ex10-3.htm


    Exhibit
10.3



    [DATE]

     

    Raymond
P. Silcock

    1449
Wynkoop Street, Apt. 204

    Denver,
CO 80202

     

    Dear
Raymond:

     

    UST
Inc. (“UST” or the “Company”) 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 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 management to the detriment of the Company and its
stockholders.

     

    In
order to induce you to remain in the employ of the Company, UST agrees 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 July 20, 2007, regarding the payment of severance benefits to you. This
Agreement amends and restates your Existing Agreement, effective 12/15, 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 August 6, 2007 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 or a subsidiary thereof, whether or
      not you continue to be an employee of the Company or a subsidiary thereof;
      provided, however, if you cease to be an officer of the Company 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 

            


    

     

     

    
      
         

      

      
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        	 	 	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 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

            


    

     

     

    
      
         

      

      
        2

        
          
 

      

      
         

      

    

     

     

    
      	
               
      

            	
               

            	
              stockholders
      of UST in  substantially the same proportions as their ownership
      of UST immediately 

            


    

     

    
      	
              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.

            


    

     

    
      	
               
      

            	
              (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.

            


    

     

     

    
      
         

      

      
        3

        
          
 

      

      
         

      

    

     

     

    
      	
               
      

            	
              (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), which act or omission is not cured within thirty (30) business
      days after a notice is delivered by the Company that specifically
      identifies the manner in which the Company believes you have materially
      breached this Agreement. 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

     

    
      	
               
      

            	
              (i)

            	
              A
      diminution in title or status as an officer or a material reduction in
      your accounting responsibilities such that as a result of such reduction
      in accounting responsibilities, you are unable to provide the
      certifications or opinions required of a Chief Financial Officer pursuant
      to applicable regulations then in
effect;

            


    

     

    
      	
               
      

            	
              (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 

            


    

     

     

    
      
         

      

      
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        	 	 	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
      circumstances 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;

            


    

     

    
      	
               
      

            	
              (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 (other than reductions similarly affecting all officers of the
      Company); 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
      

            


    

     

     

    
      
         

      

      
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        	 	 	(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 a voluntary deferral by you or 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 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 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, 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
  

            


    

     

     

    
      
         

      

      
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              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) sha1l 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 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


            


    

     

    
      
         

      

      
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        	 	 	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 Code section
409A(a)(2)(A)(i).

              


      

    

     

    
      	
               
      

            	
              (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) as more particularly described in the Release, 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 or any of its affiliates or the
      termination thereof, other than a failure or refusal of the Company to pay
      you (x) the benefits described in Section 4(c) or 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; and (iii) 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, 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 UST, any of its 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 UST and any of its 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:

            


    

     

     

    
      
         

      

      
        8

        
          
 

      

      
         

      

    

     

     

    
      	
               
      

            	
              (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 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

            


    

     

    
      	
               
      

            	
              (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;

            


    

     

     

    
      
         

      

      
        9

        
          
 

      

      
         

      

    

     

     

    
      	
               
      

            	
              (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 2-1/2
      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
      twenty-four (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 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 Code section 409A(a)(2)(B)(i)
      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;

            


    

     

    
      
         

      

      
        10

        
          
 

      

      
         

      

    

     

     

    
      	
               
      

            	
              (v)

            	
              the
      Company shall provide you with group health insurance coverage in
      accordance with Section 5(d) below. However, 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.

            


    

     

    
      	
               
      

            	
              (d)

            	
              Except
      as provided in Section 4(c)(iv) or (v) 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.

            


    

     

     

    
      
         

      

      
        11

        
          
 

      

      
         

      

    

     

    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-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 2-1/2
      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
      

            


    

     

     

    
      
         

      

      
        12

        
          
 

      

      
         

      

    

     

     

    
      
        	 	 	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 Code section
      409A(a)(2)(a)(vi), except as set forth below with 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, 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 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 Code section 4999 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
      

              


      

    

     

     

    
      
         

      

      
        13

        
          
 

      

      
         

      

    

     

     

    
      
        	 	 	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, by 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);
	 	 	 
	
                 
      

              	
                (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 Subsection
      (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 Code section
      105(h)):

            


    

     

    
      	
               
      

            	
              (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;

            


    

     

     

    
      
         

      

      
        14

        
          
 

      

      
         

      

    

     

     

    
      	
               
      

            	
              (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 Code section 105(h)), 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 Code section 4999, 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 fifth day following 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, 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
  

            


    

     

     

    
      
         

      

      
        15

        
          
 

      

      
         

      

    

     

     

    
      	
               
      

            	
               

            	
              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
      Section 5(d)(1)(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


     

    
      
         

      

      
        16

        
          
 

      

      
         

      

    

     

    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 409A
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 or any of its 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 such person within
      the meaning of Code section 1504 (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 Code
      section 280G(b)(2)) 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 Code section 280G(b)(4)(A); (ii) all “excess
      parachute payments” (within the meaning of Code section 280G(b)(1)) 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 Code section
      280G(b)(4)(B)) in excess of the “base amount” (within the meaning of Code
      section 280G(b)(3)), 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 Code sections 280G(d)(3) and (4) 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
  

            


    

     

     

    
      
         

      

      
        17

        
          
 

      

      
         

      

    

     

    
      
        	 	 	
                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
      Code section 280G(b)(2), 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 Code section 280G(b)(3).

              
	 	 	 
	
                 
      

              	
                (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 Code section 1274(d)).  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
      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, by 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
      

              


      

    

     

     

    
      
         

      

      
        18

        
          
 

      

      
         

      

    

     

     

    
      
        	 	 	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, 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. Competive 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 

            


    

     

     

    
      
         

      

      
        19

        
          
 

      

      
         

      

    

     

     

    
      
        	 	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 therewith). 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 the Company or its affiliates, or any business in
      which you have been engaged on behalf of the Company 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 or any of its 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.

            


    

     

    
      	
               
      

            	
              (a)

            	
              The
      Company 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 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, 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
  

            


    

     

    
      
         

      

      
        20

        
          
 

      

      
         

      

    

     

     

    
      
        	 	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 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 Code section 409A 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 Code section 409A.  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

            


    

     

     

    
      
         

      

      
        21

        
          
 

      

      
         

      

    

     

     

    
      
        	 	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, 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 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.

     

    
       

      
        
          
            	
                    By

                  	
                    /s/ Gary B.
      Glass

                  	 
      
	 
      	
                    Name:
      Gary B. Glass

                  	 
      
	
                     

                  	
                    Title:    Vice
      President

                  	 
      


          

        

      

       

      Agreed
to this  16th  day

      of
Dec.
2008

       

       

      
        
          
            	
                             
      /s/ Raymond P. Silcock

                  	 
      
	
                    Raymond
      P. Silcock

                  	 
      


          

        

      



    
      
         

      

      
        22

        
          
 

      

      
         

      

    

     

    RELEASE
AGREEMENT

     

    THIS
RELEASE, entered into this [_____] of [_______________] by [Name], residing at
[__________________________] (hereinafter referred to as the
“Employee”).

     

    WITNESSETH:

     

    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 _________________, 2007, 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 

     

    
      
         

      

      
        23

        
          
 

      

      
         

      

    

     

    relief
in any action or proceeding that may be commenced on 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 or 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 4 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

                	 
      


        

      

    

     

     

     

     

    24