amount of his target annual incentive compensation award and 2.99 times the annual defined contribution plan allocation for the year prior to year in which the termination of employment occurs (and the supplemental profit sharing allocation under the Supplemental Plan);

(ii)

three additional years of service and earnings credit under our retirement plans and agreements; and

(iii)

three additional years of coverage under our life, health, accident, disability and other employee plans.

Payments under these agreements are generally made in a lump sum immediately following termination. For executives hired prior to 2008, if the special excise tax under Section 280G of the Internal Revenue Code applies, and the executive’s payments are required under the agreement to be reduced to a level that will not trigger the excise tax, the Company will restore amounts lost by the executive officer due to the excise tax. If payments to the executive due to a change in control do not exceed the threshold dollar amount that triggers the excise tax by more than a specified amount, payments to the executive are reduced in order to avoid application of the excise tax. The Company has not provided these benefits to individuals who have become executives since 2008. The Company has established a “rabbi” trust with a bank for the purpose of making payments under the agreements. This trust currently is not funded. Any amounts payable under these change in control agreements are reduced by amounts payable under the severance agreements referred to below.

Severance Agreements. In 2007, the Company entered into new agreements with Messrs. Carbonari and Omtvedt, to provide each of them with severance benefits without regard to a change in control if the Company terminates their employment for reasons other than disability or cause or if they terminate their employment for good reason. The

good reason and termination (other than for cause) triggers were chosen because they are standard triggers for severance benefits. Severance payments under the agreements provide compensation to the executives in exchange for non-compete and non-solicitation protections received by the Company. The severance agreements provide the same benefits as those described above for a termination of employment following a change in control except that the multiplier is three for Mr. Carbonari and two for Mr. Omtvedt. Subject to Section 409A of the Internal Revenue Code, all the agreements provide for severance payments to be paid in installments over a one-year period. All the agreements contain restrictions on soliciting Company employees, competing with the Company and revealing confidential information for a twelve-month period following termination of employment.

The amount of severance payments provided in the change in control and severance agreements reflect competitive benefits in the market for executive talent, based upon advice from the compensation consultant, other advisors and the experiences of Compensation Committee members.

Termination Agreements. In 2011, the Company entered into termination agreements with Messrs. Shattock, Probst, Newlands, Baldock and Baladi specifying certain compensation and benefits payable to the executives in the event of their termination of employment. Each agreement states that if (1) the Company terminates the executive’s employment for a reason other than disability or cause, or (2) the executive terminates his employment for good reason, the executive will receive:

(i)

1.5 times his base salary, 1.5 times the amount of his target annual incentive compensation award and 1.5 times the annual defined contribution plan allocation for the year prior to year in which the termination of employment occurs (and the supplemental profit sharing allocation under the Supplemental Plan) (Mr. Shattock’s multiplier is 2 rather than 1.5); and

(ii)

18 months of coverage under our life, health, accident, disability and other employee plans (24 months for Mr. Shattock).

If the executive’s employment is terminated involuntarily by the Company for reasons other than disability or without cause or by the executive for good reason within 24 months following a change in control, the multiplier in sub-paragraph (i) above is changed from 1.5 to 2 (from 2 to 3 for Mr. Shattock) and the period of benefits continuation coverage in sub-paragraph (ii) is changed from 18 months to 24 months (from 24 months to 36 months for Mr. Shattock). Payments under these agreements are generally in the form of regular installments commencing within 90 days following termination; provided, however, that if a termination occurs following a change in control, payments are in the form of a lump sum within 30 days following termination of employment. If payments to the executive due to a change in control do not exceed the threshold dollar amount that triggers the excise tax under Section 280G of the Internal Revenue Code by more than a specified amount, payments to the executive are reduced in order to avoid application of the excise tax.

Severance payments under the agreements provide compensation to the executives in exchange for the non-compete and non-solicitation protections received by the Company. All the agreements contain restrictions on soliciting Company employees, competing with the Company and revealing confidential information for a twelve-month period following termination of employment.

