Exhibit 10.5

[DATE]

Daniel W. Butler
U.S. Smokeless Tobacco Company
100 West Putnam Avenue
Greenwich, CT  06830

Dear Dan:

 U.S. Smokeless Tobacco Company (the “Company”), a wholly owned subsidiary of
UST Inc. (“UST”), is pleased to provide you with this letter agreement (the
"Agreement").  The Board of Directors of UST (the "Board of Directors" or the
"Board") considers it essential to the best interests of the Company and the
interests of UST's stockholders to foster the continuous employment of key
management personnel.  In addition, the Board recognizes that, as is the case
with many publicly held corporations, the possibility of a change in control of
UST may exist, and that the uncertainty and questions which may arise among
Company management as a result of the foregoing may cause the departure or
distraction of Company management personnel to the detriment of the Company and
of UST and its stockholders.
 
In order to induce you to remain in the employ of the Company, the Company and
UST agree that you shall receive the severance benefits set forth in this
Agreement in the event your employment with the Company is terminated under the
circumstances described below either prior to or subsequent to a "Change in
Control"  (as defined in Section 2).
 
You have an existing agreement with the Company and UST (“Existing Agreement”),
dated June 23, 2006 (the “Original Effective Date”), regarding the payment of
severance benefits to you. This Agreement amends and restates your Existing
Agreement, effective December 16, 2008, in order to evidence formal compliance
with section 409A of the Internal Revenue Code of 1986, as amended, and the
guidance thereunder (the “Code”).

1.
Term of Agreement.  This Agreement shall commence on the Original Effective Date
and end on the third anniversary of such date; provided, however, that if a
Change in Control, as defined in Section 2, shall have occurred during the term
of this Agreement, this Agreement shall continue in effect for a period of not
less than twenty-four (24) months beyond the month in which such Change in
Control occurred.  Prior to a Change in Control, in no event shall the term of
this Agreement extend beyond the date on which you cease to be an officer of the
Company, UST, or a subsidiary thereof, whether or not you continue to be an
employee of the Company, UST, or a subsidiary thereof; provided, however, if

 
 

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you cease to be an officer of the Company, UST or any subsidiary thereof for
Good Reason as defined herein, this Agreement shall continue in effect for a
period of not less than thirty (30) days.  You acknowledge and agree that the
non-renewal of the term of this Agreement shall not be considered a termination
of employment hereunder for any purpose, including entitlement to severance
payments or any other benefits provided for herein.
   
2.
Change in Control.  For purposes of this Agreement, a “Change in Control” shall
be a change in control of UST and shall be deemed to have occurred if:

 
(A) any "person" (as such term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act")), other than
(1) UST or any of its subsidiaries, (2) any "person" who on the date hereof is a
director or officer of UST, (3) any trustee or other fiduciary holding
securities under an employee benefit plan of UST, (4) an underwriter temporarily
holding securities pursuant to an offering of such securities, or (5) any
corporation owned, directly or indirectly, by the stockholders of UST in
substantially the same proportions as their ownership of stock of UST (a
"Person"), is or becomes the "beneficial owner" (as defined in Rule 13d-3 under
the Exchange Act (a "Beneficial Owner")), directly or indirectly, of securities
of UST (not including in the securities beneficially owned by such Person any
securities acquired directly from UST or its affiliates) representing 20% or
more of the combined  voting power of UST's then outstanding securities,
excluding any Person who becomes such a Beneficial Owner in connection with a
transaction described in clause (C)(1) below; or
 
(B) the following individuals cease for any reason to constitute a majority of
the number of directors of UST then serving: individuals who, on the date
hereof, constitute the Board and any new director (other than a director whose
initial assumption of office is in connection with an actual or threatened
election contest, including but not limited to a consent solicitation, relating
to the election of directors of UST) whose appointment or election by the Board
or nomination for election by UST's stockholders was approved or recommended by
a vote of at least two-thirds (2/3) of the directors then still in office who
either were directors on the date hereof or whose appointment, election or
nomination for election was previously so approved or recommended; or
 
(C) there is consummated a merger or consolidation of UST or any direct or
indirect subsidiary of UST with any other corporation, other than (1) a merger
or consolidation which would result in the voting securities of UST outstanding
immediately prior to such merger or consolidation continuing to represent
(either by remaining outstanding or by being converted into voting securities of
the surviving entity or any parent thereof), in combination with the ownership
of any trustee or other fiduciary holding securities under an employee benefit
plan of UST or any subsidiary of UST, more than 50% of the combined voting power
of the securities of UST or such surviving entity or any parent thereof
outstanding immediately after such merger or consolidation, or (2) a merger or
consolidation
 
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effected to implement a recapitalization of UST (or similar transaction) in
which no Person is or becomes the Beneficial Owner, directly or indirectly, of
securities of UST (not including in the securities Beneficially Owned by such
Person any securities acquired directly from UST or its subsidiaries)
representing 20% or more of the combined voting power of UST's then outstanding
securities; or
 
(D) the stockholders of UST approve a plan of complete liquidation or
dissolution of UST or there is consummated an agreement for the sale or
disposition by UST of all or substantially all of UST's assets, other than a
sale or disposition by UST of all or substantially all of UST's assets to an
entity, more than 50% of the combined voting power of the voting securities of
which are owned by stockholders of UST in substantially the same proportions as
their ownership of UST immediately prior to such sale.
 
3.
Termination of Employment.

 
 
(a)
General.  You shall be entitled to the benefits provided in Section 4 upon the
termination of your employment during the term of this Agreement prior to a
Change in Control.  If any of the events described in Section 2 constituting a
Change in Control shall have occurred, you shall be entitled to the benefits
provided in Section 5 upon the coincident or subsequent termination of your
employment during the term of this Agreement or, as provided in Section 5, upon
the Change in Control.  In the event your employment with the Company is
terminated for any reason prior to a Change in Control and subsequently a Change
in Control shall have occurred, you shall not be entitled to the benefits
provided in Section 5, unless such termination occurs within thirty (30) days
prior to a Change in Control and such termination is by you for Good Reason or
the Company without Cause in anticipation or contemplation of such Change in
Control.

 
 
(b)
Disability.  The Company will terminate your employment at the conclusion of a
twelve (12) month period during which you continuously have a General Disability
(as defined below), a 409A Disability (as defined below) or both.  In
determining whether a disability is continuous for this purpose, a temporary
return to work shall be disregarded (I) in the case of a General Disability, if
it would be disregarded under the Company’s long-term disability plan for
salaried employees, and (II) in the case of a 409A Disability, if it would be
disregarded under the Company’s long-term disability plan for salaried employees
and it may be disregarded under Treasury Regulation §1.409A-3(i)(4).

 
 
(i)
You will be deemed to have a “General Disability” if, as a result of your
incapacity due to physical or mental illness, you shall have been absent from
the full-time performance of your duties with the Company for six (6)
consecutive months, and within thirty (30) days after written notice of
termination is given you shall not have returned to the full time performance of
your duties.

