Document:

EX-10.1

 

EXHIBIT 10.1

UST INC.

INDEMNIFICATION AGREEMENT

     This Indemnification Agreement (“Agreement”) is made and effective as of August 4,
2005 by and between UST Inc., a Delaware corporation (the “Company”), and                     
(“Indemnitee”).

RECITALS

     WHEREAS, the Company desires to attract and retain the services of highly qualified
individuals, such as Indemnitee, to serve the Company;

     WHEREAS, in order to induce Indemnitee to continue to provide services to the Company, the
Company wishes to provide for the indemnification of, and advancement of expenses to, Indemnitee to
the maximum extent permitted by law;

     WHEREAS, the Certificate of Incorporation of the Company (the “Charter”) requires
indemnification of the officers and directors of the Company, and Indemnitee may also be entitled
to indemnification pursuant to the General Corporation Law of the State of Delaware (the
“DGCL”);

     WHEREAS, the Charter and the DGCL expressly provide that the indemnification provisions set
forth therein are not exclusive, and thereby contemplate that contracts may be entered into between
the Company and members of the board of directors, officers, employees and other persons with
respect to indemnification;

     WHEREAS, it is reasonable, prudent and necessary for the Company contractually to obligate
itself to indemnify, and to advance expenses on behalf of, such persons to the fullest extent
permitted by applicable law so that they will serve or continue to serve the Company free from
undue concern that they will not be so indemnified; and

     WHEREAS, this Agreement is a supplement to and in furtherance of the indemnification provided
in the Charter and any resolutions adopted pursuant thereto, and shall not be deemed a substitute
therefor, nor to diminish or abrogate any rights of Indemnitee thereunder.

     NOW, THEREFORE, in consideration of the premises and the covenants contained herein, the
Company and Indemnitee do hereby covenant and agree as follows:

     Section 1. Services to the Company. Indemnitee agrees to serve as a director,
officer, employee or agent of the Company, as the case may be. Indemnitee may at any time and for any
reason resign from such position (subject to any other contractual

 

 

obligation or any obligation imposed by operation of law), in which event the Company shall
have no obligation under this Agreement to continue Indemnitee in such position. This Agreement
shall not be deemed an employment contract between the Company (or any of its subsidiaries or any
Enterprise) and Indemnitee. The foregoing notwithstanding, this Agreement shall continue in force
after Indemnitee has ceased to serve as a director or officer or be an employee, as the case may
be, of the Company, but only limited to those actions and conduct of such person during the time
that he served as a director or officer or was an employee of the Company.

     Section 2. Definitions

     As used in this Agreement:

          (a) “Corporate Status” describes the status of a person who is or was a director,
officer, employee or agent of the Company or of any other corporation, partnership or joint
venture, trust, employee benefit plan or other enterprise which such person is or was serving at
the request of the Company.

          (b) “Enterprise” shall mean the Company and any other corporation, partnership, joint
venture, trust, employee benefit plan or other enterprise of which Indemnitee is or was serving at
the request of the Company as a director, officer, employee, agent or fiduciary.

          (c) “Expenses” shall include all reasonable attorneys’ fees, retainers, court costs,
transcript costs, fees of experts, witness fees, travel expenses, duplicating costs, printing and
binding costs, telephone charges, postage, delivery service fees, and all other disbursements or
expenses of the types customarily incurred in connection with prosecuting, defending, preparing to
prosecute or defend, investigating, being or preparing to be a witness in, or otherwise
participating in, a Proceeding. Expenses also shall include expenses incurred in connection with
any appeal resulting from any Proceeding, including without limitation the premium, security for,
and other costs relating to any cost bond, supersedes bond, or other appeal bond or its equivalent.
Expenses, however, shall not include amounts paid in settlement by Indemnitee or the amount of
judgments or fines against Indemnitee.

          (d) “Independent Counsel” means a law firm, or a partner (or, if applicable, member)
of such a law firm, that is experienced in matters of corporation law and neither presently is, nor
in the past five years has been, retained to represent: (i) the Company or Indemnitee in any matter
material to either such party (other than with respect to matters concerning the Indemnitee under
this Agreement, or of other indemnitees under similar indemnification agreements), or (ii) any
other party to the Proceeding giving rise to a claim for indemnification hereunder. Notwithstanding
the foregoing, the term “Independent Counsel” shall not include any person who, under the
applicable standards of professional conduct then prevailing, would have a conflict of interest in
representing either the Company or Indemnitee in an action to determine Indemnitee’s rights under
this Agreement. The Company agrees to pay the reasonable

 

 

fees and expenses of the Independent Counsel referred to above and to fully indemnify such
counsel against any and all Expenses, claims, liabilities and damages arising out of or relating to
this Agreement or its engagement pursuant hereto.

