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                                                                   EXHIBIT 10.25

                          BENEFITS PROTECTION AGREEMENT



         THIS AGREEMENT made as of the 30th day of June, 1997, by and between
U.S. Trust Corporation (the "Corporation"), United States Trust Company of New
York (the "Company") and Maribeth S. Rahe (the "Executive").

         WHEREAS, the Board of Directors of the Company and the Board of
Directors of the Corporation (the "Boards") recognize that the possibility of a
Change in Control (as hereinafter defined) exists and that the threat or the
occurrence of a Change in Control can result in significant distraction of the
key management personnel of the Company and its affiliates because of the
uncertainties inherent in such a situation;

         WHEREAS, the Boards have determined that it is essential and in the
best interests of the Company, and the Corporation and its stockholders, for the
Company and its affiliates to retain the services of the Executive in the event
of a threat or occurrence of a Change in Control and to ensure the Executive's
continued dedication and efforts in such event without undue concern for the
Executive's personal financial and employment security; and

         WHEREAS, in order to induce the Executive to remain in the employ of
the Company or its affiliates, particularly in the event of a threat or the
occurrence of a Change in Control, the Company desires to enter into this
Agreement with the Executive to provide assurances to the Executive as to the
payment of certain benefits to the Executive if a Change in Control should
occur, and as to the payment of certain other benefits if the Executive's
employment is terminated following a Change in Control.

         NOW, THEREFORE, in consideration of the respective agreements of the
parties contained herein, it is agreed as follows:

         1. TERM OF AGREEMENT. This Agreement shall commence as of June 30,
1997, and shall continue in effect until June 30, 1999 (the "Term"); provided,
however, that on July 1, 1998, and on each July 1 thereafter, the Term shall
automatically be extended for one (1) year unless the Company shall have given
written notice to the Executive at least ninety (90) days prior thereto that the
Term shall not be so extended; provided, further, however, that following the
occurrence of a Change in Control, the Term shall not expire prior to the
expiration of four (4) years after such occurrence.

         2. BENEFITS PAYABLE ON CHANGE IN CONTROL. If (i) a Change in Control
(as defined in Section 11(a) hereof) occurs during the Term, (ii) the
Executive's employment with the Company and all of its affiliates has not
terminated prior to the date on which such Change in Control occurs, and (iii)
such Change in Control is not treated as a "Change in Control" for purposes of
any Change in Control Plan (as defined in Section 11(b) hereof) maintained by
the Corporation or the Company, the Corporation or the Company, as applicable,
shall pay to the Executive pursuant to this
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Agreement each benefit that would have been payable to the Executive under each
such Change in Control Plan if the Change in Control (as defined in Section
11(a) hereof) had been treated as a "Change in Control" for purposes of such
plan.

         3. BENEFITS PAYABLE ON TERMINATION AFTER CHANGE IN CONTROL. If (i) a
Change in Control (as defined in Section 11(a) hereof) occurs during the Term,
(ii) the Executive's employment with the Company and all of its affiliates
terminates as a result of either (A) an Involuntary Termination (as defined in
Section 11(c) hereof) within two (2) years following such Change in Control, or
(B) the Executive's voluntarily leaving such employment during the six (6)-
month period following such Change in Control, and (iii) for purposes of any
Change in Control Plan (as defined in Section 11(b) hereof) maintained by the
Corporation or the Company, the Boards have directed by resolution that no
payments or benefits shall be made or provided under such plan as a result of
the occurrence of such Change in Control, then the Corporation or the Company,
as applicable, shall pay or provide to the Executive pursuant to this Agreement
each benefit that would have been payable or provided to the Executive upon such
termination of the Executive's employment under each such Change in Control Plan
if the Boards did not so direct.

