1
EXHIBIT 10(w)
UST CORP.
SEVERANCE PAY PLAN
(AND SUMMARY PLAN DESCRIPTION)
JANUARY 1, 1995
I. PURPOSE
This Plan is intended to provide salary continuation to eligible
employees of UST Corp. (the "Company") in the event that their employment is
terminated as provided hereafter due to a reduction in force or a corporate
restructuring or following a Change of Control. This Plan is intended to
comply with all applicable requirements of the Employee Retirement Income
Security Act of 1974 ("ERISA") and the Regulations promulgated thereunder for
severance pay plans and is to be interpreted in a manner consistent with such
requirements. This document contains the provisions of the Plan and the
Summary Plan Description.
II. ELIGIBILITY TO PARTICIPATE
A. In order to be eligible to participate in this Plan:
1. You must be a regular full-time or part-time employee of
the Company. (Temporary employees as classified by the
Company are not eligible to participate in this Plan.)
2. You must have completed at least three (3) months of
employment with the Company at the time your employment
terminates.
III. QUALIFYING EVENTS
A. An employee eligible to participate in this Plan under Section II
above (a "participating employee") is entitled to receive
benefits under the Plan only if the employee is on the Company's
active payroll or on a leave of absence that has been approved in
writing, with guaranteed reinstatement, at the time his/her
employment terminates and only if termination occurs in one of
the following circumstances:
1. The participating employee's employment is terminated as
a result of the elimination of his/her position with the
Company in conjunction with a reduction in force or a
corporate restructuring and the employee is not offered
employment in a comparable position with the Company or
one of its Affiliates; or
2. The employee's employment is terminated other than for
Cause by the Company within twelve (12) months following
a Change of Control; and
2
3. The employee is not then covered by another severance pay
plan or by an individual employment agreement or other
severance arrangement providing benefits that in the
aggregate are comparable to or exceed those for which the
employee would otherwise be eligible under this Plan.
IV. EXCLUSIONS
A. The following are examples of events in which an employee would
not qualify for benefits under this Plan:
1. The employee resigns or otherwise voluntarily leaves
his/her employment with the Company; or
2. The employee's employment is terminated by the Company
for Cause; or
3. The employee is offered comparable employment at the time
of the elimination of his/her position; or
4. The employee is temporarily laid off, as determined by
the Company; or
5. The employee is on a leave of absence which has not been
approved in writing or as to which reinstatement is not
guaranteed.
B. This Plan does not constitute a contract of employment for a
specific term or otherwise alter the at-will nature of the
employment relationship between any employee and the Company.
V. BENEFITS
A. Benefits under the Plan are determined as follows:
1. A participating employee with less than twenty (20) full
years of continuous service as of the date the employee's
employment terminates shall receive two (2) weeks salary,
at the participating employee's final base rate of pay,
for each full year of service with the Company as of the
date the employee's employment terminates, to a maximum
of twenty-six (26) weeks of pay; provided, however, that
no participating employee shall receive less than three
weeks pay, at that employee's final base rate.
2. A participating employee with twenty (20) full years or
more of continuous service as of the date the employee's
employment terminates shall receive thirty-nine (39)
weeks of salary, at the participating employee's final
base rate of pay.
-2-
3
3. In the case of any participating employee employed on a
part-time basis, benefits hereunder shall be pro- rated,
based on the number of hours the employee is regularly
scheduled to work per week.
B. Provided that the participating employee elects to receive
benefits as salary continuation under option 2 of paragraph C of
this Section V, and provided further that the participating
employee is currently enrolled in, and exercises his/her right to
continue coverage under the Company's group health plan in
accordance with applicable federal law ("COBRA"), then, for the
duration of the period in which the participating employee is
receiving such salary continuation or, if earlier, until the date
the participating employee ceases to be eligible for continued
coverage in accordance with COBRA, the Company shall continue to
pay that share of the premium cost of the participating
employee's coverage and that of his/her eligible dependents under
the Company's group health plan that it pays for active employees
of the Company and their eligible dependents generally or,
following a Change of Control, the amount the Company was paying
for active employees of the Company and their eligible dependents
generally immediately prior to such Change of Control, if
greater.