          (e) The term “Proceeding” shall include any threatened, pending or completed action,
suit, arbitration, alternate dispute resolution mechanism, investigation, inquiry, administrative
hearing or any other actual, threatened or completed proceeding, including any appeal therein,
whether brought in the right of the Company or otherwise and whether of a civil, criminal,
administrative or investigative nature, in which Indemnitee was, is or will be involved as a party
or otherwise by reason of the fact that Indemnitee is or was a
director, officer, employee or agent of the
Company, as the case may be, by reason of any action taken by him or of any action on his part while
acting as director, officer, employee or agent of the Company, or by reason of the fact that he is or was serving at the
request of the Company as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust, employee benefit plan or other enterprise, in each case whether
or not serving in such capacity at the time any liability or expense is incurred for which
indemnification, reimbursement, or advancement of expenses can be provided under this Agreement;
provided, however, that Indemnitee shall not be entitled to indemnification pursuant to this
Agreement in connection with any claim initiated by Indemnitee against the Company or any director
or officer of the Company, unless the Company has joined in or consented to the initiation of such
Proceeding.

     Section 3. Indemnity in Third-Party Proceedings. The Company shall indemnify
Indemnitee in accordance with the provisions of this Section 3 if Indemnitee is, or is threatened
to be made, a party to or a participant in any Proceeding, other than a Proceeding by or in the
right of the Company to procure a judgment in its favor. Pursuant to this Section 3, Indemnitee
shall be indemnified against all Expenses, judgments, fines and amounts paid in settlement actually
and reasonably incurred by Indemnitee or on his behalf in connection with such Proceeding or any
claim, issue or matter therein, if Indemnitee acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the Company and, in the case of a
criminal proceeding, had no reasonable cause to believe that his conduct was unlawful. Indemnitee
shall not enter into any settlement in connection with a Proceeding without ten (10) days prior
written notice to the Company.

     Section 4. Indemnity in Proceedings by or in the Right of the Company. The Company
shall indemnify Indemnitee in accordance with the provisions of this Section 4 if Indemnitee is, or
is threatened to be made, a party to or a participant in any Proceeding by or in the right of the
Company to procure a judgment in its favor. Pursuant to this Section 4, Indemnitee shall be
indemnified against all Expenses actually and reasonably incurred by him or on his behalf in
connection with such Proceeding or any claim, issue or matter therein, if Indemnitee acted in good
faith and in a manner he reasonably believed to be in or not opposed to the best interests of the
Company. No indemnification for Expenses shall be made under this Section 4 in respect of any
claim, issue or matter as to which Indemnitee shall have been finally adjudged by a court to be

 

 

liable to the Company, unless and only to the extent that the Delaware Court of Chancery (the
“Delaware Court”) or any court in which the Proceeding was brought shall determine upon
application that, despite the adjudication of liability but in view of all the circumstances of the
case, Indemnitee is fairly and reasonably entitled to indemnification for such expenses as the
Delaware Court or such other court shall deem proper.

     Section 5.
Partial Indemnification. If a director, officer, employee or agent of the Company is entitled under any provision of this Agreement to indemnification by the Company of
some or a portion of the Expenses, judgments, fines, penalties and amounts paid in settlement of a
Proceeding but not, however, for all of the total amount thereof, the Company shall nevertheless
indemnify such director, officer, employee or agent for the portion thereof to which he is
entitled. Notwithstanding any other provisions of this Agreement, to the extent that director,
officer, employee or agent has been successful on the merits or otherwise in defense of any or all
claims relating in whole or in part to a Proceeding or in defense of any issue or matter therein,
including dismissal without prejudice, such director, officer, employee or
agent shall be
indemnified against all Expenses incurred in connection therewith. In connection with any
determination by the reviewing party or otherwise as to whether the
director, officer, employee or agent is entitled to be indemnified hereunder the burden of proof shall be on the Company to
establish that such director, officer, employee or agent is not so entitled.

     Section 6. Indemnification For Expenses as a Witness. Notwithstanding any other
provision of this Agreement, to the extent that Indemnitee is, by reason of his Corporate Status, a
witness in any Proceeding to which Indemnitee is not a party, he shall be indemnified against all
Expenses actually and reasonably incurred by him or on his behalf in connection therewith.

     Section 7. Additional Indemnification.

          (a) Notwithstanding any limitation in Sections 3, 4, or 5, the Company shall indemnify
Indemnitee to the fullest extent permitted by law if Indemnitee is a party to or is threatened to
be made a party to any Proceeding (including a Proceeding by or in the right of the Company to
procure a judgment in its favor) against all Expenses, judgments, fines and amounts paid in
settlement actually and reasonably incurred by Indemnitee in connection with the Proceeding.

          (b) For purposes of Section 7(a), the meaning of the phrase “to the fullest extent permitted
by law” shall include, but not be limited to:

               (i) to the fullest extent permitted by the provision of the DGCL that authorizes or
contemplates additional indemnification by agreement, or the corresponding provision of any
amendment to or replacement of the DGCL or such provision thereof; and

               (ii) to the fullest extent authorized or permitted by any amendments to or replacements of the
DGCL adopted after the date of this Agreement

 

 

that increase the extent to which a corporation may indemnify its officers, directors,
employees or agents.

