EXHIBIT 10.1

SUBSEQUENT AGREEMENT

          This Subsequent Agreement (this “Agreement”) by and between UST Inc.,
a Delaware corporation (the “Company”), and Richard H. Verheij (the
“Executive”), is entered into effective as of January 10, 2005 (the “Effective
Date”).

          WHEREAS, the Executive has been employed by the Company as its
Executive Vice President and General Counsel; and

          WHEREAS, the Executive and the Company are parties to an Employment
Agreement entered into as of December 14, 2000 (the “Employment Agreement”); and

          WHEREAS, pursuant to Section 8(e) of the Employment Agreement, the
Executive’s employment with the Company has terminated, effective as of the
Effective Date, in a “Termination by Mutual Consent”; and

          WHEREAS, as contemplated by, among other things, said Section 8(e),
the parties wish to enter into this Agreement and to set forth their mutual
agreement as to the rights and obligations of the parties in connection with the
Executive’s termination of employment with the Company; and

          WHEREAS, pursuant to said Section 8(e), the Executive agrees and
covenants to separately execute the general release the “Release”) annexed
hereto as Appendix A;

          NOW, THEREFORE, the Company and the Executive hereby agree as follows:

          1. Capitalized Terms.

          Unless otherwise defined herein, capitalized terms used herein shall
have the meanings ascribed to such terms in the Employment Agreement.

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          2. Termination By Mutual Consent.

          (a) The parties acknowledge that the Executive’s employment with the
Company terminated as of the Effective Date and that such termination of
employment shall constitute a “Termination by Mutual Consent” within the meaning
of Section 8(e) of the Employment Agreement. Accordingly, the parties
acknowledge and agree that (i) the dispute resolution procedures set forth in
Section 17 of the Employment Agreement shall be inapplicable; (ii) no
compensation shall be payable to the Executive in connection with such
termination of employment, except as set forth in this Agreement; (iii) the
Executive shall have no right to receive any payments under the ICP in respect
of the 2004 fiscal year; and (iv) the Executive shall have no right to
reimbursement for legal fees contemplated by § 9(d)(v) of the Employment
Agreement.

          (b) In consideration of the benefits to be provided hereunder, the
Executive agrees and covenants not to seek any recovery against the Company or
its officers, directors, employees, agents or representatives for any cause or
reason related to or arising from his employment with the Company or the
termination thereof pursuant to Section 8(e) of the Employment Agreement
(including, without limitation, seeking any recovery against the Company or its
officers, directors, employees agents or representatives in any forum, including
without limitation any court, administrative agency or otherwise), other than a
failure or refusal of the Company to pay the Executive the benefits to be
provided pursuant to this Agreement and the benefits to which he is entitled
subsequent to the Effective Date pursuant to the terms of one or more of the
Company’s employee benefit plans.

          3. Employment Agreement.

          Effective as of the Effective Date, the Employment Agreement shall
terminate and shall thereafter be of no force and effect, except that
Sections 7, 11 and 13 (as well as Annex I) of the Employment Agreement (which
are incorporated herein by reference) shall survive such termination and shall
remain in full force and effect in accordance with their terms. Executive
acknowledges that said sections shall be construed under and governed by the
laws of the State of Connecticut in accordance with the governing law provisions
set forth in Paragraph 13, below.

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          4. Compensation and Benefits.

          Subject to the Executive’s compliance with the provisions of this
Agreement, including those incorporated herein by reference, and provided the
Executive executes the Release set forth in Appendix A hereto and does not
revoke the Release within the time provided therein for such revocation, then
the Executive shall be entitled to receive from the Company the payments and
benefits set forth in Section 9(d)(i)-(iv) of the Employment Agreement. The
specific dollar amount and/or in-kind benefits to which the Executive is
entitled pursuant to Section 9(d)(i)-(iv) of the Employment Agreement are set
forth in Appendix B hereto.

