Document:

EX-10.2

 

EXHIBIT 10.2

Computer Associates International, Inc.

AMENDED AND RESTATED Non-Qualified Stock Option Certificate,

Effective as of November 22, 2004

	 	 	 	 	 
	Jeff Clarke

	 	CLAJE03
	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	Name of Option Holder
	 	 	 	 

	 	 	 
	Option Number

	 	N07820
	Total Number of Shares Granted

	 	**235,000**
	Option Date

	 	3/31/2004
	Exercise Price Per Share

	 	$26.86

	   	NON-QUALIFIED STOCK OPTION granted by Computer Associates International, Inc., a Delaware
corporation, (the “Company”) to the above-named option holder (the “Optionee”), an employee or
consultant of the Company or one of its subsidiaries, pursuant to the Computer Associates
International, Inc. 2002 Incentive Plan (the “Plan”), the terms of which are incorporated herein
by reference and which, in the event of any conflict, shall control over the terms contained
herein.

	 
	1.  	Grant and Vesting Option

	 
	   	Subject to the vesting schedule below, the Company hereby grants to the Optionee an option to
purchase on the terms herein provided a total of the number of shares of common stock, $.10 par
value, of the Company set forth above, at an exercise price per share as set forth above.

	 
	   	This option may be exercised only with respect to the portion thereof that is vested. The
Optionee’s right to exercise this option shall become vested in annual increments on the
anniversary dates of the granting of this option according to the following vesting schedule:

	 	 	 
	Anniversary Date	 	Percentage (%) of Option Shares With Respect to Which
	 	 	Optionee Has a Vested Option to Exercise
	1st

	 	34%
	2nd

	 	33%
	3rd

	 	33%

	   	Vested rights shall be calculated only in terms of full years (for example, from one anniversary
date to the next) and no partial vesting credit shall be given for partial years of employment.

	 
	   	This option shall expire and shall not be exercisable after the expiration of ten (10) years from
the date it is granted.

	 
	2.  	Stock to be Delivered

	 
	   	Stock to be delivered upon the exercise of this option may constitute an original issue of
authorized stock or may consist of treasury stock.

	 
	3.  	Exercise of Option

	 
	   	Each election to exercise this option shall be made, by delivering to the Company or its agent a
properly executed exercise notice, together with irrevocable instructions to a broker to deliver
promptly to the Company the amount of sale or loan proceeds with respect to the portion of shares
to be acquired upon exercise. Exercise of this option will not be permitted if the Company
determines, in its sole and absolute discretion, that issuance of shares at that time could
violate any law or regulation.

	 
	   	In the event an option is exercised by the executor or administrator of a deceased Optionee, or by
the person or persons to whom the option has been transferred by the Optionee’s will or the
applicable laws of descent and distribution, the Company shall be under no obligation to deliver
stock thereunder unless and until the Company is satisfied that the person or persons exercising
the option is or are the duly

 

 

	   	appointed executor(s) or administrator(s) of the deceased Optionee or the person to whom the
option has been transferred by the Optionee’s will or by the applicable laws of descent and
distribution.

	 
	4.  	Payment for and Delivery of Stock

	 
	   	Payment in full by cash, certified check, bank draft, wire transfer or postal or express money
order shall be made for all shares for which this option is exercised at the time of such
exercise, and no shares shall be delivered until such payment is made.

	 
	   	Alternatively, payment may be made by (i) delivering to the Company a properly executed exercise
notice, together with irrevocable instructions to a broker to deliver promptly to the Company the
amount of sale or loan proceeds with respect to the portion of the shares to be acquired upon
exercise having a Fair Market Value on the date of exercise equal to the sum of the applicable
portion of the exercise price being so paid, (ii) tendering to the Company (by physical delivery
or by attestation) certificates representing shares of outstanding common stock, par value $.10,
of the Company that have been held by the Optionee for at least six months prior to exercise,
having a Fair Market Value on the day prior to the date of exercise equal to the applicable
portion of the exercise price being so paid, together with stock powers duly executed and with
signature guaranteed; or (iii) any combination of the foregoing. Notwithstanding the foregoing, a
form of payment will not be available if the Company determines, in its sole and absolute
discretion, that such form of payment could violate any law or regulation.

