Exhibit 10.6

[DATE]

Mr. Richard A. Kohlberger
Senior Vice President, General Counsel

 
and Secretary

UST Inc.

6 High Ridge Park, Building A

Stamford, CT  06905

Dear Mr. Kohlberger:
 
UST Inc. (the “Company”) considers it essential to the best interests of its
stockholders to foster the continuous employment of key management
personnel.  In this connection, the Board of Directors of the Company (the
“Board”) recognizes that, as is the case with many publicly held corporations,
the possibility of a change in control may exist and that such possibility, and
the uncertainty and questions which it may raise among management, may result in
the departure or distraction of management personnel to the detriment of the
Company and its stockholders.
 
The Board has determined that appropriate steps should be taken to reinforce and
encourage the continued attention and dedication of members of the Company’s
management, including yourself, to their assigned duties without distraction in
the face of potentially disturbing circumstances arising from the possibility of
a change in control of the Company, although no such change is now contemplated.
 
In order to induce you to remain in the employ of the Company, the Company
agrees that you shall receive the severance benefits set forth in this letter
agreement (the “Agreement”) in the event your employment with the Company is
terminated under the circumstances described below subsequent to a “change in
control of the Company” (as defined in Section 2).
 
You have an existing agreement with the Company (“Existing Agreement”), dated
October 27, 1986 (the “Original Effective Date”), regarding the payment of
severance benefits upon a change in control of the Company. 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”).
 
 

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Mr. Richard A. Kohlberger
December __, 2008
Page 2
 
 
1.            Term of Agreement.  This Agreement shall commence on the Original
Effective Date and shall continue in effect through July 31, 2009; provided,
however, that commencing on August 1, 2009, and each August 1 thereafter, the
term of this Agreement shall automatically be extended for one additional year
unless, prior to such August 1, the Company shall have given notice that it does
not wish to extend this Agreement; and provided, further, that if a change in
control of the Company, as defined in Section 2, shall have occurred during the
original or extended 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. In no event, however, shall the term of
this Agreement extend beyond the earlier of (i) the end of the calendar month in
which your 65th birthday occurs or (ii) the date on which you cease to be an
officer of the Company or a subsidiary thereof, whether or not you continue to
be an employee of the Company or a subsidiary thereof.
 
2.            Change in Control.  For purposes of this Agreement, a “change in
control of the Company” shall be deemed to have occurred if (i) 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 the Company, any “person” who
on the date hereof is a director or officer of the Company, any trustee or other
fiduciary holding securities under an employee benefit plan of the Company, or
any corporation owned, directly or indirectly, by the stockholders of the
Company in substantially the same proportions as their ownership of stock of the
Company, is or becomes the “beneficial owner” (as defined in Rule 13d-3 under
the Exchange Act), directly or indirectly, of securities of the Company
representing 20% or more of the combined voting power of the Company’s then
outstanding securities; (ii) during any period of two consecutive years (not
including any period prior to the execution of this Agreement), individuals who
at the beginning of such period constitute the Board, and any new director
(other than a director designated by a person who has entered into an agreement
with the Company to effect a transaction described in clause (i) or (iii) of
this Section) whose election by the Board or nomination for election by the
Company’s stockholders was approved by a vote of at least two-thirds (2/3) of
the directors then still in office who either were directors at the beginning of
the period or whose election or nomination for election was previously so
approved (such individuals and director being hereinafter referred to as
“Continuing Directors”), cease for any reason to constitute at least a majority
thereof; or (iii) the shareholders of the Company approve a merger or
consolidation of the Company with any other corporation, other than a merger or
consolidation which would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) more than 80% of the combined voting power of the voting
securities of the Company or such surviving entity outstanding immediately after
such merger or consolidation, or the shareholders of the Company approve a plan
of complete liquidation of the Company or an agreement for the sale or
disposition by the Company of all or substantially all of the Company’s assets.
 

