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_____________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
____________________
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
____________________________
Date of report: September 28, 1995
UST CORP.
(Exact name of registrant as specified in its charter)
MASSACHUSETTS 0-9623 04-2436093
(State or other jurisdiction of (Commission (I.R.S. Employer
incorporation or organization) File Number) Identification Number)
40 COURT STREET
BOSTON, MASSACHUSETTS 02108
(Address of principal executive offices) (zip code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (617) 726-7000
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INFORMATION TO BE INCLUDED IN THE REPORT
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ITEM 5. OTHER EVENTS
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(i) UST Corp. adopts Stock Purchase Rights Plan
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On September 19, 1995, the Board of Directors of UST Corp. (the
"Company") declared a dividend distribution of one preferred share purchase
right (a "Right") for each outstanding share of common stock, par value $0.625
per share (the "Common Shares"), of the Company. The dividend is payable on
October 6, 1995 (the "Record Date") to the stockholders of record on that date.
Except as described below, each Right, when exercisable, entitles the
registered holder to purchase from the Company one one- hundredth of a share of
Series A Junior Participating Preferred Stock, par value $1.00 per share (the
"Preferred Shares"), of the Company at a price of $40 per one one-hundredth of
a Preferred Share (the "Purchase Price"), subject to adjustment. The
description and terms of the Rights are set forth in a Rights Agreement (the
"Rights Agreement") between the Company and United States Trust Company, as
Rights Agent (the "Rights Agent").
Initially, the Rights will be attached to all certificates
representing Common Shares then outstanding, and no separate Rights
certificates will be distributed. Until the earlier to occur of (i) 10
business days following a public announcement that a person or group of
affiliated or associated persons (an "Acquiring Person") have acquired
beneficial ownership of 15% or more of the outstanding Common Shares (the date
of such an announcement being a "Shares Acquisition Date"), (ii) 10 business
days (or such later date as may be determined by action of the Board of
Directors prior to such time as any Person becomes an Acquiring Person)
following the commencement of, or announcement of an intention to make, a
tender offer or exchange offer the consummation of which would result in the
beneficial ownership by a person or group of 15% or more of such outstanding
Common Shares or (iii) the declaration by the Board of Directors of the Company
that any person is an "Adverse Person" (the earliest of such dates being called
the "Distribution Date"), the Rights will be evidenced, with respect to any of
the Common Share certificates outstanding as of the Record Date, by such Common
Share certificate together with a copy of this Summary of Rights.
The Board of Directors of the Company may declare a person to be an
Adverse Person, after a determination that such person, alone or together with
its affiliates and associates, has become the beneficial owner of 10% or more
of the outstanding Common Shares and a determination by the Board of Directors,
after reasonable inquiry and investigation, that (a) such beneficial ownership
by such person is intended or reasonably likely to cause the Company to
repurchase the Common Shares beneficially owned by such
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person or to cause pressure on the Company to take action or enter into a
transaction or series of transactions which would provide such person with
short-term financial gain under circumstances where the Board of Directors
determines that the best long-term interests of the Company and its
stockholders would not be served by taking such action or entering into such
transactions at that time or (b) such beneficial ownership is causing or
reasonably likely to cause a material adverse impact on the business or
prospects of the Company. However, the Board of Directors of the Company may
not declare a person to be an Adverse Person if, prior to the time that such
person acquired 10% or more of the Common Shares then outstanding, such person
provided to the Board of Directors in writing a statement of such person's
purpose and intentions in connection with the proposed acquisition requested of
such person by the Board of Directors, and the Board of Directors, based on
such statement and reasonable inquiry and investigation, notifies such person
in writing that it will not declare such person to be an Adverse Person;
provided, however, that the Board of Directors may expressly condition in any
manner a determination not to declare a person an Adverse Person on such
conditions as the Board of Directors may select, including without limitation,
such person's not acquiring more than a specified amount of stock and/or on
such person's not taking actions inconsistent with the purposes and intentions
disclosed by such person in the statement provided to the Board of Directors.
No delay or failure by the Board of Directors to declare a person to be an
Adverse Person shall in any way waive or otherwise affect the power of the
Board of Directors subsequently to declare a person to be an Adverse Person.
In the event that the Board of Directors should at any time determine, upon
reasonable inquiry and investigation, that such person has not met or complied
with any condition specified by the Board of Directors, the Board of Directors
may at any time thereafter declare such person to be an Adverse Person.
