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Exhibit 10
THIS AGREEMENT dated as of June 27, 2000 by and between UST Inc., a
Delaware corporation with its principal executive offices at 000 Xxxx Xxxxxx
Xxxxxx, Xxxxxxxxx, Xxxxxxxxxxx 00000 (the "Company"), and Xxxxxx X. Xxxxxxx,
residing at 0 Xxxxxxx Xxxxx, Xxxxxxxx, XX 00000 (the "Employee").
W I T N E S S E T H :
WHEREAS, the parties being mindful of Employee's past service to the
Company desire to establish a mutually beneficial future relationship;
NOW, THEREFORE, IT IS AGREED between the parties as follows:
A. If, and to the extent that, Employee has been employed pursuant to an
employment and/or severance agreement, express or implied, such
agreement is hereby terminated and superseded by the terms and
conditions of this Agreement.
B. The Company hereby agrees to continue the employment of Employee until
the earlier of (i) January 1, 2001, or (ii) Employee's death (the
"Employment Period"), and Employee hereby accepts such employment, upon
the following terms and conditions:
1. Immediately upon execution of this Agreement, Employee shall sign a
letter, in the form attached as Exhibit A, acknowledging his
resignation from his designation pursuant to Section III (1) (2) of the
Smokeless Tobacco Master Settlement Agreement. Employee's salary shall
be paid at the rate of no less than $400,000 per year during the
Employment Period. This salary shall be payable in accordance with
Company's then prevailing pay practices and shall be the basis for his
continued participation in all Company's benefit plans in which an
officer is presently entitled to participate, or in which other
employees of the same or similar level of responsibility may become
entitled to participate, provided such benefits continue to be made
available to such other employees. If there is an Incentive
Compensation distribution generally for calendar year 2000, Employee
shall be eligible for consideration for Incentive Compensation for the
calendar year 2000 payable in February 2001 but for no period
thereafter. If Employee elects to retire after the Employment Period,
all issued but unexercised UST stock options shall then vest. Employee
shall be eligible to receive outplacement services; said services not
to exceed $50,000. On January 1, 2001, Employee may elect to retire
under UST Inc.'s Officers' Supplemental Retirement Plan ("the SOP")
with the benefits calculated as of the end of the Employment Period. If
Employee elects to retire after the Employment Period,
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Employee shall also receive life insurance pursuant to Company practice
and retiree medical coverage pursuant to the terms and conditions of
the SOP. At the end of the Employment Period, Employee shall sign a
letter of resignation, in the form attached as Exhibit B, acknowledging
his resignation as an officer or director of the Company or any of its
subsidiaries or affiliates.
2. Employee shall perform during the Employment period such duties of
an executive nature as may be designated from time to time by the Chief
Executive Officer of the Company or his designee. Employee agrees to
cooperate with Company in the reassignment of certain business
activities.
3. During the Employment Period, Employee shall devote such time,
attention and energy to the business of the Company as the demands of
the duties assigned to him shall reasonably require. From the date of
this Agreement through January 1, 2001, Employee shall not, without the
written consent of Company, engage in any other competitive business
activity including, but not limited to, a business involved in the
manufacture or distribution of smokeless tobacco whether or not the
same is pursued for gain, profit or other pecuniary advantage. The
foregoing shall not, however, be construed as preventing Employee from
making investments in any other business, provided, however, that such
investments do not require his services in the operation of the affairs
of the businesses in which such investments are made. If Employee
accepts full-time employment during the Employment Period, his salary
continuance, his entitlement to the Company's benefit plans set forth
in paragraph B1 and his entitlement to SOP shall then cease.
4. At all times hereafter, Company agrees that it shall not orally, in
writing or through any course of conduct, directly or indirectly,
disparage, or assist others in disparaging, Employee. At all times
hereafter, Employee agrees that he shall not orally, in writing or
through any course of conduct, directly or indirectly, disparage, or
assist others in disparaging, the Company, including any of its
parents, subsidiaries and affiliates, or any of their current or former
employees, officers, directors or agents. For these purposes,
disparagement shall include any activity which can be reasonably
anticipated to be detrimental to the reputation of Employee and the
Company or any of the other entities or persons referred to in the
prior sentence or disruptive of the business activities of the Company
or any of such entities or persons.
5. At all times hereafter, Employee will maintain the confidentiality
of all information relating to the business, customers, trade
practices, litigation, trade secrets and know-how of the Company, its
subsidiaries and affiliates, and Employee will not, directly or
indirectly, make any disclosure thereof to anyone, or make any use
thereof, on his own behalf or on behalf of any third party, without the
Company's prior written consent. At the request of the Company,
Employee will return to the Company all documents, reports, files,
memoranda, records and software, cardkey passes, door and file keys,
computer access codes
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or disks and instructional manuals, and other physical, personal and
intellectual property which he received or prepared or helped prepare
in connection with his employment with the Company, its subsidiaries
and affiliates, and Employee will not retain any copies, duplicates,
reproductions or excerpts thereof. Employee agrees to take all
necessary actions to vest such property rights in the Company.
