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EXHIBIT 10(f)(i)
UST CORP.
STOCK COMPENSATION PLAN
SECTION 1: PURPOSE; DEFINITIONS
The UST CORP. STOCK COMPENSATION PLAN (the "Plan") was established in
1992 to enable UST CORP. and its Subsidiaries to reward officers and other key
employees so as to encourage them to expend special efforts to increase
shareholder value. The amended and restated Plan set forth herein is a
continuation of the Plan as originally adopted and shall be effective as
provided at Section 10 below. Awards under the Plan as herein amended and
restated which are made prior to the stockholder approval described in Section
10 shall be subject to such approval.
For purposes of the Plan, the following terms shall be defined as set
forth below:
(a) "BOARD" means the Board of Directors of the Company.
(b) "CHANGE OF CONTROL" and "CHANGE OF CONTROL PRICE" have the
meanings set forth in Section 8.
(c) "CODE" means the Internal Revenue Code of 1986, as amended
from time to time, or any successor thereto.
(d) "COMMITTEE" means the committee appointed by the Board to
administer the Plan in accordance with Section 2.
(e) "COMPANY" means UST Corp., a corporation organized under the
laws of the Commonwealth of Massachusetts, and any successor
corporation.
(f) "DISABILITY" means permanent and total disability as
determined under the Company's disability program.
(g) "DISINTERESTED PERSON" has the meaning set forth in Rule 16b-3
under the Securities Exchange Act of 1934 as applicable to the
Company on the date of reference.
(h) "ELIGIBLE EMPLOYEE" means an employee of the Company or any
Subsidiary as described in Section 4.
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(i) "FAIR MARKET VALUE" means, as of any given date, the average
of the high and low trading prices of the Stock on the NASDAQ
National Market System on such date, or if the Stock did not
trade on such date, on the next preceding day on which trades
were made.
(j) "INCENTIVE STOCK OPTION" means any Stock Option intended to
qualify as an "incentive stock option" within the meaning of
Section 422 of the Code.
(k) "NON-QUALIFIED STOCK OPTION" means any Stock Option that is
not an Incentive Stock Option.
(l) "PARTICIPANT" means any Eligible Employee selected by the
Committee to receive grants under the Plan.
(m) "RESTRICTED STOCK" means Stock awarded pursuant to Section 6
that is subject to restrictions which lapse upon the
satisfaction of performance and/or service criteria specified
by the Committee.
(n) "STOCK" means the common stock of the Company.
(o) "STOCK OPTION" means any option to purchase shares of Stock
granted pursuant to Section 5.
(p) "SUBSIDIARY" means any corporation in which the Company owns,
directly or indirectly 50% or more of the total combined
voting power of all classes of stock of such corporation.
SECTION 2: ADMINISTRATION
The Plan shall be administered by a Committee composed of not fewer
than two members of the Board, all of whom are Disinterested Persons. Members
of the Committee shall be appointed by the Board and shall serve at the
pleasure of the Board.
The Committee shall have the power and authority, in its discretion:
(i) to select Participants from among those employees of the
Company and the Subsidiaries who are Eligible Employees;
(ii) to determine whether and to what extent Stock Options,
Restricted Stock, or any combination of the foregoing, are to
be granted to Eligible Employees hereunder;
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(iii) to determine the number of shares of Stock to be covered by
each such award granted hereunder;
(iv) to determine the terms and conditions, not inconsistent with
the terms of the Plan, of any award granted hereunder; and
(v) to determine the terms and conditions of any written
instruments evidencing Stock Options, Restricted Stock, or any
combination of the foregoing awarded under the Plan.
The Committee shall have the authority to adopt, alter and repeal such
administrative rules, guidelines and practices governing the Plan as it shall,
from time to time, deem advisable; to interpret the terms and provisions of the
Plan and any award issued under the Plan (and any agreements relating thereto);
and to otherwise supervise the administration of the Plan.