The Rights Agreement provides that, until the Distribution Date, the
Rights will be transferred with and only with the Common Shares. Until the
Distribution Date (or earlier redemption or expiration of the Rights), new
Common Share certificates issued after the Record Date upon transfer or new
issuance of Common Shares will contain a notation incorporating the Rights
Agreement by reference. Until the Distribution Date (or earlier redemption or
expiration of the Rights), the surrender for transfer of any certificates for
Common Shares outstanding as of the Record Date, even without such notation or
a copy of this Summary of Rights being attached thereto, will also constitute
the transfer of the Rights associated with the Common Shares represented by
such certificate. As soon as practicable following the Distribution Date,
separate certificates evidencing the Rights ("Rights Certificates") will be
mailed to holders of record of the Common
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Shares as of the close of business on the Distribution Date, and the separate
Rights Certificates alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date. The
Rights will expire on October 6, 2005 (the "Final Expiration Date"), unless the
Rights are earlier redeemed by the Company, as described below.
The Purchase Price payable, and the number of Preferred Shares or
other securities or property issuable, upon exercise of the Rights are subject
to adjustment from time to time to prevent dilution (i) in the event of a stock
dividend on, or a subdivision, combination or reclassification of, the
Preferred Shares, (ii) upon the grant to holders of the Preferred Shares of
certain rights or warrants to subscribe for or purchase Preferred Shares at a
price, or securities convertible into Preferred Shares with a conversion price,
less than the then current market price of the Preferred Shares or (iii) upon
the distribution to holders of the Preferred Shares of evidences of
indebtedness or assets (excluding regular periodic cash dividends paid out of
earnings or retained earnings or dividends payable in Preferred Shares) or of
subscription rights or warrants (other than those referred to above).
The number of outstanding Rights and the number of one one-hundredths
of a Preferred Share issuable upon exercise of each Right are also subject to
adjustment in the event of a stock split of the Common Shares or a stock
dividend on the Common Shares payable in Common Shares or subdivisions,
consolidations or combinations of the Common Shares occurring, in any such
case, prior to the Distribution Date.
Preferred Shares purchasable upon exercise of the Rights will not be
redeemable. Each Preferred Share will be entitled to a minimum preferential
quarterly dividend payment of $1 per share but will be entitled to an aggregate
dividend of 100 times the dividend declared per Common Share. In the event of
liquidation, the holders of the Preferred Shares will be entitled to a minimum
preferential liquidation payment of $100 per share but will be entitled to an
aggregate payment of 100 times the payment made per Common Share. Each
Preferred Share will have 100 votes, voting together with the Common Shares.
Finally, in the event of any merger, consolidation or other transaction in
which Common Shares are exchanged, each Preferred Share will be entitled to
receive 100 times the amount received per Common Share. These rights are
protected by customary antidilution provisions.
Because of the nature of the Preferred Shares' dividend, liquidation
and voting rights, the value of the one one-hundredth interest in a Preferred
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Share purchasable upon exercise of each Right should approximate the value of
one Common Share.
In the event that, after the first date of public announcement by the
Company or an Acquiring Person that an Acquiring Person has become such, the
Company is involved in a merger or other business combination transaction in
which the Common Shares are exchanged or changed, or 50% or more of the
Company's consolidated assets or earning power are sold (in one transaction or
a series of transactions), proper provision will be made so that each holder of
a Right (other than an Acquiring Person or an Adverse Person) will thereafter
have the right to receive, upon the exercise thereof at the then current
exercise price of the Right, that number of shares of common stock of the
acquiring company (or, in the event there is more than one acquiring company,
the acquiring company receiving the greatest portion of the assets or earning
power transferred) which at the time of such transaction would have a market
value of two times the exercise price of the Right.