Employee acknowledges and agrees that the Employee Secrecy Agreement
between UST Inc. and Employee, a true and complete copy of which is
attached hereto as Exhibit C, is in full force and effect, is hereby
incorporated as a part of this Agreement and will remain in full force
and effect on and after the execution of this Agreement, and will
survive the expiration of this Agreement. Employee warrants and
represents that he has not disclosed or disseminated Proprietary
Information, as defined in Exhibit C, to third parties.
In view of the nature of Employee's employment and the nature of the
confidential information of the Company to which he has had access
during the course of his employment, Employee agrees that any
violation, or threatened violation, of Paragraphs B3, 4 or 5 of this
Agreement would cause irreparable damage to Company, that the Company
has no adequate remedy at law and, therefore, in the event of such a
violation or threatened violation the Company will be entitled to
injunctive relief (temporary, preliminary and permanent), prohibiting
Employee from any such violation or threatened violation. The remedies
provided for herein shall be available to the Company should Employee
violate any of the terms and conditions of the Agreement set forth in
Exhibit C.
6. The Company acknowledges and agrees that Employee shall continue to
be indemnified with respect to any action, suit or proceeding as to
which he is made a party or is threatened to be made a party, by reason
of the fact that he was a director, officer, employee or agent of the
Company, or any of its subsidiaries or affiliates, in accordance with
and as more fully set forth in Article VIII of the Company's By-Laws.
7. Employee's employment pursuant to this Agreement may not be
terminated by the Company except in the event that Employee defaults in
or breaches any of the covenants, representations or obligations
assumed by him in Paragraphs A, B, and/or C hereof, in which event all
compensation payable hereunder to Employee or his estate by the Company
shall forthwith cease. Such remedy shall not be the Company's exclusive
remedy and Employee understands and acknowledges that the Company may
take further action including seeking monetary damages and/or
injunctive relief to enforce the provisions of this Agreement.
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8. No later than July 31, 2000, Employee (or in the event of his death,
within three (3) months after his estate shall have been offered for
probate, his estate,) shall:
(a) Promptly repay the Company any sums due to the Company
from him by reason of advances to him, Company expenditures
for his personal benefit, credit card charges for personal
items or otherwise, which have not yet been repaid.
(b) Except for loans made pursuant to UST Inc.'s Stock Option
Plan, repay any loans, advances, or other extensions of
credit, from any source whatsoever, which then are subject to
a guarantee of repayment by the Company.
9. No later than July 19, 2000, Employee or, in the event of his prior
death, his estate shall return forthwith to the Company all credit
cards issued to Employee by or through the Company.
10. Employee's employment shall be deemed to have terminated effective
upon the expiration of the Employment Period for purposes of
determining service credit for eligibility, vesting or accrual of
benefits under any Company benefit plans ("Benefit Plans") then in
effect. He may thereafter retire under any such Benefit Plan as to
which he has met the necessary eligibility and service requirements.
Nothing herein, however, shall be deemed to create any rights to
retirement benefits beyond those rights which had vested on or prior to
the expiration of the Employment Period. Upon his retirement,
Employee's benefits under all Benefit Plans will be determined in
accordance with the terms of the Benefit Plans applicable to retiring
officers of the Company then in effect.
11. Upon the expiration of the Employment Period, the Company shall,
transfer ownership of the Company's automobile currently assigned to
Employee to Employee. Company shall pay Employee and add to Employee's
2000 form W-2 an amount of income which will enable Employee to pay
federal and state income taxes on said automobile transfer. Employee
shall be responsible for any sales taxes arising from this transaction.
12. Pursuant to a Letter Agreement dated November 3, 1997, attached as
Exhibit D and on file with the Company, the Company shall as of the
expiration of the Employment Period, have the option of:
(a) removing the Security System which it had installed in
Employee's home;
(b) requiring Employee to pay the Company $100 in lieu
thereof.
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In case of the latter, Employee acknowledges that the Company
shall have no further responsibility therefore and he shall thereafter
be responsible for assuming all maintenance fees in connection with the
Security System.
13. (a) In the event that Employees' perquisites exceed $50,000.00
during the calendar year 2000, Employee agrees to promptly reimburse
the Company for all amounts in excess of $50,000.00 upon request;
provided, however that, the value of the Company's equity in the
Company automobile to be transferred to Employee shall be excluded from
the calculation of the perquisite cap.
