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EXHIBIT 10(z)
UNIFYING AGREEMENT
THIS UNIFYING AGREEMENT made this 14th day of February, 1995 and
effective January 1, 1995, by and among United States Trust Company ("USTC"), a
banking and trust company having its principal place of business in Boston,
Massachusetts, UST Corp. ("UST"), a Massachusetts corporation also having its
principal place of business in Boston, Massachusetts and the parent of USTC,
Domenic Colasacco of Needham, Massachusetts ("Colasacco"), Robert Lincoln of
Lincoln, Massachusetts ("Lincoln"), Stephen K. Moody of Cambridge,
Massachusetts ("Moody"), Lucia Santini of Mansfield, Massachusetts ("Santini")
and Robert B. Zevin of West Newbury, Massachusetts ("Zevin").
Whereas, the Asset Management Division ("AM") is a division of USTC
which provides investment advisory and trust management services and each of
the initial Principals (as defined in Section 1.1 hereof and as listed on
EXHIBIT A attached hereto) is currently employed by AM and has simultaneously
with the execution and delivery of this Agreement entered into an Employment
Agreement as provided by Section 1.2 hereof;
Whereas, the Principals are concerned that previous UST and USTC
practices have not allowed for enough spending to generate growth in AM's
business, or for fully competitive compensation for its principals;
Whereas, UST and USTC desire to stabilize and increase the
profitability of AM and to pay its employees competitive compensation;
Whereas, UST and USTC want to provide, and the Principals desire to
participate in, an incentive compensation program which reflects value created
in the AM business;
Whereas, the Principals want to make it attractive to any potential
acquiror of UST, USTC or AM to protect existing relationships with AM employees
and clients, avoid re-writing existing client contracts, and further AM as a
separate business conducted under the name "United States Trust Company"; and
Whereas, UST and USTC want, in a change of ownership situation, to
offer an opportunity to a prospective purchaser to retain the services of the
Principals and thereby receive a continuing stream of profits from AM;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements hereinafter set forth and intending to be legally bound, the parties
hereby agree as follows:
ARTICLE I - PRINCIPALS
Section 1.1. NAMES AND ADDRESSES. The names and mailing addresses of
the persons who will initially serve as Principals in accordance with the terms
of this Agreement are set forth in EXHIBIT A attached hereto and made a part
hereof. Principals may be added or removed in accordance with Sections 1.6 and
1.8 hereof. The term "Principal" as used in any provision of this Agreement
shall mean each initial Principal listed on EXHIBIT A
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attached hereto and each new Principal added in accordance with Section 1.6
hereof who, in each case, as of the date or at the time of the event or period
relevant to such provision, shall be an offlcer of AM and a signatory to
this Agreement and shall not have resigned or been removed as an officer of AM
or a Principal hereunder.
Section 1.2. EMPLOYMENT AGREEMENTS. Concurrently with the execution of
this Agreement, each of the initial Principals shall enter into an Employment
Agreement with USTC, joined in as to certain matters by UST, in substantially
the form of EXHIBIT B hereto.
Section 1.3. THE PRINCIPALS COMMITTEE. The business of AM shall be
managed by a committee of the then serving Principals (the "Principals
Committee") which shall have and may exercise all the powers of AM except as
otherwise reserved to the Senior Principal, USTC or UST by this Agreement.
Section 1.4. VOTING. Each Principal shall have one vote on all matters
to be voted on by the Principals Committee hereunder.
Section 1.5. DUTIES OF THE PRINCIPALS. The Principals shall have such
duties as are set forth in their respective Employment Agreements and this
Agreement. Whenever called upon under this Agreement or under the Employment
Agreement, the Principals Committee shall act by vote of a majority of the
Principals, unless a vote of a Super-Majority (as defined in Section 1.6.
hereof) is required under this Agreement.
Section 1.6. ELECTION OF A NEW PRINCIPAL. The Principals Committee, by
vote of seventy percent (70%) of the Principals (a "Super-Majority"), may
elect a new Principal. At the time of such election, the Principals Committee,
in accordance with Section 5.2(c), shall decide on the percentage of the
Formula Payment (as defined in the form of Employment Agreement attached
hereto as EXHIBIT B and any amendment thereto) to allocate to such new
Principal. Such person shall then become a Principal for all purposes
hereunder and a party to this Agreement upon execution of a counterpart of this
Agreement, countersigned by the Senior Principal, and an Employment Agreement
with USTC and UST substantially in the form of EXHIBIT B attached hereto, with
an appropriately amended Schedule III attached.