 
 
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(ii)
You will be deemed to have a “409A Disability” if (A) you are unable to engage
in any substantial gainful activity by reason of any medically determinable
physical or mental impairment that can be expected to result in death or can be
expected to last for a continuous period of not less than 12 months, (B) you
are, by reason of any medically determinable physical or mental impairment that
can be expected to result in death or can be expected to last for a continuous
period of not less than 12 months, receiving income replacement benefits for a
period of not less than three (3) months under an accident and health plan
covering Company employees; or (C) you are determined to be totally disabled by
the Social Security Administration.

 
 
(c)
Cause. The Company may terminate your employment hereunder for Cause.  For
purposes of this Agreement, "Cause" shall mean (i) the willful and continuous
failure by you to substantially perform your duties hereunder (other than any
such failure resulting from your incapacity due to physical or mental illness),
which failure is not cured within thirty (30) business days after demand for
substantial performance is delivered by the Company that specifically identifies
the manner in which the Company believes you have willfully and continuously not
substantially performed your duties; (ii) the willful engaging by you in
misconduct which is materially injurious to the Company, monetarily or otherwise
(including, but not limited to, your violation of the Company's Code of
Corporate Responsibility); or (iii) the commission of an act or omission that
constitutes a material breach of this Agreement (including, but not limited to,
the violation of your obligations under Sections 6, 7 or 8 hereof).  For
purposes of this subsection, no act, or failure to act, on your part shall be
considered "willful" unless done, or omitted to be done, by you not in good
faith and without reasonable belief that your action or omission was legal,
compliant with the Company’s Code of Corporate Responsibility and in the best
interest of the Company.

 
 
(d)
Good Reason.  You shall be entitled to terminate your employment for Good
Reason.  For purposes of this Agreement, “Good Reason” shall mean, without your
express written consent, (1) the occurrence prior to a Change in Control of any
of the circumstances set forth in paragraphs (i) through (iv) below and (2) the
occurrence on a Change in Control, in contemplation or anticipation of a Change
in Control provided such termination occurs within thirty (30) days prior to the
Change in Control, or following a Change in Control of any of the circumstances
set forth in paragraphs (A) through (H) below, unless, in any case, such
circumstances are fully corrected prior to the Date of Termination specified in
Notice of Termination, as defined in Sections 3(f) and 3(g), respectively, given
in respect thereof.

 
 
 
Good Reason Prior to a Change in Control.

 
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(i)
A diminution in title or status as an officer;

 
 
(ii)
Other than a Company-wide reduction, a reduction in your total target
compensation as in effect on the date hereof or as the same may be increased
from time to time; provided, however, in no event shall a reduction in your
actual bonus under UST’s Incentive Compensation Plan that is based on
performance against pre-established criteria be considered a reduction in your
target bonus;

 
 
(iii)
The relocation (except for required travel on the Company’s business to an
extent reasonably consistent with either your present business travel
obligations or changes in the Company’s business) of your principal place of
employment to a location more than fifty (50) miles from the Company’s principal
executive offices in Greenwich, Connecticut or any other metropolitan area to
which the Company’s principal executive offices are relocated, it being
understood that a relocation of the Company’s principal executive offices that
applies to all or substantially all personnel and not to you alone shall not
constitute Good Reason hereunder; or

 
 
(iv)
Any purported termination of your employment which is not effected pursuant to a
Notice of Termination satisfying the requirements of Subsection (f) hereof (and,
if applicable, the requirements of Subsection (c) hereof); for purposes of this
Agreement, no such purported termination shall be effective.  Your right to
terminate your employment pursuant to this Subsection (d) shall not be affected
by your incapacity due to physical or mental illness.  Your continued employment
shall not constitute consent to, or a waiver of rights with respect to, any
circumstance constituting Good Reason hereunder; provided that the Company’s
reassignment of your duties and responsibilities during a period of your
incapacity due to physical or mental illness shall not under any circumstance
constitute Good Reason hereunder.

 
Good Reason on or Following a Change in Control.
 
 
(A)
The assignment to you of any duties inconsistent with the position in the
Company that you held immediately prior to the Change in Control, or a
significant adverse alteration in the nature or status of your responsibilities,
including your reporting responsibilities, from those in effect immediately
prior to such change; provided, however, that no such alteration in your
reporting responsibilities alone shall be considered Good Reason hereunder prior
to the date which is six (6) months following the date of the Change in Control;

 
 
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(B)
A reduction by the Company in your annual base salary or target bonus as in
effect on the date hereof or as the same may be increased from time to time;
provided, however, in no event shall a reduction in your actual bonus under
UST’s Incentive Compensation Plan that is based on performance against
pre-established criteria be considered a reduction in your target bonus;

 
 
(C)
The relocation of your principal place of employment to a location more than
fifty (50) miles from the Greenwich, Connecticut metropolitan area (or, if
different, the metropolitan area in which the Company’s principal executive
offices are located immediately prior to the Change in Control) except for
required travel on the Company’s business to an extent substantially consistent
with your present business travel obligations;

 
 
(D)
The failure by the Company to pay to you any portion of your current
compensation except pursuant to an across-the-board compensation deferral
similarly affecting all officers of the Company and all officers of any person
whose actions resulted in a Change in Control or any person affiliated with the
Company or such person, or to pay to you any portion of an installment of
deferred compensation under any deferred compensation program of the Company,
within seven (7) days of the date such compensation is due;

 
 
(E)
The failure by the Company or UST to continue in effect any compensation plan in
which you participate immediately prior to the Change in Control which is
material to your total compensation, including but not limited to the UST Inc.
Retirement Income Plan for Salaried Employees, UST Inc. Employees’ Savings Plan,
UST Inc. Officers’ Supplemental Retirement Plan, UST Inc. Incentive Compensation
Plan and the 2005 UST Inc. Long-Term Incentive Plan, or any substitute plans
adopted prior to the Change in Control, unless an equitable arrangement
(embodied in an ongoing substitute or alternative plan) has been made with
respect to such plan, or the failure by the Company to continue your
participation therein (or in a substitute or alternative plan) on a basis not
materially less favorable, both in terms of the amount of benefits provided and
the level of your participation relative to other participants, as existed at
the time of the Change in Control;

 
 
(F)
The failure by the Company to continue to provide you with benefits
substantially similar to those enjoyed by you under any of the  life insurance,
medical, health and accident, or disability plans in which you are participating
at the time of the Change in Control, the taking of any action by the Company or
UST which would

 
 
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    directly or indirectly materially reduce any of such benefits or deprive you
of any material fringe benefit enjoyed by you at the time of the Change in
Control, or the failure by the Company to provide you with the number of paid
vacation days to which you are entitled on the basis of years of service with
the Company in accordance with the Company’s normal vacation policy in effect at
the time of the Change in Control;      
 
(G)
The failure of the Company to obtain a satisfactory agreement from any successor
to assume and agree to perform this Agreement, as contemplated in Section 9
hereof; or

 
 
(H)
Any purported termination of your employment which is not effected pursuant to a
Notice of Termination satisfying the requirements of Subsection (f) hereof (and,
if applicable, the requirements of Subsection (c) hereof); for purposes of this
Agreement, no such purported termination shall be effective.  Your right to
terminate your employment pursuant to this Subsection (d) shall not be affected
by your incapacity due to physical or mental illness.  Your continued employment
shall not constitute consent to, or a waiver of rights with respect to, any
circumstance constituting Good Reason hereunder.