All decisions made by the Committee pursuant to the provisions of the
Plan shall be final and binding on all persons, including the Company and the
Participants.
SECTION 3: STOCK SUBJECT TO PLAN
Subject to adjustment in accordance with the third and fourth
paragraphs of this Section 3, the maximum number of shares of Stock reserved
and available for awards made under the Plan in any calendar year shall be
equal to (i) 1 1/4% of the total number of shares of Stock outstanding as of
the beginning of that year, plus (ii) any unused portion of the annual limit
for prior years. In determining the number of shares available in 1994 and any
carryover from 1994, the number of shares determined under (i) above for 1994
shall be increased by 350,000. Notwithstanding the foregoing, no more than
1,000,000 shares of Stock in the aggregate (subject to adjustment under the
third and fourth paragraphs of this Section 3) may be issued pursuant to the
exercise of Incentive Stock Options under the Plan.
Subject to adjustment in accordance with the fourth paragraph of this
Section 3, no Participant may be awarded, in any calendar year, Stock Options
covering more than 175,000 shares. For purposes of the immediately preceding
sentence, the repricing of a Stock Option shall be treated as a new award and
shall count against the specified share limit. The provisions of this
paragraph and of the proviso set forth in the immediately following paragraph
shall apply to awards of Stock Options under the Plan only to the extent
required in order for Stock Options under the Plan to qualify
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for the performance-based compensation exception described in Section
162(m)(4)(C) of the Code.
To the extent that a Stock Option expires or is otherwise terminated
without being exercised, or shares of Restricted Stock are forfeited, the
shares of Stock underlying such Stock Option or the forfeited shares of
Restricted Stock, as the case may be, shall again be available for issuance in
connection with future awards under the Plan; provided, that any such future
award of a Stock Option (if made to the same Participant and in the same year
as the award of the expired or terminated Stock Option) shall count against the
annual per-Participant Stock Option award limit described in the preceding
paragraph.
In the event of any merger, reorganization, consolidation,
recapitalization, stock dividend, or other change in corporate structure
affecting the Stock, the Committee shall make an appropriate adjustment in (i)
the aggregate number of shares of Stock reserved for issuance under the Plan or
for which awards may be made under the Plan, and (ii) the number and Option
Price of shares of Stock subject to outstanding Stock Options granted under the
Plan; provided, that the number of shares of Stock subject to any award shall
always be a whole number. The Committee may make other substitutions or
adjustments, but no such substitution or adjustment shall be effective if it
would cause any Stock Option previously granted to an individual described in
Section 162(m)(3) of the Code to fail to qualify for the performance-based
compensation exception prescribed by Section 162(m)(4)(C) of the Code; and
further provided, that no such substitution or adjustment shall be effective,
without the Participant's consent, if it would cause the Incentive Stock
Options status of any Stock Option held by the Participant to be impaired.
Shares issued pursuant to Plan awards may consist in whole or in part
of authorized and unissued shares or of treasury shares.
SECTION 4: ELIGIBILITY
Officers and other key employees of the Company or Subsidiaries who
are responsible for or contribute to the growth and/or profitability of the
business of the Company or its Subsidiaries shall be eligible to be granted
awards hereunder. The Participants under the Plan shall be selected from time
to time by the Committee from among those Eligible Employees, and the Committee
shall determine the number of shares of Stock covered by each award.
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SECTION 5: STOCK OPTIONS
Stock Options may be granted alone, in addition to or in combination
with other awards granted under the Plan. Any Stock Option granted under the
Plan shall be in such form as the Committee may from time to time approve, and
the provisions of Stock Option awards need not be the same with respect to each
Participant. Recipients of Stock Options shall enter into a stock option
agreement with the Company, in such form as the Committee shall determine,
which agreement shall set forth, either expressly or by incorporation of the
terms of the Plan, among other things, the Option Price, the term of the Stock
Option and provisions regarding exercisability of the Stock Option granted
thereunder.
