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EXHIBIT 10(i)
UST CORP.
1995 STOCK OPTION PLAN FOR DIRECTORS
1. PURPOSE
The purpose of this 1995 Stock Option Plan for Directors (the "Plan") is to
advance the interests of UST Corp. (the "Company") by enhancing the ability of
the Company and certain of its subsidiaries to attract and retain non-employee
directors who are in a position to make significant contributions to the
success of the Company and to reward directors for such contributions through
ownership of shares of the Company's common stock (the "Stock").
2. ADMINISTRATION
The Plan shall be administered by a committee (the "Committee") of the Board
of Directors (the "Board") of the Company designated by the Board for that
purpose. The Committee shall have authority, not inconsistent with the express
provisions of the Plan, (a) to issue options granted in accordance with the
formula set forth in this Plan to such directors as are eligible to receive
options; (b) to prescribe the form or forms of instruments evidencing options
and any other instruments required under the Plan and to change such forms from
time to time; (c) to adopt, amend and rescind rules and regulations for the
administration of the Plan; and (d) to interpret the Plan and to decide any
questions and settle all controversies and disputes that may arise in
connection with the Plan. Such determinations of the Committee shall be
conclusive and shall bind all parties. Transactions under this plan are
intended to comply with all applicable conditions of Rule 16b-3 or its
successors under Section 16 of the Securities Exchange Act of 1934 (the
"Exchange Act"). To the extent any provision of the Plan or action by the
Committee fails to so comply, it shall be deemed null and void, to the extent
permitted by law and deemed advisable by the Committee.
3. EFFECTIVE DATE AND TERM OF PLAN
The Plan shall become effective on the date on which the Plan is approved by
the Board of Directors of the Company, subject to approval by the stockholders
of the Company. No option shall be granted under the Plan after the completion
of ten years from the date on which the Plan was adopted by the Board, but
options previously granted may extend beyond that date.
4. SHARES SUBJECT TO THE PLAN
(a) NUMBER OF SHARES. Subject to adjustment as provided in
Section 4(c), the
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aggregate number of shares of Stock that may be delivered
upon the exercise of options granted under the Plan shall be
150,000. If any option granted under the Plan terminates
without having been exercised in full, the number of shares
of Stock as to which such option was not exercised shall be
available for future grants within the limits set forth in
this Section 4(a).
(b) SHARES TO BE DELIVERED. Shares delivered under the Plan shall
be authorized but unissued Stock or previously issued Stock
acquired by the Company and held in treasury. No fractional
shares of Stock shall be delivered under the Plan.
(c) CHANGES IN STOCK. In the event of a stock dividend, stock
split or combination of shares, recapitalization or other
change in the Company's capital stock, after the effective
date of the Plan, the number and kind of shares of stock or
securities of the Company subject to options then outstanding
or subsequently granted under the Plan, the maximum number of
shares or securities that may be delivered under the Plan, the
exercise price, the "prescribed number" specified in Section
6(a), and other relevant provisions shall be appropriately
adjusted by the Committee, whose determination shall be
binding on all persons.
5. ELIGIBILITY FOR OPTIONS
Directors eligible to receive option grants under the Plan ("Eligible
Directors") shall be (a) those directors (including honorary but not including
emeritus directors) of the Company who are not employees of the Company or of
any subsidiary of the Company, and (b) those directors (not including honorary
or emeritus directors) of USTrust who are not employees of the Company or of
any subsidiary of the Company.
6. TERMS AND CONDITIONS OF OPTIONS
(a) NUMBER OF OPTIONS. On the date of the annual meeting of
stockholders at which this Plan is approved by stockholders
each individual then an Eligible Director shall be awarded on
such date an option covering shares of Stock equal in number
to the "prescribed number" as hereinafter defined.
Thereafter, on the date of each subsequent annual meeting,
there shall be awarded to each individual elected at such
meeting to serve as an Eligible Director and to each other
Eligible Director (if any) elected to office since the last
annual meeting by the board of directors of the corporation on
which he or she serves as a director, but excluding any
Eligible Director who has previously been granted options
under this Plan, an option covering the prescribed number of
shares of Stock. For purposes of this paragraph, the
"prescribed number" is: (i) 7,500 in the case of any Eligible
Director (other than an honorary director of the Company)
serving as a director both of the Company and of USTrust; (ii)
5,100 in the case of any Eligible Director (other than an
honorary director of the Company) serving as a director
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of the Company but not serving as a director of USTrust;
(iii) 4,500 in the case of any Eligible Director serving as
an honorary director of the Company; and (iv) 3,000 in the
case of any Eligible Director serving as a director of
USTrust but not serving as a director of the Company (other
than as an honorary director of the Company). The
"prescribed number" for an Eligible Director described in
both (iii) and (iv) shall be 7,500.