 
 
(e)
Employment by Affiliates.  For purposes of this Agreement, in no event shall a
termination of your employment with the Company be deemed to occur as a result
of your transfer to, or employment by, UST or any of its affiliates during the
term of this Agreement.

 
 
(f)
Notice of Termination.  Any purported termination of your employment by the
Company or by you shall be communicated by written "Notice of Termination" to
the other party hereto in accordance with this Section 3(f).  "Notice of
Termination" shall mean a notice which shall indicate the specific termination
provision in this Agreement relied upon and shall set forth in reasonable detail
the facts and circumstances claimed to provide a basis for termination of your
employment under the provision so indicated.

 
 
(g)
Date of Termination; Severance Start Date

 
 
(i)
"Date of Termination" shall mean (A) if your employment is terminated for
General Disability or 409A Disability, thirty (30) days after Notice of
Termination is given (but not before the end of the twelve (12) month period
specified in Subsection (b) above, and not if you have returned to the full-time
performance of your duties for a period that breaks the period of continuous
disability in accordance with Subsection (b) above), and (B) if your employment
is terminated pursuant to Subsection (c) or (d) hereof

 
 
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    or for any other reason (other than General Disability or 409A Disability),
the date specified in the Notice of Termination (which, in the case of a
termination pursuant to Subsection (c) hereof shall not be less than thirty (30)
days, unless a shorter time is provided by the Company prior to the occurrence
of a Change in Control, and in the case of a termination pursuant to Subsection
(d) hereof shall not be less than fifteen (15) nor more than sixty (60) days,
respectively, from the date such Notice of Termination is
given).  Notwithstanding the foregoing, following the occurrence of a Change in
Control, if you reasonably believe in good faith the Company is not providing
you with a benefit or payment to which you are entitled under the terms of this
Agreement, you may notify the Company, within forty-five (45) days after the
Date of Termination or, if any such payment or benefit is due after such 45-day
period, within 45 days following such payment date, that a dispute exists
concerning the termination and/or the amount of such payment or benefit.  In
this event, the Company shall act within fifteen (15) days to restore fully the
disputed benefits and payments (so that all benefits and payments are provided
as of such date as would have been provided had there been no delay in providing
such benefits and payments) and to continue to provide such benefits and
payments as contemplated by this Agreement thereafter (provided, however, that
in all events any payment or benefit shall not be paid or provided to you before
the payment date set forth in this Agreement or any applicable document), but
subject to termination and recapture from you of these disputed benefits and
payments in accordance with the terms of a mutual written agreement of the
parties, a binding arbitration award, or a final judgment, order or decree of a
court of competent jurisdiction (which is not appealable or with respect to
which the time for appeal therefrom has expired and no appeal has been
perfected).      
 
(ii)
“Severance Start Date” shall mean the date on which you incur a “separation from
service” under section 409A(a)(2)(A)(i) of the Code.

 
 
(h)
Release/Resignations.  As a condition and in consideration of the benefits
provided under Section 4(c) and Section 5 of this Agreement, you agree and
covenant (i) to execute a general release, in the form attached hereto as Annex
I (the "Release"), of any and all claims you may have or may believe you have
against  UST and/or its affiliates and their officers, directors, employees,
agents  or representatives and any of their successors and/or assigns; (ii) not
to seek any recovery against UST and/or its affiliates and their officers,
directors, employees, agents or representatives and any of their successors
and/or assigns for any cause or reason related to or arising from your
employment with the Company, UST or any of their affiliates or the termination
thereof, other than a failure or refusal of

 
 
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the Company to pay you (x) the benefits described in Section 4(c) of Section 5
hereof, and (y) the benefits to which you are entitled subsequent to your
termination of employment pursuant to the terms of one or more of the employee
benefit plans maintained by the Company or UST; and (iii) to cooperate fully
with the Company, UST and their affiliates concerning reasonable requests for
information about the business of the Company, UST or any of their affiliates or
your involvement and participation therein, including, but not limited to, with
respect to the defense or prosecution of any claims or actions in existence now
or in the future as more particularly described in the Release.  The covenant
set forth in clause (ii) of this Section 3(h) includes, without limitation,
seeking any recovery against the Company, UST, any of their affiliates or their
officers, directors, employees, agents or representatives and any of their
successors and/or assigns in any forum, including without limitation any court,
administrative agency or otherwise.  In the event of your termination of
employment under any of the circumstances described in Section 3, you further
agree to resign all offices or directorships that you may hold with the Company,
UST and any of their affiliates, as the case may be, in a form acceptable to the
Company.

 
4.
Severance Compensation Prior to a Change in Control.  Prior to a Change in
Control, you shall be entitled to the following benefits, provided that such
termination occurs during the term of this Agreement:

 
 
(a)
If your employment is terminated by the Company for Cause or by you for any
reason other than Good Reason, or if your employment terminates because of your
death, the Company shall pay you your full base salary in accordance with the
Company’s standard payroll practices through the Date of Termination at the rate
in effect at the time Notice of Termination is given, and provide you with all
other normal post-termination amounts (if any) to which you are entitled under
the terms and conditions of any compensation or benefit plan maintained by  the
Company or UST in which you participated as of the Date of Termination at the
time such payments are due, and the Company shall have no further obligations to
you under this Agreement.

 
 
(b)
During any period that you fail to perform your full-time duties with the
Company as a result of:

 
 
(i)
a period of 409A Disability, you shall continue to receive your base salary in
accordance with the Company’s standard payroll practices at the rate in effect
at the commencement of any such period, together with any compensation payable
to you under the Company’s short-term and long-term disability plans for
salaried employees during such period and any benefit coverages customarily
provided to disabled salaried employees, until your employment is terminated
pursuant to Section 3(b) hereof; or

 
 
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(ii)
a period of General Disability, you shall receive any compensation payable to
you under the Company’s short-term and long-term disability plans for salaried
employees during such period, as well as any benefit coverages customarily
provided to disabled salaried employees, until your employment is terminated
pursuant to Section 3(b) hereof.

 
Thereafter your benefits shall be determined under the Company's retirement,
insurance and other compensation programs then in effect in accordance with the
terms of such programs.
 