Stock Options granted under the Plan may be of two types: (i)
Incentive Stock Options and (ii) Non-Qualified Stock Options. The Committee
shall have the authority to grant any Participant Incentive Stock Options,
Non-Qualified Stock Options, or both types of Stock Options. Only those Stock
Options specifically designated as Incentive Stock Options shall be treated as
such; all other Stock Options shall be treated as Non-Qualified Stock Options.
Stock Options granted under the Plan shall be subject to the following
terms and conditions and shall contain such additional terms and conditions,
not inconsistent with the terms of the Plan, as the Committee may determine:
(a) OPTION PRICE. The Option Price per share of Stock purchasable
under a Stock Option shall be determined by the Committee at
the date of grant but in the case of an Incentive Stock Option
shall be not less than 100% of the Fair Market Value of the
Stock on such date.
(b) OPTION TERM. The term of each Stock Option shall be fixed by
the Committee, but no Stock Option shall be exercisable more
than ten years after the date such Stock Option is granted.
(c) EXERCISABILITY. Stock Options shall be exercisable at such
time or times and subject to such terms and conditions as
shall be determined by the Committee at or after grant. If
the Committee may accelerate the exercisability of a Stock
Option at any time, to such extent as it may determine.
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(d) TIMING AND METHOD OF EXERCISE. The exercise of a Stock Option
shall be accomplished by giving written notice of exercise to
the Company specifying the number of shares of Stock to be
purchased, accompanied by payment in full of the Option Price
in cash or check, by surrender of other shares of Stock which
have been held by the Participant for six months or more (or
for such other period as the Committee may determine) and
which have a value equal to the Option Price of the shares of
Stock as to which the Stock Option is being exercised, by
delivery of a properly executed exercise notice together with
irrevocable instructions to the Participant's broker to
deliver promptly to the Company the amount of sale proceeds
required to pay the Option Price, or by any combination of the
foregoing. The Company shall, prior to the delivery of any
shares of Stock subject to an exercise, make arrangements for
the payment of withholding taxes, if any, as provided in
Section 9(d).
(e) NON-TRANSFERABILITY OF OPTIONS. No Incentive Stock Option
shall be transferable by the Participant otherwise than by
will or by the laws of descent and distribution, and all
Incentive Stock Options shall be exercisable, during the
Participant's lifetime, only by the Participant. Nonqualified
Stock Options shall be transferable (i) only to the extent, if
any, determined by the Committee, and (ii) in the case of any
such Stock Option the grant of which is intended to be exempt
under Rule 16b-3 promulgated under the Securities Exchange Act
of 1934, as amended, only to the extent, if any, that
transferability is permitted (consistent with such exemption)
by such Rule.
(f) TERMINATION BY REASON OF DEATH. If a Participant's employment
with the Company or any Subsidiary terminates by reason of
death, any Stock Option held by the Participant at time of
death may thereafter be exercised, to the extent exercisable
immediately prior to death (or on such accelerated basis as
the Committee shall determine at or after grant), by the legal
representative of the estate or by the legatee of the
Participant under the will of the Participant, for a period of
one year (or such shorter period as the Committee shall
specify at grant) from the date of such death or until the
expiration of the stated term of such Stock Option, whichever
period is shorter.
(g) TERMINATION BY REASON OF DISABILITY. If a Participant's
employment with the Company or any
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Subsidiary terminates by reason of Disability, any Stock
Option held by such Participant may thereafter be exercised to
the extent it was exercisable at the time of such termination
(or on such accelerated basis as the Committee shall determine
at or after grant), for a period of one year (or such shorter
period as the Committee shall specify at grant) from the date
of such termination of employment or until the expiration of
the stated term of such Stock Option, whichever period is
shorter, provided, however, that, if the Participant dies
within such one-year period (or such shorter period as the
Committee shall specify at grant), any unexercised Stock
Option held by such Participant shall thereafter be
exercisable to the extent to which it was exercisable at the
time of death for a period of one year (or such shorter period
as the Committee shall specify at grant) from the time of such
death or until the expiration of the stated term of such Stock
Option, whichever period is shorter.