In the event that (i) any person becomes an Acquiring Person, (ii) an
Acquiring Person or Adverse Person engages in one or more "self-dealing"
transactions as set forth in the Rights Agreement, (iii) during such time as
there is an Acquiring Person or Adverse Person, there shall be a
reclassification of securities or a recapitalization or reorganization of the
Company or other transaction or series of transactions involving the Company
which has the effect of increasing by more than 1% the proportionate share of
the outstanding shares of any class of equity securities of the Company or any
of its subsidiaries beneficially owned by the Acquiring Person, or (iv) the
Board of Directors shall determine that a person is an Adverse Person, proper
provision shall be made so that each holder of a Right, other than Rights
beneficially owned by any Acquiring Person or Adverse Person, will thereafter
have the right to receive upon exercise that number of Common Shares having a
market value of two times the exercise price of the Right. UPON OCCURRENCE OF
ANY OF THE EVENTS DESCRIBED IN THE IMMEDIATELY PRECEDING SENTENCE, ANY RIGHTS
THAT ARE, OR (UNDER CERTAIN CIRCUMSTANCES SPECIFIED IN THE RIGHTS AGREEMENT)
WERE, BENEFICIALLY OWNED BY ANY ACQUIRING PERSON OR ADVERSE PERSON SHALL
IMMEDIATELY BECOME NULL AND VOID. At any time after the occurrence of any such
event and prior to the acquisition by any person or group of 50% or more of the
outstanding Common Shares, the Continuing Directors may exchange the Rights
(other than Rights owned by such person or group which have become void), in
whole or in part, at an exchange ratio of one Common Share, or one
one-hundredth of a Preferred Share (or of a share of a class or series of the
Company's preferred stock having equivalent rights, preferences and
privileges), per Right (subject to adjustment).
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With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
such Purchase Price. No fractional Preferred Shares will be issued (other than
fractions which are integral multiples of one one-hundredth of a Preferred
Share, which may, at the election of the Company, be evidenced by depository
receipts) and in lieu thereof, an adjustment in cash will be made based on the
market price of the Preferred Shares on the last trading day prior to the date
of exercise.
At any time prior to the earlier of (i) the tenth day after a Shares
Acquisition Date, (ii) the declaration by the Board of Directors that a person
is an Adverse Person or (iii) the expiration of the Rights, the Board of
Directors may redeem the Rights in whole, but not in part, at a price of $.001
per Right (the "Redemption Price"). Under certain circumstances set forth in
the Rights Agreement, such a redemption would require the concurrence of the
Company's "Continuing Directors", that is, any director who is not an Acquiring
Person, an Adverse Person or an affiliate or associate of an Acquiring Person
or Adverse Person, and who was in office prior to the date of the Rights
Agreement or subsequently nominated by a majority of the Continuing Directors.
Thereafter, the Rights may only be redeemed by the Continuing Directors in
whole, but not in part, at the Redemption Price, (a) under certain
circumstances described in the Rights Agreement involving a disposition of
Common Shares by the Acquiring Person or Adverse Person such that such person's
common share ownership is reduced to 10% or less, or (b) if such redemption is
incidental to a merger or other business combination transaction or series of
transactions involving the Company but not involving an Acquiring Person or an
Adverse Person and satisfying certain other conditions. The redemption of the
rights may be made effective at such time on such basis and with such
conditions as the Board of Directors or the Continuing Directors, as the case
may be, in their sole discretion may establish. Immediately upon any
redemption of the Rights, the right to exercise the Rights will terminate and
the only right of the holders of Rights will be to receive the Redemption
Price.
Other than those provisions relating to the principal economic terms
of the Rights, any of the provisions of the Rights Agreement may be amended by
the Board of Directors of the Company prior to the Distribution Date. After
the Distribution Date, the provisions of the Rights Agreement may be amended by
the Board (in certain circumstances, with the concurrence of the Continuing
Directors) in order to cure any ambiguity, to make changes that do not
adversely affect the interests of holders of Rights (excluding the interests of
any Acquiring Person or Adverse Person), or to shorten or lengthen any time
period under the Rights Agreement; provided,
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however, that no amendment to adjust the time period governing redemption shall
be made at such time as the Rights are not redeemable.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company, including, without limitation, the
right to vote or to receive dividends.
The Rights could have certain anti-takeover effects. The Rights could
cause substantial dilution to a person or group that attempts to acquire the
Company on terms not approved by the Company's Board of Directors. The Rights
should not interfere with any merger or other business combination approved by
the Board of Directors, in light of the ability of the Board of Directors to
redeem the Rights or amend the Rights Agreement as summarized above.
The form of Rights Agreement between the Company and the Rights Agent
specifying the terms of the Rights, which includes as Exhibit B the form of
Rights Certificate, is filed as an exhibit hereto (through incorporation by
reference of an exhibit to a Registration Statement on Form 8-A of the Company)
and incorporated herein by reference. The foregoing description of the Rights
does not purport to be complete and is qualified in its entirety by reference
to the Rights Agreement.