 
(c)
If your employment is terminated by the Company (other than for Cause, General
Disability, 409A Disability or death) or by you for Good Reason as defined in
Section 3(d)(i) through(iv), then you shall be entitled to the benefits provided
below, subject to your execution of a release described in Section 3(h) and
provided that such release becomes effective and has not been revoked in
accordance with the terms thereof:

 
 
(i)
the Company shall pay to you your full base salary through the Date of
Termination at the rate in effect at the time Notice of Termination is given, no
later than the fifth day following the Date of Termination; and shall provide
you with all other normal post-termination amounts (if any) to which you are
entitled under the terms and conditions of any compensation or benefit plan of
the Company, at the time such payments are due;

 
 
(ii)
to the extent that an annual bonus has not been paid to you in respect of any
fiscal year, the Company shall pay to you, in the immediately following fiscal
year at the time that annual bonuses in respect of such initial fiscal year are
regularly paid by the Company (but not later than 2-½ months after the end of
such initial fiscal year), the product of (x) the actual annual bonus that you
would have been entitled to under the UST Inc. Incentive Compensation Plan had
you remained employed through the regular payment date and (y) a fraction, the
numerator of which is the number of days that have elapsed in each such fiscal
year through the Date of Termination, and the denominator of which is 365;

 
 
(iii)
in lieu of any further salary and bonus payments to you for periods subsequent
to the Date of Termination, the Company shall pay to you, in 24 equal monthly
installments, a severance payment equal to the product of (1) the sum of (A)
your annual salary rate in effect immediately prior to the Date of Termination,
and (B)  an amount equal to seventy-five percent (75%) of the target annual
bonus in effect as of the Date of Termination, and (2) the number two (2); these
installments shall begin to be paid upon your

 
 
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Severance Start Date (in accordance with the Company’s standard payroll
practices for severance pay), except in the event you are a “specified employee”
on your Severance Start Date, as determined by the Company in accordance with
rules established by the Company in writing in advance of the “specified
employee identification date” that relates to your Severance Start Date or, if
later, by December 31, 2008, such payments shall be delayed until the date that
is six (6) months after your Severance Start Date, with the lump sum value of
all payments that are so delayed paid on the date that is six (6) months after
your Severance Start Date (if you die after your Severance Start Date but before
payment of all twenty-four (24) installments, any remaining installments will be
paid to your estate as a lump sum and without regard to any six-month delay that
otherwise applies to specified employees).  For purposes of this Agreement,
“specified employee” shall be defined as provided in section 409A(a)(2)(B)(i) of
the Code and “specified employee identification date” shall be defined as
provided in Treasury Regulation §1.409A-1(i);
     
 
(iv)
for a twenty-four (24) month period following the Date of Termination, the
Company shall arrange to provide you with life insurance benefits substantially
similar to those which you were receiving immediately prior to the Notice of
Termination at a cost and level of benefits which are substantially similar to
those you were receiving prior to the Date of Termination.  Benefits otherwise
receivable by you pursuant to this paragraph (iv) shall be reduced to the extent
comparable coverage is actually  provided to you by another employer during the
twenty-four (24) month period following your termination, and any such
coverage  actually provided to  you by such employer shall be reported to the
Company;

 
 
(v)
the Company shall provide you with group health insurance coverage in accordance
with Section 5(d) below.  Benefits otherwise receivable pursuant to this
paragraph (v) shall be reduced to the extent comparable benefits are actually
received by you from another employer during the twenty-four (24) month period
following your termination, and any such benefits actually received by you from
such employer shall be reported to the Company; and

 
 
(vi)
UST shall extend to you the same indemnification arrangements as are generally
provided to other similarly situated officers to the extent authorized by
applicable law and in accordance with Article VIII of UST’s By-Laws.

 
 
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(c)
Except as provided in Section 4(b)(iv) or Section 5(d) hereof, you shall not be
required to mitigate the amount of any payment provided for in this Section 4 by
seeking other employment or otherwise, nor shall the amount of any payment or
benefit provided for in this Section 4 be reduced by any compensation earned by
you as the result of employment by another employer, by retirement benefits, by
offset against any amount claimed to be owed by you to the Company, or
otherwise.

 
5.
Severance Compensation on, in Anticipation or Contemplation of or Following a
Change in Control.  On or following a Change in Control, and in the event of a
termination by you for Good Reason or by the Company without Cause that is made
in anticipation or contemplation of and occurs within thirty (30) days prior to
a Change in Control, you shall be entitled to the following benefits during a
period of Disability, or upon termination of your employment, as the case may
be, provided that such period or termination occurs during the term of this
Agreement, or as otherwise provided below in subsection (e)(A) or (B) of this
Section 5:

 
 
(a)
During any period that you fail to perform your full-time duties with the
Company as a result of:

 
 
(i)
a period of 409A Disability, you shall continue to receive your base salary in
accordance with the Company’s standard payroll practices at the rate in effect
at the commencement of any such period, together with any compensation payable
to you under the Company’s short-term and long-term disability plans for
salaried employees during such period and any benefit coverages customarily
provided to disabled salaried employees, until your employment is terminated
pursuant to Section 3(b) hereof.

 
 
(ii)
a period of General Disability, you shall receive any compensation payable to
you under the Company’s short-term and long-term disability plans for salaried
employees during such period, as well as any benefit coverages customarily
provided to disabled salaried employees, until your employment is terminated
pursuant to Section 3(b) hereof.

 
Thereafter your benefits shall be determined under the Company's retirement,
insurance and other compensation programs then in effect in accordance with the
terms of such programs.
 
 
(b)
If your employment is terminated by reason of your death or by the Company for
Cause or by you other than for Good Reason as defined in Section 3(d)(A) through
(H), the Company shall pay you your full base salary in accordance with the
Company’s standard payroll practices through the Date of Termination at the rate
in effect at the time Notice of Termination is given, and provide you with all
other normal post-

 
 
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    termination amounts (if any) to which you are entitled under the terms and
conditions of any compensation or benefit plan of the Company at the time such
payments are due, and the Company shall have no further obligations to you under
this Agreement.      
 
(c)
If your employment is terminated by you for Good Reason as defined in Section
3(d)(A) through (H), or by the Company other than for Cause, General Disability,
409A Disability or death, then, you shall be entitled to the benefits provided
below, subject to your execution of a release described in Section 3(h) and
provided that such release becomes effective and has not been revoked in
accordance with the terms thereof:

 
 
(i)
the Company shall pay to you your full base salary through the Date of
Termination at the rate in effect at the time Notice of Termination is given, no
later than the fifth day following the Date of Termination; and provide you with
all other normal post-termination amounts (if any) to which you are entitled
under the terms and conditions of any compensation or benefit plan of the
Company at the time such payments are due;

 
 
(ii)
to the extent that an annual bonus has not been paid to you in respect of any
fiscal year, the Company shall pay to you, in the immediately following fiscal
year at the time that annual bonuses in respect of such initial fiscal year are
regularly paid by the Company (but not later than 2-½ months after the end of
such initial fiscal year), the product of (x) an amount equal to the
target  annual bonus in effect immediately preceding the Date of Termination or,
if greater, such target in effect immediately prior to the Change in Control,
and (y) a fraction, the numerator of which is the number of days that have
elapsed in the fiscal year in which the Date of Termination occurs through the
Date of Termination, and the denominator of which is 365;

 
 
(iii)
in lieu of any further salary and bonus payments to you for periods subsequent
to the Date of Termination, the Company shall pay as severance pay to you an
amount equal to the product of (1) the sum of (A) your annual salary rate in
effect as of the Date of Termination or, if greater, such rate in effect
immediately prior to the Change in Control, and (B) an amount equal to 100% of
the target annual bonus in effect as of the Date of Termination or, if greater,
such target in effect immediately prior to the Change in Control, and (2) the
number two (2);  in the event your Severance Start Date occurs on or within two
(2) years following an event that constitutes a  change in the ownership or
effective control of the Company or in the ownership of a substantial portion of
the assets of the Company within the meaning of section 409A(a)(2)(a)(vi) of the
Code, except as set forth below with

 
 
