-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, M6hBiCJ5R2pew19IuK8y0viF06r45VfGNMQCs0z3fqDJcacrqf0h6FOQeF7XvvxV OZwpeT92o+gaKBwWXxTf0w== 0000950135-95-001999.txt : 19951002 0000950135-95-001999.hdr.sgml : 19951002 ACCESSION NUMBER: 0000950135-95-001999 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19950928 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19950927 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: UST CORP CENTRAL INDEX KEY: 0000316901 STANDARD INDUSTRIAL CLASSIFICATION: NATIONAL COMMERCIAL BANKS [6021] IRS NUMBER: 042436093 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-09623 FILM NUMBER: 95576588 BUSINESS ADDRESS: STREET 1: 40 COURT ST CITY: BOSTON STATE: MA ZIP: 02108 BUSINESS PHONE: 6177267012 MAIL ADDRESS: STREET 1: 40 COURT ST CITY: BOSTON STATE: MA ZIP: 02108 8-K 1 UST CORP. 1 _____________________________________________________________________ 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 2 INFORMATION TO BE INCLUDED IN THE REPORT ---------------------------------------- ITEM 5. OTHER EVENTS - --------------------- (i) UST Corp. adopts Stock Purchase Rights Plan ------------------------------------------- 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 3 -2- 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 4 -3- 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 5 -4- 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). 6 -5- 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, 7 -6- 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 ----------------------------------------------- Bank/Connecticut, released from Stipulation and Agreement ---------------------------------------------------------- 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 ------------------------------------------------------------ Banking ------- 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. 8 -7- Moot was also elected the 11th member of UST Corp.'s Executive Policy Committee. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS EXHIBITS - -------- 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. 9 -8- SIGNATURE --------- 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 ----------------------------- Eric R. Fischer Executive Vice President, General Counsel and Clerk DATED: September 28 , 1995 EX-99.1 2 UST CORP PRESS RELEASE 1 UST CORP. ADOPTS STOCK PURCHASE RIGHTS PLAN --------------------------------- 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. 2 -2- 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. EX-99.2 3 EMPLOYMENT AGREEMENT WITH SUZANNE MOOT 1 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. ----------- 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. 2 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. -2- 3 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 -3- 4 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. -4- 5 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 -5- 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 -6- 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. -7- 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 ------------------------------------- -8- -----END PRIVACY-ENHANCED MESSAGE-----