The amount of severance payments provided in the termination agreements reflects competitive benefits in the market for executive talent, based upon advice from the compensation consultant, other advisors and the experiences of Compensation Committee members.

Payments to Mr. Carbonari following termination of employment. In 2002, the Company extended a special retention arrangement to Mr. Carbonari. At the time, Mr. Carbonari was employed by one of the Company’s subsidiaries and had been identified through the succession planning process as an employee with a very high potential but that the Company was at risk of losing. The arrangement was intended to encourage Mr. Carbonari to stay with the Company and perform well until retirement. Under this arrangement, if Mr. Carbonari remained employed until his normal retirement age (or an early retirement date, if approved by the Compensation Committee), he would receive a single payment equal to three times his then base salary payable six-months following the time of retirement. The Compensation Committee approved the payment of Mr. Carbonari’s retention payment in 2011 and the promised retention amount, equal to $3,600,000. In addition to Mr. Carbonari’s retention payment, following his termination of employment, he became eligible for the payment of a success bonus in the amount of $1,200,000 for successful completion of the Spin-Off. He also became eligible for severance pay equal to $9,255,057, payable following his termination of employment. Pursuant to his severance arrangement, Mr. Carbonari received an enhancement to his Beam Supplemental Plan benefit equal to three additional years of pension accrual in the amount of $10,589,618, payable following his termination of employment. The retention payment, success bonus, severance pay and Beam Supplemental Plan payments will be made in 2012 with his other accrued Beam Supplemental Plan payments following Mr. Carbonari’s termination of employment, in some cases subject to the six-month delay imposed under Internal Revenue Code Section 409A.

Payments to Mr. Omtvedt following termination of employment. Following Mr. Omtvedt’s termination of employment, he became eligible for the payment of a success bonus in the amount of $668,000 for successful completion of the Spin-Off. He also became eligible for severance pay equal to $2,536,008, payable following his termination of employment. Pursuant to his severance arrangement, Mr. Omtvedt received an enhancement to his Beam Supplemental Plan benefit equal to two additional years of pension accrual in the amount of $755,926, payable following his termination of employment with his other accrued Beam Supplemental Plan payments. The success bonus, severance pay and Beam Supplemental Plan payments will be in 2012 following Mr. Omtvedt’s termination of employment, in some cases subject to the six-month delay imposed under Internal Revenue Code Section 409A. The Company also entered into a consulting arrangement with Mr. Omtvedt effective immediately following his termination of employment. The consulting arrangement provides for the payment of a fee of $500,000 to Mr. Omtvedt based on his provision of services on a part-time basis through December 31, 2012.

Split Dollar Life Insurance. Mr. Omtvedt would also be entitled to retain a split-dollar life insurance policy in order to provide a death benefit, but any insurance proceeds after death in excess of the death benefit will be returned to the Company.

EQUITY COMPENSATION PLAN INFORMATION


Plan Category	Number of securities to be issued upon exercise of outstanding options, warrants and rights(a)			Weighted- average exercise price of outstanding options, warrants and rights (b)		Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c)
Equity compensation plans approved by security holders		13,480,942	(1)	$	51.71		5,955,748	(2)
Equity compensation plans not approved by security holders		0			n/a		0
Total		13,480,942		$	51.71		5,955,748

(1)	As of December 31, 2011, the number of securities to be issued upon exercise of outstanding stock options was 12,439,977 and upon payment of outstanding RSUs were 1,040,965.

(2)	5,955,748 shares remain available for issuance under the Company’s 2011 Long-Term Incentive Plan, which allows for grants of stock options, performance stock awards, restricted stock awards and other stock-based awards.

Report of the Audit Committee

The Audit Committee of the Board is composed of three directors who are “independent” as defined under the New York Stock Exchange Listed Company Manual and Rule 10A-3 of the Exchange Act. The Audit Committee has a written charter that has been approved by the Board. A copy of the Audit Committee Charter is available on the Company’s website at http://investor.beamglobal.com under the tab “Corporate Governance – Committees of the Board.” The Audit Committee has appointed PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for 2012.

Management has the responsibility for the Compa