(ii) UST Corp.'s Connecticut banking subsidiary, UST
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Bank/Connecticut, released from Stipulation and Agreement
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On September 14, 1995, UST Corp.'s Connecticut banking subsidiary, UST
Bank/Connecticut headquartered in Bridgeport, Connecticut, was released by the
Banking Commissioner of the State of Connecticut from the terms of a
Stipulation and Agreement, originally issued on June 3, 1991 and subsequently
amended on each of August 13, 1992, October 21, 1993 and September 22, 1994.
A description of the terms of the Stipulation and Agreement (none of which
remains in effect) was included in UST Corp.'s Annual Report on Form 10-K for
the year ended December 31, 1994.
(iii) Appointment of Executive Vice President/Marketing and Retail
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Banking
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On September 1, 1995, Ms. Suzanne Moot, who had previously served as
an outside marketing consultant to UST Corp., joined UST Corp. and USTrust as
Executive Vice President/Marketing and Retail Banking. Ms.
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Moot was also elected the 11th member of UST Corp.'s Executive Policy
Committee.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
EXHIBITS
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1. Rights Agreement, dated as of September 19, 1995, including
Exhibits thereto, between the Company and United States Trust Company, as
Rights Agent. Incorporated by reference from the Company's Registration
Statement on Form 8-A dated September 26 , 1995, to which it is an exhibit.
2. UST Corp.'s Press Release dated September 22, 1995 related to
adoption of the Company's new Stock Purchase Rights Plan.
3. Employment Agreement, dated as of September 1, 1995, between
UST Corp. and Suzanne Moot, Executive Vice President/Marketing and Retail
Banking.
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SIGNATURE
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Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereto duly authorized.
UST CORP.
By: /s/ Neal F. Finnegan
-----------------------------
Neal F. Finnegan
President and
Chief Executive Officer
By: /s/ Eric R. Fischer
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Eric R. Fischer
Executive Vice President,
General Counsel and Clerk
DATED: September 28 , 1995
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UST CORP.
ADOPTS STOCK PURCHASE RIGHTS PLAN
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BOSTON, MASSACHUSETTS, September 22, 1995 -- UST Corp. announced that,
at its regular Board of Directors meeting, the Board declared a special
dividend distribution of one preferred share purchase right for each
outstanding share of UST common stock. This dividend will be distributed on
October 6, 1995 to stockholders of record as of the close of business on that
date.
The rights will become exercisable only if a person or group (i)
acquires 15% or more of UST's common stock, (ii) announces a tender offer that
would result in ownership of 15% or more of the common stock, or (iii) is
declared to be an "Adverse Person" by the Board of Directors. "Adverse Person"
includes any person or group who owns at least 10% of UST's common stock and
attempts an action that would adversely impact UST. Each right would entitle a
stockholder to buy 1/100th of a share of a new series of junior participating
preferred stock.
Once a person or group has acquired 15% or more of the outstanding
common stock of UST or is declared an "Adverse Person" by the Board of
Directors, each right may entitle its holder (other than the acquiring person
or adverse person) to purchase, at an exercise price of $40, shares of common
stock of UST (or of any company that acquires UST) at a price equal to 50% of
their current market price. Under certain circumstances, the Continuing
Directors (as defined in the rights plan) may exchange the rights for common
stock (or equivalent securities) on a one-for-one basis.
Until declaration of an Adverse Person, or ten days after public
announcement that any person or group has acquired 15% or more of UST's common
stock, the rights are redeemable at the option of the Board of Directors, in
certain cases with the concurrence of the Continuing Directors. Thereafter,
they may be redeemed by the Continuing Directors in connection with certain
acquisitions not involving any acquiring person or Adverse Person or in certain
circumstances following a disposition of shares by the acquiring person or
Adverse Person. The redemption price is $.001 per right.
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The rights will expire on October 6, 2005, unless redeemed prior to
that date. Distribution of the rights is not taxable to stockholders.
Neal F. Finnegan, President of UST, said: "This rights plan is
designed to help the Board of Directors assure that all UST stockholders are
treated fairly in any unsolicited merger or other acquisition." Mr. Finnegan
also stated that most New England bank holding companies of UST's size have
rights plans in effect, and that adoption of the rights plan was not triggered
by any attempt to acquire the Company.
A detailed description of the rights plan will be mailed to UST's
stockholders at the time of the distribution.
UST Corp. is a Boston based bank holding company. Through its
subsidiaries, the Company provides a broad range of financial services,
principally to individuals and privately-held, owner-managed companies in New
England. These services include commercial banking, consumer financial
services, trust and money management and equipment leasing.
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UST CORP.