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    respect to status as a specified employee, such amount will be paid in a
lump sum no later than the fifth day following your Severance Start Date;
otherwise, except as set forth below with respect to status as a specified
employee, such amount shall be paid in twenty-four (24) equal monthly
installments that shall begin to be paid upon your Severance Start Date (in
accordance with the Company’s standard payroll practices for severance pay); in
either case, in the event you are a “specified employee” on your Severance Start
Date, as determined by the Company in accordance with rules established by the
Company in writing in advance of the “specified employee identification date”
that relates to your Severance Start Date or, if later, December 31 2008, such
payments shall be delayed until the date that is six (6) months after your
Severance Start Date, with the lump sum value of all payments that are so
delayed paid on the date that is six (6) months after your Severance Start Date
(if you die after your Severance Start Date but before payment of the lump sum
or all twenty-four (24) installments, any remaining amounts will be paid to your
estate as a lump sum and without regard to any six-month delay that otherwise
applies to specified employees);      
 
(iv)
the Company also shall promptly reimburse you for all legal fees and expenses
incurred by you as a result of such termination (including all such fees and
expenses, if any, incurred in contesting or disputing any such termination or in
seeking to obtain or enforce any right or benefit provided by this
Agreement.  To the extent that any such reimbursement does not qualify for
exclusion from Federal income taxation, the Company will make the reimbursement
only if (A) the corresponding expense is incurred by you during your lifetime
(or by your estate on your behalf after your death and within ten years of such
termination), and (B) the request for reimbursement is submitted no later than
two months prior to the last day of the calendar year following the calendar
year in which the expense was incurred so that the Company can make the
reimbursement on or before the last day of the calendar year following the
calendar year in which the expense was incurred.  The amount of expenses
eligible for such reimbursement during a calendar year will not affect the
amount of expenses eligible for such reimbursement in another calendar year, and
the right to such reimbursement is not subject to liquidation or exchange for
another benefit from the Company. The Company shall also promptly reimburse you
for all legal fees and expenses incurred by you in connection with any tax audit
or proceeding to the extent attributable to the application of section 4999 of
the Code to any payment or benefits provided hereunder); each
such  reimbursement shall be paid no later than the end of the calendar year
next following the calendar year in which you or the

 
 
14

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Company remit to the Internal Revenue Service the taxes that are the subject of
the audit or proceeding or, where as a result of the audit or proceeding no
taxes are due or are remitted but other reimbursable expenses have been
incurred, the end of the calendar year following the calendar year in which the
audit is completed or there is a final and nonappealable settlement or other
resolution of the proceeding.  For purposes of the foregoing, in the event you
are a “specified employee” on your Severance Start Date (as determined by the
Company in accordance with rules established by the Company in writing in
advance of the “specified employee identification date” that relates to your
Severance Start Date or, if later, December 31, 2008), and to the extent that
any portion of the reimbursements described above in this paragraph (iv) relate
to expenses that were triggered by your “separation from service” within the
meaning of section 409A(a)(2)(A)(i) of the Code and such reimbursements
constitute a “deferral of compensation” within the meaning of section 409A of
the Code, such reimbursements shall be paid no earlier than the date that is six
(6) months after your Severance Start Date (if you die after your Severance
Start Date but before such reimbursements have been made, such reimbursements
will be paid to your estate in a lump sum without regard to any six-month delay
that otherwise applies to specified employees); and
     
 
(v)
for a twenty-four (24) month period after such termination, the Company shall
arrange to provide you with life insurance benefits substantially similar to
those which you were receiving immediately prior to the Notice of Termination
(as well as the group health coverage described in Section 5(d) below), at a
cost and level of benefits which are substantially similar to those you were
receiving prior to the Date of Termination.  Benefits otherwise receivable by
you pursuant to this paragraph (v) shall be reduced to the extent comparable
coverage is actually provided to you by another employer during the twenty-four
(24) month period following your termination, and any such coverage actually
provided to you by such employer shall be reported to the Company.

 
 
(d)
For a twenty-four (24) month period after the termination referenced in Section
4(c) or Section 5(c), the Company shall arrange to provide you with group health
coverage substantially similar to that which you were receiving immediately
prior to the Notice of Termination.

 
 
(i)
If such coverage is provided under a self-insured medical reimbursement plan
maintained by the Company (within the meaning of section 105(h) of the Code):

 
 
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(A)
there will be no charge to you for such coverage for any month that falls within
the first six months following your Severance Start Date;

 
 
(B)
the charge to you for each remaining month of coverage will equal the Company’s
monthly COBRA charge for such coverage, and you will be required to pay such
monthly charge in accordance with the Company’s standard COBRA premium payment
requirements; and

 
 
(C)
on the date that is six months following your Severance Start Date the Company
will pay you a lump sum in cash equal to the product of (I) the Company’s
monthly COBRA charge on the payment date for family coverage under the Company’s
group health plan, and (II) the difference between (a) the number twenty-four
(24), and (b) the number of months of coverage provided under clause  (A) above.

 
 
(ii)
If such coverage is provided under a fully-insured medical reimbursement plan
(within the meaning of section 105(h) of the Code), there will be no charge to
you for such coverage.

 
 
(e)
If any of the Total Payments (as defined below) will be subject to the tax (the
"Excise Tax") imposed by section 4999 of the Code, the Company shall pay to you
an additional amount (the "Gross-Up Payment") such that the net amount retained
by you, after deduction of any Excise Tax on the Total Payments and any federal,
state and local income and employment taxes and Excise Tax upon the Gross-Up
Payment, shall be equal to the Total Payments.  The Gross-Up Payment will be
paid to you or remitted by the Company to the appropriate tax authorities in a
lump sum no later than the applicable date. For this purpose, the applicable
date shall be – (A) in the case of that portion of the Total Payments that is
payable upon a Change in Control, that is payable without the occurrence of your
termination of employment and that is exempt from section 409A of the Code, the
date of a Change in Control but not before January 1, 2009; (B) in the case of
that portion of the Total Payments that is payable upon or as result of a Change
in Control, that is payable without the occurrence of your termination of
employment and that is subject to section 409A of the Code, the date you remit
the specified taxes to the appropriate tax authorities (or, if the specified
taxes are remitted by the Company, the date the taxes are due) but not before
January 1, 2009; (C) in the case of that portion of the Total Payment that is
payable upon your termination of employment and that is exempt from section 409A
of the Code, your Date of Termination; and (D) in the case of that portion of
the Total Payments that is payable upon your Severance Start Date and that is
subject to section 409A of the Code, your Severance Start Date. However,

 
 