Section 1.7. TERM. Each Principal shall remain a Principal until (i) he
dies, resigns, is removed or becomes disqualified, (ii) his Employment
Agreement is terminated with or without cause, or (iii) this Agreement is
terminated with or without cause pursuant to Article VI hereof.
Section 1.8. REMOVAL OF A PRINCIPAL. The Principals Committee, by vote
of a SuperMajority of the Principals, may instruct USTC to terminate, with or
without cause, a Principal's employment by USTC and of the related Employment
Agreement.
(a) If a Principal is terminated by the Principals Committee without
cause pursuant to this Section 1.8, (i) the Principal shall be entitled to
payment by AM of the greater of (A) the amount of compensation that such
Principal would have received under Section 3.1
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hereof for the remainder of the then current term of the Principal's Employment
Agreement, or (B) an amount equal to such Principal's then current Annual Base
Salary (as defined in Section 3.1) and (ii) the Principal's Employment
Agreement with UST and USTC (including, without limitation, Sections 12, 13
and 14 thereof) shall immediately terminate and the Principal shall be free to
compete with AM's business. The amounts payable to the terminated Principal
under this Section 1.8(a) shall be paid at such times and in such amounts as
would otherwise have been required under the terms of such Principal's
Employment Agreement UNLESS the Principals Committee, by vote of a
Super-Majority of the Principals (with the terminated Principal excluded from
voting), decides to accelerate payment of the amounts due hereunder.
(b) If a Principal is terminated by the Principals Committee for cause
pursuant to this Section 1.8, AM's obligations to pay further compensation
hereunder and under such Principal's Employment Agreement shall cease as of
the date of termination, except that any amounts theretofore accrued under
Section 3.1 hereof shall be paid when due to the Principal, and the provisions
of the Principal's Employment Agreement with UST and USTC shall immediately
terminate (except for the provisions of Sections 12 (b), 12(c), 12(d), 13 and
14 thereof).
(c) As used herein, "cause" shall mean (i) any material breach by a
Principal of his Employment Agreement; (ii) any act by a Principal causing a
material breach of AM's duties to UST and USTC under Section 10 of such
Principal's Employment Agreement; (iii) the conviction of a Principal for a
crime involving moral turpitude; or (iv) willful misconduct in the performance
by a Principal in connection with the Principal's duties under such
Principal's Employment Agreement after due notice and reasonable opportunity to
correct such conduct.
Section 1.9. DISABILITY. The Principals Committee, by vote of a
Super-Majority of the Principals, may terminate a Principal's employment upon
thirty (30) days' notice to such Principal if such Principal should be unable,
for one or more periods aggregating four (4) months during any consecutive
twelve (12) month period, because of illness, accident, or other disability
(mental or physical), to discharge substantially all of his duties hereunder,
and such disability shall be continuing at the time of such notice. After any
such termination, AM shall continue to pay such Principal for three (3)
consecutive months at his then current salary rate, UNLESS the Principals
Committee, by vote of a Super-Majority of the Principals, decides to increase
or otherwise change the amounts to be paid to any such disabled Principal
hereunder. The foregoing amounts and any additional amounts paid to such
disabled Principal hereunder shall be paid out of AM's Share of Revenues (as
defined in the form of Employment Agreement attached hereto as EXHIBIT B and
any amendment thereto).
Section 1.10. DEATH OF A PRINCIPAL. In the event of a Principal's death
during the term of this Agreement, AM's obligations to pay further
compensation hereunder and under such Principal's Employment Agreement shall
cease as of the date of death, except that any amounts theretofore accrued
under Sections 3.1 and 3.2 hereof shall be paid when due to the Principal's
estate, UNLESS the Principals Committee, by vote of a Super-Majority of the
Principals, decides to increase or otherwise change the total amounts to be
paid to any such deceased Principal hereunder. The foregoing amounts and any
additional amounts paid to such deceased Principal hereunder shall be paid out
of AM's Share of Revenues (as defined in the form of Employment Agreement
attached hereto as Exhibit B and any amendment thereto).
