EXHIBIT 10(l)
FIRST AMENDED AND RESTATED EMPLOYMENT AGREEMENT
This First Amended and Restated Employment Agreement (hereafter, this
"Employment Agreement") made and entered into as of the 21st day of November,
1995 by and between UST Corp. ("UST"), a bank holding company with its principal
place of business in Boston, Massachusetts, and Xxxx X. Xxxxxxxx, a resident of
Cohasset, Massachusetts, (the "Employee"), amending in part and restating that
certain Employment Agreement between the parties dated as of the 20th day of
April, 1993, as amended on July 13, 1993 and February 15, 1994 (the "Original
Agreement").
WITNESSETH:
WHEREAS, the parties entered in the Original Agreement as of April 20, 1993
in connection with the employment of the Employee as President and Chief
Executive Officer of UST and thereafter amended the Original Agreement on July
13, 1993 and February 15, 1994 and wish to further amend the Original Agreement
hereby;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein, the parties hereto do hereby agree as follows:
I. Employment:
UST hereby employs the Employee as President, Chief Executive Officer and
as a Director of UST and as a Director of UST's subsidiary banks, USTrust and
United States Trust Company. The Employee may also at the pleasure of UST's
Board of Directors be appointed or elected from time to time, to serve as a
member of committees of the Board of Directors of UST and/or its subsidiaries.
The Employee hereby agrees to accept such positions upon election or
appointment. In addition, if elected or appointed, the Employee may also serve
as an officer or Director of any other affiliate of UST, if such service is
deemed appropriate by the UST Board of Directors. All such activities and
services shall be rendered by the Employee in good faith and in a manner
consistent with banking industry standards.
II. Compensation:
Effective as of January 1, 1996, the Employee shall be paid a base salary
at the rate of not less than $360,000 per annum during the term hereof, payable
on the first and third Fridays of each month (or upon such other schedule as
executive UST Officers are then paid). Increases, if any, over and above the
annual base salary set forth herein shall be determined annually by the Board of
Directors of UST.
The Employee shall be eligible to be considered for an annual bonus of up
to a maximum of fifty percent (50%) of his annual base salary for each full
calendar year during the term hereof. The determination of whether bonus
compensation will be granted and, if so, the amount of any such bonus shall be
determined by the Board of Directors of UST in its discretion based on its
assessment of the Employee's performance during the applicable calendar year and
taking into consideration the Employee's total compensation (including but not
limited to the value of Restricted Stock, as hereafter defined, granted him) in
comparison with that of other chief executive officers in businesses comparable
to UST. The Employee
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shall not be eligible to participate in any other bonus plan, program or
arrangement of UST during the term hereof unless expressly so authorized by the
Board of Directors of UST.
In addition, the Employee shall receive an allowance of $790 per month
which he shall use to defray the costs of the business use of an automobile
owned by the Employee. The Employee's annual dues and reasonable business
expenses related to UST's business at the Bay Club and the Union Club shall also
be reimbursed by UST. Except as otherwise provided herein, the Employee also
shall be entitled to such fringe benefits, including without limitation benefits
under UST's Supplemental Retirement Benefits Plan(s), and paid vacation time, as
UST may provide to other executive UST officers.
Pursuant to the Original Agreement, the Employee was granted by UST's Board
of Directors, stock options under UST's Stock Compensation Plan as amended by
UST from time to time (the "Plan"), enabling the Employee to purchase up to an
aggregate of 150,000 shares (subject to anti-dilution provisions) of UST Common
Stock. All such options have vested as of the effective date hereof. The
Employee was granted additional options to purchase 200,000 shares of UST Common
Stock under the Plan thereafter, which options have also vested.
Pursuant to the Original Agreement, the Employee was granted 60,000 shares
of UST Restricted Common Stock ("Restricted Stock") under the Plan, 40,000
shares of which have vested as of the effective date hereof and the remaining
20,000 shares of which shall vest on April 20, 1996, in accordance with the
Plan.
As of the effective date hereof, the Employee has been granted an
additional 45,000 shares of Restricted Stock under the Plan, one third of which
shares shall vest on each of January 2, 1997, January 2, 1998 and January 4,
1999, in accordance with the Plan.
