RETENTION BONUS
AGREEMENT
THIS
RETENTION BONUS AGREEMENT (the “Agreement”), effective
as of November 3, 2005 (the “Effective Date”), is
between UST Inc., a Delaware corporation (the
“Company”), and Vincent A. Gierer, Jr. (the
“Executive”).
WHEREAS,
the Executive and the Company are parties to an employment
agreement dated July 23, 1987 (the “Employment
Agreement”); and
WHEREAS,
the Board of Directors of the Company has determined that the
Employment Agreement should remain in full force and effect and
that appropriate steps should be taken to encourage the Executive
to remain employed by the Company as its Chairman and Chief
Executive Officer through December 31, 2006, consistent with
the Company’s succession plan.
NOW,
THEREFORE, in consideration of the mutual agreements set forth
herein and for other good and valuable consideration, the receipt
and adequacy of which is hereby acknowledged, the Company and the
Executive hereby agree as follows:
1.
Definitions . All capitalized terms not defined herein shall
have the meanings set forth in the Employment Agreement.
2.
Duties of the Executive . During the period commencing on
the Effective Date and ending on the close of business on
December 31, 2006 (the “Retention Period”), the
Executive hereby agrees to continue to serve in the position of
Chairman and Chief Executive Officer and continue to perform
services for the Company pursuant to the Employment
Agreement.
3.
No Future Equity Awards . The Executive acknowledges and
agrees that the Retention Bonus referred to in Section 4(a) hereof
shall be in lieu of any grants of equity awards to the Executive by
the Company during 2005 and 2006 and that the Executive shall have
no rights to be granted any such equity awards.
(a) Except
as otherwise provided in Section 4(b) and 4(c) hereof, so long as
the Executive remains employed by the Company through the last day
of the Retention Period, the Executive shall earn a retention bonus
(the “Retention Bonus”) in the amount of five million
dollars ($5,000,000), such Retention Bonus to be paid to the
Executive in a single cash lump sum as soon as practicable on or
after July 1, 2007 (the “Payment
Date”).
(b) Notwithstanding
anything in Section 4(a) to the contrary, in the event that, prior
to the end of the Retention Period, the Company terminates the
Executive’s
employment
without Cause, the Executive terminates his employment for Good
Reason or the Executive’s employment terminates by reason of
his death or Disability, the Company shall pay to the Executive (or
his estate as applicable), on the Payment Date, a pro rata portion
of the Retention Bonus, such pro rata portion to be based upon a
fraction the numerator of which is the number of full months
elapsed from the Effective Date to the date of termination and the
denominator of