     Section 8. Exclusions. Notwithstanding any provision in this Agreement to the
contrary, the Company shall not be obligated under this Agreement to make any indemnity in
connection with any claim made against Indemnitee:

          (a) for which payment has actually been made to or on behalf of Indemnitee under any insurance
policy or other indemnity provision, except with respect to any excess beyond the amount paid under
any insurance policy or other indemnity provision;

          (b) for an accounting of profits made from the purchase and sale (or sale and purchase) by
Indemnitee of securities of the Company within the meaning of Section 16(b) of the Securities
Exchange Act of 1934, as amended, or similar provisions of state statutory law or common law;

          (c) on account of conduct by Indemnitee that is established by a final judgment as knowingly
fraudulent or deliberately dishonest or that constituted willful misconduct;

          (d) on account of conduct by Indemnitee that is established by a final judgment as
constituting a breach of Indemnitee’s duty of loyalty to the Company or resulting in any personal
profit or advantage to which Indemnitee was not legally entitled; or

          (e) for which payment is prohibited by applicable law.

     Section 9. Advances of Expenses. The Company shall advance, to the extent not
prohibited by law, the Expenses incurred by Indemnitee in connection with any Proceeding, and such
advancement shall be made within two (2) business days after the receipt by the Company of a
statement or statements requesting such advances from time to time, whether prior to or after final
disposition of any Proceeding. Advances shall be unsecured and interest free. Advances shall be
made without regard to Indemnitee’s ability to repay the expenses and without regard to
Indemnitee’s ultimate entitlement to indemnification under the other provisions of this Agreement.
Advances shall include any and all reasonable Expenses incurred pursuing an action to enforce this
right of advancement, including Expenses incurred preparing and forwarding statements to the
Company to support the advances claimed. The Indemnitee shall qualify for advances upon the
execution and delivery to the Company of this Agreement which shall constitute an undertaking
providing that the Indemnitee undertakes to the fullest extent required by law to repay the advance
if and to the extent that it is ultimately determined by a court of competent jurisdiction in a
final judgment, not subject to appeal, that Indemnitee is not entitled to be indemnified by the
Company. This Section 9 shall not apply to any claim made by Indemnitee for which indemnity is
excluded pursuant to Section 8. The right to advances under this paragraph shall in all events
continue until final disposition of any Proceeding.

 

 

     Section 10. Procedure for Notification and Defense of Claim.

          (a) To obtain indemnification under this Agreement, Indemnitee shall submit to the Company a
written request therefor.

          (b) The Company will be entitled to participate in the Proceeding at its own expense.

     Section 11. Procedure Upon Application for Indemnification.

          (a) Upon written request by Indemnitee for indemnification pursuant to Section 10(a), a
determination, if required by applicable law, with respect to Indemnitee’s entitlement thereto
shall be made in the specific case by Independent Counsel in a written opinion to the Board, a copy
of which shall be delivered to Indemnitee and, if it is so determined that Indemnitee is entitled
to indemnification, payment to Indemnitee shall be made within ten (10) days after such
determination. Indemnitee shall cooperate with the Independent Counsel making such determination
with respect to Indemnitee’s entitlement to indemnification, including providing to such counsel
upon reasonable advance request any documentation or information which is not privileged or
otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably
necessary to such determination. Any costs or expenses (including attorneys’ fees and
disbursements) incurred by Indemnitee in so cooperating with the Independent Counsel shall be borne
by the Company (irrespective of the determination as to Indemnitee’s entitlement to
indemnification) and the Company hereby indemnifies and agrees to hold Indemnitee harmless
therefrom.

          (b) The Independent Counsel shall be selected by Indemnitee. The Company may, within ten (10)
days after written notice of such selection, deliver to the Indemnitee a written objection to such
selection; provided, however, that such objection may be asserted only on the
ground that the Independent Counsel so selected does not meet the requirements of “Independent
Counsel” as defined in Section 2 of this Agreement, and the objection shall set forth with
particularity the factual basis of such assertion. Absent a proper and timely objection, the
person so selected shall act as Independent Counsel. If such written objection is so made and
substantiated, the Independent Counsel so selected may not serve as Independent Counsel unless and
until such objection is withdrawn or a court has determined that such objection is without merit.
If, within twenty (20) days after the later of submission by Indemnitee of a written request for
indemnification pursuant to Section 10(a) hereof, and the final disposition of the Proceeding, no
Independent Counsel shall have been selected and not objected to, the Indemnitee may petition a
court of competent jurisdiction for resolution of any objection which shall have been made by the
Company to the selection of Independent Counsel and/or for the appointment as Independent Counsel
of a person selected by the court or by such other person as the court shall designate, and the
person with respect to whom all objections are so resolved or the person so appointed shall act as
Independent Counsel under Section 11(a) hereof. Upon the due commencement of any judicial
proceeding

 

 

pursuant to Section 13(a) of this Agreement, Independent Counsel shall be discharged and
relieved of any further responsibility in such capacity (subject to the applicable standards of
professional conduct then prevailing).

     Section 12. Presumptions and Effect of Certain Proceedings.

          (a) In making a determination with respect to entitlement to indemnification hereunder, the
Independent Counsel making such determination shall presume that Indemnitee is entitled to
indemnification under this Agreement if Indemnitee has submitted a request for indemnification in
accordance with Section 10(a) of this Agreement, and the Company shall have the burden of proof to
overcome that presumption in connection with the making by the Independent Counsel of any
determination contrary to that presumption. Neither the failure of the Company or of Independent
Counsel to have made a determination prior to the commencement of any action pursuant to this
Agreement that indemnification is proper in the circumstances because Indemnitee has met the
applicable standard of conduct, nor an actual determination by the Company or by Independent
Counsel that Indemnitee has not met such applicable standard of conduct, shall be a defense to the
action or create a presumption that Indemnitee has not met the applicable standard of conduct.