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In addition to the options granted the Employee, as described above, the
Employee has been granted by UST's Board of Directors, as of the effective date
hereof, stock options under the Plan, having the terms described herein, which
will enable the Employee to purchase up to an aggregate of 150,000 additional
shares of UST Common Stock at the fair market value of UST Common Stock at the
close of trading on November 21, 1995, as reported by the Wall Street Journal,
i.e., at 13 7/16 (the "Exercise Price"). The options shall vest as follows: (i)
one third of the shares on January 2, 1996; (ii) one third on the earlier of
January 2, 1997 or the first trading day on which the closing price of UST
Common Stock shall have equaled or exceeded for ten consecutive trading days the
Exercise Price plus Three Dollars ($3.00); and (iii) the last third on the
earlier of January 2, 1998 or the first trading day on which the closing price
of UST Common Stock shall have equaled or exceeded for ten consecutive trading
days the Exercise Price plus Six Dollars ($6.00).
All stock options granted the Employee hereunder shall be treated as
incentive stock options to the extent permitted by applicable law.
The Employee shall not receive any Directors' fees or Directors'
compensation for attendance at UST or UST subsidiary Directors' meetings.
III. Term:
Unless earlier terminated by the death or "Disability" of the Employee as
defined in Section V hereof or as otherwise provided in this Employment
Agreement, the Employee is engaged for a period commencing on the effective date
hereof and ending on January 4, 1999, 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
original or any renewal term that this Employment Agreement shall not renew.
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UST shall have the right to terminate this Employment Agreement for Cause,
meaning dishonesty which materially and adversely affects UST, gross
malfeasance, gross misconduct or the Employee's conviction of a felony or his
willful violation of any provision of federal or state banking or securities law
or his willful failure to perform his obligations under this Employment
Agreement. Except in the case of dishonesty, UST agrees to give written notice
of at least ten (10) business days as to the particulars which are asserted to
be the basis for termination and an opportunity extending not more than ten (10)
business days to cure such event in a manner which reasonably assures UST that
such event will not recur. Should the Employee be terminated for any of the
reasons set forth in this Section III, he shall be paid salary, earned
additional compensation, awarded bonuses and other fringe benefits through the
date of termination, but shall forfeit his rights to any unvested compensation,
benefits, securities or other consideration under this Employment Agreement as
of the date of such termination.
The Employee shall have the right to terminate this Employment Agreement
for Good Reason, meaning (i) failure of UST to continue the Employee in his
position as President and Chief Executive Officer; (ii) material diminution in
the nature or scope of the Employee's responsibilities, duties or authority;
(iii) material failure of UST to provide the Employee base salary and benefits
in accordance with the terms of Section II hereof, other than an insubstantial
failure not occurring in bad faith and which is remedied by UST within 10
business days of receipt of notice from the Employee; or (iv) a permanent
transfer of the Employee to a work site more than twenty-five miles distant from
his work site on the effective date hereof.
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IV. Scope of Service:
Employee shall devote his full time and effort to the faithful performance
of his duties hereunder and shall be engaged in no outside business or
employment during the course of his employment hereunder. It is agreed that the
provisions of this Section will not be deemed to be violated by the holding of
directorships or related positions in charitable, educational or not-for-profit
organizations which do not involve continuous or substantial time commitments or
such other directorships as the Board of Directors of UST may approve, or by
passive personal real estate or other personal investment activities which the
Employee is able to monitor outside of his normal working hours.
V. Disability:
In the event the Employee shall be unable to perform his regular and
customary duties by reason of physical or mental ailment or other disability for
a period of six consecutive months or less (a "Disability"), he shall be
entitled to receive regular compensation during that period. In the event said
illness or other disability shall continue for a period longer than six
consecutive months, UST's obligations under this Employment Agreement shall
terminate and his compensation thereafter shall be limited to the amounts
received from insurance payments provided by UST.
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VI. Non-competition:
In the event the Employee shall leave his employment without Good Reason
during the term hereof or shall be discharged during the term hereof for one or
more of the causes set forth in Section III, the Employee agrees that he will
not enter into the employment of any other financial institution or entity in
Eastern Massachusetts or the Bridgeport, Connecticut banking market (as defined
by the Federal Reserve Bank of Boston) having assets in excess of $1 billion for
a period equal to the balance of the term provided for herein or for a period of
six months, whichever is greater. The Employee further agrees that for a period
of two years following such termination of his employment hereunder, he will not
directly or indirectly, for his own account or for the account of others, (i)
solicit the business of persons whom he knows to be customers of UST or any of
its subsidiaries or affiliates with regard to the provision of any type of
financial service provided by UST or any of its subsidiaries, or (ii) after
notice from UST that any person or persons is or are a customer, commence or
continue the solicitation of such business from such person or (iii) solicit or
hire executive personnel of UST or any of its subsidiaries for the benefit of
any entity controlled by the Employee or by which the Employee is employed or
from which the Employee receives any form of fee or compensation.
