Exhibit 10.25
THE PEOPLE’S
BANK
CHANGE IN CONTROL EMPLOYEE
SEVERANCE PLAN
ARTICLE I
PURPOSE OF THE
PLAN
The purpose of the People’s
Bank Change in Control Employee Severance Plan (the
“Plan”) is to provide specified benefits to certain
Employees, as provided herein, whose employment is terminated in
connection with or subsequent to a Change in Control of either
People’s Bank (the “Bank”) or its parent,
People’s United Financial, Inc., (the “Company”),
(the Bank and the Company and all subsidiaries of the Bank are
hereinafter collectively referred to as the
“Employer”).
ARTICLE II
DEFINITIONS
2.01. Total
Compensation. An
Employee’s “Total Compensation” for purposes of
this Plan shall mean such Employee’s wages as defined in Code
Section 3401(a) and all other payments of compensation by any
Employer (in the course of such Employer’s trade or business)
for which such Employer is required to furnish such Employee a
written statement under Code Sections 6041(d), 6051(a)(3) and 6052
during the calendar year immediately preceding the calendar year in
which the Date of Termination occurs; provided that such Total
Compensation must be determined by (a) also including amounts
which are contributed by an Employer pursuant to a salary reduction
agreement and are not includable in the gross income of such
Employee under Section 125, 132(f)(4), 402(e)(3), 402(h) of
the Code or deferral of compensation pursuant to the People’s
Bank Supplemental Savings Plan (to the extent such amounts are not
otherwise so included) and (b) excluding compensation (whether
in the form of cash or stock) earned or paid under any incentive
plan with an accrual period of more than one year, including, but
not limited to, the Bank’s 1998 Long-Term Incentive Plan, the
Long-Term Retention Plan for Commercial Lenders or any successor
long-term incentive plan of the Employer in which the Employee is a
participant and (c) excluding any payments for reimbursement
of business expenses, rents, tuition reimbursement, insurance
premiums paid by the Employer or other special emoluments and
(d) excluding any “retention” payment, i.e.,
additional compensation paid pursuant to an agreement by the
Employer to pay the Employee additional compensation to remain
employed until a designated time or completion of designated
services.
2.02. Cause.
Termination of an Employee’s
employment for “Cause” shall mean termination because
of personal dishonesty, incompetence, willful misconduct, breach of
fiduciary duty involving personal profit, intentional failure to
perform stated duties, willful violation of any law, rule or
regulation (other than traffic violations or similar offenses) or
final cease-and-desist order or material breach of any provision of
this Plan.
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2.03. Change in
Control. A “Change
in Control” shall be deemed to have occurred upon the
happening of any of the following events:
(i) the consummation of a
reorganization, merger or consolidation of the Company with one or
more other persons, other than a transaction following
which:
(A) at least 51% of the equity
ownership interests of the entity resulting from such transaction
are beneficially owned (within the meaning of Rule 13d-3
promulgated under the Securities Exchange Act of 1934, as amended
(“Exchange Act”)) in substantially the same relative
proportions by persons who, immediately prior to such transaction,
beneficially owned (within the meaning of Rule 13d-3 promulgated
under the Exchange Act) at least 51% of the outstanding equity
ownership interests in the Company; and
(B) at least 51% of the securities
entitled to vote generally in the election of directors of the
entity resulting from such transaction are beneficially owned
(within the meaning of Rule 13d-3 promulgated under the Exchange
Act) in substantially the same relative proportions by persons who,
immediately prior to such transaction, beneficially owned (within
the meaning of Rule 13d-3 promulgated under the Exchange Act) at
least 51% of the securities entitled to vote generally in the
election of directors of the Company;
(ii) the acquisition of all or
substantially all of the assets of the Company or beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of 25% or more of the outstanding securities of the
Company entitled to vote generally in the election of directors by
any person or by any persons acting in concert;
(iii) a complete liquidation or
dissolution of the Company;
(iv) the occurrence of any event if,
immediately following such event, at least 50% of the members of
the Board of Directors of the Company who belong to any of the
following groups do not belong to any of the following
groups:
(A) individuals who were members of
the Board of Directors of the Company on the Effective Date of this
Agreement; or
(B) individuals who first became
members of the Board of Directors of the Company after the
Effective Date of this Agreement either:
(1) upon election to serve as a
member of the Board of Directors of the Company by the affirmative
vote of three-quarters of the members of such Board, or of a
nominating committee thereof, in office at the time of such first
election; or
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(2) upon election by the
shareholders of the Board of Directors of the Company to serve as a
member of such Board, but only if nominated for election by the
affirmative vote of three-quarters of the members of such Board, or
of a nominating committee thereof, in office at the time of such
first nomination;
Provided, however,
that such
individual’s election or nomination did not result from an
actual or threatened election contest or other actual or threatened
solicitation of proxies or consents other than by or on behalf of
the Board of Directors of the Company; or
(v) any event which would be
described in Section 2.03 (i), (ii), (iii) or
(iv) if the term “Bank” were substituted for the
term “Company” therein.