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notwithstanding provision (D) immediately above, in the event you are a
“specified employee” on your Severance Start Date (as determined by the Company
in accordance with rules established by the Company in writing in advance of the
“specified employee identification date” that relates to your Severance Start
Date or, if later, by December 31, 2008), and to the extent that any portion of
the Gross-Up Payment relates to Total Payments that were triggered by your
“separation from service” within the meaning of section 409A(a)(2)(A)(i) of the
Code, payment of such portion of the Gross-Up Payment which constitutes a
“deferral of compensation” within the meaning of section 409A of the Code and is
not deemed to be payable upon another permissible payment date under section
409A of the Code shall be delayed until the date that is six (6) months after
your Severance Start Date (if you die after your Severance Start Date but before
the Gross-Up Payment is made, it will be paid to your estate as a lump sum and
without regard to any six-month delay that otherwise applies to specified
employees).  Notwithstanding the foregoing provisions of this Section 5(e), if
it shall be determined that you are entitled to the Gross-Up Payment, but that
the Parachute Value (as defined below) of the Total Payments does not equal or
exceed 110% of the Safe Harbor Amount (as defined below), then except as
provided by the full paragraph that immediately follows paragraph (iii) of this
subsection (e), no Gross-Up Payment shall be made to you and the amounts payable
to you under Section 5(c) and (d) of this Agreement shall be reduced to the
extent necessary to cause the Parachute Value of the Total Payments, in the
aggregate, to be equal to the Safe Harbor Amount.  Any such reduction shall be
applied under Section 5(c) and (d) as follows:

 
 
 
(i)
first, for purposes of Section 5(d)(i)(A), there will be a charge to you for
each month of coverage, applied on a month-to-month basis as necessary to cause
the aggregate Parachute Value of the Total Payments to equal the Safe Harbor
Amount, in an amount equal to the Company's monthly COBRA charge for such
coverage, and you will be required to pay such monthly charge in accordance with
the Company's standard COBRA premium payment requirements;

 
 
(ii)
second, for purposes of Section 5(c)(v), there will be a charge to you for each
month of coverage, applied on a dollar-for-dollar basis as necessary to cause
the aggregate Parachute Value of the Total Payments to equal the Safe Harbor
Amount, in an amount equal to the premium paid by the Company for such coverage,
and you will be required to pay such monthly charge to the Company at the same
time as the Company is required to make payment of such premium to the insurance
carrier; and

 
 
(iii)
third, the amount payable under Section 5(c)(ii), the amount payable under
Section 5(c)(iii) and the amount payable under

 
 
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Section 5(d)(i)(C) shall each be reduced, on a pro rata basis (based on the
dollar amounts payable under Section 5(c)(ii), Section 5(c)(iii) and Section
5(d)(i)(C)), as necessary to cause the aggregate Parachute Value of the Total
Payments to equal the Safe Harbor Amount;

 
However, solely to the extent that the prior two sentences become applicable
(determined before the application of this paragraph) and in the event that the
right to the Gross-Up Payment is not considered subject to a substantial risk of
forfeiture under section 409A of the Code, then you shall continue to be
entitled to the Gross-Up Payment, but the amounts payable to you under Section
5(c) and (d) plus the Gross-Up Payment shall be reduced to the extent necessary
to cause the Parachute Value of the Total Payments, in the aggregate, to be
equal to the Safe Harbor Amount.  These reductions generally shall be made in
the order specified above, provided however, that the amount of the Gross-Up
Payment shall be added to the payments specified in subsection (iii) above and
shall also be subject to pro rata reduction as specified in subsection (iii)
based on the dollar amount of the Gross-Up Payment.
 
 
[In the event that application of the above ordering rules results in the
imposition upon you of an excise tax or penalty interest under section 409A of
the Code, the Company will pay you an additional payment (the “409A Gross-Up
Payment”) in an amount equal to such excise tax and penalty interest plus all
income and employment taxes on such excise tax and penalty interest, including,
if the 409 Gross-Up Payment is a Total Payment, payment of any Gross-Up Payment
on this payment.  For this purpose, all income taxes will be assumed to apply to
you at the highest marginal rate in effect on the date the 409A Gross-Up Payment
is made.  The 409A Gross-Up Payment shall be paid no later than the end of the
calendar year next following the calendar year in which you remit the
corresponding excise tax and penalty interest to the Internal Revenue Service.]

 
 
(f)
For purposes of determining whether any of the Total Payments will be subject to
the Excise Tax and the amount of such Excise Tax, (i) all payments or benefits
received or to be received by you in connection with a Change in Control or the
termination of your employment (whether payable pursuant to the terms of this
Agreement or of any other plan, arrangement or agreement with the Company, UST
or any of their affiliates or successors, any person whose actions result in a
Change in Control or any person affiliated (or which, as a result of the
completion of the transactions causing a Change in Control, will become
affiliated) with the Company or UST or such person within the meaning of section
1504 of the Code (such payments or benefits, excluding the Gross-Up Payments,
being hereinafter referred to as the "Total Payments")) shall be treated as
"parachute payments" (within the meaning of section

 
 
18

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    280G(b)(2) of the Code) unless, in the opinion of tax counsel selected by
the independent auditors of the Company (as of the date immediately prior to the
Change in Control) and reasonably acceptable to you, such payments or benefits
(in whole or in part) do not constitute parachute payments, including by reason
of section 280G(b)(4)(A) of the Code; (ii) all "excess parachute payments"
(within the meaning of section 280G(b)(1) of the Code) shall be treated as
subject to the Excise Tax, unless in the opinion of such tax counsel such excess
parachute payments represent reasonable compensation for services actually
rendered (within the meaning of section 280G(b)(4)(B) of the Code) in excess of
the "base amount" (within the meaning of section 280G(b)(3) of the Code), or are
not otherwise subject to the Excise Tax; and (iii) the value of any noncash
benefits or any deferred payment or benefit shall be determined by the Company's
independent auditors in accordance with the principles of sections 280G(d)(3)
and (4) of the Code and the regulations promulgated thereunder.  For purposes of
determining the amount of the Gross-Up Payment, you shall be deemed to pay
federal income taxes at your applicable rate of federal income taxation in the
calendar year in which the taxes upon which the Gross-Up Payment is made are due
and state and local income and employment taxes at your applicable rate of
taxation in your state and locality of residence on the date the taxes upon
which the Gross-Up Payment is made are due, net of the maximum reduction in
federal income taxes that could be obtained from deduction of such state and
local taxes.  For purposes of this Agreement, (x) the term "Parachute Value"
when applied to any payment shall mean the present value as of the date of the
Change in Control of the portion of such payment that is treated as a "parachute
payment" under section 280G(b)(2) of the Code, as determined by tax counsel for
purposes of determining whether and to what extent the Excise Tax will apply to
you and (y) the term "Safe Harbor Amount" shall mean 2.99 times your "base
amount", within the meaning of section 280G(b)(3) of the Code.      
 