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VII. Confidential Information:
The Employee recognizes and acknowledges that there may be made available
to him in the course of his employment hereunder confidential information of or
relating to UST and its subsidiaries and affiliates, including, without
limitation, client and customer lists, acquisition, expansion, and other
strategic plans (collectively the "Confidential Information"). The Employee
hereby acknowledges that the Confidential Information, as it may exist from time
to time, is a valuable, special and unique asset of the business of UST and its
subsidiaries and affiliates. Except as may be required by law, the Employee
shall not, during or after the term of his employment hereunder, make any use of
Confidential Information or disclose any Confidential Information to any person,
firm, corporation, association or other entity for any reason or purpose
whatsoever, other than in connection with the normal performance of his duties
hereunder.
UST or any of its subsidiaries or affiliates shall be entitled to obtain
injunctive relief, restraining the Employee from disclosing or using any
Confidential Information in violation of this Section VII or from any violation
of Section VI hereof, and to recover any and all costs and expenses incurred in
enforcing this Employment Agreement, in addition to any other relief provided by
applicable law. The Employee acknowledges that the nature of the business of UST
and the value of the Confidential Information render inadequate any remedy at
law which may be obtained by UST or any of its subsidiaries or affiliates for a
breach by the Employee of Section VI hereof or this Section VII and the Employee
therefore hereby agrees that UST or any of its subsidiaries or affiliates may
seek such equitable remedies.
VIII.Change of Control:
In the event that during the term of this Employment Agreement there shall
have occurred a "Change of Control" (as defined in Section 8 of the Plan) in the
ownership of UST,
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the person(s), corporation(s) or other entity or entities so acquiring control
of UST shall assume UST's obligations under this Employment Agreement.
A. Elective Termination:
In addition, upon such a Change of Control, the Employee shall be entitled
to terminate this Employment Agreement by a written notice to UST or its
successor, and in such event (in addition to whatever entitlements the Employee
shall then have under this Employment Agreement for any benefits other than
salary, additional compensation or bonus not yet earned), the Employee shall be
entitled to receive a cash severance payment equal to 2.99 times the "base
amount" as defined in Section 280G(b)(3) of the Internal Revenue Code of 1986,
as amended, but excluding his W-2 earnings resulting from the exercise of stock
options, payable in one lump sum on the date of termination.
B. Involuntary Termination:
In addition, in the event that, subsequent to such a Change of Control, UST
or its successor terminates the Employee's employment (other than for the causes
specified in Section III hereof), UST or its successor otherwise breaches this
Employment Agreement, or the successor to UST does not expressly assume UST's
obligations under this Employment Agreement, then the Employee shall be entitled
to receive a severance payment as set forth in Section VIII. A. above (in
addition to whatever other entitlements the Employee shall then have under this
Employment Agreement for any benefits other than salary, additional compensation
or bonus not yet earned). For these purposes, any diminution in the rights,
benefits or entitlements of the Employee or positions or authorities occupied by
the Employee prior to the Change of Control shall be conclusively deemed to be a
breach of this Employment Agreement.
C. Elective or Involuntary Termination:
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Upon a "Change of Control," as defined in the Plan, the vesting of any
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.
If, in connection with a Change of Control, any other employees who hold
stock options under the Plan or UST Restricted Common 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 such 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.
D. Reductions. Notwithstanding anything to the contrary contained in this
Employment Agreement, the payments and benefits to which the Employee would be
entitled pursuant to this Section VIII or otherwise as a result of a Change of
Control shall be reduced (i) by any severance pay or comparable payments to
which the Employee is entitled under applicable law as a result of the
termination of his/her employment and (ii) to the maximum amount for which UST
will not be limited in its deduction pursuant to Section 280G of the Internal
Revenue Code of 1986, as amended, or any successor provision or pursuant to any
other provision of applicable law. 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 UST of the need for such
reduction or, if the Employee fails to so specify timely, as determined by UST.
