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EXHIBIT 10(i)(vii)
EXECUTIVE EMPLOYMENT AGREEMENT
This Agreement is made by and between UST Corp., a Massachusetts
corporation, (the "Company" or "UST") and Xxxx Xxxxxx (the "Employee") as of the
10th day of August, 1998 (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 hereby offers, and the Employee hereby accepts,
employment with 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, which term shall automatically renew
thereafter for successive terms of one year each unless either party gives
notice to the other at least sixty (60) days prior to the expiration of the
initial or any renewal term that this Agreement shall not renew. Notwithstanding
the foregoing, in the event that this Agreement is in effect on the date of
consummation of a Change of Control, as defined in Section 6.g.ii below, 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 the position of
an Executive Vice President of the Company and/or such other executive position
or positions with the Company, its subsidiaries and other affiliates to which
the parties may hereafter from time to time agree and the Employee 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 of
Directors of the Company (the"Board") or its designees.
b. During employment, the Employee shall devote his full business
time and best efforts, judgment, skill and knowledge exclusively to the
advancement of the interests of the Company, its subsidiaries and other
affiliates and to the discharge of his duties and responsibilities for them.
While employed by the Company, the Employee shall not be engaged in any other
business activity, except as approved by the Board, the President or the Board's
designee in writing. It is agreed, however, that the provisions of this Section
3.b shall
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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 and other affiliates.
4. COMPENSATION. As compensation for all services performed for the
Company and its subsidiaries and other affiliates during the term of this
Agreement, the Company shall pay the Employee a base salary at an annual rate
not less than Two Hundred Thousand Dollars ($ 200,000), 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 duties for the Company and, if applicable, its
subsidiaries and other affiliates, 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 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 employment terminates.
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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 duties or responsibilities on behalf of the Company and, if
applicable, its subsidiaries and other affiliates; (ii) the Employee's fraud,
embezzlement or other material dishonesty with respect to the Company or any of
its subsidiaries or other affiliates; (iii) the Employee's gross misconduct or
his 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.
d. BY THE COMPANY OTHER THAN FOR CAUSE. The Company may terminate
the Employee's employment other than for Cause upon notice to the Employee under
this subsection d or under subsection g below, whichever is applicable. 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 receipt of notice of termination of employment and does not timely
revoke the Employee Release, the Company:
i. shall pay the Employee severance pay in an amount equal to
the sum of twelve (12) months' base salary at the rate in effect on
the date of termination plus the amount of any performance bonus
paid to the Employee in the calendar year immediately preceding that
in which termination occurs, 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. at the Employee's election, (A) shall continue to pay, for
the period of twelve (12) months following termination of the
Employee's employment or, if earlier, until the date the Employee is
covered under another employer's health plan that is comparable to
that of the Company (the "Post-Employment Health Coverage Period"),
that share of the premium cost of Employee's participation and that
of his 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) shall 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 the
Employee and his eligible dependents may exercise any rights they
have
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under Sections 601-607 of ERISA and Section 4980B of the
Internal Revenue Code (collectively referred to as "COBRA") to
continue participation in the group health plan at their cost,
effective as of the date the Employee's employment terminates.
Should the Employee elect option (A) above, the period of any
continued health coverage to which the Employee and his eligible
dependents may be entitled under COBRA as a result of the Employee's
termination of employment will commence at the end of the
above-defined Post-Employment Health Coverage Period.
Notwithstanding anything to the contrary contained herein, the
Employee may elect option (A) directly above only if the Employee
elects to receive payment under subparagraph d.i., directly above,
in the form of salary continuation.
