BOSTON - UST Corp. has approved a shareholder rights plan and declared a dividend of one preferred share purchase right for every share of common stock, exercisable if any person or company acquires at least 15% of the common stock.

The rights were to be distributed tax-free on Oct. 6 to shareholders of that date and will expire on Oct. 6, 2005, unless redeemed earlier.

Each right would entitle the holder to buy 0.01 shares of a new series of junior participating preferred stock or buy $40 worth of common stock, with each share purchased for half of its current market price.

Under certain circumstances, the "continuing directors," those not affiliated with a 15% stockholder, may also exchange the rights for common stock on a one-for-one basis.

The rights would become active if any buyer passes the 15% mark, initiates a tender offer that would result in 15% ownership, or is declared to be an "adverse person" by the company's board. An "adverse person" includes any buyer who owns at least 10% of the stock and attempts a hostile action.

The redemption price is $.001 per right.

Company officials said the plan is intended to protect UST shareholders in the event of an unsolicited merger offer, but was not adopted in response to any attempt to buy UST.

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