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Mr. Richard A. Kohlberger
December __, 2008
Page 3
 
 
3.           Termination Following Change in Control.  (i) General.  If any of
the events described in Section 2 constituting a change in control of the
Company shall have occurred, you shall be entitled to the benefits provided in
Section 4(iii) upon the subsequent termination of your employment during the
term of this Agreement unless such termination is (a) because of your death,
General Disability or 409A Disability, (b) by the Company for Cause, or (c) by
you other than for Good Reason.  In the event your employment with the Company
is terminated for any reason and subsequently a change in control of the Company
shall have occurred, you shall not be entitled to any benefits hereunder.
 
(ii)           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 long-term disability plan for
salaried employees maintained by the Company, and (II) in the case of a 409A
Disability, if it would be disregarded under the long-term disability plan for
salaried employees maintained by the Company and it may be disregarded under
Treasury Regulation § 1.409A-3(i)(4).

    (a)    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.

    (b)    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.

(iii)           Cause.  Termination by the Company of your employment for
“Cause” shall mean termination upon an act or acts of dishonesty constituting a
felony under the laws of the United States or any State thereof and resulting or
intended to result directly or indirectly in gain or personal enrichment at the
expense of the Company.  Notwithstanding the foregoing, you shall not be deemed
to have been terminated for Cause unless and until there shall have been
delivered to you a copy of a resolution duly adopted by the affirmative vote of
not less than three-quarters (3/4) of the entire membership of the Board at a
meeting of the Board called and
 
 

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Mr. Richard A. Kohlberger
December __, 2008
Page 4
 
 
held for such purpose (after reasonable notice to you and an opportunity for
you, together with your counsel, to be heard before the Board), finding that in
the good faith opinion of the Board you were guilty of conduct set forth above
in this Subsection and specifying the particulars thereof in detail.
 
(iv)           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, the occurrence after a change in control
of the Company of any of the following circumstances unless, in the case of
paragraphs (a), (e), (f), (g) or (h), such circumstances are fully corrected
prior to the Date of Termination specified in the Notice of Termination, as
defined in Sections 3(vii) and 3(vi), respectively, given in respect thereof:
 
    (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
of the Company, or a significant adverse alteration in the nature or status of
your responsibilities from those in effect immediately prior to such change;
 
    (b)           a reduction by the Company in your annual base salary as in
effect on the date hereof or as the same may be increased from time to time;
 
    (c)           the relocation of the Company’s principal executive offices to
a location outside the Stamford Metropolitan Area (or, if different, the
metropolitan area in which such offices are located immediately prior to the
change in control of the Company) or the Company’s requiring you to be based
anywhere other than the Company’s principal executive offices 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 of the Company 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 to continue in effect any
compensation plan in which you participate immediately prior to the change in
control of the Company which is material to your total compensation, including
but not limited to the Company’s Retirement Income Plan for Salaried Employees,
Employees’ Savings Plan, Officers’ Supplemental Retirement Plan, Incentive
Compensation Plan, and 1982 Stock Option 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 such
substitute or alternative plan) on a
 

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Mr. Richard A. Kohlberger
December __, 2008
Page 5
 
 
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
Company’s life insurance, medical, health and accident, or disability plans in
which you were participating at the time of the change in control of the
Company, the taking of any action by the Company which would 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 of the
Company, 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 of the Company;
 
    (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 5 hereof; or
 
    (h)           any purported termination of your employment which is not
effected pursuant to a Notice of Termination satisfying the requirements of
Subsection (vi) hereof (and, if applicable, the requirements of Subsection (iii)
hereof); for purposes of this Agreement, no such purported termination shall be
effective.
 
Your right to terminate your employment pursuant to this Subsection 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.
 
(v)            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, any of the Company’s
affiliates during the term of this Agreement.

(vi)           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 Section 6.  “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.
 
(vii)          Date of Termination; Severance Start Date.