(h) OTHER TERMINATION. Except as otherwise provided in this
Section 5, unless otherwise determined by the Committee, if a
Participant's employment with the Company or any Subsidiary
terminates for any reason other than death or Disability, the
Stock Option may thereafter be exercised to the extent it was
exercisable at the time of such termination (or on such
accelerated basis as the Committee shall determine at or after
grant) for the lesser of three months from the date of
termination or until the expiration of such Stock Option's
term; provided, that if the Participant's employment is
terminated for cause, all Stock Options then held by the
Participant shall terminate immediately.
SECTION 6: RESTRICTED STOCK
(a) GENERAL. Restricted Stock may be issued either alone or in
addition to other awards granted under the Plan. The
Committee shall determine the Eligible Employees to whom, and
the time or times at which, grants of Restricted Stock will be
made; the number of shares of Stock to be awarded; the price,
if any, to be paid by the recipient of Restricted Stock; any
performance objectives applicable to Restricted Stock awards;
the date or dates on which restrictions applicable to such
Restricted Stock shall lapse during the Restricted Period (as
defined at Section 6(c)(i) below); and all other conditions of
the Restricted Stock awards. The performance
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objectives, if any, to which a grant of Restricted Stock may
be subject may include, without limitation, objectives based
on the performance of the Company, the performance of one or
more Subsidiaries, the performance of one or more divisions or
other business segments, personal performance, or external
performance measures, all as determined by the Committee. The
Committee may also condition the grant of Restricted Stock
upon the exercise of Stock Options or upon such other criteria
as the Committee may determine. The provisions of Restricted
Stock awards need not be the same with respect to each
recipient.
(b) AWARDS AND CERTIFICATES. The prospective recipient of an
award of shares of Restricted Stock shall not have any rights
with respect to such award, unless and until such recipient
has executed an agreement evidencing the award (a "Restricted
Stock Award Agreement") and has delivered a fully executed
copy thereof to the Company, within a period of 60 days (or
such other period as the Committee may specify) after the
award date. The stock certificate or certificates issued in
respect of shares of Restricted Stock shall be registered in
the name of the Participant and shall bear an appropriate
legend referring to the terms, conditions, and restrictions
applicable to such award, substantially in the following form:
"The transferability of this certificate and the
shares of stock represented hereby are subject to
the terms and conditions (including forfeiture) of
the UST Corp. Stock Compensation Plan and a
Restricted Stock Award Agreement entered into
between the registered owner and UST Corp. Copies of
such Plan and Agreement are on file in the offices of
UST Corp."
The Committee may require that the stock certificates evidencing such
shares of Stock be held in the custody of the Company until the
restrictions thereon shall have lapsed, and that, as a condition of
any Restricted Stock award, the Participant shall have delivered a
stock power, endorsed in blank, related to the Stock covered by such
award.
(c) RESTRICTIONS AND CONDITIONS. The shares of Restricted Stock
awarded pursuant to this Section 6
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shall be subject to the following restrictions and conditions:
(i) Subject to the provisions of the Plan and the Restricted Stock
Award Agreement, during such period as may be set by the
Committee commencing on the grant date (the "Restricted
Period"), the Participant shall not be permitted to sell,
transfer, pledge or assign shares of Restricted Stock awarded
under the Plan. In the case of a Restricted Stock award
providing for the lapsing of restrictions only upon the
attainment of performance related goals, the Restricted Period
shall be deemed to continue until such performance related
goals have been met. Within these limits, the Committee may
provide for the lapse of restrictions in installments and may
accelerate or waive such restrictions in whole or in part
based on such factors and such circumstances as the Committee
may determine, including, but not limited to, the attainment
of performance related goals, the Participant's termination of
employment, death or Disability, or the occurrence of a
"Change of Control" as defined in Section 8 below.