C. Benefits under Section V.A for which a participating employee is
eligible shall be reduced by all taxes and other amounts which
the Company is required to withhold under applicable law and
shall be payable, at the participating employee's election, (1)
in a single lump sum within thirty (30) days following the date
of termination of the participating employee's employment or (2)
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
date of termination of the participating employee's employment.
D. Benefits otherwise payable under this Plan shall be reduced by
any amounts to which the employee is entitled under applicable
law as a result of the termination of his/her employment.
E. The Company pays the full cost of benefits provided under this
Plan from the Company's general assets.
F. Benefits under the Plan are not assignable or subject to
alienation. Likewise, benefits are not subject to attachments by
creditors or through legal process against the Company or any
employee.
G. Notwithstanding anything to the contrary contained herein, any
and all payments to be provided hereunder to or on behalf of any
participating employee are subject to reduction to the extent
required by applicable statutes, regulations, rules and
-3-
4
directives of federal, state and other governmental and regulatory
bodies having jurisdiction over the Company and/or any of its
Affiliates.
VI. DEFINITIONS
A. Words or phrases which are initially capitalized or within
quotation marks shall have the meanings provided in this Section
VI and as provided elsewhere herein. For purposes of this Plan,
the following definitions apply:
1. An "Affiliate" means any individual, corporation or other
entity directly or indirectly controlling, controlled by
or under common control with the Company, where control
may be by management authority, equity interest or
otherwise.
2. "Cause" for termination means only (i) the employee's
refusal to perform or gross negligence in the performance
of, his/her duties and responsibilities for the Company
or (ii) the employee's fraud, embezzlement or other
material dishonesty with respect to the Company or any of
its Affiliates or (iii) an action or omission by the
employee in violation of the banking or other laws
governing the operations of the Company and/or (iv) the
employee's conviction of, or plea of no contest to, a
felony, each as communicated to the employee by notice
from the Company setting forth in reasonable detail the
nature of such Cause.
3. A "Change of Control" shall be deemed to have been
consummated if hereafter
(i) 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
(ii) during any period of two consecutive years
(not including any period prior to the establishment of
this Plan), individuals who at the beginning of such
period constitute the Board of Directors of the Company
(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 (i), (iii) or (iv) of this Section
V.A.3) 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
-4-
5
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
(iii) the stockholders of the Company approve 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
(iv) the stockholders of the Company approve a
plan of complete liquidation of the Company; or
(v) there occurs a closing of a sale or other
disposition by the Company of all or substantially all of
the Company's assets.
4. The "Company" means UST Corp. or, following a Change of
Control, any successor of UST Corp.
VII. ADMINISTRATION, CLAIMS PROCEDURE AND GENERAL INFORMATION
A. The Company reserves the right to amend, modify and terminate the
Plan. Also, the Company, as the Plan administrator within the
meaning of ERISA, reserves full discretion to administer the Plan
in all of its details, subject to the requirements of law. The
Company shall have such discretionary powers as are necessary to
discharge its duties. Any interpretation or determination that
the Company makes regarding this Plan, including without
limitation determinations of eligibility, participation and
benefits, will be final and conclusive, in the absence of clear
and convincing evidence that the Company acted arbitrarily and
capriciously.
B. Notwithstanding anything to the contrary contained herein, this
Plan may not be modified, amended or terminated during the first
twelve (12) months following a Change of Control, excluding only
such administrative changes as may be required for the assumption
of this Plan by the successor of Company upon a Change of
Control, and any participating employee who is such for purposes
of this Plan at the
-5-
6
time of a Change of Control will remain so for twelve (12) months
following that Change of Control.