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 in accordance with Section 3.a
above; (ii) a change adverse to the Employee in the Employee's primary reporting
relationship; (iii) material diminution in the nature or scope of the Employee's
responsibilities, duties or authority; (iv) 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 (v) a permanent transfer of the Employee to a work
site more than twenty-five miles distant from his work site on the Effective
Date. In the event of termination in accordance with this Section 6.e, the
Company shall provide the Employee severance pay 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 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 (as defined in subsection g.ii
below) 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 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 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
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(1) shall pay the Employee an amount equal to the sum of
twenty-four (24) months' base salary at the rate in effect on the date of
termination of the Employee's employment plus two times the amount of any
performance bonus paid to the Employee in the calendar year immediately
preceding that in which termination occurs, 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 following the effective date of the Employee Release, but
retroactive to the date of termination, and
(2) at the Employee's election, (A) shall continue to
pay, for the period of twenty-four months following termination of the
Employee's employment or, if earlier, until the date the Employee is
covered under another employer's health plan that is comparable to that of
the Company (the "Change of Control Post-Employment Health Coverage
Period"), that share of the premium cost of Employee's participation and
that of his 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) shall 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 twenty-four (24) months, which lump
sum shall be payable within thirty (30) days following the effective date
of the Employee Release, and the Employee and his eligible dependents may
exercise their rights under COBRA to continue participation in the group
health plan at their cost effective as of the date his employment
terminates. Should the Employee elect option (A) above, the period of any
continued health coverage to which the Employee and his eligible
dependents may be entitled under COBRA as a result of the Employee's
termination of employment will commence at the end of the above-defined
Change of Control Post-Employment Health Coverage Period. Notwithstanding
anything to the contrary contained herein, the Employee may only elect
option (A) directly above if the employee elects to receive payment under
subparagraph g.i.(1) in the form of salary continuation.
(3) Upon a Change of Control as defined in the Company's
Stock Compensation Plan as amended by the Company from time to time (the
"Plan"), the vesting of any UST Restricted Common Stock ("Restricted
Stock") or stock options to purchase UST Common Stock granted to the
Employee and not yet exercised, expired, surrendered or canceled shall be
in accordance with the Plan.
(4) If in connection with a Change of Control as defined
in the Plan any other employees who hold stock options under the Plan or
Restricted Stock will have their options or Restricted Stock or both
cashed out, whether under the Plan or otherwise, the Employee shall have
the right to have all or any of his options or Restricted Stock or both
cashed out on the same basis and at the same time the options and
Restricted Stock of such other employees are cashed out.
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ii. Except as otherwise provided with respect to subparagraphs
g.i.(3) and g.i.(4) directly above, 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 other
affiliates or any trustee or other fiduciary holding securities under an
employee benefit plan of the Company or any of its subsidiaries or other
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. Notice by the Company
pursuant to Section 2 hereof that this Agreement shall not renew shall be
treated as termination
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by the Company other than for Cause pursuant to Section 6.d. Notice by the
Employee pursuant to Section 2 hereof that this Agreement shall not renew 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, its subsidiaries and
other affiliates continually develops Confidential Information, that the
Employee may develop Confidential Information for the Company, its subsidiaries
and other affiliates 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 regular duties for the Company,
its subsidiaries and other affiliates, and shall never use for his own benefit
or that of another, any Confidential Information obtained by the Employee
incident to his employment or other association with the Company or any of its
subsidiaries or other affiliates. The Employee understands that this restriction
will continue to apply throughout his employment and after his employment
terminates, regardless of the reason for such termination; provided, however,
that the obligations contained in this Section 7 shall not apply to any
Confidential Information that becomes publicly known through no fault of the
Employee and shall not prevent the Employee from disclosing Confidential
Information as required by law or regulation.
b. As used in this Agreement, "Confidential Information" means any
and all information of the Company, its subsidiaries and other 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 other affiliates and
the people and organizations with whom any of them has business relationships
and the substance of those relationships. Confidential Information also includes
any information received by the Company or any of its subsidiaries or other
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 (a)
for a period of two years following the termination of his employment pursuant
to Section 6.b or 6.c or 6.f hereof or (b) in the event of termination pursuant
to Section 6.d or 6.e or 6.g hereof, for a period equal to the months of
severance pay provided the Employee thereunder:
(i) the Employee shall not, directly or indirectly, solicit or
encourage any customer of the Company or any of its subsidiaries or other
affiliates to terminate or diminish substantially its relationship with the
Company or any of its subsidiaries or other affiliates and
(ii) the Employee shall not, directly or indirectly, hire or attempt
to hire any
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executive personnel of the Company or any of its subsidiaries or other
affiliates or solicit or encourage any executive personnel of the Company or any
of its subsidiaries or other affiliates to discontinue employment with the
Company or any of its subsidiaries or other affiliates.
For purposes of this Section 8, the term "months of severance pay" shall mean
the quotient of the total sum of payments to be made to the Employee under the
applicable termination provision divided by the Employee's base salary at the
monthly rate in effect on the date of termination.
