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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:
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(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
(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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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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(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
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