(b) EXERCISE PRICE. The exercise price of each option shall be
100% of the fair market value per share of the Stock on the
date the option is granted. In no event, however, shall the
option price be less, in the case of an original issue of
authorized stock, than par value per share. For purposes of
this paragraph, the fair market value of a share of Stock on
any date shall be the average of the high and low prices of
the Stock on the NASDAQ National System on such date, or if
the Stock did not trade on such date, on the next preceding
day on which trades were made.
(c) DURATION OF OPTIONS. The latest date on which an option may
be exercised (the "Final Exercise Date") shall be the fifth
anniversary of the date the option was granted.
(d) Exercise of Options.
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(1) Each option shall become exercisable as follows: (A)
to the extent of one-third (1/3) of the shares
covered by the option, on the earliest testing date
(as hereinafter defined) on which the per-share fair
market value of the Stock is at least three dollars
($3.00) higher than on the date of grant; (B) to the
extent of an additional one-third (1/3) of the
shares, on the earliest testing date on which the
per-share fair market value of the Stock is at least
six dollars ($6.00) higher than on the date of grant;
and (C) to the extent of an additional one-third
(1/3) of the shares, on the earliest testing date on
which the per- share fair market value is at least
nine dollars ($9.00) higher than on the date of
grant. For purposes of the preceding sentence, a
"testing date" with respect to any per-share dollar
value is the last day of any period of ten
consecutive trading days (commencing after the date
on which the Plan is approved by the stockholders of
the Company) on each day of which the per-share fair
market value of the Stock equaled or exceeded such
dollar value; provided, that a date shall not be
considered a "testing date" for purposes of
determining the exercisability of an option under
this paragraph if the director to whom the option was
awarded ceased to be a director of the Company and
its subsidiaries prior to the testing date. In all
events, each option shall become fully exercisable on
the third anniversary of the date of grant provided
the Eligible Director to whom the option was awarded
is still a director on such anniversary. For
purposes of the preceding sentence, the following
rules of construction shall apply: (A) with respect
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to any option grants described in Section 6(a)(iii),
an Eligible Director described therein shall be
treated as ceasing to be a director when he or she is
no longer an Eligible Director described inSection
5(a); (B) with respect to any option grants described
in Section 6(a)(iv), an Eligible Director described
therein shall be treated as ceasing to be a director
when he or she is no longer an Eligible Director
described in Section 5(b); and (C) with respect to
any option grants described in Section 6(a)(i) or
Section 6(a)(ii), an Eligible Director described
therein shall be treated as ceasing to be a director
when he or she ceases to be a director of the Company
or becomes an honorary or emeritus director of the
Company.
In addition to and not in limitation of the
foregoing, each option outstanding at the time of a
"Change of Control" as hereinafter defined shall
become fully exercisable upon the Change in Control.
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
adoption 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 6(d)(1)) 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
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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 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.
(2) Any exercise of an option shall be in writing, signed
by the proper person and delivered or mailed to the
Company, to the attention of the Company's General
Counsel, accompanied by (i) any documentation
required by the Committee and (ii) payment in full
for the number of shares for which the option is
exercised.
(3) The Committee shall withhold from the number of
shares otherwise issuable to the individual upon
exercise a number of shares with a fair market value
equal to any federal, state, or local withholding tax
requirements due upon the exercise of the option.
(4) If an option is exercised by the executor or
administrator of a deceased director, or by the
person or persons to whom the option has been
transferred by the director's will or the applicable
laws of descent and distribution, the Company shall
be under no obligation to deliver Stock pursuant to
such exercise until the Company is satisfied as to
the authority of the person or persons exercising the
option.
(e) PAYMENT FOR AND DELIVERY OF STOCK. Stock purchased under the
Plan shall be paid for in one or a combination of the
following forms of payment: (i) by cash or by check
(acceptable to the Company in accordance with guidelines
established for this purpose), bank draft or money order
payable to the order of the Company, (ii) by delivery of
shares of Stock (which, in the case of shares of Stock
acquired from the Company, have been outstanding for at least
six months) having a fair market value on the last business
day preceding the date of exercise equal to the purchase
price, or (iii) by delivery of a properly executed exercise
notice together with irrevocable instructions to the option
holder's broker to deliver promptly to the Company the amount
required to pay the exercise price.
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An option holder shall not have the rights of a stockholder
with regard to awards under the Plan except as to Stock
actually received by him or her under the Plan.