EXECUTIVE EMPLOYMENT AGREEMENT
This Agreement is made by and between UST Corp., a Massachusetts
corporation, (the "Company") and Suzanne Moot (the "Employee") as of the 1st
day of September, 1995 (the "Effective Date").
In consideration of the mutual promises, terms and conditions
contained in this Agreement, the parties agree as follows:
1. EMPLOYMENT. The Company agrees to continue the employment of
the Employee, and the Employee agrees to continue in the service of the
Company, subject to the terms and conditions contained in this Agreement.
2. TERM. Subject to earlier termination, as provided hereafter,
the Employee's employment hereunder shall be for an initial term of two (2)
years, commencing on the Effective Date, and may be renewed thereafter only by
written agreement, signed by the Employee and the Chief Executive Officer of
the Company. Notwithstanding the foregoing, in the event that this Agreement
is in effect on the date of consummation of a Change of Control, as hereafter
defined, this Agreement shall automatically be extended on said date such that
the remaining term of the Agreement shall then be two (2) years, but this
Agreement shall be renewable thereafter only by a written agreement signed by
the Employee and a duly authorized representative of the Company. The term of
this Agreement, as from time to time renewed or extended in accordance with
this Section 2, is hereafter referred to as "the term hereof" or "the term of
this Agreement".
3. PERFORMANCE.
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a. During the term hereof, the Employee shall hold such
executive position or positions with the Company and/or any of its subsidiaries
as may be designated from time to time by the Board of Directors of the Company
(the "Board") and shall perform the duties and assume the responsibilities of
such positions and such other appropriate duties and responsibilities as may be
assigned by the Board or its designees.
b. During employment, the Employee shall devote his/her
full business time and best efforts, judgment, skill and knowledge exclusively
to the advancement of the Company's interests and to the discharge of his/her
duties and responsibilities for the Company. While employed by the Company,
the Employee shall not be engaged in any other business activity, except as
approved by the Board or its designee in writing. It is agreed, however, that
the provisions of this Section 3.b shall not be violated by the Employee's
holding of directorships or related positions in charitable, educational or
not-for-profit organizations which do not involve continuous or substantial
time commitments or by passive personal investment activities, provided that
such positions and activities are not in conflict, and do not otherwise
interfere, with the Employee's duties and responsibilities to the Company and
its subsidiaries.
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4. COMPENSATION. As compensation for all services performed for
the Company and its subsidiaries during the term of this Agreement, the Company
shall pay the Employee a base salary at an annual rate not less than the
Employee's base salary on the Effective Date, subject to increase from time to
time by the Company in its discretion. Notwithstanding the foregoing, the
Company may reduce the Employee's base salary, but (i) only in the event of a
salary reduction affecting all or substantially all of the Company's officers
employed under an executive employment agreement and only in proportion to the
salary reductions applicable to such other affected officers and (ii) only if
no Change of Control has occurred.
5. EMPLOYEE BENEFITS. During the term hereof, the Employee shall
be entitled to participate in any and all employee benefit plans from time to
time in effect for employees of the Company generally, excluding only plans
providing payments and/or other benefits in the event of termination of
employment. Such participation shall be subject to the terms of the applicable
plan documents, generally applicable Company policies and the discretion of the
Board or any administrative or other committee provided for in or contemplated
by such plan.
6. TERMINATION OF EMPLOYMENT. Notwithstanding the provisions of
Section 2 above, the Employee's employment under this Agreement shall terminate
under the following circumstances and, in that event, the Company shall have
only such obligations to the Employee as are specified below under the
applicable termination provision:
a. UPON DEATH. In the event of the Employee's death
during the term hereof, the Employee's employment hereunder shall immediately
and automatically terminate. In such event, the Company shall pay to the
Employee's designated beneficiary or, if no beneficiary has been designated by
the Employee, to the Employee's estate, any base salary earned and unpaid
through the date of death.
b. AS A RESULT OF DISABILITY. In the event that the
Employee becomes disabled during the term hereof and, as a result, is unable to
perform substantially all of his/her duties for the Company for more than one
hundred and twenty (120) days during any period of three hundred and sixty-five
(365) days, the Company may terminate the Employee's employment without further
obligation upon notice to the Employee. In the event of such disability, the
Employee will continue to receive his/her base salary and benefits under
Sections 4 and 5 hereof until the earlier of the date the Employee becomes
eligible for disability income under the Company's long-term disability or
workers' compensation insurance plan or the date his/her employment terminates.
c. BY THE COMPANY FOR CAUSE. The Company may terminate
the Employee's employment for Cause at any time upon notice to the Employee
setting forth in reasonable detail the nature of such Cause. The following, as
determined by the Board in its reasonable judgment, shall constitute Cause for
termination: (i) the Employee's refusal to perform, or gross negligence in the
performance of, his/her duties or responsibilities on behalf of the Company;
(ii) the Employee's fraud, embezzlement or other material dishonesty with
respect to the Company or any of its subsidiaries; (iii) the Employee's gross
misconduct or his/her conviction of, or plea of no contest to, a felony. In
the event of such termination, the Company shall have no further obligation to
the Employee, other than for base salary earned through the date of
termination.