9. REMEDIES. The Employee acknowledges that, if he 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 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 subsidiaries or other affiliates 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 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. INDEMNIFICATION. The Company shall, and the Company shall use its best
efforts to cause its subsidiaries and other affiliates to, indemnify the
Employee to the maximum
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extent permitted by law and regulation in connection with any liability, expense
or damage which the Employee incurs or to which the Employee is exposed as a
result of the Employee's employment and positions with the Company and its
subsidiaries and other affiliates as contemplated by this Agreement, provided
that the Employee shall not be indemnified with respect to any matter as to
which he shall have been adjudicated in any proceeding not to have acted in good
faith in the reasonable belief that his action was in the best interest of the
Company and its subsidiaries and other affiliates. The Company, on behalf of
itself and its subsidiaries and other affiliates, hereby confirms that the
occupancy of all offices and positions which are occupied or held by the
Employee, now or hereafter, have been so occupied or held at the request of and
for the benefit of the Company and its subsidiaries and affiliates for purposes
of the Employee's entitlement to indemnification under applicable provisions of
the respective articles of organization and/or other similar documents of the
Company and its subsidiaries and other affiliates.
14. 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; provided, however, that this Agreement shall not terminate or
supersede any agreement between the parties with respect to the securities of
the Company. 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, 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.
15. 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.
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/ Xxxx X. Xxxxxx /s/ Xxxxx X. Xxxxxx
____________________ By: _________________________
Senior Vice President
Title: ______________________
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"A"
RELEASE OF CLAIMS
FOR AND IN CONSIDERATION OF the special payments to be made to me in
connection with my separation of employment, as set forth in the employment
agreement between UST Corp and me dated as of the 10th day of August, 1998 (the
"Employment Agreement"), I, on my own behalf and on behalf of my heirs,
beneficiaries and representatives and all others connected with me, hereby
release and forever discharge UST Corp. (the "Company"), its subsidiaries and
other affiliates, and all of their respective officers, directors, shareholders,
employees, agents, representatives, successors and assigns and all others
connected with them (all collectively, the "Released"), both individually and in
their official capacities, from any and all liabilities, claims, demands,
actions and causes of action of any type (all collectively "Claims") which I
have had in the past, now have, or might now have, through the date of my
execution of this Release of Claims, in any way resulting from, arising out of
or connected with my employment or its termination or pursuant to any federal,
state or local employment law, regulation or other requirement (including
without limitation Title VII of the Civil Rights Act of 1964, the Age
Discrimination in Employment Act, the Americans with Disabilities Act, and the
Massachusetts fair employment practices act, each as may be amended).
Excluded from the scope of this Release of Claims is (i) any claim arising
hereafter under the terms of the Employment Agreement or under the terms of any
of the Company's qualified and non-qualified employee benefit plans (including
without limitation the Company's employee pension plan, profit sharing plan or
stock ownership plan) and (ii) any right of indemnification or contribution
pursuant to the Articles of Organization or By-Laws of the Company that I have
or hereafter acquire if any claim is asserted or proceedings are brought against
me by any governmental or regulatory agency, or by any customer, creditor,
employee or shareholder of the Company, or by any self-regulatory organization,
stock exchange or the like, related or allegedly related to my having been an
officer or employee of the Company or to any of my activities as an officer or
employee of the Company.
By acceptance of or reliance on this Release of Claims, the Company
promises that neither it nor any of the other Released affiliated with the
Company will taken any action that is designed, specifically as to me or with
respect to a class of similarly situated former employees, to reduce or
abrogate, or may reasonably be expected to result in an abridgement or
elimination of, any rights of indemnification or contribution available to me
pursuant to the Articles of Organization or By-Laws of the Company, or under any
policy or policies of directors and officers liability insurance affording
coverage to former officers and in effect from time to time, unless any such
abridgement or elimination of rights is also generally applicable to
then-current officers and employees of the Company.
In signing this Release of Claims, I acknowledge that I have had at least
twenty-one
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(21) days from the date of my receipt of notice of termination of my
employment (or, if applicable, the date I gave such notice to the Company) to
consider the terms of this Release of Claims, that I am encouraged by the
Company to seek the advice of an attorney prior to signing this Release of
Claims and that I am signing this Release of Claims voluntarily and with a full
understanding of its terms. I understand that I may revoke this Release of
Claims at any time within seven (7) days of the date of my signing by written
notice to the President of the Company and that this Release of Claims will take
effect only upon the expiration of such seven-day revocation period and only if
I have not timely revoked it.
IN WITNESS WHEREOF, I have set my hand and seal on the date written below.
Signature: _________________________________
Xxxx Xxxxxx
Date Signed: _______________________________
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