         4. BENEFITS PAYABLE ON TERMINATION OF RETIREMENT PLAN AFTER CHANGE IN
CONTROL. If (i) a Change in Control (as defined in Section 11(a) hereof) occurs
during the Term, (ii) the Employees' Retirement Plan of United States Trust
Company of New York and Affiliated Companies (the "Retirement Plan") is
terminated within four (4) years following such Change in Control, (iii) the
Executive's employment with the Company and all of its affiliates had not
terminated prior to such Change in Control, and (iv) such Change in Control is
not treated as a "Change in Control" for purposes of Section 13.2 of the
Retirement Plan, the Company shall pay to the Executive pursuant to this
Agreement the increased benefit that would have been payable to the Executive
under Section 13.2 of the Retirement Plan as a result of such termination of the
Retirement Plan if the Change in Control (as defined in Section 11(a) hereof)
had been treated as a "Change in Control" for purposes of Section 13.2 of the
Retirement Plan.

         5. TERMINATION BEFORE CHANGE IN CONTROL. If the Executive's employment
with the Company and all of its affiliates is terminated by the Company or any
affiliate at any time prior to a Change in Control (as defined in Section 11(a)
hereof ) and the Executive reasonably demonstrates that such termination was at
the request of a third party who had indicated an intention or had taken steps
reasonably calculated to effect such Change in Control and who effectuated such
Change in Control, such termination of the Executive's employment shall be
treated, for purposes of this Agreement, as an Involuntary Termination (as
defined in Section 11(c) hereof) of the Executive's employment occurring
immediately after the Change in Control, and as an "Involuntary Termination" of
the Executive's employment occurring immediately after a "Change in Control" as
those terms are defined in the applicable Change in Control Plans.

         6. TIME AND MANNER OF PAYMENT. Each benefit payable to the Executive
hereunder shall be paid or provided in the same amount, in the same form, and at
the same time or for the same period, as such benefit would have been paid or
provided to the Executive under the terms of the


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applicable Change in Control Plan if the Change in Control (as defined in
Section 11(a) hereof) had been treated as a "Change in Control" for purposes of
such plan.

         If any payment to be made to the Executive under this Agreement is or
will be subject to the excise tax imposed by Section 4999 of the Code or any
interest or penalties with respect to such excise tax (such excise tax, together
with any such interest and penalties, are collectively referred to as the
"Excise Tax"), then the Executive shall be entitled to receive an additional
payment (a "Gross-Up Payment") in an amount such that after payment by the
Executive of all taxes (including any interest or penalties imposed with respect
to such taxes), including any Excise Tax, imposed upon the Gross-Up Payment, the
Executive retains an amount of the Gross-Up Payment equal to the Excise Tax
imposed upon such payment. The amount of the Gross-Up Payment shall be
determined in the same manner, and shall be paid in the same form and at the
same time, as provided in the 1990 Change in Control and Severance Policy for
Top Tier Officers of United States Trust Company of New York and Affiliated
Companies.

         The Corporation or the Company shall deduct from any payment otherwise
required to be made to the Executive hereunder all federal, state, local and
other taxes required by law to be withheld with respect to such payment.

         7. CORPORATION'S OBLIGATION. The Corporation agrees that it will take
such steps as may be necessary to cause the Company to meet each of its
obligations to the Executive under this Agreement.

         8. NON-DUPLICATION OF BENEFITS. If the Executive receives a payment
under Section 2 hereof with respect to any option held by the Executive under
the 1995 Stock Option Plan of U.S. Trust Corporation, the option so held by the
Executive shall be treated as cancelled, for purposes of such plan, effective
immediately after the Change in Control resulting in such payment. The
obligations of the Corporation or the Company to make any other payment under
any other Change in Control Plan shall be offset to the extent such payment is
made under this Agreement.

         9. SUCCESSORS. This Agreement shall be binding upon the Corporation,
the Company, and any assignee or successor corporation or organization resulting
from the merger, consolidation or other reorganization thereof or succeeding to
substantially all of the assets and business of the Corporation or the Company.
The Corporation and the Company agree that they will make appropriate provision
for the preservation of the Executive's rights under this Agreement in any
agreement or plan that they may enter into or adopt to effect any such merger,
consolidation, reorganization or transfer of assets.

