1
EXHIBIT 10(V)(V)
UST CORP.
EXECUTIVE EMPLOYMENT AGREEMENT
This Agreement is made by and between UST Corp., a Massachusetts
corporation, (the "Company") and Kenneth L. Sullivan (the "Employee") as of the
24th day of October, 1994 (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 work site on the
Effective Date.
-3-
4
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
-5-
6
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 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.
-6-
7
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 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/ Kenneth L. Sullivan By: /s/ Neal F. Finnegan
----------------------- --------------------
Title: President and CEO
-8-
9
"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 ____ day of _____________,
1994 (the "Employment Agreement"), I, on my own behalf and on behalf of my
heir, beneficiaries and representatives and all others connected with me,
hereby release and forever discharge UST Corp. (the "Company"), its
subsidiaries and affiliates, and all of their respective officers, directors,
employees, agents, representatives, successors and assigns and all others
connected with them (all collectively, the "Releasees"), both individually and
in their official capacities, from any and all liability, 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, as amended, the
Age Discrimination in Employment Act, as amended, the Americans with
Disabilities Act, as amended, and the Massachusetts fair employment practices
act, as 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 employee qualified and non-qualified 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 assert 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 Releasees 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 (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
-9-
10
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: ____________________________
-10-