  (a)           "Date of Termination" shall mean (A) if your employment is
terminated for General Disability or 409A Disability, thirty (30) days after
Notice of
 

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Mr. Richard A. Kohlberger
December __, 2008
Page 6
 
 
Termination is given but not before the end of the twelve (12) month period
specified in Subsection (ii) 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 (ii) above, and (B) if your
employment is terminated pursuant to Subsection (iii) or (iv) hereof 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 (iii) hereof shall not be less than thirty (30) days, and
in the case of a termination pursuant to Subsection (iv) hereof shall not be
less than fifteen (15) nor more than sixty (60) days, respectively, from the
date such Notice of Termination is given); provided, however, that 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).

  (b)        “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.

4.            Compensation Upon Termination or During Disability.  Following a
change in control of the Company, 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:
 
(i)            During any period that you fail to perform your full-time duties
with the Company as a result of:

    (a)    a period of 409A Disability, you shall continue to receive your base
salary in accordance with the standard payroll practices of the Company at the
rate in effect at the commencement of any such period, together with any
compensation payable to you under the
 

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Mr. Richard A. Kohlberger
December __, 2008
Page 7
 
 
short-term and long-term disability plans for salaried employees maintained by
the Company during such period and any benefit coverages customarily provided to
disabled salaried employees, until your employment is terminated pursuant to
Section 3(ii) hereof.

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

(ii)           If your employment shall be terminated by the Company for Cause
or by you other than for Good Reason, 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, plus all other amounts to which you are entitled under any compensation
plan of the Company at the time such payments are due, and the Company shall
have no further obligations to you under this Agreement.
 
(iii)           If your employment by the Company shall be terminated by you for
Good Reason or by the Company other than for Cause, General Disability or 409A
Disability, then, subject to the provisions of Subsection (iv) hereof, you shall
be entitled to the benefits provided below:
 
  (a)           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; plus all
other amounts to which you are entitled under any compensation plan of the
Company, at the time such payments are due;
 
  (b)           in lieu of any further salary payments to you for periods
subsequent to the Date of Termination, the Company shall pay as severance pay to
you a lump sum severance payment 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 of the Company, and
(B) the highest annual amount payable to you under the Company's Incentive
Compensation Plan with respect to any of the three (3) calendar years
immediately preceding the Date of Termination; provided, however, that the
amount taken into account under this clause (B) shall in no event exceed
seventy-five percent (75%) of the amount taken into account under clause (A)
hereof, and (2) the number three (3); except as provided below with respect to
status as a
 

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Mr. Richard A. Kohlberger
December __, 2008
Page 8
 
 
specified employee such amount will be paid no later than the fifth day
following your Severance Start Date; however, 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  (if you die
after your Severance Start Date but before such payment is made, it will be paid
to your estate 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);
 
  (c)           the Company also shall promptly pay to you 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 payment does not qualify for
exclusion from Federal income taxation, the Company will make the payment 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 payment 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 payment 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 payment
during a calendar year will not affect the amount of expenses eligible for such
payment in another calendar year, and the right to such payment is not subject
to liquidation or exchange for another benefit from the Company. The Company
shall also promptly pay to you 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 payment shall be paid no later than the end of the
calendar year next following the calendar year in which you or the 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
 

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Mr. Richard A. Kohlberger
December __, 2008
Page 9
 
 
Severance Start Date or, if later, by December 31, 2008), and to the extent that
any portion of the payments described above in this Subsection (c) 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 payments constitute a
“deferral of compensation” within the meaning of section 409A of the Code, such
payments 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 payments have been made, such payments will be paid to your estate in a
lump sum without regard to any six-month delay that otherwise applies to
specified employees);
 
  (d)           for a thirty-six (36) month period after such termination, the
Company shall arrange to provide you with life, disability, and accident
insurance benefits substantially similar to those which you were receiving
immediately prior to the Notice of Termination.  Benefits otherwise receivable
by you pursuant to this paragraph (d) shall be reduced to the extent comparable
benefits are actually received by you during the thirty-six (36) month period
following your termination, and any such benefits actually received by you shall
be reported to the Company; and
 
  (e)           for a thirty-six (36) month period after such termination, 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.
 