          5. Mutual Nondisparagement.

          (a) The Executive shall not make, participate in the making of, or
encourage any other person to make any statements, written or oral, which
criticize, disparage or defame the goodwill or reputation of the Company, any of
its subsidiaries or affiliates or any of their respective past or present
directors, officers, executives or employees.

          (b) The Company shall instruct its directors and officers and the
directors and officers of its subsidiaries and affiliates not to make,
participate in the making of, or encourage any other person to make any
statements which disparage or defame the reputation of the Executive.

          (c) Notwithstanding the foregoing, nothing in this Section 5 shall
prohibit any person from making truthful statements when required by order of a
court or other body having jurisdiction, or as otherwise may be required by law
or legal process.

          6. Cooperation.

          The Executive further agrees that he shall not voluntarily testify in
any proceeding before any court, tribunal, administrative agency or panel
regarding anything having to do with the Company. Moreover, in the event that
the Executive is subpoenaed to provide such testimony, he will immediately
notify a managerial representative of either the Company’s Legal Department or
its Chief Executive Officer of the issuance of such subpoena. The Executive
further agrees that he will cooperate with the Company in all respects in
connection with any and all litigation or proceedings commenced in which the
Executive is involved by virtue of his prior employment with the Company; any
transaction or matter that involved or involves or may involve facts or
circumstances with which the Executive was involved or acquainted as a director,
officer, employee or advisor of the Company or any of its affiliates; or as to
which the Executive has or could reasonably be expected to have knowledge.

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          7. Non-Competition.

          In order to further ensure that the Company and the Executive receive
the benefit of this Agreement, and in consideration of the benefits provided
hereunder, which benefits (including the Company’s agreement to deem the
Executive as having satisfied certain prerequisites for purposes of certain of
such benefits) Executive acknowledges he would not be entitled to receive but
for the Company’s grant of the same in consideration of the following covenant
not to compete, the Executive hereby covenants and agrees that, effective as of
the Effective Date, and for a period of five (5) years thereafter, he:

(i) shall not either directly or indirectly engage or participate in any
business or industry which is then in direct or indirect competition with the
principal business of the Company wherever located in the world; and

(ii) shall not knowingly solicit, request, advise or induce any agent, client,
supplier or other business contact of the Company to cancel, curtail or
otherwise adversely change its relationship with the Company.

     For purposes of this covenant not to compete, the phrase “directly or
indirectly engage or participate in” shall include: (a) being employed by,
associated with, providing professional services for or consulting with or on
behalf of any company, corporation, joint venture, limited liability company,
business, sole proprietorship, partnership, association, organization or
individual(s) (hereinafter “Competitors”), directly or indirectly involved,
conducting business or operating in the tobacco industry, smokeless or
otherwise; and, (b) any direct or indirect ownership, holding, acquisition or
profit participation interest in any Competitors, whether as an owner,
stockholder, partner, joint venturer or otherwise.

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          The Executive acknowledges and agrees that the duration and scope
provisions of this covenant are drafted expressly in acknowledgement of the
nature, type, and geographical scope of the business of the Company, and in
recognition of the Executive’s prior status, title, responsibilities and high
level of access to a variety of proprietary and otherwise highly classified,
confidential and sensitive information of the Company, and of its operations,
processes, financial status, officers, directors, employees, contractors,
methods of doing business, strategies, business plans and the like. The
Executive further acknowledges that the provisions relating to the covenant not
to compete shall be construed under and governed by the laws of the State of
Connecticut in accordance with the governing law provisions set forth in
Paragraph 13, below. In the event that any of the provisions relating to the
Executive’s covenant not to compete are deemed invalid or otherwise
unenforceable as drafted by a court of competent jurisdiction, the Executive
acknowledges that such court of competent jurisdiction shall have the right to
revise, modify or otherwise “blue pencil” such provisions to the minimum extent
necessary to ensure their validity and enforceability and to sufficiently
protect the interests of the Company. The Executive further acknowledges that
the non-compete provisions contained in this paragraph supersede and replace
those non-competition provisions contained in the Employment Agreement.