Section 1.11. RESIGNATION OF A PRINCIPAL. In the event that a
Principal resigns, AM's
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obligations to pay further compensation hereunder shall cease as of the date of
such resignation, except that any amounts theretofore accrued under Section 3.1
hereof shall be paid when due to the Principal.
ARTICLE II - SENIOR PRINCIPAL
Section 2.1. NOMINATION AND ELECTION OF THE SENIOR PRINCIPAL. On an
annual basis, the Principals Committee, by vote of a majority of the
Principals, shall nominate a person from among the Principals to be the Senior
Principal of AM. Such person shall serve as Senior Principal of AM unless his
nomination is vetoed by vote of USTC's Board of Directors taken within 60 days
of notification of such nomination. Colasacco shall serve as the Senior
Principal of AM for the term beginning January 1, 1995 and until his successor
is duly elected and qualified. No person elected under this Section 2.1. to
serve as the Senior Principal shall be precluded from serving more than one
term.
Section 2.2. REMOVAL OF THE SENIOR PRINCIPAL. During his term, the
Principals Committee may remove, with or without cause, a Principal as the
Senior Principal, by vote of a Super-Majority of the Principals.
Section 2.3. POWERS OF THE SENIOR PRINCIPAL. Subject to Section 2.5
hereof and the other terms and conditions of this Agreement, the Senior
Principal shall have general supervision and control over AM's business.
Recognizing that AM is a division of USTC, the Senior Principal shall control
all expenditures of AM subject to (i) the power of USTC's Board of Directors to
exercise its rights under Section 5A of the form of Employment Agreement
attached hereto as EXHIBIT B and any amendment thereto, (ii) the Revenue
Sharing Provision contained in Section 10 of the form of Employment Agreement
attached hereto as EXHIBIT B and any amendment thereto and (iii) approval by
the Principals Committee if required pursuant to the terms of this Agreement.
Section 2.4. DUTIES OF THE SENIOR PRINCIPAL. The Senior Principal
shall represent and act on behalf of AM on all matters, except those matters
specifically reserved to the Principals Committee under this Agreement and
those matters that may be delegated by the Senior Principal or the Principals
Committee hereunder. Without limiting the generality of the foregoing, whenever
a consent or approval of the Principals shall be required under any Employment
Agreement or this Agreement, the Senior Principal or, in the Senior Principal's
absence, another Principal designated in writing by the Principals Committee,
shall communicate any consent or approval authorized by the Principals.
Section 2.5. ISSUES REQUIRING THE PRINCIPALS COMMITTEE'S APPROVAL. The
Principals Committee, by a vote of a majority of the Principals, may require
that certain decisions of the Senior Principal be subject to prior approval of
the Principals Committee.
ARTICLE III - COMPENSATION OF THE PRINCIPALS
Section 3.1. ANNUAL BASE SALARY. Subject to the Revenue Sharing
Provision contained in Section
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10 of the form of Employment Agreement attached hereto as EXHIBIT B and any
amendment thereto, while employed by USTC under the Employment Agreement, each
of the Principals shall receive the annual base salary (the "Annual Base
Salary") set forth in EXHIBIT C attached hereto.
Section 3.2. INCENTIVE PAYMENTS. Subject to the Revenue Sharing
Provision contained in Section 10 of the form of Employment Agreement attached
hereto as EXHIBIT B and any amendment thereto, from time to time, but not less
than annually, the Senior Principal shall make recommendations to the
Principals concerning the incentive compensation payments that shall be paid by
AM to each of the Principals, including the Senior Principal. Unless a majority
of the Principals agree to a different incentive compensation payment
arrangement, the recommendations of the Senior Principal shall be implemented
in the manner proposed by the Senior Principal.