          (b) The termination of any Proceeding or of any claim, issue or matter therein, by judgment,
order, settlement or conviction, or upon a plea of guilty, nolo contendere or its
equivalent, shall not (except as otherwise expressly provided in this Agreement) of itself
adversely affect the right of Indemnitee to indemnification or create a presumption that Indemnitee
did not act in good faith and in a manner which he reasonably believed to be in or not opposed to
the best interests of the Company or, with respect to any criminal Proceeding, that Indemnitee had
reasonable cause to believe that his conduct was unlawful.

          (c) For purposes of any determination of good faith, Indemnitee shall be deemed to have acted
in good faith if Indemnitee’s action is based on the records or books of account of the Enterprise,
including financial statements, or on information supplied to Indemnitee by the officers of the
Enterprise in the course of their duties, or on the advice of legal counsel for the Enterprise or
the Board or counsel selected by any committee of the Board or on information or records given or
reports made to the Enterprise by an independent certified public accountant or by an appraiser,
investment banker or other expert selected with reasonable care by the Company or the Board or any
committee of the Board. The provisions of this Section 12(c) shall not be deemed to be exclusive
or to limit in any way the other circumstances in which the Indemnitee may be deemed to have met
the applicable standard of conduct set forth in this Agreement.

          (d) The knowledge and/or actions, or failure to act, of any director, officer, agent or
employee of the Enterprise shall not be imputed to Indemnitee for purposes of determining the right
to indemnification under this Agreement.

     Section 13. Remedies of Indemnitee.

 

 

          (a) Subject to Section 13(e), in the event that (i) a determination is made pursuant to
Section 11 of this Agreement that Indemnitee is not entitled to indemnification under this
Agreement, (ii) advancement of Expenses is not timely made pursuant to Section 9 of this Agreement,
(iii) no determination of entitlement to indemnification shall have been made pursuant to Section
11(a) of this Agreement within ninety (90) days after receipt by the Company of the request for
indemnification, (iv) payment of indemnification is not made pursuant to Sections 5 or 6 or the
last sentence of Section 11(a) of this Agreement within ten (10) days after receipt by the Company
of a written request therefor, or (v) payment of indemnification pursuant to Sections 3, 4 or 7 of
this Agreement is not made within ten (10) days after a determination has been made that Indemnitee
is entitled to indemnification, Indemnitee shall be entitled to an adjudication by a court of his
entitlement to such indemnification or advancement of Expenses.

          (b) In the event that a determination shall have been made pursuant to Section 11(a) of this
Agreement that Indemnitee is not entitled to indemnification, any judicial proceeding commenced
pursuant to this Section 13 shall be conducted in all respects as a de novo trial, on the merits
and Indemnitee shall not be prejudiced by reason of that adverse determination. In any judicial
proceeding commenced pursuant to this Section 13, the Company shall have the burden of proving
Indemnitee is not entitled to indemnification or advancement of Expenses, as the case may be.

          (c) If a determination shall have been made pursuant to Section 11(a) of this Agreement that
Indemnitee is entitled to indemnification, the Company shall be bound by such determination in any
judicial proceeding commenced pursuant to this Section 13, absent (i) a misstatement by Indemnitee
of a material fact, or an omission of a material fact necessary to make Indemnitee’s statement not
materially misleading, in connection with the request for indemnification, or (ii) a prohibition of
such indemnification under applicable law.

          (d) The Company shall be precluded from asserting in any judicial proceeding commenced
pursuant to this Section 13 that the procedures and presumptions of this Agreement are not valid,
binding and enforceable and shall stipulate in any such court that the Company is bound by all the
provisions of this Agreement. The Company shall indemnify Indemnitee against any and all Expenses
and, if requested by Indemnitee, shall (within ten (10) days after receipt by the Company of a
written request therefor) advance, to the extent not prohibited by law, such Expenses to
Indemnitee, which are incurred by Indemnitee in connection with any action brought by Indemnitee
for indemnification or advance of Expenses from the Company under this Agreement or under any
directors’ and officers’ liability insurance policies maintained by the Company, regardless of
whether Indemnitee ultimately is determined to be entitled to such indemnification, advancement of
Expenses or insurance recovery, as the case may be. 

          (e) Notwithstanding anything in this Agreement to the contrary, no determination as to
entitlement to indemnification under this Agreement shall be required to be made prior to the final
disposition of the Proceeding.

 

 

     Section 14. Non-exclusivity; Survival of Rights; Insurance; Subrogation.