          8. Indemnification.

          The Company acknowledges and agrees that it shall extend the Executive
the same indemnification arrangements as are generally provided to other
similarly situated Company officers to the extent authorized by applicable law
and in accordance with Article VIII of the Company’s By-Laws.

          9. Breach by the Executive.

          The Executive acknowledges that in the event of a material breach of
any term of this Agreement, the Company shall be entitled to any and all relief
available, including but not limited to the right to reimbursement for any of
the consideration paid to the Executive under the terms of this Agreement, with
the exception of the first of the 78 bi-weekly payments contemplated by section
9(d)(ii) as outlined in Appendix B hereto, said payment being deemed sufficient
consideration for the Executive’s execution of the Release; the right to cease
any further payments or benefits otherwise due under the terms of this
Agreement; injunctive relief; attorney fees; and reimbursement for all costs
expended by the Company in securing such relief.

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          10. Taxes.

          Notwithstanding any other provision of this Agreement, the Company may
withhold from any amounts payable under this Agreement, or any other benefits
received pursuant hereto, any amounts required or authorized to be withheld
under any applicable law or regulation including any federal, state and/or local
taxes. Furthermore, the parties intend that all payments made pursuant to this
Agreement including the SOP benefit described in Appendix B hereof shall comply
in all respects with 409A of the Internal Revenue Code of 1986 as amended,
including Notice 2005-1 and any subsequent guidance issued under said section.
The parties agree to work together to effectuate the intent of this provision,
including but not limited to revising the timing and/or form of payment
hereunder, as may be necessary to ensure the terms and conditions applicable to
such payments comply with Section 409A.

          11. Counterparts.

          This Agreement may be executed in one or more counterparts, including
by facsimile, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.

          12. Entire Agreement.

          This Agreement represents the entire agreement between the parties
with respect to the subject hereof and supersedes all prior discussions,
representations, arrangements and agreements with respect to the subject matter
hereof.

          13. Governing Law.

          This Agreement shall be governed by, and construed in accordance with,
the laws of the State of Connecticut, without reference to principles of
conflict of laws.

          14. Severability Clause.

          In the event that any provision of this Agreement is held to be void
or unenforceable by a court of competent jurisdiction: (i) such provisions shall
be modified to the minimum extent necessary to cure such defect and make such
provisions valid and enforceable; (ii) the remaining provisions of this
Agreement will nevertheless be binding upon the parties and not in any way
affected or impaired; and (iii) under no circumstances shall the Executive be
entitled to any additional monies, benefits and/or compensation as a result.

Executive’s Initials: /s/ RHV

 

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          15. No Waiver.

          The Executive acknowledges and agrees that the Company’s failure or
decision not to take action on account of any breach or default by him of any
term of this Agreement shall not be deemed or construed as a waiver by the
Company of its right to take action for a subsequent breach or default by him,
even if such breach or default is similar to the prior breach or default for
which the Company did not take action.

          16. Joint Drafting of Agreement.

          The Executive acknowledges that each party has cooperated in the
drafting and preparation of this Agreement. Hence, in any construction or
interpretation of this Agreement, the same shall not be construed against any
party on the basis that the party was the drafter.

          IN WITNESS WHEREOF, each of the parties hereto has duly executed this
Agreement as of the date first set forth above.

              UST Inc.

  By:
Name:   /s/ Vincent A. Gierer, Jr.

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Vincent A. Gierer, Jr.

  Title:   Chairman and Chief Executive Officer
 
       
 
            /s/ Richard Verheij

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Richard H. Verheij

Executive’s Initials: /s/ RHV

 

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APPENDIX A

RELEASE AGREEMENT

          THIS RELEASE, entered into this 8th day of February, 2005, by Richard
H. Verheij residing at 76 Hollow Tree Ridge Road, Darien, Connecticut 06820
(hereinafter referred to as the “Executive”).