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d. BY THE COMPANY OTHER THAN FOR CAUSE. The Company
may terminate the Employee's employment other than for Cause at any time upon
notice to the Employee. In the event of such termination prior to, or more
than two years following, a Change of Control and provided that the Employee
executes the release of claims attached hereto and marked "A" (the "Employee
Release") within twenty-one (21) days of his/her receipt of notice of
termination of employment and does not timely revoke the Employee Release, the
Company shall:
i. pay the Employee severance pay in an amount equal
to twelve (12) months' base salary at the rate in effect on
the date of termination, which the Employee may elect to
receive (A) in a single lump sum, payable within thirty (30)
days following the effective date of the Employee Release or
(B) as salary continuation payable at the Company's regular
payroll periods and in accordance with its regular payroll
practices commencing on the next regular payday immediately
following the effective date of the Employee Release, but
retroactive to the date of termination and,
ii. (A) if the Employee and/or his/her eligible
dependents exercise their right to continue participation in
the Company's group health plan under applicable federal law
("COBRA"), then, for the period of twelve (12) months
following termination of the Employee's employment or, if
earlier, until the date the Employee ceases to be eligible for
continued participation under COBRA, the Company shall
continue to pay that share of the premium cost of Employee's
participation and that of his/her eligible dependents in the
Company's group health plan as it pays for active employees of
the Company and their eligible dependents generally OR (B) if
the Employee and his/her eligible dependents elect not to
continue participation in the Company's group health plan
under COBRA, the Company will pay the Employee a single lump
sum payment equal to the amount that the Company would have
expended if participation had been elected and continued for a
period of twelve (12) months, which lump sum shall be payable
within thirty (30) days following the effective date of the
Employee Release, and
iii. The Company shall pay the cost of
outplacement services for the Employee through a firm selected
by the Employee (and reasonably acceptable to the Company), up
to a maximum cost to the Company of not more than $20,000; it
being understood and agreed that no payment will be provided
to the Employee in lieu of outplacement services.
e. BY THE EMPLOYEE FOR GOOD REASON. The Employee may
terminate employment hereunder for Good Reason upon notice to the Company
setting forth in reasonable detail the nature of such Good Reason. The
following shall constitute Good Reason for termination by the Employee: (i)
failure of the Company to continue the Employee in an executive position; (ii)
material diminution in the nature or scope of the Employee's responsibilities,
duties or authority, other than as is materially consistent with the Employee's
assignment to another executive position; (iii) material failure of the Company
to provide the Employee base salary and benefits in accordance with the terms
of Sections 4 and 5 hereof; or (iv) a permanent transfer of the Employee to a
work site more than twenty-five miles distant from his/her
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work site on the Effective Date. In the event of termination in accordance
with this Section 6.e, the Company shall provide the Employee base salary and
health insurance benefits in accordance with Section 6.d hereof, provided that
the Employee executes the Employee Release within twenty-one (21) days of
his/her notice of termination of employment and provided further that the
Employee does not timely revoke the Employee Release.
f. BY THE EMPLOYEE OTHER THAN FOR GOOD REASON. The Employee
may resign employment other than for Good Reason at any time upon one month's
notice to the Company. In the event of such termination, the Company shall
have no further obligation to the Employee, other than for base salary earned
through the date of termination.
g. Upon a Change of Control.