         10. NON-ASSIGNABILITY. Neither this Agreement nor any right or interest
hereunder shall be assignable or transferable by the Executive, or by her
beneficiaries or legal representatives, except by will or by the laws of descent
and distribution. This Agreement shall inure to the benefit of and be
enforceable by the Executive's legal personal representative.

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         11. DEFINITIONS. As used in this Agreement, the following terms shall
have the following meanings:

         (a) "CHANGE IN CONTROL" shall mean that any of the following events has
occurred:

                    (i) 20% or more of the common shares of the Corporation has
         been acquired by any person (as defined by Section 3(a)(9) of the
         Securities Exchange Act of 1934) other than directly from the
         Corporation,

                   (ii) there has been a merger or equivalent combination after
         which 49% or more of the voting shares of the surviving corporation is
         held by persons other than former shareholders of the Corporation, or

                  (iii) 20% or more of the directors elected by shareholders to
         the Board of Directors of the Corporation are persons who were not
         nominated by the Corporation's Board of Directors or by the Executive
         Committee of the Corporation's Board of Directors in the most recent
         proxy statement of the Corporation.

         (b) "CHANGE IN CONTROL PLAN" shall mean (i) in the case of the Company,
the 1990 Change in Control and Severance Policy for Top Tier Officers of United
States Trust Company of New York and Affiliated Companies; and (ii) in the case
of the Corporation, the following: the Benefit Equalization Plan of U.S. Trust
Corporation, the 1995 Stock Option Plan of U.S. Trust Corporation, the Executive
Incentive Plan of U.S. Trust Corporation, the Executive Deferred Compensation
Plan of U.S. Trust Corporation, and the Deferred Restricted Unit Plan of U.S.
Trust Corporation. Each plan referred to in (i) and (ii) of the preceding
sentence shall mean the plan as in effect on the date of this Agreement, and as
amended from time to time thereafter; provided, however, that no such amendment
shall be taken into account for purposes of this Agreement to the extent it
would result in any reduction of the benefits payable hereunder to the Executive
with respect to such plan as in effect prior to such amendment, unless the
Executive has consented in writing to such plan amendment.

         (c) "INVOLUNTARY TERMINATION" shall mean the termination of an
Executive's employment with the Company and all of its affiliates

                   (i)    by the Company or an affiliate, or

                   (ii)   by the Executive following

                             (A) any reduction in the Executive's base salary,
                       or in the Executive's opportunity to earn an annual bonus
                       in an amount at least equal to the percentage of the
                       Executive's annual base salary that was used to determine
                       the Executive's target bonus award for the year
                       immediately preceding the year in which a Change in
                       Control occurs,

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                             (B) any change, without the Executive's consent, in
                       the location of the Executive's place of employment to a
                       borough other than Manhattan or, if such place of
                       employment is not in Manhattan, to a city other than the
                       city in which the Executive's place of employment is
                       located,

                             (C) any material diminishment of the Executive's
                       responsibilities with respect to the business of the
                       Company or an affiliate, or

                             (D) any other material adverse change in the
                       conditions of the Executive's employment with the Company
                       or an affiliate.

         An Involuntary Termination pursuant to clause (ii) above shall be
deemed to occur within two (2) years following a Change in Control if the event
described in subclause (A), (B), (C) or (D) that gives rise to such termination
occurs within two (2) years following a Change in Control and such termination
occurs within six (6) months after such event.

         IN WITNESS WHEREOF, the Corporation and the Company have caused this
Agreement to be executed by the duly authorized Chairman of the Compensation and
Benefits Committee of their respective Boards of Directors, and the Executive
has executed this Agreement, as of the day and year first above written.

                                      U.S. TRUST CORPORATION


ATTEST:                               By:
                                           -----------------------------------
                                           Philip L. Smith, Chairman
------------------------------             Compensation and Benefits Committee
         Secretary

                                      UNITES STATES TRUST COMPANY
                                           OF NEW YORK


ATTEST:                               By:
                                           -----------------------------------
                                           Philip L. Smith, Chairman
------------------------------             Compensation and Benefits Committee
         Secretary



                                      ----------------------------------------
                                                 Maribeth S. Rahe

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