Section 3.3. THE ZEVIN AGREEMENT. The following provisions shall apply
with respect to the compensation to be paid to Zevin hereunder:
(a) USTC and Zevin are parties to an Independent Contractor Agreement
for Consulting Services dated September 30, 1994 (the "Independent Contractor
Agreement"). During the Original Term, any Renewal Term and the Phase II Term
(as defined in Zevin's Employment Agreement) of Zevin's Employment Agreement,
Zevin shall be compensated by UST and USTC solely in accordance with Sections
3.1 and 3.2 and Article V hereof. During such Terms, the provisions of the
Independent Contractor Agreement shall not be in effect. In the event of a
breach of Zevin's Employment Agreement or a breach of this Agreement by UST or
USTC, however, the provisions of the Independent Contractor Agreement shall
immediately be deemed to be in effect but shall not be effective retroactively.
If such an event shall occur, Section 3.3(b) hereof shall not apply.
(b) If Zevin resigns or is removed as a Principal at or after the
expiration of the Phase II Term of Zevin's Employment Agreement, the terms and
conditions of the Independent Contractor Agreement shall immediately be in
effect, and he shall thereafter be entitled to payment of all amounts earned
under the Independent Contractor Agreement, subject to the following
limitations. The foregoing sentence notwithstanding, if Zevin received an
initial payment of a Formula Payment (as defined in Zevin's Employment
Agreement) during the term of his Employment Agreement, AM shall not be
obligated to begin payments to Zevin under Section 4 of the Independent
Contractor Agreement until the amount calculated under Section 4 of the
Independent Contractor Agreement for the period after such initial payment is
made, which amount would otherwise be paid to Zevin under the Independent
Contractor Agreement, exceeds seventy-five percent (75%) of such initial
payment (the "Base Amount"). The Base Amount shall be adjusted upward if Zevin
receives additional amounts of the Formula Payment from the escrow established
under Section 11(f) of the Employment Agreement. In such case, AM shall not be
obligated to begin payments to Zevin under Section 4 of the Independent
Contractor Agreement until the total amount which would otherwise be paid to
Zevin under the Independent Contractor Agreement exceeds seventy-five percent
(75%) of the new Base Amount. For purposes of determining amounts which would
otherwise be paid to Zevin under this Section 3.3(b), only those accounts that
have heretofore been designated as Zevin's accounts under the Independent
Contractor Agreement and their "successor accounts" (as defined in the
Independent Contractor Agreement) shall be used.
ARTICLE IV - COMPENSATION OF EMPLOYEES OF AM WHO ARE NOT PRINCIPALS
Section 4.1. ANNUAL BASE SALARY. Subject to the Revenue Sharing
Provision contained in
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Section 10 of the form of Employment Agreement as attached hereto as EXHIBIT B
and any amendment thereto, each employee of AM who is not a Principal (each a
"Non-Principal") shall receive an annual base salary to be determined by the
Senior Principal in his sole discretion.
Section 4.2. INCENTIVE PAYMENTS. Subject to the Revenue Sharing
Provision contained in Section 10 of the form of Employment Agreement as
attached hereto as EXHIBIT B and any amendment thereto, from time to time, but
not less than annually, the Senior Principal shall make recommendations to the
Principals concerning incentive compensation payments to be paid by AM to the
Non-Principals. Unless a majority of the Principals agree to a different
incentive compensation payment arrangement, the recommendations of the Senior
Principal shall be implemented in the manner proposed by the Senior Principal.
ARTICLE V - FORMULA PAYMENTS
Section 5.1. FORMULA PAYMENTS. If a Triggering Event (as defined in
the form of Employment Agreement attached hereto as EXHIBIT B and any amendment
thereto) shall occur, UST shall be required to pay to the Principals then still
employed by UST a Formula Payment (as defined in the form of Employment
Agreement attached hereto as EXHIBIT B and any amendment thereto).
Section 5.2. ALLOCATION OF THE FORMULA PAYMENT.
(a) Unless modified in accordance with Section 5.2(c), the Formula
Payment shall be allocated among the Principals as follows:
Colasacco 25%
Zevin 20%
Lincoln 15%
Moody 10%
Santini 5%
The balance of the Formula Payment shall be allocated in accordance with
Section 5.2(b).
(b) The Senior Principal shall make a recommendation to the Principals
Committee as to how any amounts not allocated under Section 5.2(a) should be
allocated among the Non-Principals and the Principals. Unless a majority of the
Principals agree to allocate such amounts in a different manner, the
recommendation of the Senior Principal will be implemented in the manner
proposed by the Senior Principal.