The Company shall not be obligated to deliver any shares of
Stock (A) until, in the opinion of the Company's counsel, all
applicable federal and state laws and regulations have been
complied with, and (B) if the outstanding Stock is at the time
listed on any stock exchange, until the shares to be delivered
have been listed or authorized to be listed on such exchange
upon official notice of issuance, and (C) until all other
legal matters in connection with the issuance and delivery of
such shares have been approved by the Company's counsel. If
the sale of Stock has not been registered under the Securities
Act of 1933, as amended, the Company may require, as a
condition to exercise of the option, such representations or
agreements as counsel for the Company may consider appropriate
to avoid violation of such Act and may require that the
certificates evidencing such Stock bear an appropriate legend
restricting transfer.
(f) NONTRANSFERABILITY OF OPTIONS. No option may be transferred
other than by will or by the laws of descent and distribution,
and during an Eligible Director's lifetime an option may be
exercised only by him or her.
(g) RETIREMENT; DISABILITY. If an Eligible Director retires as a
director of the Company and its subsidiaries (i) at or after
65, or (ii) by reason of permanent disability whenever
occurring, all options held by the retired or disabled
Eligible Director, to the extent not otherwise exercisable,
shall become exercisable. The Eligible Director's options
shall remain exercisable for one year from retirement (subject
to paragraph (i) below) or for the remainder of their original
five-year option term if less, and then shall terminate to the
extent not previously exercised.
(h) OTHER TERMINATION. If an Eligible Director's service as a
director terminates for any reason other than retirement under
(g) above or death, all options held by the director that are
not then exercisable shall terminate. Options that are
exercisable on the date of termination shall continue to be
exercisable for a period of three months (subject to paragraph
(i) below) or for the remainder their original five-year term
if less, and then shall terminate to the extent not previously
exercised. For the purposes of this paragraph (h): (A) with
respect to any option grants described in Section 6(a)(iii),
an Eligible Director described therein shall be treated as
having terminated when he or she ceases to be an Eligible
Director described in Section 5(a) (other than by reason of
retirement under paragraph (g) above, or death); (B) with
respect to any option grants described in Section 6(a)(iv), an
Eligible Director described therein shall be treated as having
terminated when he or she ceases to be an Eligible Director
described in Section 5(b) (other than by reason of retirement
under paragraph (g) above, or death); and (C) with respect to
any option grants described in Section 6(a)(i) or Section
6(a)(ii), an Eligible Director described therein shall be
treated as having
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terminated when he or she ceases to be a director of the
Company (other than by reason of retirement under paragraph
(g) above, or death) or becomes an honorary or emeritus
director of the Company.
(i) DEATH. If an Eligible Director's service as a director of the
Company and its subsidiaries terminates by reason of death,
all options held by the Eligible Director which were not then
exercisable shall be treated as having become exercisable
immediately prior to death. If an Eligible Director dies at
any time while holding exercisable options (including options
treated as having become exercisable by reason of the
preceding sentence), all such options may be exercised by his
or her executor or administrator, or by the person or persons
to whom the option is transferred by will or the applicable
laws of descent and distribution, at any time within one year
after the director's death or during the remainder of the
original five-year option term if less. After completion of
that one-year (or shorter) period, such options shall
terminate to the extent not previously exercised.
(j) MERGERS, ETC. In the event of a consolidation or merger in
which the Company is not the surviving corporation or which
results in the acquisition of substantially all the Company's
outstanding Stock by a single person or entity or by a group
of persons and/or entities acting in concert, or in the event
of a sale or transfer of substantially all of the Company's
assets or a dissolution or liquidation of the Company, all
options hereunder will terminate; provided, that 20 days prior
to the effective date of any such merger, consolidation, sale,
dissolution, or liquidation, all options outstanding hereunder
that are not otherwise exercisable shall become immediately
exercisable.
7. EFFECT, DISCONTINUANCE, CANCELLATION, AMENDMENT, TERMINATION AND
EFFECTIVENESS
Neither adoption of the Plan nor the grant of options to a director shall
affect the Company's right to grant to such director options that are not
subject to the Plan, to issue to such directors Stock as a bonus or otherwise,
or to adopt other plans or arrangements under which Stock may be issued to
directors.
The Committee may at any time terminate the Plan as to any further grants of
options. The Committee may at any time or times amend the Plan for any purpose
which may at the time by permitted by law; provided, that except to the extent
expressly required or permitted by the Plan, no such amendment will, without
the approval of the stockholders of the Company, effectuate a change for which
stockholder approval is required in order for the Plan to continue to qualify
under Rule 16b-3 promulgated under Section 16 of the Exchange Act.
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