-------------------------
(i) If a Change of Control occurs and, within two (2)
years following such Change of Control, the Company terminates the Employee's
employment other than for Cause, or the Employee terminates his/her employment
for Good Reason, and the Employee executes the Employee Release within
twenty-one (21) days of the date of notice of termination of his/her employment
and does not timely revoke it, then, in lieu of any payment and benefits to
which the Employee would otherwise be entitled under Section 6.d or 6.e hereof,
the Company
(1) shall pay the Employee an amount equal
to eighteen (18) months' base salary at the rate in effect on the date
of termination of the Employee's employment, which the Employee may
elect to receive (A) in a single lump sum, payable within thirty (30)
days following the effective date of the Employee Release or (B) as
salary continuation payable at the Company's regular payroll periods
and in accordance with its regular payroll practices commencing on the
next regular payday immediately following the final payment under
Section 6.d or 6.e hereof, whichever is applicable,
(2) provided the Employee elects to receive
payment hereunder in the form of salary continuation and provided
further that the Employee has exercised his/her right to continue
participation in the Company's group health plan under applicable
federal law ("COBRA"), then, for the duration of the period in which
the Employee is receiving such salary continuation or, if earlier,
until the date the Employee ceases to be eligible for continued
participation under COBRA, the Company shall continue to pay that
share of the premium cost of Employee's participation and that of
his/her eligible dependents in the Company's group health plan as it
pays for active employees of the Company and their eligible dependents
generally or, if greater, the amount it was paying for active
employees of the Company and their eligible dependents generally
immediately prior to the Change of Control and
(3) shall pay the cost of outplacement
services for the Employee through a firm selected by the Employee (and
reasonably acceptable to the Company), up to a maximum cost to the
Company of not more than $20,000; it being understood and agreed that
no payment will be provided to the Employee in lieu of outplacement
services.
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ii. A "Change of Control" shall be deemed to have
been consummated if hereafter
(A) any "person", as such term used in
Section 13(d) and 14(d) of the Securities Exchange Act of 1934 as
amended (the "Exchange Act") other than the Company or any of its
subsidiaries or affiliates or any trustee or other fiduciary holding
securities under an employee benefit plan of the Company or any of its
subsidiaries or affiliates, becomes a beneficial owner (within the
meaning of Rule 13d-3, as amended, as promulgated under the Exchange
Act), directly or indirectly, of securities representing twenty-five
(25%) percent or more of the combined voting power of the Company's
then outstanding securities; or
(B) during any period of two
consecutive years (not including any period prior to the Effective
Date), individuals who at the beginning of such period constitute the
Board, and any new director (other than a director designated by a
person who has entered into an agreement with the Company to effect a
transaction described in clause (A), (C) or (D) of this Section
6.g.ii) whose election by the Board or nomination for election by the
Company's stockholders was approved by a vote of at least two-thirds
of the directors then still in office who either were directors at the
beginning of the period or whose election or nomination for election
was previously so approved, cease for any reason to constitute at
least a majority thereof; or
(C) there occurs a merger or
consolidation of the Company with any other corporation, other than a
merger or consolidation which would result in the voting securities of
the Company outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted into
voting securities of the surviving entity) more than eighty percent
(80%) of the combined voting power of the voting securities of the
Company or such surviving entity outstanding immediately after such
merger or consolidation; provided, however, that a merger or
consolidation effected to implement a recapitalization of the Company
(or similar transaction) in which no "person" (as hereinabove defined)
acquires more than twenty-five percent (25%) of the combined voting
power of the Company's then outstanding securities shall not
constitute a Change of Control; or
(D) the stockholders of the Company
approve a plan of a complete liquidation of the Company; or
(E) there occurs a closing of a sale or
other disposition by the Company of all or substantially all of the
Company's assets.
h. UPON EXPIRATION OF THE TERM HEREOF. In the event
that the term of this Agreement expires and, at the time of such expiration,
the Company has not offered to extend or renew this Agreement on terms no less
favorable in the aggregate as those set forth herein, then such expiration
shall be treated as a termination by the Company of the Employee's employment
other than for Cause in accordance with Section 6.d hereof. In the event that
the Company has offered such extension or renewal prior to the expiration of
the term hereof, but such offer has not been accepted by the Employee at the
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<PAGE> 6
time of such expiration, then such expiration shall be treated as a termination
by the Employee of his employment other than for Good Reason.