      (1)          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):

                    (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 group health plan maintained by the Company, and (II)
 

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Mr. Richard A. Kohlberger
December __, 2008
Page 10
 
the difference between (a) the number thirty-six (36), and (b) the number of
months of coverage provided under clause  (A) above, with the amount of such
payment grossed up for taxes at the maximum individual Federal tax rate and
maximum individual applicable state tax rate in effect on the payment date.  

                 (2)             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.
 
(iv)           Notwithstanding the provisions of Subsection (iii) hereof, if
 
  (a)           any payments or benefits received or to be received by you,
whether pursuant to the terms of this Agreement or any other plan, arrangement
or agreement with the Company, any person whose actions result in a change in
control of the Company or any person affiliated with the Company or such person,
constitute “parachute payments” (such payments or benefits being hereinafter
referred to as the “Parachute Payments”) within the meaning of section
280G(b)(2) of the Internal Revenue Code of 1986, as amended (the “Code”), and
 
  (b)           the aggregate present value of the Parachute Payments reduced by
any excise tax imposed under section 4999 of the Code (or any similar tax that
may hereafter be imposed) (the “Excise Tax”) would be less than 3 times your
“base amount,” as defined in section 280G(b)(3) of the Code,
 
then the Company will reduce the portion of the Parachute Payments to which you
would otherwise be entitled under Subsection (iii) hereof by an amount (if any)
such that the aggregate present value of the Parachute Payments is equal to 2.99
times your base amount (the “Reduced Amount”).  Any such reduction shall be
applied under Subsection (iii) as follows:
 
       (1)           first, for purposes of Subsection (iii)(e)(1)(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 present value of the Parachute
Payments to equal the Reduced 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;
 
       (2)           second, for purposes of Subsection (iii)(d), 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 present value of the Parachute Payments to
equal the Reduced 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
 

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Mr. Richard A. Kohlberger
December __, 2008
Page 11
 
       (3)           third, the lump sums payable under Subsection (iii)(b) and
Subsection (iii)(e)(1)(C) shall each be reduced, on a pro rata basis (based on
the dollar amounts payable under Subsection (iii)(b) and Subsection
(iii)(e)(1)(C)), as necessary to cause the aggregate present value of the
Parachute Payments to equal the Reduced Amount.
 
For purposes of the preceding paragraph, your base amount, the present value of
the Parachute Payments, the amount of the Excise Tax and all other appropriate
matters shall be determined by the Company’s independent auditors in accordance
with the principles of section 280G of the Code and based upon the advice of tax
counsel selected by such auditors.
 
[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 “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.  For this
purpose, all income taxes will be assumed to apply to you at the highest
marginal rate in effect on the date the Gross-Up Payment is made.  The 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.]
 
(v)           Except as provided in Subsection (iii)(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.            Successors; Binding Agreement.  (i) The Company will 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 to expressly assume and agree to perform this Agreement in the same
manner and to the same extent that the Company would be required to perform it
if no such succession had taken place.  Failure of the Company 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 of the Company, 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.
 
(ii)           This Agreement shall inure to the benefit of and be enforceable
by your personal or legal representatives, executors, administrators,
successors, heirs, distributees,
 

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Mr. Richard A. Kohlberger
December __, 2008
Page 12
 
 
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 amounts, 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.
 
6.            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.
 
7.            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 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 Section
4 shall survive the expiration of the term of this Agreement.
 
8.            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.
 
9.            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.
 
10.          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
 

--------------------------------------------------------------------------------

Mr. Richard A. Kohlberger
December __, 2008
Page 13
 
 
your right to be paid until the Date of Termination during the pendency of any
dispute or controversy arising under or in connection with this Agreement.
 
11.          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.
 
12.          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 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.
 
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.
 
 

  Sincerely,             UST Inc.                    
By:
/s/  Gary B. Glass
   
 
Vice President
 

 

Agreed to this 15 day
of December, 2008
 
 
          /s/ Richard A Kohlberger
 
Richard A Kohlberger