          (a) The rights of indemnification and to receive advancement of Expenses as provided by this
Agreement shall not be deemed exclusive of any other rights to which Indemnitee may at any time be
entitled under applicable law, the Charter, the Company’s Bylaws, any agreement, a vote of
stockholders or a resolution of directors, or otherwise. No amendment, alteration or repeal of this
Agreement or of any provision hereof shall limit or restrict any right of Indemnitee under this
Agreement in respect of any action taken or omitted by such Indemnitee in his Corporate Status
prior to such amendment, alteration or repeal. To the extent that a change in Delaware law, whether
by statute or judicial decision, permits greater indemnification or advancement of Expenses than
would be afforded currently under the Charter, Bylaws and this Agreement, it is the intent of the
parties hereto that Indemnitee shall enjoy by this Agreement the greater benefits so afforded by
such change. No right or remedy herein conferred is intended to be exclusive of any other right or
remedy, and every other right and remedy shall be cumulative and in addition to every other right
and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The
assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the
concurrent assertion or employment of any other right or remedy.

          (b) To the extent that the Company maintains an insurance policy or policies providing
liability insurance for directors, officers, employees, or agents of the Company or of any other
Enterprise, Indemnitee shall be covered by such policy or policies in accordance with its or their
terms to the maximum extent of the coverage available for any such director, officer, employee or
agent under such policy or policies. If, at the time of the receipt of a notice of a claim pursuant
to the terms hereof, the Company has director and officer liability insurance in effect, the
Company shall give prompt notice of the commencement of such proceeding to the insurers in
accordance with the procedures set forth in the respective policies. The Company shall thereafter
take all necessary or desirable action to cause such insurers to pay, on behalf of the Indemnitee,
all amounts payable as a result of such proceeding in accordance with the terms of such policies.

          (c) In the event of any payment under this Agreement, the Company shall be subrogated to the
extent of such payment to all of the rights of recovery of Indemnitee, who shall execute all papers
required and take all action necessary to secure such rights, including execution of such documents
as are necessary to enable the Company to bring suit to enforce such rights.

          (d) The Company shall not be liable under this Agreement to make any payment of amounts
otherwise indemnifiable hereunder (or for which advancement is provided hereunder) if and to the
extent that Indemnitee has otherwise actually received such payment under any insurance policy,
contract, agreement or otherwise.

          (e) The Company’s obligation to indemnify or advance Expenses hereunder to Indemnitee who is
or was serving at the request of the Company as a director, officer, employee or agent of any other
corporation, partnership, joint venture,

 

 

trust, employee benefit plan or other enterprise shall be reduced by any amount Indemnitee has
actually received as indemnification or advancement of Expenses from such other corporation,
partnership, joint venture, trust, employee benefit plan or other enterprise.

     Section 15. Duration of Agreement. This Agreement shall continue until and terminate
upon the later of: (a) ten (10) years after the date that Indemnitee shall have ceased to serve as
a director, officer, employee or agent of the Company, as the case may be or (b) one (1) year
after the final termination of any Proceeding, then pending in respect of which Indemnitee is
granted rights of indemnification or advancement of Expenses hereunder and of any proceeding
commenced by Indemnitee pursuant to Section 13 of this Agreement relating thereto. This Agreement
shall be binding upon the Company and its successors and assigns and shall inure to the benefit of
Indemnitee and his heirs, executors and administrators. The Company shall require and cause any
successor (whether direct or indirect by purchase, merger, consolidation or otherwise) to all,
substantially all or a substantial part, of the business and/or assets of the Company, by written
agreement in form and substance satisfactory to the Indemnitee, expressly to assume and agree to
perform this Agreement in the same manner and to the same extent that the Company would be required
to perform if no such succession had taken place.

     Section 16. Severability. If any provision or provisions of this Agreement shall be
held to be invalid, illegal or unenforceable for any reason whatsoever: (a) the validity, legality
and enforceability of the remaining provisions of this Agreement (including without limitation,
each portion of any Section of this Agreement containing any such provision held to be invalid,
illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall not in any
way be affected or impaired thereby and shall remain enforceable to the fullest extent permitted by
law; (b) such provision or provisions shall be deemed reformed to the extent necessary to conform
to applicable law and to give the maximum effect to the intent of the parties hereto; and (c) to
the fullest extent possible, the provisions of this Agreement (including, without limitation, each
portion of any Section of this Agreement containing any such provision held to be invalid, illegal
or unenforceable, that is not itself invalid, illegal or unenforceable) shall be construed so as to
give effect to the intent manifested thereby.

     Section 17. Enforcement.

 

 

          (a) The Company expressly confirms and agrees that it has entered into this Agreement and
assumed the obligations imposed on it hereby in order to induce Indemnitee to serve as a director,
officer, employee or agent of the Company, and the Company acknowledges that Indemnitee is relying upon
this Agreement in serving in such capacity on behalf of the Company.

          (b) This Agreement constitutes the entire agreement between the parties hereto with respect to
the subject matter hereof and supersedes all prior agreements and understandings, oral, written and
implied, between the parties hereto with respect to the subject matter hereof; provided,
however, that this Agreement is a supplement to and in furtherance of the Charter and
Bylaws of the Company and applicable law, and shall not be deemed a substitute therefor, nor to
diminish or abrogate any rights of Indemnitee thereunder.
Notwithstanding the foregoing, in the event that this Agreement shall
be deemed to be invalid, illegal or unenforceable, in whole or in
part, for any reason whatsoever, and the Company has previously
entered into an indemnification agreement with Indemnitee, then the
terms of such indemnification agreement entered into previously by
and between the parties hereto shall be deemed to be in full force
and effect and shall be considered a legal, binding and enforceable
obligation against the Company.