In no event, however, shall a Change
in Control be deemed to have occurred as a result of any
acquisition of securities or assets of the Company, the Bank or a
subsidiary of either of them, by the Company, the Bank, any
subsidiary of either of them, or by any employee benefit plan
maintained by any of them. For purposes of this Section 2.03,
the term “person” shall include the meaning assigned to
it under Sections 13(d)(3) or 14(d)(2) of the Exchange
Act.
In no event shall a Change in
Control be deemed to have occurred as a result of the occurrence of
any of the events or transaction described in this
Section 2.03 (i), (ii), (iii) or (iv) if effected in
the context of the conversion of People’s Mutual Holdings
from a mutual-form entity into a stock-form entity pursuant to
applicable laws and rules.
2.04. Code.
“Code” shall mean the
Internal Revenue Code of 1986, as amended.
2.05. Date of
Termination. “Date
of Termination” shall mean (i) if an Employee’s
employment is terminated for Cause, the date on which the Notice of
Termination is given, and (ii) if an Employee’s
employment is terminated for any other reason, the date specified
in the Notice of Termination.
2.06. Disability.
Termination by the Employer of an
Employee’s employment based on “Disability” shall
mean termination because of any physical or mental impairment which
qualifies the Employee for disability benefits under the applicable
long-term disability plan maintained by the Employer or, if no such
plan applies, which would qualify the Employee for disability
benefits under the Federal Social Security System.
2.07. Employee.
“Employee” shall mean
any individual who was employed by the Employer as of the Effective
Date and who is not party to an individual employment or change in
control agreement with the Employer as of the date of the Notice of
Termination; PROVIDED, however, that an individual who is
considered by the Bank to be an independent contractor or temporary
employee, even if he or she is determined to be an employee of the
Employer for any other purpose, shall not be eligible to
participate in the Plan. The characterization in the
Employer’s records of the relationship between
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the individual and the Employer
shall be conclusive as to the individual’s status for
purposes of this Plan.
2.08. Good Reason.
Termination by an Employee of his or
her employment for “Good Reason” shall mean termination
by the Employee following a Change in Control of the Company and
within 60 days following the occurrence of one or more of the
following events:
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(a)
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Without the
Employee’s express written consent:
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(i)
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any reduction
in the Employee’s base salary; or
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(ii)
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change in the
method of computation of commissions and/or performance incentive
compensation that would, if target goals were achieved, result in a
reduction of more than 20% in the value of the Employee’s
commission and/or incentive performance compensation
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as in effect immediately prior to
the date of the Change in Control of the Company or as the same may
be increased from time to time thereafter;
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(b)
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Without the
Employee’s express written consent, the assignment to a
position that requires knowledge, skills or abilities that differ
substantially from those applicable to the Employee’s
position with the Employer immediately prior to a Change in Control
of the Company; or
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(c)
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Without the
Employee’s express written consent, relocation of the
Employee’s principal site of employment to a location that
would require the Employee to increase his or her daily one way
commuting distance by more than twenty five (25) miles as
compared to the employee’s commuting distance immediately
prior to the Change in Control.
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2.09. IRS.
“IRS” shall mean the
Internal Revenue Service.
2.10. Notice of
Termination. Any
purported termination of an Employee’s employment by the
Employer following a Change in Control for any reason or by an
Employee for Good Reason, shall be communicated by written
“Notice of Termination” to the other party hereto. For
purposes of this Plan, a “Notice of Termination” shall
mean a dated notice which (i) indicates the specific
termination provision in this Plan relied upon, (ii) sets
forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of the Employee’s employment
under the provision so indicated, (iii) specifies a Date of
Termination, except in the case of the Employer’s termination
of the Employee’s employment for Cause, which shall be
effective immediately; and (iv) is given in the manner
specified in Article VII, Section 7.01 hereof.
2.11. Retirement.
“Retirement” shall mean
the termination of an Employee’s employment in accordance
with the Employer’s retirement policies of mandatory
retirement at 65 or another designated age.
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ARTICLE III
BENEFITS
3.01. Payments and Benefits upon
Termination.
(a) If the Employee’s
employment is terminated subsequent to a Change in Control of the
Company by (i) the Employer for other than Cause, Disability,
Retirement or the Employee’s death or (ii) the Employee
for Good Reason, then the Employer shall: in lieu of any other
severance or separation pay
(A) pay to the Employee the
following amount of severance compensation, subject to reduction as
provided in subsection 3.01(c):
(i) if the Employee is exempt
Director level (Grade 55) or above at the date of the Change in
Control of the Company, a cash severance amount, such amount being
paid in a lump sum as of the Date of Termination, equal to
1/13 th o