(b) For purposes of this paragraph, perquisites shall consist
of: (i) the personal use of the lease value of the Company automobile
referenced in paragraph 11 herein; (ii) tax and financial planning;
(iii) fees incurred in connection with the maintenance of Employee's
home security system; and (iv) dues and membership fees to the extent
reimbursable pursuant to Company policy.
14. In consideration for the above, Employee hereby irrevocably and
unconditionally releases the Company, its owners, stockholders,
officers, directors, employees, representatives, and agents, and each
of their respective successors and assigns (collectively, the
"Releasees"), from any and all manner of actions, causes of action and
claims, which he ever had, now has, or may have as of the date of this
Agreement or which his heirs, next of kin, distributees, executors, or
administrators hereafter may have by reason of any matter whatsoever,
other than (a) claims of a breach of this Agreement; (b) claims for
benefits which have accrued and vested to Employee's account in
accordance with the terms of the Company's Employees' Savings Plan or
SOP; or (c) claims relating to the exercise of options which have
heretofore been granted to and are currently exercisable by Employee
pursuant to the terms of the Company's stock option plan. This release
includes, but is not limited to, any claims relating in any way to
Employee's employment relationship with the Company, or the termination
thereof, including, but not limited to, claims which could arise under
any contract of employment, express or implied, or under any statute,
including but not limited to the federal Age Discrimination in
Employment Act of 1967, the Americans with Disabilities Act of 1990,
the Employee Retirement Income Security Act of 1974, the Civil Rights
Act of 1964, as amended, and the Connecticut Law against
Discrimination, or any other federal, state or local law, or any common
law now or hereafter recognized.
15. Employee represents that he has not filed against the Company or
the Company's owners, stockholders, predecessors, successors, assigns,
agents, directors, officers, employees, representatives, divisions or
subsidiaries (collectively, its "Related Persons"), any complaints,
charges or lawsuits with any governmental agency or any court arising
out of Employee's employment by the Company or any other matter arising
on or prior to the date hereof.
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Employee covenants and agrees that he will not seek recovery in any
court or before any governmental agency or self-regulatory body against
the Company or any of its Related Persons arising out of any of the
matters set forth in this paragraph; provided, however, that this shall
not limit Employee from commencing a proceeding for the sole purpose of
enforcing his rights under this Agreement.
16. Employee acknowledges that he has carefully read and fully
understands the terms of this Agreement, and that his acceptance of
this Agreement releases the Releasees from any and all claims arising
out of his employment relationship with the Company, or the termination
thereof. Employee acknowledges that he fully understands that the offer
of salary and benefits continuation contained herein (the "Offer") does
not constitute an admission by the Company of (a) any wrong doing, (b)
any liability to Employee or (c) any rights of Employee to the salary
or benefits constituting the Offer.
17. Employee acknowledges that the Company has advised him by this
writing to consult with an attorney of his own choosing prior to
executing this Agreement and has given him at least twenty-one (21)
days to consider the Agreement. Having done so, Employee is knowingly
and voluntarily entering into this Agreement including, but not limited
to, the releases and waivers set forth above, in exchange for the
payments to be made and benefits to be provided to Employee by the
Company pursuant to this Agreement. If this Agreement has not been
executed by Employee prior to July 19, 2000, it shall be deemed revoked
by the Company.
18. Employee understands that the Agreement shall not become effective
for a period of seven (7) days following the day he signs it, and that
he may revoke the Agreement at any time before the seven-day period
expires.
19. Employee understands that, as of June 27, 2000, all Company
provided programs, including, but not limited to, the Employees'
Activities Club, UST Inc.'s Sons and Daughters Scholarship Fund,
Educational Assistance, Charitable Gift Program for Matching
Contributions, Adoption Assistance Program, Financial Planning Program,
Pre-Retirement Planning Program, Service Recognition Award Program and
Company Store Spending Allowance, shall terminate.
20. No representative of the Company has made any representations or
promises to Employee concerning the terms and effects of this Agreement
other than those contained in this Agreement and, in executing this
Agreement, Employee does not rely and has not relied upon any
representations or statements not set forth herein with regard to the
subject matter, basis or effect of this Agreement or otherwise. If
Employee shall die prior to receipt of any payments due from the
Company for the Employment Period, all remaining payments shall be
payable to his estate.
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21. This Agreement, including Exhibits, constitutes the entire
agreement of the parties with respect to its subject matter and may not
be modified or amended except by a writing signed by both parties. This
Agreement supersedes all prior agreements and understandings concerning
its subject matter, including, but not limited to, Employee's
employment with the Company. Upon the execution of this Agreement,
Employee's Change In Control Severance Agreement, dated January 1,
1991, shall terminate. Company does not anticipate a change of control
during the Employment Period.