          WHEREAS, the Executive and UST Inc., a corporation existing under the
laws of the State of Delaware and having its principal offices in Greenwich,
Connecticut (hereinafter referred to as “UST”), entered into an employment
agreement (the “Employment Agreement”) dated as of December 14, 2000, pursuant
to Section 8(e)(ii) of which the Executive agreed and covenanted, upon a
Termination by Mutual Consent (as defined in the Employment Agreement), to
execute a general release of any and all claims he may have or may believe he
has against UST and/or its officers, directors, employees, agents and
representatives; and

          WHEREAS, the employment of the Executive was terminated as of
January 10, 2005, in a Termination by Mutual Consent; and

          WHEREAS, as contemplated by Section 8(e) of the Employment Agreement,
the Executive and the Company are contemporaneously herewith entering into a
Subsequent Agreement (as defined in Section 9(d) of the Employment Agreement);

          NOW, THEREFORE, in consideration of the benefits to be provided to the
Executive pursuant to the Subsequent Agreement, it is agreed as follows:

          1. The Executive voluntarily, knowingly and willingly releases and
forever discharges UST, its parents, subsidiaries and affiliates, together with
their respective employees, officers, directors, partners, shareholders,
executives and agents, and each of their predecessors, successors and assigns
(collectively, the “Releasees”), from any and all charges, complaints, claims,
promises, agreements, controversies, causes of action and demands of any nature
whatsoever which against them the Executive or his executors, administrators,
successors or assigns ever had, now have or hereafter can, shall or may have by
reason of any matter, cause or thing whatsoever arising prior to the time the
Executive signs this Release.

Executive’s Initials: /s/ RHV

 

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          2. The release being provided by the Executive in this Release
includes, but is not limited to, any rights or claims relating in any way to the
Executive’s employment relationship with UST, or the termination thereof, or
under any statute, including the federal Age Discrimination in Employment Act,
Title VII of the Civil Rights Act, the Americans with Disabilities Act or any
other federal, state or local laws or judicial decision, except that the
foregoing shall not preclude the Executive from pursuing his rights pursuant to
Section 2(b) of the Subsequent Agreement nor shall it release any of the
Releasees from any obligations under the Subsequent Agreement including any
appendices thereto.

          3. By signing this Release, the Executive represents that he has not
and will not in the future commence any action or proceeding arising out of the
matters released hereby, and that he will not seek or be entitled to any award
of legal or equitable relief in any action or proceeding that may be commenced
on his behalf.

          4. The Executive acknowledges that UST has hereby advised him of his
right to consult with an attorney of his choosing prior to signing this Release
and has encouraged him to do so. The Executive represents that he has had the
opportunity to review this Release and, specifically, the release in paragraph
1, with an attorney of his choice. The Executive also agrees that he has entered
into this Release freely and voluntarily.

          5. The Executive acknowledges that he has been given at least
twenty-one (21) days to consider the terms of this Release. Furthermore, once he
has signed this Release, the Executive shall have seven (7) additional days from
the date of signing this Release to revoke his consent hereto. The Release will
not become effective until seven (7) days after the date the Executive has
signed it, which will be the effective date of this Release.

          IN WITNESS WHEREOF, the Executive has executed this Release Agreement
as of the date set forth above.

     

  /s/ Richard Verheij

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Richard H. Verheij
/s/ Delores Portanova

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WITNESS
   

Executive’s Initials: /s/ RHV

 

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APPENDIX B

COMPENSATION AND BENEFITS

     Pursuant to Section 9(d)(ii) of the Employment Agreement, set forth below
is each and every specific dollar amount and specific in kind benefit due under
the Employment Agreement and Company employee benefit plan (other than
tax-qualified employee benefit plans). Section references made herein are to the
applicable Sections of the Employment Agreement.