7. CONFIDENTIAL INFORMATION.
------------------------
a. The Employee acknowledges that the Company
continually develops Confidential Information, that the Employee may develop
Confidential Information for the Company and that the Employee may learn of
Confidential Information during the course of employment. The Employee agrees
to comply with the policies and procedures of the Company for protecting
Confidential Information and agrees that he shall never disclose to any person,
corporation or other entity, except as required for the proper performance of
his/her regular duties for the Company, and shall never use for his/her own
benefit or that of another, any Confidential Information obtained by the
Employee incident to his/her employment or other association with the Company
or any of its affiliates or subsidiaries. The Employee understands that this
restriction will continue to apply throughout his/her employment and after
his/her employment terminates, regardless of the reason for such termination.
b. As used in this Agreement, "Confidential Information"
means any and all information of the Company, its subsidiaries and affiliates,
that is not generally known by others with whom any of them competes or does
business, or with whom any of them plans to compete or do business, including
without limitation any and all information concerning the identity and special
needs of the customers of the Company, its subsidiaries and affiliates and the
people and organizations with whom any of them has business relationships and
those relationships. Confidential Information also includes any information
received by the Company or any of its subsidiaries or affiliates from others
with any understanding, express or implied, that it will not be disclosed.
8. NON-SOLICITATION. While the Employee is employed by the
Company and for a period of two years thereafter, the Employee shall not,
directly or indirectly, solicit or encourage any customer of the Company or any
of its subsidiaries or affiliates to terminate or diminish its relationship
with the Company or any of its subsidiaries or affiliates, or to conduct with
any person, corporation or other entity any business or activity which such
customer conducts or could conduct with the Company or any of its subsidiaries
or affiliates, nor shall the Employee conduct, on his/her own behalf or that of
another, any such business or activity with a customer of the Company or any of
its subsidiaries or affiliates.
9. REMEDIES. The Employee acknowledges that, if he/she were to
breach any of the provisions of Section 7 or Section 8 of this Agreement, the
harm to the Company would be irreparable. The Employee therefore agrees that,
in addition to any other remedies available to it, the Company shall be
entitled to obtain preliminary and permanent injunctive relief against any such
breach, without having to post bond.
10. TAXES. All payments made to the Employee under this Agreement
shall be reduced by any tax or other amount required to be withheld by the
Company under applicable law.
11. REDUCTIONS. Notwithstanding anything to the contrary
contained in this Agreement, (a) any and all payments and benefits to be
provided to the Employee hereunder are subject to reduction to
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<PAGE> 7
the extent required by applicable statutes, regulations, rules and directives
of federal, state and other governmental and regulatory bodies having
jurisdiction over the Company and/or any of its affiliates or subsidiaries and
(b) the payments and benefits to which the Employee would be entitled pursuant
to Section 6.g hereof or otherwise as a result of a Change of Control shall be
reduced to the maximum amount for which the Company will not be limited in its
deduction pursuant to Section 280G of the Internal Revenue Code of 1986, as
amended, or any successor provision. Any such reduction shall be applied to
the amounts due to the Employee in such manner as the Employee may reasonably
specify within thirty (30) days following notice from the Company of the need
for such reduction or, if the Employee fails to so specify timely, as
determined by the Company.
12. ASSIGNMENT. The Company may assign its rights and obligations
under this Agreement without the consent of the Employee in the event that the
Company shall hereafter effect a reorganization, consolidate with, or merge
into, any other person, corporation or other entity or transfer all or
substantially all of its assets to any other person, corporation or other
entity. The Company requires the personal services of the Employee and he/she
may not assign this Agreement. This Agreement shall inure to the benefit of
and be binding upon the Company and the Employee and their respective
successors, executors, administrators, heirs and permitted assigns.
13. MISCELLANEOUS. This Agreement sets forth the entire agreement
between the Company and the Employee and supersedes all prior communications,
agreements and understandings, whether written or oral, with respect to the
Employee's employment. The headings and captions contained herein are for
convenience of reference only and are not part of this Agreement. This
Agreement may not be modified or amended, its term may not be extended or
renewed, and no breach of this Agreement shall be deemed to be waived, unless
agreed to in writing by the Employee and the Company. This is a Massachusetts
contract and shall be governed by and construed in accordance with the laws of
the Commonwealth of Massachusetts.
14. NOTICES. Any notices provided for in this Agreement shall be
in writing and shall be effective when delivered in person or deposited in the
United States mail, postage prepaid, and addressed to the Employee at his last
known address on the books of the Company or, in the case of the Company, at
its main office, attention of the Senior Vice President, Human Resources with a
copy to the General Counsel of the Company.
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<PAGE> 8
IN WITNESS WHEREOF, this Agreement has been executed as a sealed
instrument by the Company, by its duly authorized representative, and by the
Employee, as of the date first written above.
THE EMPLOYEE UST CORP.
/s/ Suzanne Moot By: /s/ Neal F. Finnegan
- ---------------- --------------------
Name
Title: President and Chief Executive Officer
-------------------------------------
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