22. This Agreement shall be construed in accordance with the laws of
the State of Connecticut. Employee hereby consents, on a non-exclusive
basis, to the jurisdiction of the courts of the State of Connecticut
and the Federal Courts located within the State of Connecticut in any
action or proceeding arising out of or related to this Agreement and
the Agreement set forth in Exhibit C attached hereto.
23. The Company will require any successor (whether direct or indirect,
by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to
expressly assume and agree to perform this Agreement in the same manner
and to the same extent that the Company would be required to perform it
if no such succession had taken place. Failure of the Company to obtain
such assumption and agreement prior to the effectiveness of any such
succession shall be a breach of this Agreement and shall entitle you to
compensation from the Company in the same amount and on the same terms
to which you would be entitled hereunder if you terminate your
employment for good reason following a change in control of the
Company.
C. Employee and Company acknowledge that effective January 1, 2001, he
will be eligible for participation in the UST Inc. Officers'
Supplemental Retirement Plan, as amended as of March 24, 1999 ("SOP"),
under which he will accrue a specified supplemental retirement benefit.
Employee does hereby acknowledge that he can lose the portion of his
accrued SOP benefit that accrued on or after March 24, 1999 (the
"Forfeitable Accrued Benefit"), even after he has retired from the
Company.
Employee acknowledges and understands that he will lose his Forfeitable
Accrued Benefit after his retirement from the Company only if he had
conducted himself while a Company Employee in a way that would have
given the Company "Cause" to terminate his employment if it had known
about his conduct or if he later conducts himself in a way that would
give the Company "Cause" to terminate his employment if he were still a
Company employee. For this purpose, Cause means:
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Violation of the Employee Secrecy Agreement or any other
agreement restricting an employee's right to compete against
the Company, at a time when such agreement is still in effect;
or
Intentional misconduct that materially injures the Company,
financially or otherwise.
Employee acknowledges and understands that the loss of his Forfeitable
Accrued Benefit is governed by the applicable terms of the SOP, which
can be summarized as follows:
1. If the Company discovers after Employee retires from the Company
that, while he was an employee of the Company, he conducted himself in
a way that would have allowed the Company to terminate his employment
for Cause had the Company known of his conduct, then
(a) Employee will forfeit any portion of his Forfeitable
Accrued Benefit that has not already been distributed to him
at the time the Company discovers his misconduct; and
(b) If Employee has already received distribution of any part
of his Forfeitable Accrued Benefit at the time the Company
discovers his act of Cause, Employee must repay to the Company
the amount he received.
2. If, after Employee retires from Company, Employee commits an act of
Cause, and the Company discovers this misconduct, Employee will lose
his Forfeitable Accrued Benefit, as described in Paragraph C1(A) and
(B), above.
3. In all cases, if Employee dies before the Company discovers his past
misconduct, Employee's beneficiaries or estate will be subject to the
forfeiture and repayment provisions described above.
4. The Company may deduct any amounts that Employee (or, if applicable,
his beneficiaries or estate) owes the Company in connection with the
Forfeitable Accrued Benefit from amounts that the Company owes to
Employee (or, if applicable, his beneficiaries or estate).
Employee acknowledges and understands that the plan document for the
SOP sets forth the forfeiture and repayment provisions described above
and that the foregoing merely summarizes such provisions. Employee also
acknowledges
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and understands that, if the terms contained herein differ in any way
from the terms of the SOP, the terms of the SOP will be followed.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement in
duplicate as of the day and year first above written.
UST INC.
By: /s/ XXXXXXX XXXXXXX
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Title: EXECUTIVE VICE PRESIDENT
AND GENERAL COUNSEL
Dated: JULY 11, 0000
Xxxxxxxxx, Xxxxxxxxxxx
AGREED AND ACCEPTED THIS
12TH day of JULY, 2000.
/s/ XXXXXX X. XXXXXXX
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XXXXXX X. XXXXXXX
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EXHIBIT "A"
July 12, 2000
Xx. Xxxxxxx X. Xxxxxxx
General Counsel
UST Inc.
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
RE: RESIGNATION OF DESIGNATION PURSUANT TO
SECTION III(1)(2) OF THE SMOKELESS
TOBACCO MASTER SETTLEMENT AGREEMENT
Dear Xxxxxxx:
Effective immediately, I hereby resign my designation pursuant to Section
III(1)(2) of the Smokeless Tobacco Master Settlement Agreement and all
responsibilities relating to said designation.
Sincerely yours,
/s/ XXXXXX X. XXXXXXX
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Xxxxxx X. Xxxxxxx
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