	 
	   	The Company shall not be obligated to deliver any stock unless and until (i) satisfactory
arrangements have been made with the Company for the payment of any applicable tax withholding
obligations, (ii) all applicable federal and state laws and regulations have been complied with,
(iii) in the event the outstanding common stock is at the time
listed upon any stock exchange, the shares to be delivered have been listed, or authorized to be listed upon official notice of
issuance upon the exchanges where it is listed, and (iv) all legal matters in connection with the
issuance and delivery of the shares have been approved by counsel of the Company. The Optionee
shall have no rights of a stockholder until the stock is actually delivered to him.

	 
	5.  	Recovery and Reimbursement of Option Gain

	 
	   	The Company shall have the right to recover, or receive reimbursement for, any compensation or
profit realized by the exercise of this option or by the disposition of any option shares to the
extent that the Company has such a right of recovery or reimbursement under applicable securities
laws.

	 
	6.  	Transferability of Options

	 
	   	Except as provided below, this option may not be transferred by the Optionee otherwise than by
will or the laws of descent and distribution or pursuant to a qualified domestic relations order
as defined in Section 414(p) of the Internal Revenue Code, and during the Optionee’s lifetime this
option may be exercised only by the Optionee. Notwithstanding the foregoing, this option may be
transferred by the Optionee to members of his or her immediate family or to one or more trusts for
the benefit of such family members or to one or more partnerships in which such family members are
the only partners provided that (i) the Optionee does not receive any consideration for such
transfer, (ii) written notice of any proposed transfer and the details thereof shall have been
furnished to the Compensation and Human Resource Committee at least three (3) days in advance of
such transfer, and (iii) the Compensation and Human Resource Committee consents to the transfer in
writing. Options transferred pursuant to this provision will continue to be subject to the same
terms and conditions that were applicable to such options immediately prior to transfer and the
option may be exercised by the transferee only to the same extent that the option could have been
exercised by the Optionee had no transfer been made. For this purpose, the Optionee’s “family
members” shall include the Optionee’s spouse, children, grandchildren, parents, grandparents
(whether natural step, adopted or in-laws) siblings, nieces, nephews and grandnieces and grand
nephews.

	 
	7.  	Termination of Employment or Consultancy

	 
	   	Upon termination of employment or consultancy, other than termination of employment or consultancy
by reason of (i) Retirement, as defined in the Plan, (ii) disability, or (iii) death, any portion
of this option that has not become vested as of the date of termination shall immediately
terminate and any portion of this option that has already vested as of such date shall terminate
thirty (30) days after termination of employment or consultancy or the expiration date of the
option, whichever occurs first.

	 
	8.  	Retirement

	 
	   	In the event of the Optionee’s Retirement, as defined in the Plan, from the employ of Company or
any subsidiary, any portion of this option that has not become vested as of the date of Retirement
shall immediately terminate and any portion of this option that has already vested as of such date
shall terminate one (1) year after such Retirement or on the expiration date of the option,
whichever occurs first.

	 
	9.  	Disability

	 
	   	In the event of termination of employment of the Optionee because of disability, any unexercised
portion of this option held by the Optionee at the date of such termination (vested and unvested)
will immediately become exercisable in full and will remain exercisable by the Optionee for a
period of one (1) year or the remaining term of the option, whichever is shorter.

	 
	10.  	Death

	 
	   	If an Optionee dies while employed by the Company, any unexercised portion of this option held by
the Optionee at his date of death (vested and unvested) will immediately become exercisable in
full and will remain exercisable by the estate of the deceased Optionee or the person given
authority to exercise his options by his will or by operation of law for a period of one (1) year
or the remaining term of the option, whichever is shorter.