(c) The Principals Committee, by a vote of a Super-Majority of the
Principals, may at any time modify the allocation of the Formula Payment set
forth in Section 5.2(a) hereof and Schedule III to the Employment Agreements.
ARTICLE VI - TERM
This Agreement shall be effective until terminated by agreement of
UST, USTC and a Super-Majority of the Principals.
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ARTICLE VII - AMENDMENT OF THE EMPLOYMENT AGREEMENTS
The Employment Agreements to be executed by each of the initial
Principals concurrently with the execution of this Agreement and by persons
subsequently becoming Principals hereunder may not be amended, nor may any
change or modification thereof, or waiver of any provision thereof, be effected
except by written instrument executed or otherwise authorized in writing by the
affected Principal, a Super-Majority of the Principals, USTC and UST.
ARTICLE VIII - GENERAL PROVISIONS
Section 8.1. APPLICABLE LAW. This Agreement shall be governed by and
construed and enforced in accordance with the substantive laws of The
Commonwealth of Massachusetts which apply to contracts executed and performed
solely in Massachusetts without giving effect to its principles of conflicts of
law. UST, USTC and the Employee hereby consent to the jurisdiction of any state
or federal court located within Suffolk County, Massachusetts, and assent that
service of process may be made by registered mail to the parties' respective
addresses as provided in Section 8.7 hereof and shall be effective in the same
manner as notices are effective under such Section 8.7.
Section 8.2. WAIVERS: AMENDMENTS.
(a) WAIVERS. The operation or effect of any provision of this
Agreement may only be waived in accordance with this Section 8.2(a). UST, USTC
and a Super-Majority of the Principals may by written consent waive, either
prospectively or retrospectively and either for a specified period of time or
indefinitely, the operation or effect of any provision of this Agreement.
(b) AMENDMENTS. This Agreement may not be amended (except as provided
in Sections 1.6, 1.8 or 5.2(c)), nor shall any parties be added hereto (except
as provided in Section 1.6), nor any change or modification be effected except
by written instrument executed by a Super-Majority of the Principals, USTC and
UST.
Section 8.3. ACTIONS IN WRITING: Telephone Meetings. Any actions to be
taken by the Principals hereunder may be taken at a meeting, or may be taken
without a meeting, if a consent in writing, setting forth the action so taken,
is signed by no less than the number of Principals that would be necessary to
authorize or take such action at a meeting. Participation in a meeting by means
of conference telephone or similar communications equipment by means of which
all persons participating in the meeting can hear each other at the same time
shall constitute presence in person at any such meeting.
Section 8.4. SUCCESSORS AND ASSIGNS. This Agreement shall inure to the
benefit of, and be binding upon, UST, USTC, any person or firm which may
succeed to the business of UST, USTC or AM, and each of the Principals and
their respective heirs, legal representatives, successors, and permitted
assigns.
Section 8.5 ENTIRE AGREEMENT. This Agreement and the applicable
Employment Agreements
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constitute the entire agreement among the parties concerning the subject
matter hereof and supersede all prior agreements and understandings,
written or oral, among them concerning such subject matter.
Section 8.6. SEVERABILITY. In the event that any provision of this
Agreement shall be determined to be unenforceable by any court of competent
jurisdiction by reason of its extending for too great a period of time or over
too large a geographic area or over too great a range of activities, it shall
be interpreted to extend only over the maximum period of time, geographic area
or range of activities as to which it may be enforceable. If any provision of
this Agreement shall be determined to be invalid, illegal or otherwise
unenforceable by any court of competent jurisdiction, the validity, legality
and enforceability of the other provisions of this Agreement shall not be
affected thereby. Except as otherwise provided in this paragraph, any invalid,
illegal or unenforceable provision of this Agreement shall be severable, and
after any such severance, all other provisions hereof shall remain in full
force and effect.
Section 8.7. NOTICES. All notices, consents, approvals, requests,
demands or other communications ("notices") which any of the parties to this
Agreement may desire or be required to give hereunder shall be in writing and
shall be deemed properly given if sent by certified or registered mail,
postage prepaid, return receipt requested, telefax with confirmation received,
or by express courier service, addressed as follows:
(a) to USTC at
United States Trust Company
40 Court Street
Boston, Massachusetts 02108
Fax: (617) 726-7320
Attn: Neal Finnegan, Chairman, Executive Committee
to UST at
UST Corp.