(ii) Except as provided in clause (c)(i) above, the Participant
shall have, with respect to the shares of Restricted Stock,
all of the rights of a stockholder of the Company, including
the right to vote the shares and the right to receive any
dividends thereon. Certificates for shares of unrestricted
Stock shall be delivered to the Participant as soon as
practicable after the Restricted Period expires without such
shares of Stock having been forfeited. The Company's
obligation to deliver vested shares of Stock upon the
expiration of the Restricted Period (whether in the normal
course or on an accelerated basis as described in the
preceding paragraph) shall be subject to the Company's being
satisfied that arrangements for the payment of withholding
taxes, if any, as provided in Section 9(d) have been made.
(iii) Subject to the provisions of the Restricted Stock Award
Agreement and this Section 6, upon termination of employment
for any reason during the Restricted Period, all shares of
Stock still subject to restriction shall be forfeited by the
Participant, and the Participant shall only
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receive the amount, if any, paid by the
Participant for such Restricted Stock.
SECTION 7: AMENDMENT AND TERMINATION
The Board may amend, alter, or discontinue the Plan at any time;
provided, that no such amendment or alteration shall be effective without the
approval of the stockholders to the extent that stockholder approval is
required to preserve the qualification of the Plan under Section 162(m)(4)(C)
or Section 422 of the Code or its exemption under Rule 16b-3 promulgated under
the Securities Exchange Act of 1934, as amended. The Committee may, consistent
with the terms of the Plan, prospectively or retroactively amend the terms of
any previously granted award. In no event, however, shall any amendment or
alteration (whether affecting the Plan generally or particular awards) impair
the rights of any Participant under any then outstanding award without the
consent of such Participant.
SECTION 8: CHANGE OF CONTROL
The following acceleration and valuation provisions shall apply in the
event of a "Change of Control" as defined in this Section 8:
(a) As of the date of the "Change of Control":
(i) any Stock Options awarded under the Plan not previously
exercisable and vested shall become fully exercisable and
vested;
(ii) the restrictions applicable to any Restricted Stock awarded
under the Plan shall lapse and such shares shall be deemed
fully vested; and
(iii) any Participant to whom a Stock Option shall have been granted
shall have the right (subject to any legal limitations
applicable to such Stock Option, including any limitations
required to preserve the qualification under Section 422 of
the Code of any such Stock Option that is an Incentive Stock
Option) to receive in respect of such Stock Option, and in
extinguishment thereof, for each share of Stock subject to
such Stock Option an amount equal to the excess of (x) the
"Change of Control Price" (as defined in paragraph (c) of this
Section 8) of the securities, cash or other property, or
combination thereof, which would be received in
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connection with the transaction giving rise to the Change of
Control in respect of a share of Stock, over (y) the Option
Price of such Stock Option, unless provision is made in
connection with such transaction for the substitution for such
Stock Option of new options of the successor corporation or
parent thereof, with appropriate adjustments as to the number
and kind of shares and the per share Option Price as provided
in Section 3 hereof.
(b) For purposes of paragraph (a) of this Section 8, a "Change of
Control" shall be deemed to have occurred if:
(i) any "person," as such term is used in Sections 13(d) and 14(d)
of the Securities and Exchange Act, (the "Exchange Act")
(other than the Company, any trustee or other fiduciary
holding securities under an employee benefit plan of the
Company, or any company owned, directly or indirectly, by the
stockholders of the Company in substantially the same
proportions as their ownership of stock of the Company), is or
becomes the "beneficial owner" (as defined in Rule 13d-3 under
the Exchange Act), directly or indirectly, of securities of
the Company representing 25% or more of the combined voting
power of the Company's then outstanding securities;
(ii) during any period of two consecutive years (not including any
period prior to the execution of the Plan), 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 (i), (iii) or (iv) of this
Section 8(b)) whose election by the Board or nomination for
election by the Company's stockholders was approved by a vote
of at least two-thirds (2/3) 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 (hereinafter referred to as "Continuing
Directors"), cease for any reason to constitute at least a
majority thereof;
(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
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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 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
25% of the combined voting power of the Company's then
outstanding securities shall not constitute a Change of
Control of the Company; or
(iv) the stockholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or
disposition by the Company of all or substantially all of the
Company's assets.