 

 

	11.  	Changes In Stock

	 
	   	In the event of any stock split, reverse stock split, dividend or other distribution (whether in
the form of cash, shares, other securities or other property), extraordinary cash dividend,
recapitalization, merger, consolidation, split-up, spin-off, reorganization, combination,
repurchase or exchange of shares or other securities, the issuance of warrants or other rights to
purchase shares or other securities, or other similar corporate transaction or event, the number
and kind of shares of stock of the Company covered by this option, the option price and other
relevant provisions may be appropriately adjusted by the Compensation and Human Resource
Committee, in its discretion, to the extent necessary to prevent dilution or enlargement of the
benefits or potential benefits intended to be provided by this option. Any such determinations
and adjustments made by the Compensation and Human Resource Committee shall be binding on all
persons. In the event of (i) a consolidation or merger in which the Company is not the surviving
corporation, (ii) a consolidation or merger in which the Company is the surviving corporation but
holders of shares receive securities or another corporation, or (iii) a sale of substantially all
of the Company’s assets (as an entirety) or capital stock to another person, this option shall be
deemed to apply to the equivalent amount of securities, cash or other property that is received by
Company stockholders in exchange for their Company shares pursuant to such transaction; provided,
however, that the Compensation and Human Resource Committee may, in its discretion, either (i)
provide, upon written notice to the Optionee, that this option shall terminate as of the date
specified in such notice (in which case the Compensation and Human Resource Committee may, but
does not have to, accelerate the vesting of any portion of this option that has not already vested
as of the date such notice is provided to the Optionee), or (ii) cancel this option and in
consideration of such cancellation pay to the Optionee an amount in cash with respect to each
share then remaining under the option equal to the difference between the Fair Market Value of
such share on the date of cancellation (or, if greater, the per share value of the consideration
received by Company stockholders as a result of the merger, consolidation, reorganization or sale)
and the per share exercise price of the option.

	 
	12.  	Continuance of Employment

	 
	   	This option shall not be deemed to obligate the Company or any subsidiary to retain the Optionee
in its employ for any period.

	 
	13.  	Incorporation by Reference of Employment Agreement

	 
	   	Notwithstanding any of the foregoing, this stock option grant shall be subject to the applicable
terms and conditions of the Employment Agreement entered into by and between Computer Associates
International, Inc. and the Optionee, dated as of November 22, 2004, which are incorporated herein
by reference.

	 
	   	IN WITNESS WHEREOF, Computer Associates International, Inc. has caused this certificate to be
executed by the Interim Chief Executive Officer. This option is granted at the Company’s principal
executive office, One Computer Associates Plaza, Islandia, New York 11749, on the date stated
above.

	 
	   	Computer Associates International, Inc.

	 	 	 	 	 
	By

	 	 	 	 
	

	 	 	 	 
	

	 	Kenneth Cron	 	 
	

	 	Interim CEOEXHIBIT 10.1

 

EXHIBIT 10.1

SUBSEQUENT AGREEMENT

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

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

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

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

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

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

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

          1. Capitalized Terms.

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

Executive’s Initials: /s/ RHV

 

 

          2. Termination By Mutual Consent.

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

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

          3. Employment Agreement.

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

Executive’s Initials: /s/ RHV

 

 

          4. Compensation and Benefits.

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

          5. Mutual Nondisparagement.

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

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

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

          6. Cooperation.

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

Executive’s Initials: /s/ RHV

 

 

          7. Non-Competition.

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

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

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

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

Executive’s Initials: /s/ RHV

 

 

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

          8. Indemnification.

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

          9. Breach by the Executive.

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

Executive’s Initials: /s/ RHV

 

 

          10. Taxes.

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

          11. Counterparts.

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

          12. Entire Agreement.

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

          13. Governing Law.

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

          14. Severability Clause.

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

Executive’s Initials: /s/ RHV

 

 

          15. No Waiver.

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

          16. Joint Drafting of Agreement.

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

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

	 	 	 	 	 
	 	 	UST Inc.
	

	 	By:

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

Vincent A. Gierer, Jr.
	

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

Richard H. Verheij

Executive’s Initials: /s/ RHV

 

 

\

APPENDIX A

RELEASE AGREEMENT

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

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

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

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

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

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

Executive’s Initials: /s/ RHV

 

 

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

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

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

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

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

	 	 	 
	

	 	/s/ Richard Verheij

Richard H. Verheij
	/s/
Delores Portanova

WITNESS
	 	 

Executive’s Initials: /s/ RHV 

 

 

APPENDIX B

COMPENSATION AND BENEFITS

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

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

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

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

Executive’s Initials: /s/ RHV

 

 

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

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

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

Executive’s Initials: /s/ RHV

 

 

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

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

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

Executive’s Initials: /s/ RHV

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