     Section 18. Modification and Waiver. No supplement, modification or amendment of this
Agreement shall be binding unless executed in writing by the parties thereto. No waiver of any of
the provisions of this Agreement shall be deemed or shall constitute a waiver of any other
provisions of this Agreement nor shall any waiver constitute a continuing waiver.

     Section 19. Notice by Indemnitee. Indemnitee agrees promptly to notify the Company in
writing upon being served with any summons, citation, subpoena, complaint, indictment, information
or other document relating to any Proceeding or matter which may be subject to indemnification or
advancement of Expenses covered hereunder. The failure of Indemnitee to so notify the Company shall
not relieve the Company of any obligation which it may have to the Indemnitee under this Agreement
or otherwise.

     Section 20. Notices. All notices, requests, demands and other communications under
this Agreement shall be in writing and shall be deemed to have been duly given if (a) delivered by
hand and receipted for by the party to whom said notice or other communication shall have been
directed, (b) mailed by certified or registered mail with postage prepaid, on the third business
day after the date on which it is so mailed, (c) mailed by reputable overnight courier and
receipted for by the party to whom said notice or other communication shall have been directed or
(d) sent by facsimile transmission, with receipt of oral confirmation that such transmission has
been received:

          (a) If to Indemnitee, at such address as Indemnitee shall provide to the Company.

          (b) If to the Company to:

UST Inc.

Attn: Corporate Secretary

100 W. Putnam Avenue

Greenwich, CT 06830

 

 

or to any other address as may have been furnished to Indemnitee by the Company.

     Section 21. Contribution. To the fullest extent permissible under applicable law, if
the indemnification provided for in this Agreement is unavailable to Indemnitee for any reason
whatsoever, the Company, in lieu of indemnifying Indemnitee, shall contribute to the amount
incurred by Indemnitee, whether for judgments, fines, penalties, excise taxes, amounts paid or to
be paid in settlement and/or for Expenses, in connection with any claim relating to an
indemnifiable event under this Agreement, in such proportion as is deemed fair and reasonable in
light of all of the circumstances of such Proceeding in order to reflect (i) the relative benefits
received by the Company and Indemnitee as a result of the event(s) and/or transaction(s) giving
cause to such Proceeding; and/or (ii) the relative fault of the Company (and its directors,
officers, employees and agents) and Indemnitee in connection with such event(s) and/or
transaction(s).

     Section 22. Applicable Law and Consent to Jurisdiction. This Agreement and the legal
relations among the parties shall be governed by, and construed and enforced in accordance with,
the laws of the State of Delaware, without regard to its conflict of laws rules. The Company and
Indemnitee hereby irrevocably and unconditionally (i) agree that any action or proceeding arising
out of or in connection with this Agreement shall be brought only in the Delaware Court, and not in
any other state or federal court in the United States of America or any court in any other country,
(ii) consent to submit to the exclusive jurisdiction of the Delaware Court for purposes of any
action or proceeding arising out of or in connection with this Agreement, (iii) appoint, to the
extent such party is not otherwise subject to service of process in the State of Delaware, The
Corporation Trust Company, Wilmington, Delaware as its agent in the State of Delaware as such
party’s agent for acceptance of legal process in connection with any such action or proceeding
against such party with the same legal force and validity as if served upon such party personally
within the State of Delaware, (iv) waive any objection to the laying of venue of any such action or
proceeding in the Delaware Court, and (v) waive, and agree not to plead or to make, any claim that
any such action or proceeding brought in the Delaware Court has been brought in an improper or
inconvenient forum.

     Section 23. Identical Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall for all purposes be deemed to be an original but all of which
together shall constitute one and the same Agreement. Only one such counterpart signed by the party
against whom enforceability is sought needs to be produced to evidence the existence of this
Agreement.

     Section 24. Miscellaneous. The headings of the paragraphs of this Agreement are
inserted for convenience only and shall not be deemed to constitute part of this Agreement or to
affect the construction thereof.

     IN WITNESS WHEREOF, the parties have caused this Agreement to be signed as of the day and year
first above written.

 

 

	 	 	 	 	 
	 	UST Inc.

 	 
	 	By:  	 	 
	 	 	[Name]  	 
	 	 	[Title] 	 
	 
	 	INDEMNITEE

 	 
	 	By:  	 	 
	 	 	[Name] 	 
	 	 	[Title]<PAGE>

                                                                    Exhibit 10.1

                           EXECUTIVE SEVERANCE POLICY

APPLICATION

This policy applies to the officers of Cray Inc. ("Cray" or the "Company"). In
particular it applies to all individuals who are appointed by the Board of
Directors to officer positions and to those individuals who are appointed by the
Chief Executive Officer as officers. The current individuals covered by this
policy are listed on Exhibit A; the Chief Executive Officer may change Exhibit A
from time to time.

The Company has entered into management retention agreements with certain of its
officers that become applicable if there is a "Change of Control," as defined in
those agreements, of Cray. If those agreements are applicable, then the
individuals covered by those agreements are covered by those agreements and not
by this policy.