(g)
In the event that the Excise Tax is subsequently determined to be less than the
amount taken into account hereunder, you shall repay to the Company at the time
that the amount of such reduction in Excise Tax is finally determined (subject
to the last sentence of this subsection) the portion of the Gross-Up Payment
attributable to such reduction (plus the portion of the Gross-Up Payment
attributable to the Excise Tax and federal, state and local income and
employment taxes imposed on the Gross-Up Payment being repaid by you if such
repayment results in a reduction in Excise Tax or a federal, state and local
income and employment taxes deduction) plus interest on the amount of such
repayment at 120% of the applicable federal rate (as defined in section 1274(d)
of the Code).  In the event that the Excise Tax is determined to exceed the
amount taken into account hereunder (including by reason of any payment the
existence or amount of which cannot be determined at the time of the Gross-Up
Payment) or additional Total Payments are made to you after the application of
any

 
 
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    cutback as provided in Section 5(e) hereof, which additional Total Payments
result in the cutback to the Safe Harbor Amount no longer being applicable, the
Company shall pay you an additional amount equal to the gross-up payment in
respect of such excess and the value of the Total Payments which were originally
cutback and are subject to restoration hereunder (plus any interest payable with
respect to such excess) within five (5) business days following the time that
the amount of such excess or restoration is finally determined; provided,
however, that in the event you are a “specified employee” on your Severance
Start Date (as determined by the Company in accordance with rules established by
the Company in writing in advance of the “specified employee identification
date” that relates to your Severance Start Date or, if later, December 31, 2008)
and any such additional gross-up payment would be made prior to the date that is
six (6) months after your Severance Start Date and to the extent that payment of
any portion of such additional gross-up payment that relates to Total Payments
that were triggered by your “separation from service” within the meaning of
section 409A(a)(2)(A)(i) of the Code, payment of such portion of the additional
gross-up payment if such payment itself constitutes a “deferral of compensation”
within the meaning of section 409A of the Code and is not deemed to be payable
upon another permissible payment date under section 409A of the Code shall be
delayed until the date that is six (6) months after your Severance Start Date
(if you die after your Severance Start Date but before the additional gross-up
payment is made, it will be paid to your estate as a lump sum and without regard
to any six-month delay that otherwise applies to specified employees); and
provided, further, that each additional gross-up payment required to be made by
the Company to you and/or each repayment of a gross-up payment required to be
made by you to the Company shall be paid no later than the end of the calendar
year next following the calendar year in which you or the Company remit the
corresponding taxes to the Internal Revenue Service.      
 
(h)
Except as provided in Section 5(c)(v) or Section 5(d) hereof, you shall not be
required to mitigate the amount of any payment provided for in this Section 5 by
seeking other employment or otherwise, nor shall the amount of any payment or
benefit provided for in this Section 5 be reduced by any compensation earned by
you as the result of employment by another employer, by retirement benefits, by
offset against any amount claimed to be owed by you to the Company, or
otherwise.

 
6.
Noncompetition.  You agree that you will not engage in any Competitive Activity
during the one-year period following your termination of employment with the
Company for any reason (or, where you receive payments pursuant to Section 4(c)
or Section 5(c) hereof, then during the two-year period following your
termination of employment with the Company). For purposes of this Section,
"Competitive Activity" shall mean activity, without the written consent of an
authorized officer of UST, consisting of your participation in the management
of,

 
 
20

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  or acting as a consultant for or employee of, any business operation of any
enterprise if such operation (a "Competitive Operation") is then in substantial
and direct competition with any business operation of UST and/or any of its
affiliates, any place in the world, as now or hereafter designated by the Board;
provided, however, that no business operation may be designated as a business
operation that is in substantial competition with UST and/or any of its
affiliates unless the profits, sales or assets attributable to such business
operation amount to at least ten percent (10%) of said business' total profits,
sales or assets.  Competitive Activity shall not include (1) the mere ownership
of up to five percent (5%) of the outstanding securities in any enterprise; or
(2) the participation in the management of, or acting as a consultant for or
employee of, any enterprise or any business operation thereof, other than in
connection with a Competitive Operation of such enterprise, provided that you do
not furnish advice with respect to inventions, processes, customers, methods of
distribution, methods of manufacture, marketing or business strategy relating to
any Competitive Operation of such enterprise, or the formation of a Competitive
Operation.    
7.
Confidentiality.  You agree not to disclose, either while employed by the
Company or at any time thereafter, to any person not employed by the Company, or
not engaged to render services to the Company, except with the prior written
consent of an officer authorized to act in the matter by the Board, any
confidential information of the Company or its affiliates obtained by you while
in the employ of the Company, including, without limitation, information
relating to any of the Company's or its affiliates' inventions, processes,
formulae, plans, devices, compilations of information, methods of distribution,
customers, client relationships, marketing strategies or trade secrets;
provided, however, that this provision shall not preclude you from the use or
disclosure of information known generally to the public or of information not
considered confidential by persons engaged in the business conducted by the
Company or from disclosure required by law or court order and to your legal
counsel in connection herewith).  The agreement herein made in this Section 7
shall be in addition to, and not in limitation or derogation of, any obligations
otherwise imposed by law upon you in respect of confidential information and
trade secrets of the Company or its affiliates.

 
8.
Non-Solicitation.  You agree that you shall not solicit any person who is a
customer of the businesses conducted by UST or its affiliates, or any business
in which you have been engaged on behalf of UST or its affiliates at any time
during the Term of this Agreement and for a two (2) year period thereafter on
behalf of an employer affiliated with you or any business described in Section
6; or induce or attempt to persuade any employee of the Company, UST or any of
their affiliates to terminate his employment relationship in order to enter into
employment with an employer affiliated with you or any business described in
Section 6.

 
9.
Successors:  Binding Agreement.

 
 
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(a)
The Company and UST shall require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of the
business and/or assets of the Company or UST to expressly assume and agree to
perform this Agreement in the same manner and to the same extent that the
Company and UST would be required to perform it if no such succession had taken
place.  Failure of the Company and/or UST to obtain such assumption and
agreement prior to the effectiveness of any such succession shall be a breach of
this Agreement and shall entitle you to compensation from the Company in the
same amount and on the same terms to which you would be entitled hereunder if
you terminate your employment for Good Reason following a Change in Control,
except that for purposes of implementing the foregoing, the date on which any
such succession becomes effective shall be deemed the Date of Termination.  As
used in this Agreement, "Company" shall mean the Company as hereinbefore defined
and any successor to its business and/or assets as aforesaid which assumes and
agrees to perform this Agreement by operation of law, or otherwise.

 
 
(b)
This Agreement shall inure to the benefit of and be enforceable by your personal
or legal representative, executors, administrators, successors, heirs,
distributees, devisees and legatees.  If you should die while any amount would
still be payable to you hereunder if you had continued to live, all such
payments, unless otherwise provided herein, shall be paid in accordance with the
terms of this Agreement to your devisee, legatee or other designee or, if there
is no such designee, to your estate.

 
10.
Notice.  For the purpose of this Agreement, notices and all other communications
provided for in the Agreement shall be in writing and shall be deemed to have
been duly given when delivered or mailed by United States certified or
registered mail, return receipt requested, postage prepaid, addressed to the
respective addresses set forth on the first page of this Agreement, provided
that all notice to the Company shall be directed to the attention of the Board
with a copy to the Secretary of the Company, or to such other address as either
party may have furnished to the other in writing in accordance herewith, except
that notice of change of address shall be effective only upon receipt.

 
11.
Miscellaneous.  No provision of this Agreement may be modified, waived or
discharged unless such waiver, modification or discharge is agreed to in writing
and signed by you and such officer as may be specifically designated by the
Board.  No waiver by either party hereto at any time of any breach by the other
party hereto of, or compliance with, any condition or provision of this
Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time.  No agreements or representations, oral or otherwise, express
or implied, with respect to the subject matter hereof have been made by either
party which are not expressly set forth in this Agreement.  The validity,
interpretation, construction and performance of this Agreement shall be governed
by the laws of the State of

 
 
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  Delaware without regard to its conflicts of law principles.  All references to
sections of the Exchange Act or the Code shall be deemed also to refer to any
successor provisions to such sections.  Any payments provided for hereunder
shall be paid net of any applicable withholding required under federal, state or
local law.  The obligations of the Company under Sections 4 and 5 and your
obligations under Sections 6, 7 and 8 shall survive the expiration of the term
of this Agreement.    
12.
Validity.  The invalidity or unenforceability of any provision of this Agreement
shall not affect the validity or enforceability of any other provision of this
Agreement, which shall remain in full force and effect.