C. If you believe you are being denied any rights under the Plan,
you may file a claim in writing with the Company, as Plan
administrator. If your claim is denied, in whole or in part, the
Plan administrator will notify you in writing, giving the
specific reasons for the decision, including specific reference
to the pertinent Plan provisions and a description of any
additional material or information necessary to perfect your
claim and an explanation of why such material or information is
necessary. The written notice will also advise you of your right
to request a review of your claim and the steps that need to be
taken if you wish to submit your claim for review. If the Plan
administrator does not notify you of its decision within 90 days
after it had received your claim (or within 180 days, if special
circumstances exist requiring additional time, and if you had
been given a written explanation for the extension within the
initial 90-day period), you should consider your claim to have
been denied. At this time you may request a review of the denial
of your claim.
A request for review must be made in writing by you or your duly
authorized representative to the Company, as Plan administrator,
within 60 days after you have received the notice of denial. As
part of your request, you may submit written issues and comments
to the Plan administrator, review pertinent documents, and
request a hearing. The Plan administrator's written decision
will be made within 60 days (or 120 days if a hearing is held or
if other special circumstances exist requiring more than 60 days
and written notice of the extension is provided to you within the
initial 60-day period) after your request has been received.
Again, the decision will include specific reasons, including
references to pertinent Plan provisions.
D. As a participant in the Plan, you are entitled to certain rights
and protections under ERISA. ERISA provides that all Plan
participants shall be entitled to:
1. examine, without charge, at the Plan administrator's
office, all Plan documents and copies of the documents
filed by the Plan administrator with the U.S. Department
of Labor; and
2. obtain copies of these documents and other Plan
information upon written request to the Plan
administrator. The Plan administrator may make a
reasonable charge for the copies.
In addition to creating rights for Plan participants, ERISA
imposes duties upon the people who are responsible for the
operation of the Plan. The people who operate the Plan, called
"fiduciaries", have a duty to do so prudently and in the interest
of Plan participants.
-6-
7
Neither the Company nor any other person may discriminate against
an employee in any way to prevent him/her from obtaining benefits
or exercising rights under ERISA.
If a claim for benefits is denied in whole or in part, you must
receive a written explanation of the reason for the denial. You
have the right to have the Plan administrator review and
reconsider the claim.
Under ERISA, there are steps you can take to enforce the above
rights. For instance, if you request materials from the Plan
administrator and you do not receive them within 30 days, a suit
may be filed in federal court.
In such a case, the court may require the Plan administrator to
provide the materials and pay you up to $100 a day until they are
received, unless they were not sent due to reasons beyond the
Plan administrator's control. If you have a claim for benefits
which is denied or not processed, in whole or in part, a suit may
be pursued in a state or federal court. If you are discriminated
against for asserting your rights, you may seek assistance from
the U.S. Department of Labor, or may file suit in a federal
court.
The court will decide who should pay the court costs and legal
fees. If you are successful, the court may order the other party
to pay these costs and fees. If you should lose, the court may
order you to pay these costs and fees.
If you have any questions about the Plan, you should contact the
Plan administrator. If there are any questions about this
statement or about employee rights under ERISA, please contact
the nearest area office of Pension and Welfare Benefits, U.S.
Department of Labor.
E. The following information about this Plan is provided in
accordance with the applicable requirements of ERISA and the
regulations promulgated thereunder:
Plan Sponsor
------------
UST Corp.
40 Court Street
Boston, MA 02108
Employer Identification Number of Plan Sponsor
----------------------------------------------
04-2436093
Plan Number
-----------
515
-7-
8
Plan Administrator
------------------
UST Corp.
40 Court Street
Boston, MA 02108
Attn: Human Resources Dept.
Tel. (617) 726-7000
Type of Administration
----------------------
Company-administered
Type of Plan
------------
The plan is a severance pay plan
Plan Year
---------
The plan year is the calendar year
Legal Process
-------------
The agent for service of legal
process with respect to the plan is:
General Counsel
UST Corp.
40 Court Street
Boston, MA 02108
-8-