IX. Indemnification Undertakings:
UST shall, and UST shall use its best efforts to cause its subsidiaries and
affiliates to, indemnify the Employee to the maximum extent permitted by law and
regulation in connection with any liability, expense or damage which the
Employee incurs or to which the Employee is
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exposed as a result of the Employee's employment and positions with UST and its
subsidiaries and affiliates as contemplated by this Employment 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 UST and its subsidiaries and affiliates. UST, on behalf of itself and its
subsidiaries and affiliates, hereby confirms that the occupancy of all offices
and positions which in the future are or were occupied or held by the Employee
have been so occupied or held at the request of and for the benefit of UST and
its subsidiaries and affiliates for purposes of the Employee's entitlement to
indemnification under applicable provisions of the respective articles of
organizations and/or by-laws or other similar documents of UST and its
subsidiaries and affiliates.
X. Notices:
All notices required under this Employment Agreement shall be sufficient if
made in writing, by certified or registered mail, return receipt requested, or
by hand delivery provided that any party may change such address by providing
notice thereof:
If to the Employee:
Xxxx X. Xxxxxxxx
00 Xxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxxxx 00000
with a copy to
Xxxx X. Xxxxxx, Esq.
Xxxxxxx, Xxxx & Xxxxx
000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
If to UST Corp.:
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Attention: Xxxxx Xxxxxx, Senior Vice President
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
with a copy to
Xxxx X. Xxxxxxx, Esq.
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
XI. Withholding:
All payments made by UST under this Employment Agreement shall be reduced
by any tax or other amounts required to be withheld by UST under applicable law.
XII. Amendments and Waivers:
This Employment Agreement represents the exclusive statement of the entire
agreement between the parties concerning the subject matter hereof; provided,
however, that this Employment Agreement shall not terminate or supersede any
additional obligations of the Employee pursuant to any other agreement with
respect to the Confidential Information or the like or with respect to any
restrictions on the activities of the Employee or the like or with respect to
the securities of UST. This Employment Agreement may not be amended, modified or
revoked in whole or in part except by written agreement of the parties. No
waiver of any provision hereof shall be effective unless made in writing and
signed by the waiving party. The failure of either party to require the
performance of any term or obligation of this Employment Agreement, or the
waiver by either party of any breach of this Employment Agreement, shall not
prevent any subsequent enforcement of such term or obligation or be deemed a
waiver of any subsequent breach.
XIII. Governing Law:
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This Employment Agreement shall be governed, construed and enforced in
accordance with the laws of the Commonwealth of Massachusetts, without regard to
the conflict of laws principles thereof.
XIV. Severability:
In the event that any provision of Section VI or VII hereof shall be
determined by any court of competent jurisdiction to be unenforceable by reason
of its being extended over too great a time, too large a geographic area or too
great a range of activities, such provision shall be deemed to be modified to
permit its enforcement to the maximum extent permitted by law.
In the event that any part of this Employment Agreement shall be held to be
illegal or null and void by any court of competent jurisdiction, such
determination shall not affect the enforceability, validity or binding nature of
the remaining parts of this Employment Agreement and they shall remain in full
force and effect.
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XV. Non-Assignment:
Neither the Employee nor UST may make any assignment of this Employment
Agreement or any interest herein, by operation of law or otherwise, without the
prior written consent of the other; provided, however, that UST may assign its
rights and obligations under this Employment Agreement without the consent of
the Employee to any person(s), corporation(s) or other entity or entities with
which UST shall hereafter affect a reorganization, consolidate with, or merge
into or to which UST shall hereafter transfer all or substantially all of its
properties or assets if in so doing UST assigns the entire Employment Agreement
and all rights and obligations of the Employee and UST thereunder.
XVI. Binding Nature:
This Employment Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective heirs, executors, administrators, legal
representatives, successors and permitted assigns.
XVII. No Conflicting Agreement:
The Employee hereby represents and warrants to UST that he is under no
contract, agreement or obligation which (i) prohibits him from entering into
this Employment Agreement, (ii) conflicts with the terms of this Employment
Agreement or (iii) prevents him, in any way, from performing the duties
contemplated hereby.
IN WITNESS WHEREOF, the parties hereto have caused this Employment
Agreement to be executed in duplicate originals as of the date first written
above. UST CORP.
By: /s/ Xxxxxxx X. Xxxxxxxx
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Title: Chairman, Compensation Committee
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and Authorized Signer
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/s/ Xxxx X. Xxxxxxxx
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