This policy does not apply if the officer's employment is terminated for Cause,
death, Disability, retirement or resignation other than for Good Reason (as such
terms are defined in Section 2 below).

The Company has adopted a severance policy for all employees in connection with
reductions-in-force. If applicable, this policy is in lieu of and replaces the
reduction-in-force policy for the covered officers.

POLICY

If the employment of an officer of the Company terminates and this policy is
applicable to such termination, then:

1.    Severance Payment. The officer will be entitled to Severance Payments as
      follows:

      a. Salary Continuation. The officer will continue to receive his or her
      Salary, to be paid in accordance with the Company's standard salary
      payment policy for all employees, for the following periods, as
      applicable:

            President and Chief Executive Officer - for a period of twelve
            months, provided that from March 1, 2005, through March 31, 2008,
            the amount shall be 200% of Salary.

            Senior Vice President - for a period of nine months, plus one month
            for each year of service as an officer of the Company, up to a
            maximum of twelve months

<PAGE>

            Vice President - for a period of six months, plus one month for each
            year of service as an officer of the Company, up to a maximum of
            nine months.

            New Officers - the Compensation Committee of the Board of Directors
            is authorized to approve salary continuation for different periods,
            and to add targeted bonus and other compensation to the definition
            of "Salary" in connection with the hiring or appointment of new
            officers and senior managers, such determinations to be set forth in
            minutes of the Compensation Committee.

            *For purposes of calculating "a year of service" for salary
            continuation purposes, an individual shall be deemed to have
            completed a "year of service" as on officer if the individual has
            completed ten or more full months as an officer.

            The Board of Directors shall determine the period of time over which
            the salary continuation payments are made. These salary continuation
            payments will cease if, while receiving these salary continuation
            payments, the officer becomes re-employed by the Company or any of
            its subsidiaries but will continue if the officer is employed by
            another employer.

      b. Vacation. Any accrued vacation balance to be paid in accordance with
      the Company's standard practice for paying accrued vacation to terminating
      employees.

      c. Benefits. The Company will continue to provide the following benefits
      in accordance with the Company's policies and benefits applicable to all
      employees:

            The Company will pay under COBRA the Company portion of the medical
            benefits that the officer was receiving prior to termination;

            The Company will provide to the officer the Dental, Vision and
            Orthodontia benefits on the same terms as were provided to the
            officer prior to termination; and

            The Company will reimburse the cost of a term life insurance policy
            for the appropriate period in the amount provided to the officer
            immediately prior to termination'

            provided, however, to the extent the Company adjusts or changes any
            or all of the medical, vision, orthodontia and life insurance
            benefits

                                       2
<PAGE>

                  generally for employees in the United States, then the Company
                  shall make a comparable adjustment in the benefits provided to
                  the officer

            The benefits identified in this clause 1(c) will be provided for a
            period ending the earlier of (i) when the officer no longer receives
            continued salary under clause 1(a) above or (ii) when the officer is
            employed by an employer that provides medical, dental, vision,
            orthodontia and life insurance benefits, as the case may be, and the
            officer was eligible to receive any such benefits. As part of the
            officer's termination, he or she will agree to notify the Company
            promptly if he or she becomes an employee of another employer.

      d.    Stock Options. All outstanding stock options shall cease to vest
            upon termination and all outstanding stock options shall be
            exercisable at any time before the earlier of (i) the expiration
            date of the option or (ii), if permitted under the applicable stock
            option agreements, the expiration of the salary payments under
            clause 1(a) above and, if not so permitted, then pursuant to the
            provisions of the applicable stock option agreements

      e.    Outplacement. The Company will pay for outplacement services (Drake
            Beam Morin Senior Executive Level Programs or equivalent) for a
            period ending the earlier of (i) when the officer no longer receives
            continued salary under clause 1(a) above or (ii) when the officer is
            employed.

2.    Definitions:

      a.    Cause. For purposes of this policy, "Cause" means a termination of
            employment resulting from a good faith determination by the Board of
            Directors that:

            -     the officer has willfully failed or refused in a material
                  respect to follow reasonable policies or directives
                  established by the Board of Directors or the Chief Executive
                  Officer or willfully failed or refused to attend to material
                  duties or obligations of his or her office (other than any
                  such failure resulting from the officer's incapacity due to
                  physical or mental illness), which the officer has failed to
                  correct within a reasonable period following written notice to
                  such officer; or

            -     there has been an act by the officer involving wrongful
                  misconduct which has a demonstrably adverse impact on or
                  material damage to the Company or its subsidiaries, or which
                  constitutes a misappropriation of the assets of the Company or
                  its subsidiaries; or

                                       3
<PAGE>

            -     the officer has engaged in an unauthorized disclosure of
                  confidential information; or

            -     the officer, while employed by the Company or any of its
                  subsidiaries, has performed services for another company or
                  person which competes with the Company, without the prior
                  written approval of the Chief Executive Officer of the
                  Company.

      b.    Disability. For purposes of this policy, "Disability" means that, at
            the time the officer's employment is terminated, he or she has been
            unable to perform the duties of his or her position for a period of
            six consecutive months as a result of the officer's incapability due
            to physical or mental illness.