40 Court Street
Boston, Massachusetts 02108
Fax: (617) 726-7320
Attn: Neal Finnegan, President and Chief Executive Officer
with a copy to
Eric R. Fischer, Executive Vice President and General Counsel
Fax: (617) 726-7209
or to such other address as may be designated by UST or USTC by notice to all
Principals pursuant to the terms of this Section; and
(b) to the Principals at their respective addresses set forth
in EXHIBIT A or to such other addresses as
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may be designated by each Principal by notice to UST and USTC.
All notices shall be deemed effective upon receipt. Any notice given
to a Principal at that Principal's last known address shall be considered
effective upon delivery to such address.
Section 8.8. CAPTIONS. All section titles or captions contained in
this Agreement are for convenience of reference only and shall not be deemed
part of this Agreement.
Section 8.9. GENDER AND NUMBER. All nouns, pronouns and variations
thereof shall be deemed to refer to the masculine, feminine, neuter, singular
or plural as the context may require.
Section 8.10. COUNTERPARTS. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original and all of which
together shall constitute a single agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Unifying
Agreement as of the day and year first above written.
UNITED STATES TRUST COMPANY
By: /s/ Neal F. Finnegan
--------------------
Its:
Joined in as to those matters where its name appears.
UST CORP.
By:/s/ Neal F. Finnegan
--------------------
Its:
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UNIFYING AGREEMENT
PRINCIPAL'S SIGNATURE PAGE
The undersigned hereby executes the Unifying Agreement among UST, USTC
and the other Principals, hereby agrees to all of the provisions of such
Unifying Agreement and hereby authorizes this signature page to be attached,
together with signature pages of the other Principals, to a counterpart of such
Unifying Agreement executed by UST and USTC.
Dated this 14th day of February, 1995.
By: /s/ Domenic Colasacco
---------------------
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UNIFYING AGREEMENT
PRINCIPAL'S SIGNATURE PAGE
The undersigned hereby executes the Unifying Agreement among UST, USTC
and the other Principals, hereby agrees to all of the provisions of such
Unifying Agreement and hereby authorizes this signature page to be attached,
together with signature pages of the other Principals, to a counterpart of such
Unifying Agreement executed by UST and USTC.
Dated this 14th day of February, 1995.
By: /s/ Robert A. Lincoln
---------------------
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UNIFYING AGREEMENT
PRINCIPAL'S SIGNATURE PAGE
The undersigned hereby executes the Unifying Agreement among UST, USTC
and the other Principals, hereby agrees to all of the provisions of such
Unifying Agreement and hereby authorizes this signature page to be attached,
together with signature pages of the other Principals, to a counterpart of such
Unifying Agreement executed by UST and USTC.
Dated this 14th day of February, 1995.
By: /s/ Stephen K. Moody
--------------------
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UNIFYING AGREEMENT
PRINCIPAL'S SIGNATURE PAGE
The undersigned hereby executes the Unifying Agreement among UST, USTC
and the other Principals, hereby agrees to all of the provisions of such
Unifying Agreement and hereby authorizes this signature page to be attached,
together with signature pages of the other Principals, to a counterpart of such
Unifying Agreement executed by UST and USTC.
Dated this 14th day of February, 1995.
By: /s/ Robert B. Zevin
-------------------
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EXHIBIT A
NAMES AND ADDRESSES OF PRINCIPALS
Domenic Colasacco
21 Eaton Road
Needham, MA 02192
Robert A. Lincoln
67 Conant Road
Lincoln, MA 01773
Stephen K. Moody
217 Lexington Avenue
Cambridge, MA 02138
Lucia B. Santini
1691 West Street
Wrentham, MA 02093
Robert B. Zevin
71 Stewart Street
West Newbury, MA 01985
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EXHIBIT B
(Attach form of Employment Agreement)
[See Exhibit 10(y) to this Form 10-K]
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EXHIBIT C
Name Annual Base Salary
---- ------------------
Domenic Colasacco $225,000
Robert A. Lincoln $155,000
Stephen K. Moody $130,000
Lucia B. Santini $100,000*
Robert B. Zevin $185,000
<FN>
* Full time equivalent rate.