  •   Section 9(d)(i): $2,211.54 in respect of unpaid salary through January 10,
2005, will be paid on January 21, 2005.     •   Section 9(d)(ii): an aggregate
of $4,254,537.00 (3 times the sum of annual salary ($575,000.00) plus ICP
payable for 2003 ($843,179.00)), such amount to be payable in 78 biweekly
payments of $54,545.35, commencing on July 22, 2005.     •   Section 9(d)(iii):
the following benefit coverages shall remain in full force and effect through
January 9, 2008, under the same terms and conditions applicable to all active
employees, including any applicable employee contributions required toward such
benefit coverages:

  •   Life Insurance based on $1,500,000.00 in coverage     •   Survivor Income
based on a base salary of $575,000.00 (benefit is 25% of base salary payable as
a 10 year certain annuity)     •   Long-Term Disability based on $383,333.33 in
coverage (66 2/3% base salary)     •   Medical, Dental and Vision (Employee only
coverage)

     Benefits provided to the Executive pursuant to Section 9(d)(iii) are
subject to the same terms and conditions as enumerated in the Company’s
applicable benefit plans or programs as such may be amended from time to time;
provided, however, that because the Executive’s participation in such plans and
programs is barred, all of the benefits described above will be maintained in
force under separate arrangements, except as may otherwise be provided herein.
With respect to the Executive’s medical,

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dental and vision benefits referenced above, the first eighteen (18) months of
such benefits coverage will be provided to the Executive under the Consolidated
Omnibus Budget Reconciliation Act (“COBRA”). Executive must elect COBRA coverage
on forms to be provided by the Company. During this eighteen (18) month COBRA
period, the Executive will be required to continue paying the employee
contributions required toward such benefit coverages under the same terms and
conditions applicable to all active employees; the Company will pay the
remaining cost of providing such COBRA coverage. At the expiration of this
eighteen (18) month COBRA period, the Executive’s remaining eighteen (18) months
of medical, dental and vision benefits will be provided to the Executive under
separate arrangements; Executive will continue to be required to pay the
employee contributions required toward such benefit coverages under the same
terms and conditions applicable to active employees.

All of the benefit coverages described herein shall be reduced to the extent
comparable benefits are actually received by or made available to the Executive
without cost during the Continuation Period (and any such benefits actually
received by or made available to the Executive shall be reported to the Company
by the Executive as soon as practicable after they become effective). Moreover,
the Executive shall be responsible for any and all federal, state and local
taxes due with respect to the benefits described above, including but not
limited to any taxes due as a result of the Executive being subject to imputed
income on any portion of coverage paid for by the Company.

  •   Section 9(d)(iv): the Executive shall be deemed to be a participant in the
Company’s Officers’ Supplemental Retirement Plan (“SOP”). The Executive shall
accrue additional benefits under the SOP and other supplemental retirement
income plans or arrangements of the Company during the Continuation Period based
on an annual salary of $575,000.00 and an ICP of $843,179.00. The Executive
shall be entitled to the following annual SOP benefit (expressed as a single
life annuity) commencing as soon as practicable following payment of the 78th
and final biweekly payment provided for herein: $376,528.64.

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As soon as practicable following the Executive’s attainment of age 55, the
above-described annual SOP benefit shall be reduced in accordance with the terms
of the SOP and the Executive shall be entitled to the following annual benefit
with respect to the SOP, UST Inc. Benefit Restoration Plan and UST Inc. Excess
Retirement Benefit Plan (each expressed as a single life annuity payable at age
55):

SOP: $187,794.96 Benefit Restoration Plan: $143,621.40 Excess Retirement Benefit
Plan: No benefit due because the Executive’s qualified retirement plan benefits
do not exceed Internal Revenue Code Section 415 limits.

Any benefits due to the Executive under the SOP or any other supplemental
retirement income plan or arrangement shall be paid monthly and in accordance
with the terms of such plans or arrangements (including any offset for payments
under qualified plans) at the time and in the form permitted under such plans or
arrangements, as may be amended from time to time.

Executive’s Initials: /s/ RHV