 
13.
Counterparts.  This Agreement may be executed in several counterparts, each of
which shall be deemed to be an original but all of which together will
constitute one and the same instrument.

 
14.
Arbitration.  Any dispute or controversy arising under or in connection with
this Agreement shall be settled exclusively by arbitration, conducted before a
panel of three arbitrators in New York, New York, in accordance with the rules
of the American Arbitration Association then in effect.  Judgment may be entered
on the arbitrator's award in any court having jurisdiction; provided, however,
that you shall be entitled to seek specific performance of your right to be paid
until the Date of Termination during the pendency of any dispute or controversy
arising under or in connection with the Agreement.

 
15.
Code Section 409A.  It is intended, and this Agreement will be so construed,
that any amounts payable under this Agreement and the Company’s and your
exercise of authority or discretion hereunder shall comply with the provisions
of section 409A of the Code and the treasury regulations relating thereto so as
not to subject you to the payment of interest and tax penalty which may be
imposed under section 409A of the Code.  In furtherance of this intent, to the
extent that any regulations or other guidance issued under section 409A of the
Code would result in you being subject to the payment of such interest or tax
penalty, the Company and you agree to amend this Agreement prior to January 1,
2009 in order to bring this Agreement into compliance with section 409A of the
Code in a manner which has the least adverse effect on you.

 
16.
Entire Agreement.  This Agreement sets forth the entire agreement of the parties
hereto in respect of the subject matter contained herein and supersedes all
prior agreements, promises, covenants, arrangements, communications,
representations or warranties, whether oral or written, by any officer, employee
or representative of any party hereto; including, without limitation, the Letter
Agreement between you, the Company and UST, dated March 22, 2005, the Existing
Agreement, and any addendums, amendments or modifications thereof; and any prior
agreement of the parties hereto in respect of the subject matter contained
herein is hereby terminated and cancelled.  Notwithstanding the foregoing,
nothing contained herein shall be deemed to be a termination or cancellation of
your right to

 
 
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indemnification by UST as an officer pursuant to: (a) applicable state law, with
all exclusions and exceptions provided by such law to remain in full force and
effect; (b) any indemnification agreement entered into between you and UST which
shall remain in full force and effect; (c) any applicable director and officer
insurance arrangements; and (d) in accordance with Article VIII of UST’s
By-Laws.

 
If this letter sets forth our agreement on the subject matter hereof, kindly
sign and return to the Company the enclosed copy of this letter, which will then
constitute our agreement on this subject.
 
UST Inc. and U.S. Smokeless Tobacco Company

By
 /s/ Gary B. Glass
 
    Name: 
Gary B. Glass
 
 
 
Title:   Vice President, General Counsel and Asst. Secty. 
         
 

 

 
Agreed to this 16th day
of December, 2008
 
 
          /s/ Daniel W. Butler
 
Daniel W. Butler
 

 
 

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RELEASE AGREEMENT

 THIS RELEASE, entered into this [     ] day of [              ] by
[Name],  residing
at [                                                                     ]
(hereinafter referred to as the "Employee").

W I T N E S S E T H:

 WHEREAS, the Employee, and UST Inc., a Delaware corporation ("UST"), having its
principal office in Greenwich, Connecticut, entered into a letter agreement (the
"Agreement") dated as of ________, 2006, pursuant to Section 3(h) of which the
Employee agreed and covenanted, to execute a general release of any and all
claims he may have or may believe he has against UST, its affiliates and/or
their respective officers, directors, employees, agents and representatives; and

 WHEREAS, the employment of the Employee was terminated as of [           ];

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

1.           The Employee voluntarily, knowingly and willingly releases and
forever discharges UST, its parents, subsidiaries and affiliates, together with
their respective past and present officers, directors, partners, shareholders,
employees and agents, and each of their predecessors, successors and assigns,
from any and all charges, complaints, claims, promises, agreements,
controversies, causes of action and demands of any nature whatsoever which
against them the Employee 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 Employee signs
this agreement.

2.           The release being provided by Employee in this agreement includes,
but is not limited to, any rights or claims relating in any way to the
Employee's employment relationship with UST, its parents, subsidiaries and
affiliates, 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 law or
judicial decision.  Notwithstanding the foregoing, Employee does not hereby
release any rights in and to employee benefit plans maintained by UST pursuant
to the Employee Retirement Income Security Act ("ERISA") in which Employee has a
vested interest as of the date of Employee's signature on this
Agreement.  Furthermore, nothing contained herein shall be deemed a waiver of
Employee's right to indemnification by UST as a corporate officer/director
pursuant to: (a) applicable state law, with all exclusions and exceptions
provided by such law to remain in full force and effect; (b) any indemnification
agreement entered into between the Employee and UST; (c) any applicable director
and officer insurance arrangements; and (d) in accordance with Article VIII of
UST’s By-Laws.

3.           By signing this release agreement, the Employee 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
 
25

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his behalf.  This paragraph will not preclude Employee from filing an
administrative charge of discrimination, provided Employee does not seek any
relief for himself/herself in connection with such proceeding.

4.           By signing this release agreement, the Employee agrees to cooperate
fully with UST and its affiliates concerning reasonable requests for information
about the business of UST or any of its affiliates or your involvement and
participation therein; the defense or prosecution of any claims or actions now
in existence or which may be brought in the future against or on behalf of UST
or any of its affiliates which relate to events or occurrences that transpired
while the Employee was employed by UST and its affiliates; and in connection
with any investigation or review by any federal, state or local regulatory,
quasi-regulatory or self-governing authority (including, without limitation, the
Securities and Exchange Commission) as any such investigation or review relates
to events or occurrences that transpired while the Employee was so
employed.  The Employee's full cooperation shall include, but not be limited to,
being available to meet and speak with officers or employees of UST or any of
its affiliates and/or their counsel at reasonable times and locations, executing
accurate and truthful documents and taking such other actions as may reasonably
be requested by UST or any of its affiliates and/or their counsel to effectuate
the foregoing.  UST agrees to reimburse you for any reasonable, out-of-pocket
travel, hotel and meal expenses incurred in connection with the Employee’s
performance of obligations pursuant to this paragraph 5 for which the Employee
has obtained prior approval from UST.

5.           The Employee acknowledges that UST has hereby advised him to
consult with an attorney prior to signing this release agreement.  The Employee
represents that he has had the opportunity to review this agreement and,
specifically, the release in paragraph 1, with an attorney of his choice.  The
Employee also agrees that he has entered into this agreement freely and
voluntarily.

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

    IN WITNESS WHEREOF, the Employee has executed this release agreement as of
the date first set forth above.

 
 
   
[Name]
 

___________________________________
WITNESS
 
 
 
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