      c.    Good Reason. For purposes of this policy, "Good Reason" means:

            -     a reduction in salary or benefits (other than applicable to
                  employees generally); or

            -     a material diminution in job responsibilities; or

            -     a request to relocate, except for office relocations that
                  would not increase the officer's one-way commute by more than
                  25 miles.

      d.    Salary. For purposes of this policy, "Salary" means the officer's
            base salary in effect at the time, exclusive of any bonus and of any
            variable pay component, except as follows:

            For the President and Chief Executive Officer, "Salary" means the
            total of the President and Chief Executive's base salary in effect
            at the time, the Preisdent and Chief Executive's bonus under the
            executive bonus plan in effect at the time, assuming 100% of the
            target is reached, and the override bonus based at meeting the plan
            for the year, as approved by the Board (if the Board has not yet
            approved a plan for the applicable year, the previous year's plan
            will be used to determine such bonus).

3.    Conditions. It is a condition for any officer to receive the benefits
      under this policy that the officer execute the Company's standard
      termination agreement and general release and any required revocation or
      waiting period shall have expired, and it is a condition to the
      continuation of salary and other benefits under this policy that the
      officer, following termination, complies with the terms of his or her
      Employee Confidentiality Agreement and any agreement executed during the
      officer's employment or in connection with the officer's termination of
      employment.

                                       4
<PAGE>

4.    Unfunded Obligations. The obligations of the Company under this policy are
      funded from the Company's general assets.

5.    Administration. This policy shall be administered by the Chief Executive
      Officer of the Company, or such other person or persons as the Chief
      Executive Officer may appoint (such person or persons are referred to as
      the "Administrator"), provided that the Board of Directors may appoint
      another person as Administrator.

6.    ERISA Plan. This policy is intended to be and shall be administered and
      maintained as a welfare benefit plan under Section 3(1) of the Employee
      Retirement Income Security Act of 1974 ("ERISA"), providing certain
      benefits to participants on certain severances from employment. This
      policy is not intended to be a pension plan under Section 3(2)(A) of ERISA
      and shall be maintained and administered so as not to be such a plan.

7.    Claims. Claims for benefits under this policy shall be governed by these
      procedures. The Administrator shall establish administrative processes and
      safeguards to ensure and verify that claims decisions are made in
      accordance with the plan and that, where appropriate, plan provisions have
      been applied consistently with respect to similarly situated claimants.
      Any person claiming a benefit, or requesting an interpretation, ruling or
      information, shall present the request in writing to the chair of the
      Administrator, who will decide the claim.

      7.1 If the claim is wholly or partially denied, the Administrator will
      notify the claimant of the adverse determination within a reasonable time
      not longer than 90 days after the plan received the claim unless special
      circumstances require an extension of time. The Administrator will notify
      a claimant in writing of the need for any extension before the end of the
      initial 90 days. Any notice of extension will indicate the special
      circumstances requiring the extension and the date by which a decision is
      expected. Any extension will be no longer than another 90 days after the
      initial period.

      7.2 The Administrator will provide the claimant with written or electronic
      notification of any adverse determination on a claim, including the
      specific reason or reasons for the determination; reference to the
      specific plan provisions on which the determination is based; a
      description of any additional material or information necessary for the
      claimant to perfect the claim and an explanation of why it is necessary; a
      description of the review procedures under 7.3 and 7.4 and the applicable
      time limits; and a statement of the claimant's right to bring a legal
      action under ERISA following any adverse determination on review.

                                       5
<PAGE>

      7.3 A claimant may request review within 60 days after receiving a
      notification of an adverse determination on a claim and may submit written
      comments, documents, records and other information relating to the claim

                  (a) Upon request and at no charge, the claimant may have
            copies of any document, record or other information that was relied
            on in making the determination; was submitted, considered or
            generated in the course of making the determination, whether or not
            relied on; or demonstrates compliance with the processes and
            safeguards under 7.1(a).

                  (b) The Administrator's review shall take into account all
            comments, documents, records and other information submitted by the
            claimant relating to the claim, whether or not considered in the
            initial determination.

      7.4 The Administrator will respond to an appeal by notifying the claimant
      of its determination on review within a reasonable time not longer than 60
      days after the plan received the request for review unless an extension of
      time is required for a hearing or other special circumstances. The
      Administrator will also notify a claimant in writing of the need for any
      extension before the end of the initial 60 days. Any notice of extension
      will indicate the special circumstances requiring the extension and the
      date by which a decision is expected. No extension will be longer than
      another 60 days after the initial period.

      7.5 The Administrator will provide the claimant with written or electronic
      notification of its determination on appeal. If the determination is
      adverse, the notice will include the specific reason or reasons for the
      determination; reference to the specific plan provisions on which the
      determination is based; a statement that, upon request and at no charge,
      the claimant may have copies of any document, record or other information
      under 7.3; and a summary of the claimant's right to bring a civil action
      under ERISA.

8.    Status as Policy. The Company may modify and/or terminate this policy at
      any time and, prior to termination of his or her employment, no officer
      has any vested rights under this policy.

                                       6

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