(c) For purposes of this Section 8, "Change of Control Price"
means the higher of (i) the highest price per share paid or
offered in any transaction related to a Change of Control of
the Company or (ii) the highest price per share paid in any
transaction reported on the exchange on which the Stock is
traded at any time during the sixty-day period preceding the
Change of Control, as determined by the Committee; provided,
however, that, in the case of Incentive Stock Options such
price shall not be the higher of the foregoing items (i) and
(ii), but shall be the Fair Market Value of the securities,
cash or other property, or combination thereof, which would be
received in connection with the transaction on the date of
such Change of Control.
SECTION 9: GENERAL PROVISIONS
(a) The Committee may require each person purchasing shares of
Stock pursuant to a Stock Option to represent to and agree
with the Company in writing that such person is acquiring the
shares of Stock without a view to distribution thereof. The
certificates for such shares of Stock may include any legend
which the Committee deems appropriate to reflect any
restrictions on transfer.
(b) All certificates for shares of Stock delivered under the Plan
shall be subject to such stock-transfer
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orders and other restrictions as the Committee may deem
advisable under the rules, regulations, and other requirements
of the Securities and Exchange Commission, any stock exchange
upon which the Stock is then listed, and any applicable
Federal or state securities law, and the Committee may cause a
legend or legends to be put on any such certificates to make
appropriate references to such restrictions.
(c) Nothing contained in the Plan shall prevent the Board from
adopting other or additional compensation arrangements,
subject to stockholder approval if such approval is required;
and such arrangements may be either generally applicable or
applicable only in specific cases. The adoption of the Plan
shall not confer upon any employee of the Company or any
Subsidiary any right to continued employment with the Company
or a Subsidiary, as the case may be, nor shall it interfere in
any way with the right of the Company or a Subsidiary to
terminate the employment of any of its employees at any time.
(d) Each Participant shall, no later than the date as of which the
value of an award first becomes includible in the gross income
of the Participant for Federal income tax purposes, pay to the
Company, or make arrangements satisfactory to the Company
regarding payment of, any Federal, state, or local taxes of
any kind required by law to be withheld with respect to the
award. The obligations of the Company under the Plan shall be
conditional on such payment or arrangements and the Company
(and, where applicable, its Subsidiaries) shall, to the extent
permitted by law, have the right to deduct any such taxes from
any payment of any kind otherwise due to the Participant.
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(e) No member of the Board or the Committee, nor any officer or
employee of the Company acting on behalf of the Board or the
Committee, shall be personally liable for any action,
determination, or interpretation taken or made in good faith
with respect to the Plan, and all members of the Board or the
Committee and each and any officer or employee of the Company
acting on their behalf shall, to the extent permitted by law,
be fully indemnified and protected by the Company in respect
of any such action, determination or interpretation.
SECTION 10: EFFECTIVE DATE OF PLAN
The Plan as herein amended and restated shall be effective on the date
it is adopted by the Board, subject to the approval by the Company's
stockholders within twelve months of the date it is adopted by the Board.
SECTION 11: TERM OF PLAN
No Stock Option or Restricted Stock award shall be granted under the
Plan on or after ______________ _______, 2004,1 but awards granted prior to
said date may extend beyond that date.
* * * * END OF PLAN * * * *
________________________
1 [The day before the tenth anniversary of adoption by the Board.]
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